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Chably ther effectiva "is Fxcellency said that there were methods of securing this connection between the two lines. Mr.

Cresson stated that the increased import duties had already

been agreed to and were now being paid, and he has since referred me to the Tariff (p. 91 Hongkong Directory.) Mr. Law was uncertain. Sir Henry May and Mr. Clementi latar showed by

reference to the Customs returns that the removal of the Stations to a greater distance had not resulted in any decrease in the revenue collected though it is assumed that the cost of collection is greater. Sir Henry Kay points out that the extended frontier to be watched at Beep Bay and Mirs Bay would

in any circumstances involve increased cost.

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Footnotes by the Governor,

Any basis of understanding arrived at must

of course be submitted to the Secretary of State before it la submitted to Peking. It should also be for a limited period

subject to renewal.

.B.

The Tariff referred to is not the increased

tariff which was only to be granted in return for the abolitior of Lekin, and currency reform, and for which China is still agitating. It was framed on August 29th. anterior to the Mach Treaty, article 8 of which refers to the increased tariff and is subject to approval of all Powers,

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