+
(4).
stipulation of simple conditions relating to dis- crimination and freedom from further taxation in treaty port area. I incline to D. which might be taken in conjunction with B.
7.
Objection in principle to use of customs machinery for collection of import surtaxes applies with even greater force to proposed surtax on exporta seeing that latter was not contemplated at Washington. Export surtax itself however is unobjectionable from point of view of British trede but may be strongly
opposed by Japanese.
My recommendations in this telegram are in con- flict with policy I have hitherto advocated of opposing unconditional grant of surtaxes to Canton but our hands are being forced by events and policy I now recommend is dependent on assumption that Cantonese offer to end boycott is a genuine one sná that system of collecting end allocating existing customs revenues will remain unchanged.
Repeated to Tokyo, Shangkad, Hongkong end
Canton.
312
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