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extremely small; (b) that if applied to all British subjects the number might be increased by perhaps 100 men mainly of Portuguese race, but that very considerable separation allowances would have to be made to them since they are all breadwinners supporting either wives and families of their own or if unmarried their parents and other relations; and (c) that the places of Portuguese clerks in commercial firms would have to be filled by Chinese, a course objectionable to many employers on account of the danger of the leakage not only of trade secrets but in the case of shipping firms of information useful to the enemy, I added that in these circumstances I held the strong opinion that compulsion should be for local service in defence of the Colony, but I pointed out that unless the Hongkong Volunteer Carps and Hongkong Volunteer Reserve were availed of by the Military Authorities to a degree which would oblige those authorities to notify me that the services of the whole of the Hongkong Volunteer Corps and Hongkong Volunteer Reserve were indispensable, I could not recommend to you that the necessary legislation, for the establishment of such a board as is referred to, and for the grmt of certificates by me of the nature desired, should be introduced.

5.

The gentlemen present concurred in the opinioni expressed by me and asked me to lay the matter before you and to obtain your sanction for introducing legislation for compulsory military service for the defence of the Colony. They added that the release of the members belonging to the commercial community of the Hongkong Volunteer Corps and Hongkong Volunteer Reserve for such further duties as may be required of them either now or in the event of more urgent contingencies, would have their hearty co-operation and assistance. Finally they begged that action might be taken to give effect to these sugestions at the earliest possible moment in order that the present feeling of dissatisfaction and unrest might be removed. I was asked to tele- -graph to you on the subject but I pointed out the difficulty of placing you in possession of the facts within the compass of a

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