CO129-496 - Public Offices - 1926 — Page 475

:

(3)

471

which has proved totally ineffective as we pointed

out would be the case. In view however of

magnitude and delicacy of issues involved in thus breaking away from Washington policy and having re- gard to unsympathetic reception hitherto recorded by Japanese and Americans here to our proposals for un- conditional grant it would be I think preferable that our intention should be communicated and explained to other Powers by His Majesty's Government direct rather than through diplomatic body here.

I also venture to repeat suggestion made in my telegram No.376 that in all circumstances an easier and better line to follow might be to legalize new levy

This as a special provincial likin compensation tax. would enable us to argue that whereas raising of import tariff proper is held up by absence of a Chinese gov- ernment with which to negotiate and having regard to our anxiety to liquidate Washington promises without further delay we propose to meet claims of provinces by immediate grant to the latter of a likin compensa- tion tax of the kind we advocated throughout conference as constituting a part of conference programme which concerns in the main the provinces alone and which can therefore in the last resort be proceeded with without further negotiation and in the absence of any Central

Government.

I await your instructions before sounding inspector general of customs on point raised in Canton telegram No.56.

Addressed to Foreign Office No.435, repeated to Tokyo, Canton, Hongkong and Shanghai.