The Chinese Customs Revenue in th 1937 amounted to no less than $342 millions, an increase of $18 millions. over 1996, thanks to the excellent start given in the Arst seven months of the year. You are aware that negotiations are proceeding in regard to the Customs tariff and administration in the areas controlled by the Japanese forces, It is hardly necessary for me to emphasize how important it is that the Customs Ad-Mlnistration should remain as now constituted, and continue to be the Sole instrument controlling Customs affairs throughout the whole country, The present administrative system has weathered political upheavals and civil strife over many years and the maintenance of its existing status and credit is unquestionably to the advantage of both China and japan, in order that in due recourse the refinancing and rehabilitation of the country may proceed smoothly, {am glad to say that repeated assurances have been given by the Japanese that the foreign loans will be respected. Sir Frederick Maze is a dificult position. He is an omelal of the Chinese Government, Dut as custodian wf the revenues earmarked for the service of import-fant foreign loans he has certain responsibilities which are of an inter-ational nature, ders of all jeountries look to him to steer a Jcourse between strongly conflicting currents. We are confident that with his customary tact and political sagacity he is doing his utmost to preserve the integrity of this important administration, As an international trustee ho deserves international support. The foreign powers. have in the past brought their in" fluence to bear under similar cir cumstances and they are, we understand, doing so now, particularly as the retention of the "open door" in China depends a good deal on the continued existence of an internatienallzed Customs Administration such as exists at the present time.
Salt The Salt Revenue in 1937 is reported to have been very much the same as in 1936 owing to. further Increased taxation, but the Salt JAdministration has. unfortunately failed to maintain its control over, the North China Salt areas. This administration has been in the situation of an ugly duckling along. side the favoured Customs, and has therefore been rather neglected by its foster parents, the international powers, Nevertheless it is important that the Customs and Salt Should be treated on an equivalent "basis, ab the arguments used in the tone case apply also in the other. The outstanding foreign loans secured the salt revenues require a com-Paratively modest annual remittance Jot funds and the revenues collected should continue to be ample for {these requirements.
It Is satisfactory to be able to note that, in spile of the war, the Naional Government has continued Tegularly to pay the forelm loan obligations secured on the Customs, salt" and railways,
Text read from the printed page and cleaned; old type leaves the occasional error.