I have read Mr. B. Robertson's despatch very carefully for I believe it sent an account of the time that arrangements would be easily acceded to by the Government and believe the course here recommended is the best that could be adopted. Namely, to allow the Chinese authorities to check the smuggling that has been the chief obstacle to a good understanding on the subject.

Our persistent refusal hitherto has led to the Wangling, and this rule has already been established for their junk trading with Wongleng. Effective acceptance, or cooperation with the Chinese authorities, provided that the abuses incident to it at Bingbing are prevented, has been the only way to prevent smuggling and maintain a good understanding.

The tariff provided by the Treaty of Tientsin has been the chief and the only duty demanded or under any pretext. What is called the Blockade of Kowloon (for as soon as a foreign staff enabled them to create an effective preventive service) has been the natural outcome of a state of things that was felt to be intolerable.

I have little doubt that this, coupled with the building of steamers and the employment of an official at Kowloon, will prevent smuggling and prove a satisfactory solution of the difficulty. In 1869, when I intended to sign the convention, which was not ratified in consequence of the opposition of the Wingate and others, the appointment of a Palmer was considered unjustifiable by the Chinese Authorities.

Any attempt to ascertain or regulate the levy of native duties would be hopeless; the certainty of failure may console those who think this measure is intriguing — which I doubt.

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