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is merely transhipment trade. In other cases is a distributing

Rea. 5 AR[5] trade the stocks for which are kept in Hongkong. Amongst these

articles may be mentioned, copra, fabrics for clothing, food-

-stuffs, hides, hemp cordage, lead, and mineral oils and motor

spirit. In most cases the current of this trade is one which flowe into China and Japan and the Philippine Islands through Hongkong and is not an outward current to Europe or America. An example of this is the large trade in mineral oils and motor spirit carried

on from Hongkong as a centre by the Asiatic Petroleum Company, the Standard Oil Company, the Vacuum Oil Company, and the Texas

Oil Company. In some cases the trade is largely in articles of

British manufacture such as that in Manchester and Bradford goods.

The Trade in such articles as hides and lead has been closely

scrutinised.

The stoppage of all this business would cause

grave dislocation of the local market, great inconvenience in

neighbouring countries, and serious interference with neutral

trade, and, so far as I can judge, does not seem to be demanded

by Imperial interests. I would therefore ask that I may be allowed

to continue to exercise my discretion with regard to exportation to

destinations other than what I have termed "neutral ports in

Europe".

5. I would also be glad of instructions as to

how to deal with the case of raw silk. Shipments of this commodity

to Marseilles by the steamers of the Messageries Maritimes have

been allowed.

I have the honour to be,

Sir,

Your most obedient,

humble servant,

4may

Governor, &c..

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