CO129-521-12 Chinese Customs- proposed agreement with Hong Kong 2-4-1930 - 16-6-1930 — Page 258

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fundamental modification in present draft, (ii) that

modification of clause 5 as suggested by Chinese would

react detrimentally on British interests in China for

reasons given in paragraph 5 of your telegram under

reference, (iii) that while article 10 is considered

of minor importance the omission of article 5 might be

considered by China as tantamount to an acknowledgment

that Chinese customs had a right to function in Hongkong

on their own terms.

In view of the above considered and almost un-

animous opinion of joint committee, the terms of Canton

despatch No. 173 and its enclosures and Hongkong tele-

gram of December 13th I do not propose to offer an

opinion except that I gather from conversation with some

members of committee that they feel the matter has now

gone so far that Hongkong cannot withdraw from the posi-

tion they have taken in regard to present draft."

Ends.