The Council is, of course, aware (as the Honourable Gentlemen stated,) that all questions of the nature of that now under consideration should properly be addressed to the British Minister at Peking, who is ex-Officio Superintendent of Trade in China, and not to the Governor of Hongkong, whose jurisdiction is limited by law to the waters of this Colony. And it will be recollected that the Chamber of Commerce has hitherto acted on this prin- ciple, and has addressed its correspondence on matters affecting the trade of this community direct to the Minister, without even transmitting the letters through the Governor. The Honourable Member has, I think, given reasons which will be deemed sufficient by the British Legation in China, for treating the present case as an exception to the general rule of the Chamber. Moreover, I have always considered myself justified in addressing both Her Majesty's Government and my late lamented friend, Sir HARRY PARKES, on all matters affecting the commercial and general interests of this Colony. Thus I have reported, both by telegraph and by despatch, all the French blockades and other proceedings which can affect, directly or indirectly, the trade of this community; such as the stopping and search of the Glenroy, and of other British Merchant vessels, and of one of the P. & O. steamers; and the declaration of the French that they will treat rice as contraband of war. My instructions from the Imperial Authorities on this subject are to the effect that they recognise the exercise by the French of the customary rights of Belligerent nations, and that the legality of any seizure of a British ship by French cruizers "must depend, in the first instance, on the decision of the Prize Court, subject to ulterior diplomatic action."

These instructions confirm in principle the opinion given two months ago by my responsible Legal Adviser (the Attorney General), when one of the leading Mercantile Firms here asked a question of the Government as to whether coal would be regarded by the French as contraband of war; and suggested that the Home Government should be consulted on this point. I was then advised that "Neither the Imperial Government, nor the Colonial Government can give an authoritative opinion on questions of this nature, nor should any such application as that suggested be made to the Home Government.

Whatever cargo private firms carry in their ships on the China Seas under present circumstances, they carry entirely at their own risk."

I was further advised in connexion with this question that "it is of the utmost import- ance that the Colonial Government should not give any legal opinion upon matters of this kind; for otherwise it may find itself involved in dangerous responsibilities,

(1.) To the Belligerents; for acts which, though harmless from an international point of view so long as they are distinctly the acts of private persons only, and done without the sanction or connivance of the Government, might, if they were done. under the positive sanction or advice of the Government, form a proper subject of complaint by the Belligerents.

(2.) To the Mercantile Firms, or other persons obtaining the opinion; who, if any harm should happen to them, would say that they were acting in accordance with the authoritative opinion of the Government, and were entitled to be either supported by the Government or compensated by it for loss incurred while acting within its advice."

Having thus stated as briefly as possible what has already taken place respecting this import- ant subject, and the broad principles applicable to cases of this nature, I will now reply to the special questions put by my Honourable friend.

With regard to the 1st question, viz.: "Has the blockade of Pakhoi been legally notified?", I am advised that the notifications made to the Government and published in the Gazette of the 7th and 28th March (as stated above,) would be regarded as sufficient "to affect all merchants in this Colony with notice of the existence of an actual blockade, and with an obligation to observe it."

With regard to the 2nd question, viz.: "Whether the blockade is effective?" I am advised that this is a question, the reply to which must depend on facts of which the Colonial Government has no precise knowledge.

With regard to the 3rd question, I must, of course, in the first instance, communicate respecting it with Her Majesty's Chargé d'Affaires at Peking, who has already expressed his desire to co-operate with me as heartily as did Sir HARRY PARKES. Meanwhile, I will remark that, while there is no doubt but that the place where the legality of any seizures of ships must be tested is the Prize Court of the captors, still, at the same time, if under pretence of seizing vessels for breach of blockade, or for other similar offences, any Belligerent Power were to pursue any system clearly in violation of the rights of neutrals, as recognised by international law, the Government of the neutral Power would interfere on behalf of its subjects. I shall not fail, whenever circumstances seem to require it, to invoke energetically that ulterior diplomatic action" which has been referred to above.

حمد

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