From the terms of the Article it is evident that the Japanese contemplate the introduction of the manufacture of Refined Sugar upon an extended scale, and hence doubt the omission of Refined Sugar from the Tariff, because as long as it is free, the Japanese Factories will be bountied against those of Hongkong, to the extent of the duty levied upon Refined Sugar imported, viz. £1.12.9. per ton.
Article 4 might be made also to operate merely as a means of levying an additional duty on Refined sugar from Hongkong, for there is nothing to prevent the Japanese Government encouraging Refineries under state subsidy and imposing an excise tax equal to such subvention, which tax would also be levied upon the Hongkong Sugars already bearing the initial duty of £1.12.9 per ton. Under such conditions the Japanese Refineries would be paying tax, while their Government would obtain the additional revenue from imported sugars on which a heavy import duty has already been laid.
We think the above facts make it perfectly clear that the Refined Sugar interests of Trade in Hongkong must be seriously affected by the provisions of the Treaty, and we shall be greatly obliged if your Chamber will communicate our views to His Excellency the Governor to ascertain whether, whilst the Treaty was under consideration, any enquiries were received from Her Majesty's Government as to the effect of the New Tariff.