is to inform the Marquess of

Salisbury that,

as regards the

Leased Territory

at Hongkong,

that territory forms

an integral

part of the Colony, all reference to

it should in Mr Chamberlain's

opinion be omitted

from the

suggested declaration.

3. It should be explained to the

Duke that the leased territory

at Kowloon has been declared to

be an

integral part of the Colony,

that, as far as

possible, the Laws

of the Colony

are already

applied to it: it therefore stands

on a

wholly different footing

from an extension into a

sphere of interest. It is

an extension, conditioned by

a term

of years, of an existing

Colony, which

is not

unforeseen at the present time

as regards Custom duties.

4. Mr Chamberlain also apprehends

that the declaration, at least in

the form in which it stands,

could have no applicability to

the leased territory of Kowloon;

he would therefore suggest that the

declarations should be confined

to spheres of interest

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