246
37.
Mr. G. V. Sheppard's personal views.
F.0. views on whole
question.
great majority of the Chinese vessels were general
passenger and cargo vessels or tugs, while the
inland passenger and freight trade was entirely
in Chinese hands.
40. Copy of a private letter of Mr. G.V. Shep-
pard's to his office (Jardine's) in Hongkong gives
his views. He is in favour of allowing the
Customs to function at Hongkong, but thinks there
should be a substantial quid pro quo. He considers
the Chinese-flag proposition is of no value, be-
cause it is what the Customs will be forced to
grant directly the Chinese junk-owner of the Canton
province prefers steam or motor. He thinks the
factory treatment privilege is also of no value,
as the Chinese never abide by the stipulations for
freedom from further taxation in China itself
(nevertheless all foreign factories in China
seem to be trying to get it. A.H.G.).
Sheppard thinks that once the Chinese exclude
the foreign-flag from Hongkong and get their
(Customs) fingers into the Hongkong pie, they
will start agitating for retrocession on the
ground that it is after all nothing but a
Chinese place and that, as for foreign ships,
they can still bring their cargoes to Hongkong
from abroad, after retrocession, as they do now
at Shanghai. Mr. Sheppard is evidently in fa-
vour of letting the agreement remain in abey-
ance till the commercial treaty defines our
navigation rights.
Mr.
41. In a letter to the C.0. of January 18,
1950, the Foreign Office lay down their views
/on
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