CO129-531-15 Chinese customs- proposed agreement with Hong Kong 9-7-1931 - 17-1-1932 — Page 78

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certain powerful Chinese officials in the smuggling and in

the development of the Chung Shan free port scheme, which

would provide a convenient base for smuggling operations;

this hostility was increased by the action of the Minister

of Finance in giving instructions that Customs duties

were for the time being to be levied on all imports and

exports passing through Chung Shan.

3.

I fully share the opinion, which Sir William Peel

has expressed to me, that the action of the Central

Executive Committee in rejecting the agreement without

formulating any counter-proposals and without advancing

any reasoned arguments against it, places the Hongkong

Government in a strong, not to say unimpeachable, position.

The latter have not only shown their readiness to cooperate

over the smuggling problem without demanding any substantial

quid pro quo, but they have apparently won over the Customs

and the Minister of Finance, who are the only parties

really interested in the question from a revenue point of

view, from their previous hostility. The ways of the

Chinese and the workings of their political intrigues are

as inscrutable as ever, but I am not without hope that,

once the present agitation has had time to die down, and

possibly the hopes of the promoters of the Chung Shan

scheme have not been justified by results, the agreement

will go through after all.

I have, etc.,

(Sgd) MILES W. LAMPSON.

V.