CO129-495 - Governor Sir Clementi - 1926 [11-12] — Page 477

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if necessary endeavour to bargain with provinces for service debt charges. We do not consider anything

is to be gained by trying to (grp. undec.) details of such a policy now include extent to which it may or may not be possible to differentiate between old and new charges and we would urge that we should rather wait and see how conference develops bearing principles of your ideas in mind. We have ourselves been at work for some time on concrete (? grp. ontd.) which we shall shortly lay before other delegations for levying likin compensation tax at rate of one-third of imort duty proceeds of which will be controlled by Chinese likin compensation furd committes with fullest pro- vincial reprezentation and distributed by latter to provinces who would thus receive one-quarter of total proceeds of tax collected by customs from (gtp.unoc.) whatever they might amount to. In the meantime Chinese delegation are acting in accordance with our views in marking time and refusing to negotiate peading establishment of a more representative government and when negotiations are resumed we will keep question of ways und means of securing provincial acceptance of proposed arrangements constantly in the foreground. We gather danger you anticipate to customs may be zumed up under three main hoads:

1. Attitude or provincial enthorities or in

other worda of leading provincial militarists like Sun,

Wa Fel-fu and Charg.

2. Attitude of nationaliste, that is to Bay of

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