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threatened against the Government for damages, as it is said that the old Collectorate were conniving at Opium passing the stations without paying duty.

It is alleged that Opium was allowed to pass for 30 taels a picul. I do not know what amount of truth there is in this statement, but there can be no doubt that for nearly 3 weeks in the latter part of February, the stations around Macau and Hongkong refused to take Opium when offered, and took advantage of the situation.

The Chinese were able to ship into Macao as much opium as could be got hold of.

6.

This Government will be in a much stronger position for having submitted these new proposals, even if they are not acceptable to China. And as I have said, in that case, the Government will have to pass a measure, although by a majority of one official vote, and that will be Mr. Russell's, who now takes a seat at the Council in the absence of Sir George Phillipps.

The Colonial Government, out of deference to the Chamber of Commerce and the Unofficial Members of the Council, who have large interests in the Colony, would be prepared to do so, so that the markets are now pretty well glutted.

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