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well as the Green Island Company to obtain stone from Haiphong rather than from the "orth River but he insisted that it was a matter for arrangement between the contractors who wanted too much profit out of the trade and the Chinese concerned.

His attitude convinced me wint tue Canton Government were determined on differential treatment against the Green Island Company. A letter confirming what he had said (copy and translation enclosed) awaited we on my return to Shameen. He had already informed me officially that no limestone was to be obtained on the West kiver near Shiu lling, whence the Green Island Company have obtained stone for several years. Two out of the three districts which supply the Company with stone are therefore still closed to mort. No report has yet been received from the Ying Tak Bontøractors,

On the 21st. instant at my request, Hr. Cilman sent his Tai Tong contractor, Liu Shou-peng, to see me. Mr. Liu stated that he presented his petition to the Samshui lagistrate, Chu Feng, on the 8th. instant: that the Laistrate ad infor..ed him that the dollar tax was levied at the request of the gentry: that he was in constant comunica- -tion with the Canton Autnorities, and that they were aware of the pro- -posed imposition and offered no objection to it. The L is trate also informed Liu that he had accompanied Lung Tutu from kuangi and had received his present appointment fra him. On enquiry I found that the expenses of this contractor were roughly as follows:-

Labour in quarrying..

carriage to junk...

Cents

.40 per ton.

.10

likin at Lu Pao....

.27

Customs duty at Canton.

..09

Freight from quarry to Green Island

...1.00

Discharging expaises

.20

82.06 per ton.

For some of the quarries they paid a rent and there were also office expenses but as they sold at 82.30 per ton in Hongkong currency (the:- -selves paying their various items of expenditure in subsidiary coin) there remained a good profit. From more remote quarries such as those

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