6. Due to the circumstances, we cannot but have a very serious effect upon the future of our trade with China, and we have therefore considered it imperative to telegraph to the Secretary of State for Foreign Affairs protesting against this decision and requesting that the instructions sent to His Majesty's representative in China be suspended pending receipt of our written protest.
The trade between the Colony of Hong Kong and the upper sections of the West River has been opened up and developed chiefly by the enterprise of these British Steamship Companies who have expended a very large sum in promoting this business.
Trade increased and it was evident that it would in time prove highly remunerative, benefiting alike the Chinese and this Colony.
The attack on the S.S. "Sainan" has, however, seriously affected the business of the new line and has unquestionably checked its prosperity. Under these circumstances, this Committee considers the owners are entitled to compensation and that the amount asked for, namely $150,000, is not excessive.
From many years' experience of China, we hold the opinion, which has in the past been repeatedly expressed by our predecessors, that the high Provincial Authorities are quite competent to maintain order in the provinces of the Two Kwangs should they seriously desire to do so.
If, through their supineness or tacit approval, they allow attacks to be made on British property or British subjects who by Treaty are entitled to protection, we are strongly of opinion that it is the officials who should be held directly responsible for the mischief caused and that the cutting off of a few heads and the payment of a small indemnity are not of themselves sufficient punishment for the outrage.
The sum asked by the owners of the steamer for consequential damages is not so much required as a money payment for loss sustained, as to demonstrate to the high Chinese officials that full reparation must be made for the slight thus put upon the British Flag.