and reporting the erection of Custom Houses by the Chinese Government near Hong Kong, and stating that much mischief will result to the community of the colony from such a proceeding.

In reply and in compliance with the Duke of Buckingham's request to be favored with observations which may occur to them on the subject, I am to state for his Grace's information that with regard to the Junk, My Lords must refer to their letter of the 7th March last, in which they stated that they could give no decided opinion on the subject owing to the want of sufficient information. Sir R. Macdonald in his present Despatch gives no further facts, but states that "it may be regarded almost as superfluous to accumulate further evidence as to the strict legality, so far as regards British rights, of any seizure made by the Chinese, in their own waters nearer than our own."

Under these circumstances, My Lords do not feel themselves in a position to do otherwise than refer to their previous communication on this subject.

The second point raised by Sir R. Macdonald in his Despatches is the erection of Custom House Stations on the mainland of China, in the vicinity of Hong Kong by the Chinese Authorities for the purpose of collecting the local impost on opium, of which it appears the Government...

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