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of conciliation.
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Government, moreover, have since initiated a wiser policy
Furthermore, the completion of the Canton-
Kowloon Railway in 1911 resulted in the establishment of a
Chinese Customs' Examination and Duty-collecting Office at
the Kowloon terminus of the Railway. The principle, there-
fore, of the Chinese Customs functioning on British soil has
thus been definitely established what China now desires is
merely an extension of that principle! I understand that
the British Government have extended unprecedented facilities
to the United States Government in connection with the
enforcement of the Prohibition laws, and I trust, therefore,
that the Colonial Office will view with a sympathetic eye
China's efforts to protect her Revere from serious loss
owing to the organised smuggling which is of daily occurrence
between Hongkong (practically a free port) and China. I
further append a copy of certain recommendations which I
propose to lay before the Hongkong Authorities, etc., for
their consideration. And I ought to add that unless the
Hongkong Government concedes reasonable facilities and
permits us to shorten our line of defence by functioning
in British waters, China will unquestionably be put to
enormous expense in attempting to protect her fiscal inter-
ests in the new conditions now obtaining in South China.
I believe, furthermore, that an arrangement on the general
lines now proposed by me would further promote the friendly
relations happily now existing between China and Hongkong,
and this, in turn, would benefit British trade and advance
British interests generally.
I