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Brew $609/13.

Shanghai; goods sent from America to the Eastern market will be transhipped in Manila, where already every endeavour is

made to divert business from this Colony; produce from

China, normally coming to this port, will be handled in

Japan.

4.

I may instance particularly the Yunnan tin trade, and I may refer in this connection to Sir Henry

5609/13. May's Despatch No. 20 of the 17th. January, 1913, and to

recent telegraphic correspondence on the subject of tin control. The war restrictions have done much to loosen the hold which Hongkong has upon this important business, and

the Chinese merchants who handle it, made more anɑ more impatient of the difficulties put in their way, will not readily accept a further three year period of hampering

conditions.

5.

It is obvious that restriction upon export from Hongkong will not benefit the Empire, as the goods which it is desired to control can so easily pass round the Colony. It would seem sufficient, as far as Hong- -kong is concerned, that goods subject to control, which arrive from other parts of the Empire, should be accompani - -ed by documents showing destination and the restrictions imposed. Hongkong's part should be confined to seeing that the restrictions are given effect to; the ultimate control remaining in the hands of the country of origin.

6.

In short Hongkong is probably the only important Crow Colony in the Empire in which the problema dealt with by the Committee do not arise, and I would, therefore request that all hampering conditions which have been imposed for war purposes upon the freedom of this port

may

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