CO129-495 - Governor Sir Clementi - 1926 [11-12] — Page 555

iz

(2)

once collected, whether exercised by Inspector General or diplomatic body, would cease, thus meeting13 condition laid down in last sentence of your telegram

No.49. We hope that the necessary safety of funds would still be obtained by custodianship arrangements acceptable to Chinese.

4. It is (grp. undec.) imposition of further charge for debt service on customs, as one of the conditions of an increase, will augment and prolong foreign financial interest in those revenues. We

believe this to be inevitable unless conference breaks down or China repudiates her debts, while our plan would have the advantage of increasing Chinese financial interest pari-passu.

We think imposition of further charges is more

likely to diminish than increase risk of civil war

by reducing amount of free money. Further we believe

that so long as China remains in the present state

of disorder and disunion foreign powers will have to

intervene in the event of attacks on the customs

administration in order to make continuance of foreign

trade possible. If this is so, existence of foreign

financial interest as ground for intervention is surely

advantageous rather than otherwise. It need not

in itself commit His Majesty's Government to any

further intervention than they would in any case wish

to undertake on behalf of the vital commercial interests

at stake.