{
Fonclosure 4.
290
has not resulted in the Chinese Customs collecting less
revenue, although it has probably increased the cost of
collection. On the other hand the local Commissioner of
Customs has repeated a complaint made in former years that
smuggling, especially of Salt, Sulphur and Saltpetre, from
this Colony to China is of frequent occurrence, and that
there is much evasion of duty, particularly on Cattle and
Rice, over the land frontier of the New Territories. Mr.
Harris accordingly submitted for my consideration on the
14th. of last January the enclosed "Memorandum upon in-
-proved trade and revenue collection facilities" urging
that liberal and harmonious fiscal arrangem nts are
necessary in order that both Chine and this Colony may
derive full benefit from the Kowloon-Canton Railway and
that the future prosperity of Hongkong lies along the line
of co-operation with the expanding trade potentialities of
the Chinese Empire.
3.
Acting in this belief Mr. Harris
proposed 16 articles for consideration as the basis of a
Customs Agreement between this Colony and China: and for
my own assistance in considering these proposals I appoint-
-ed the gentlemen whose names are given in the annexed
schedule to be a Committee to discuss the matter with me.
The Committee met at Government House on the 15th. ultimo
and I attach the minutes of the meeting, which lasted for
several hours, and at which the 16 articles proposed by
Mr. Harris were discussed seriatim. Subsequently on the
18th. ultimo I had a meeting with Mr. Harris at Government
House, the Colonial Secretary being also present, and I
enclose some notes prepared by Sir Henry Hay of the conver-
then -sation which/took place.
4.
As the result of these prolonged
discussions and of many other meetings between the
Colonial Secretary, the Harbour Master, the Registrar-
-General
Anclosure 5. Penclosure 6.
Enclosure