MEMORANDUM.
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Between the 15th December 1908 and the 6th of January 1909 the question of the losses caused to Hong Kong by the opium policy of His Majesty's Government was con- sidered by the Cabinet. As a result of their delibera- tions a confidential despatch dated the 8th of January 1909 was sent to the Governor of the Colony (Sir F. Lugard) which reviewed the whole situation. patch contained the following passage:-
The des-
"His Majesty's Government recognise that as a resul t of giving effect to their policy the Colonial revenue must suffer a loss which it would be impossible for the local Government wholly to replace. The amount of that loss cannot be estimated until the conditions which will obtain after March 1910 are known with some degree of accuracy, but when the time arrives His Majesty's Govern- ment on their part will be prepared to ask Parliament to give a substantial contribution towards making good to the Colony the revenue which it is found to have lost as the direct result of measures adopted under their instructions".
A copy of this despatch was sent to the Treasury on the 8th of January 1909, in a letter which, after drawing attention to the passage above quoted, went on to say that "this undertaking has been given as the result of the deliberations of His Majesty's Ministers on the subject".
On the 5th of March the Treasury replied "My Lords note the assurance that has been given to the Colegial Government as to the grant of assistance from the Imperial
Exchequer
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