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Sir Malcolm Delevingne proceeded to formulate a definite proposal that we should announce that Hong Kong will prohibit opium smoking as soon as the situation in Ohina has been re-established and the smuggling of opium on the present huge scale out of China into the Colony oeas€6; and that as regards Malaya here the abolition of opium smoking would involve the complete reorganisation of the Finances of the States and the protected States could not be forced to dispense with the opium revenue, the colony of the Straits Settlements would be instructed to prepare a scheme at once for the gradual elimination of the opium revenue from their budget, and a similar course recommended to the protected States,

The Home Secretary then fomulated the following definite proposals:-

(1

That we should sign the draft Agreement of the First Conference; (2. That we should communicate to Washington to represent the

impropriety of the American proposals regarding opium moking before the Second Conference;

(3, That we should make a public announcement on the lines just

suggested by Sir Malcolm Delevingne as to Hong Kong and Malayaj That the necessary instructions should be given to the Straits Settlements at once;

4.

5, That we should repeat our proposal for an impartial Commission

to visit the Far Eastern parts where opium smoking is permitted.

Mr. Waterlow objected to 2 He did not think the Americans would be prepared to withdraw their proposals and he expressed the opinion that if yu allow Americans to talk sufficiently they become more tractable.

Sir Gilbert Grindle strongly deprecated any such public statement in regard to the revenue considerations since the Malayan authorities had reported that raising these revere questions would have very serious

but Sir Malcolm effects on our relations with the Malay Rulerst Delevingne thought it was impossible to overlook these considerations and that a promise to eliminate them in the future would be preferable to a mere attempt to ignore them, It was left that these proposals should be seriously considored.

Sir Louis Kershaw referring to Mr. Waterlow's suggestion that the Americans should be allowed to talk, asked whether we could possibly give way on the question of competence, which he regarded as a vital question of principle, Mr. Waterlow replied that in view of a letter which had just been sent by Mr. Chamberlain to Bishop Brent, he understood Mr. Chamberlain's view to be that we ought not to take a stand merely on the question of competence.

asked whether Mr. Waterlow The Home Secretary

He then asked whether had a copy of this letter but was told he had not. this letter in fact tied the hands of the goverment on this important point, but air, Waterlow did not think that it did so and Sir Louis Kewshaw, who had seen the draft, agreed.

Sir Gilbert Grindle agreed that we ought not to give way on the question of competence but suggested that we might express our willingness for the matter to be referred back to the convening

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