CO129-531-15 Chinese customs- proposed agreement with Hong Kong 9-7-1931 - 17-1-1932 — Page 122

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which involves an infringement of our sovereign rights.

This caused repeated exchange of views without leading to

any result.

It is learnt that the Hongkong Government are

now suddenly granting permission for the establishment of a

Customs station and the collection of duty in their

territory without stipulating any conditions. Compare

this generosity with their former closeness and we must

inquire into the reason for it carefully. Briefly, if a

Customs station is established in Hongkong's territory and

duties collected, then from that time all imported goods

will not pass through Canton for consumption in the various

areas and the Canton market will therefore suffer a great

blow, which it could with difficulty withstand. Now with

a view to remedy smuggling effectively, the anti-smuggling

patrol boats and the customs patrols should be increased

in number and customs stations and barriers should be set

up in the free ports in the territory. These plans will

entail small outlay and the results will be large.

Therefore the Hongkong Government, while expressing

sentiments of friendly help in the matter of erecting a

Customs station in Kowloon, really wish to move the nerve-

centre of the trade and commerce of South China, and to

weaken Canton while strengthening Hongkong. It is

essential that this proposal be defeated with the aim of

enriching the National Treasury and shewing regard at

the same time for the livelihood of the people.

I would observe that the National Government'

proclamation declaring the opening of Chungshan port is of

very deep significance. Very recently a certain engineer

of the Dutch Irrigation Engineering Company stated in

general that the port certainly possessed first class

qualifications, and could be completed without great

expense./