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now prepared that the Commissioner of Chinese Customs in Hong Kong should continue to be British and should be a person acceptable to the Hong Kong Government. Mr. Haze saw this point and concurred, so far as he was personally concerned.

5. I next pointed out that, during the recent negotiations between Sir Miles Lampson and Mr. C.T. Wang at Nanking for the preparation of a new Anglo- Chinese commercial treaty, the Chinese Government had taken up the position that in such new treaty our present privileges of trading in British ships in Chinese inland waters and along the Chinese coast

must be abolished. I pointed out that it was

essential from the Hong Kong point of view that Hong Kong should be definitely regarded by the Chinese as foreign territory, and that, therefore, ships should be allowed to trade from Hong Kong to Canton up the Pearl River, in the same manner as (say) French ships now trade up the Thames to London, and further that all

ships must be allowed, as at present, to trade from

Hong Kong up and down the China coast, calling, for

example, at Swatow, Foochow, etc., on the way to Shanghai. Mr. Maze agreed that this also was a reasonable stipulation, but he said that it would be necessary for him to make representations in person both on this point and also on the previous point, which I had raised, to lir. T.V. Soong and to other

Chinese authorities. It would be useless to endeavour

to deal with such questions by telegram or despatch

from Hong Kong. He wished, however, very much to open

the negotiations now and carry them as far as possible

during

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