CO129-521-13 Chinese Customs- proposed agreement with Hong Kong 27-8-1930 - 16-10-1930 — Page 237

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27.

(p.7 in 5 Y}

Chinese object to Inland Waters Clause (Art).

He feared there might be trouble over the Inland Water privileges, but said that the Minister of

Finance had promised to support the draft as it

stood, Mr. Mase having pointed out to him that unless the Customs were permitted to exercise

increased control in Hongkong itself, and re-

establish the former Customs atations near Hong-

kong, thus shortening the preventive line, the difficulty of dealing effectively with the alarm- ing increase of smuggling in the neighbourhood

would be enormously increased.

26. The fear that the draft agreement would break on the rook of Chinese opposition to the clause (Article 5) granting inland water privileges

to all vessels registered with the Customs pro-

ceeding from Hongkong to inland places, proved correct, as the Chinese Government feared they would be charged with inconsistency in making

such a concession. Er. Maze offered to the

Governor instead to attach an exchange of notes,

stipulating that Hongkong vessels under the Chinese flag, like Chinese junks, might trade freely to

and from Hongkong and Chinese "inland" places.

Mr. Maze pointed out that this was really more

of a concession than it looked, for the reason

that, once coastal trade privileges were with drawn from foreign flag vessels, direct inland trade to non-open places would be permissible only to Chinese flag vessels, and that, without

some Agreement of this kind, even Chinese-flag

vessels, coming from Hongkong, a foreign port,

would be debarred from such privileged trade.

/Mr.