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of opinion that in order to avoid leakage of cargo to enemy firms only two or three well-known Chinese firms could safely be in- cluded in that list. The necessity however of encouraging exports from the United Kingdom has resulted in a limited expansion of that list to include a few other Chinese firms who could show bona fide business relations with foreign countries in Europe or America. The limited number of such firms has, I think, prevented any con- siderable leakage to enemy firms, although one recent case which gas come to my knowledge proves that even the most respected Chinese firms can not be trusted to refuse the considerable bribes offered them to import for enemy firms, since the chances of detection are at best very small. It is obvious that the expansion of the White List to include the multitude of native firms which engage in legitimate business with Hongkong, the Straits Settle- ments, the Philippine Islands and the Dutch East Indies would re- ault within a short time in a complete resumption of enemy trade through this ready made host of nominees.
The difficulty might be met by the preparation of
a special White List of such Chinese firms, whose transactions would have to be limited to certain specified destinations and to embrace only certain classes of goods.
Your Excellency's Government I observe grant per- mission to export in some cases upon production of a bond by the exporter in Hongkong. The system is probably effective; but I have the honour to warn Your Excellency that the signature and seal of my Office on a Certificate of Importation granted by the Customs is only a proof of the landing of the goods and that the professed consignee is not a "fence" to my knowledge, British Shipping Companies can be trusted equally to deliver to no such persons, whether a bond is exacted from the exporter or not.
As regards export cargo for transhipment in your Colony, the China Navigation Company have been exacting from exporters here who are not on the White List a declaration which gives the details of the cargo, its marks, its value, its con-
signees
.0 OXO MOH