CO129-495 - Governor Sir Clementi - 1926 [11-12] — Page 557

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will not agree to this proposal which is of constructive benefit to China and to our trade unless we on cur side agree to include debt

You also hold consolidation in the treaty.

that debt consolidation in itself is of constructive benefit to the whole of China.

3. We have objected that to consolidate the unsecured debt would impose a huge annual charge upon and involve extension of present foreign control over the whole customs revemies as increased by the Conference, that this would antagonise the provinces who might interfere by force to prevent these large revenues being taken for such a purpose and that such interference might involve denger not merely to the revenues but to the customs administration the preservation of which is a vital British interest.

4. You have met these objections by pro- posing to eliminate as far as possible all control and interference once the revenue has been collected and lodged in the banks at Shanghai. Your proposal does not however dispose of the difficulty that control bogins at the point where the revenue is collected which is also the point

As I where interference may be apprehended. understand it, your policy must involve if it does not actually contemplate forcible intervention by the powers to ward off any local threat to the

customs