CO129-496 - Public Offices - 1926 — Page 25

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(4).

and honest administration of customs which is the only organ of government really functioning in China today.

(4). I strongly endorse views of Inspector Gener- al that issue between Canton and Hong Kong does not arise out of customs surplus question and that it can- not be remedied by anything we can do at tariff confer-

ence.

I consider that manifestos and public utterances of Canton leaders as well as demands of strike com- mittee in recent abortive negotiations clearly indicate that hostility of Canton towards Hong Kong is based on a Bolshevik inspired movement against so- called British imperialism to which alleged humilia- tion of China by unequal treaties etc. is attributed and also on further pretext of Shanghal Shameen shoot- ing incident last summer.

I also concur in his opinion that Canton euthori- ties are always likely to yield if the powers show a united front and I believe directing influences at Canton are sufficiently wide awake to realize that while they may defy us singly they cannot afford to risk rupture with all the powers.