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(F 127/69/10)
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Extract from enclosure to despatch from Sir Miles Lampson (Peking)
No. 1603 (433/84), Dated 6th November, 1930.
Mr. Yano called in the afternoon with a packet of questions,
on which he sought enlightenment.
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He next asked me what was the meaning of the Hong Kong
Customs negotiations, to which he had seen an allusion in
the paper. I explained to him briefly. He seemed rather
mystified, but I hope got the general gist of what it was all
about. I emphasised that the Agreement was one in the interests
both of Hong Kong and China, to prevent smuggling from the Colony
into the latter. Mr. Yano observed laughingly that it had always
been stated at Canton, when he was down there as Consul-General,
that the prosperity of Hong Kong was largely due to the smuggling
trade into China. I observed that I had not been aware that that
was so, and he could not expect me to admit or believe it. In
any case, it made it all the more necessary, if it were true now
as a result of the increased tariff, that there should be some
arrangement to stop such abuses of the free-port system not
only in the interests of China, but in the interests of Hong Kong
itself. Obviously the Government of Hong Kong had no desire, and
could have no desire, that such a state of affairs should
exist.
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