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I think the above quotations go far to show that His Majesty's Consuls at Cauton have not acted under the assumption that they were entitled to register a British vessel" in the sense of giving it that national character that alone entitles it to fly the British flag, though I confess that the phrase, Certificate of Registry, has been loosely used for "Certificate of Ownership" by both my predecessors and myself. I am unable to trace who was responsible for the statement in the printed form inclosed in my despatch No. 12 of the 5th February last, that it is "issued in terms of the Maritime Order in Council, 1874." It will be observed that in the proposed amended form I had altered this to "issued under the sanction of His Britannic Majesty's Minister, dated Peking, 3rd February, 1886."

I have the honour to inclose copy of my remarks on Article 4, and the Articles under the heading of Inland Waters Steam Navigation of the draft Merchant Shipping Regulations, 1907.

With Sir Edward Grey's opinion that the whole matter is in a very unsatisfactory condition I most fully agree. When the Inland Waters Steam Navigation Regula- tions were negotiated, it was believed that British trade with the interior of China would greatly benefit. As a matter of fact the British launches running under them in these waterways are almost entirely engaged in the Chinese passenger traffic, are entirely manned and officered by Chinese, and are probably to a very great extent owned by Chinese under British names. Under present conditions Consuls have no adequate control over the launches, and it was to obtain such most necessary control that I asked for sanction of the local Regulations which have been disallowed. Whatever His Majesty's Government may decide on this subject, I venture to submit that very considerable discretion should be left in the hands of His Majesty's Consuls to deal with the constantly varying local conditions.

As regards the flying of the red ensign, which is now declared illegal, I request instructions as to whether I am to take immediate steps to stop it. To do so will, undoubtedly in the eyes of the Chinese authorities, be equivalent to a withdrawal of British protection.

I am sending copy of this despatch to Sir Havilland de Sausmarez.

I have, &c.

(Signed)

Inclosure 3 in No. 1.

R. W. MANSFIELD.

Remarks by Consul-General Mansfield respecting Article 4 and Articles under Heading of Inland Waters Steam Navigation.

PART II-Registry.

Regulation 4-British launches plying under the Inland Waters Steam Navigation Rules, while coming under the denomination "ships" (see definition), are furnished with none of the documents herein mentioned as essential to navigation in ChinesO. waters.

PART VI-Inland Waters Steam Navigation.

Regulation 42 (3) (c).-In shallow waters such as those of the Canton Delta, an accident is hardly conceivable in which the launch could not be beached. Many of the launches are too small to carry the life-saving apparatus herein described, and in the larger ones the passenger carrying capacity would be greatly diminished by it.

Regulation 42 (3) (h). This limitation of the number of passengers carried (it must be remembered that no cargo practically is carried) would in combination with the enforcement of the preceding clause effectually drive all launches carrying the British flag out of the trade. Annexed is a copy of the Special Rules in force here for the guidance of the Customs Surveyor who, as reported by me, has been also appointed Inspector of hulls and machinery of British launches: also the Inspection and Survey Certificate issued by me on his report. As regards the number of passengers, I also inclose a copy of the Customs rules for determining the number of passengers that may be carried by steam launches and passenger boats in tow of launches, The space therein allowed seems amply sufficient when it is taken into consideration that the passengers are without exception Chinese, and the distances travelled are generally

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very short---10, 15 or 20 miles probably on an average. Longer journeys are nearly always made, on the West River at any rate, in well found steamers plying between (Canton and Wuehow. It seems highly desirable that the conditions ruling for Chinese

and British launches should, as far as possible, be identical.

Regulations 45, 48, 49.--At so great a distance from Peking the functions attri- buted to the Minister in these Regulations would in practice be very difficult to exercise. The Consul should have power to act provisionally, and from his action there is, I take it, always power to appeal; and in Regulation No. 48 powers should be given to cancel a certificate, temporarily or definitely, where repeated infractions of rules as to overcrowding, care of machinery, &c., occur.

Inclosure 4 in No. 1.

Sir II. de Sausmares to Sir J. Jordan.

(No. 13.) Sir,

Supreme Court, Shanghae, October 1, 1907. A DELAY has occurred in answering your despatch of the 2nd July as to the Canton Launch Regulations in consequence of Mr. Mansfield's opinion that "if it is desired to put an immediate and effective stop to British launches now plying under the regulations, it is only necessary to lay down that they must conform to the provisions of the Merchant Shipping Act."

Since then I have had the opportunity of a conversation with you, and I have now the honour to furnish you with my comments on the situation; they, I think, will require consideration before the rules referred to in Sir E. Grey's despatch of the 15th May last can be drafted.

The question appears to be one of importance as the principle involved affects not only the Canton launches but the majority of launches plying on the inland waters of China under the British flag.

I entirely agree that, as the law stands, the right to fly the rod ensign depends entirely on the provisions of the Merchant Shipping Act, and that the necessity of registration thereunder follows. I do not, however, understand that it is obligatory that Shanghae should be the port of registry, though it appears so in Sir E. Grey's despatch. Registration in any port of registry, eg., Hong Kong, would suffice.

It would appear from Mr. Mansfield's despatch that the red ensign is now flown by launches, which would in many cases probably fail to qualify for registration. Holding the strong views that I do as to the necessity of protecting our flag where properly flown on British shipping, especially in Chinese waters, I think that it behoves us carefully to scrutinize claims to fly that flag. Indeed I have, on one or two occasions where an abuse of this right has been brought to my notice in Court, directed the matter to be reported to the registrar of shipping with the result that more than one ship has been removed from the registry. It is clear that when undertaking the responsibility of protecting a ship as British, we should insist on its being bond fide a British ship.

There is, however, a further most important point of view from which the question must be regarded, that of British trade in the inland waters.

If it were purely a question of a few passenger launches the matter would be of small importance, but I understand it to be far otherwise, and it is therefore necessary to devise some plan which will conform to the law and which will not make registration too onerous.

The procedure for registration is contained in sections 4-13 of the Merchant Shipping Act. There is nothing therein which cannot be done by an agent in Shanghae save the surveying of the ship. The survey must be by a surveyor who may be appointed by His Majesty's Minister under Article 13 of "The China and Corca (Shipping Registry) Order in Council, 1904.” It would therefore be competent for you to appoint a sufficient number of surveyors at different ports to obviate any hardship which a survey in Shanghae would involve. Further, if the retention of an agent's services in Shanghae should be too onerous, I see no reason why you should not issue instructions under Article 17 (1) to Consular officers in the out-ports which would direct them to take the necessary papers and transmit them to the registrar of shipping in Shanghae.

There are, however, provisions in the Merchant Shipping Act which will probably be onerous, particularly in the engagement and discharge of native crews,

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