THIS DOCUMENT IS THE PROPERTY OF HIS BRITANNIC MAJESTY'S GOVERNMENT.
182
CHINA.
ONFIDENTIAL.
February 4, 1930.
SECTION 1.
| F 678/101/10]
No. 1.
Sir M. Lampson to Mr. A. Henderson.-(Received February 4, 1930.)
(No. 1787. Sir.
Confidential.)
Peking, December 10, 1929.
I HAVE the honour to acknowledge the receipt of your despatch No. 702 of the 12th July calling for a report on the present situation and future prospects of the Chinese Maritime Customs Administration, which crossed my despatch No. 1015 of the 15th July on the same subject.
2. In view of the fact that the ground in question had been partly covered by my despatch above referred to, I have delayed my reply until I had received reports on the subject for which I had called from Mr. Aveling and His Majesty's consuls- general at Shanghai, Canton, Hankow and Tientsin. Copies of these reports are enclosed herewith.*
3. I have the honour to draw special attention to Mr. Aveling's able and illuminating despatch, the general tenor of which is confirmed by the reports from Mr. Garstin, Mr. Moss, Mr. Giles and Sir James Jamieson. From my own observations 1 endorse the main conclusions reached therein, namely, that there is a general feeling of relief, both inside and outside the service, at the restoration of its internal harmony and the comparative smoothness with which the new régime is operating, as well as a general recognition of the ability, tact and success with which Mr. Maze has directed the affairs of the Customs administration. There are certain obvious drawbacks connected with the recent changes, the most serious of which is probably the increasing tendency to corruption in the lower ranks of the outdoor staff of the service. Moreover, the British trader, so long accustomed to regard the Customs as a foreign service to which he could look to uphold the interests of the foreigner, has to adjust his outlook to the new condition of things in which the administration is, in fact as well as in name, a department of the Ministry of Finance, and the inspector-general the servant of the Chinese Government instead of the autocratic head of a quasi-independent foreign administration. fundamental change in the status of the service is an inevitable, and in the light of the policy of His Majesty's Government, a not undesirable development. And on the whole the general situation of the administration, as set forth in the enclosed reports, is decidedly encouraging and infinitely better than one could have dared to hope two years or even a year ago.
This
4. As regards the handling and disposal of the revenues, it will be noted that the actual collection, and the control of the collected cash, remain in the hands of the commissioners, who lodge the sums they receive locally in the local collecting banks, which, as formerly, are in some cases foreign and in other cases Chinese banks. From the outset the revenues are divided into two parts, namely, the proceeds of the original 5 per cent. duties and the proceeds of the balance of the present import duties as increased by the new rates, the latter totalling roughly the same amount as the former. From the local collecting banks the proceeds of the 5 per cent. duties. are remitted to the inspector-general's account in the "Custodian Bank" (now only one, the Hong Kong and Shanghai Bank) at Shanghai for the foreign loans and indemnities and Chinese bond issues which were secured on, and actually served out of, the customs revenues before the raising of the tariff. The proceeds of the balance of the customs duties are separately remitted to the inspector-general's account in the Central Bank (the Chinese Government Bank) at Shanghai, where they are available for the free use of the Minister of Finance, subject to such commitments as he himself may have entered into in respect of new loan issues with Chinese banks. (see also paragraph 7 below).
5. It is interesting to recall briefly the recent history of the attitude of His Majesty's Government, and of the other foreign Governments concerned, towards China's customs revenues. Originally, we went into the Tariff Conference of 1925 with the same policy as that pursued at the time by the other Powers, namely, of
[30 d—1]
*
Report from Mr. Aveling only printed.
B
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