No. 2.

163

(No. 3.) My Lord,

Sir J. Mackay to the Marquess of Lansdowne,--(Received December 23.)

Hong Kong, November 23, 1901.

IN continuation of my despatch No. 1 of the 11th instant, I have now the honour to inform you that I had a further interview with Sir Ernest Satow here on Monday, the 11th instant, at which I was favoured with a full expression of his views on the various subjects set forth in my instructions.

Sir Ernest was good enough to place at my disposal, so long as I may require them, the services of Mr. J. W. Jamieson, Commercial Attaché to the Legation at Peking.

On Monday evening (11th instant) I left Hong Kong, accompanied by Mr. Cockburn and the Secretaries, for Canton, where we spent three days, and had the opportunity of hearing the views of the Acting Consul-General, Mr. James Scott, the mercantile com- munity, and the Commissioner of the Imperial Maritime Customs, Mr. F. A. Morgan. Mr. Morgan's defence of the existing West River and Inland Navigation Rules, of which so much complaint has been beard, was not very strong, and, after several interviews, be finally promised to consider whether some other Rules could be devised which would permit steamers to trade freely upon the West River and inland waters of the Southern Provinces, and, at the same time, sufficiently safeguard the revenues of China.

Since I left Canton I have received the inclosed letter from Mr. Scott, Acting British Consul-General at Canton, dated the 18th instant, with copy of his despatch of the 16th instant to Sir Ernest Satow, by which your Lordship will observe that Mr. Morgan has written to Sir Robert Hart, proposing that certain important alterations should be made forthwith in the Rules; and, if these are sanctioned, the difficulties now experienced in running steamers between Canton and the West River ports will be, in a great measure, removed. There are other important changes which are necessary in connection with the West River trade; but these can stand over till negotiations take place in Shanghae.

In connection with the new Rules which Mr. Morgan has proposed to Sir Robert Hart, I also inclose a copy of a letter, dated the 18th instant, from Mr. Fearon, Chairman of the Canton Chamber of Commerce, with the correspondence above mentioned. I also send copy of my letter to Mr. Scott, dated the 19th instant, and copy of my letter to Mr. Fearon, dated the 14th instant.

The

While in Canton I called on the Governor, the Tartar General, and the "Hoppo (Head of the Native Customs), and received return visits from these officials. Viceroy was unable to see me, owing to illness; I understand he is suffering from acute phthisis, and is not expected to live long.

We were entertained at dinner by the Canton Chamber of Commerce on the 13th instant, and on the morning of the 15th instant left by steamer for Wuchow, on the West River.

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