Custom House Officer by the Chinese Government in the neighbourhood of Macao.

Lord Carnarvon will see from this despatch that the Portuguese Government are anxious to obtain the cooperation of Her Majesty's Government in reciprocating the measures contemplated by the Chinese Authorities, on the ground that Macao and Hong Kong are in similar circumstances, their interests alike, and the views and principles maintained by the Governments are identical.

From this view Lord Derby totally dissents. For China has never recognised Macao as belonging to Portugal, and the dispute as to its tenure has prevented the conclusion of a Treaty between the two Countries.

On the other hand, Hong Kong was ceded to Great Britain by Treaty, and is treated by China in the matter of Customs duties as a foreign port.

Lord Derby therefore proposes, with Lord Carnarvon's concurrence, to reply to the Duke of Saldanha that Her Majesty's Government regret that they are unable to comply with the request of the Portuguese Government in regard to their relations with China.

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