from foreign-flag vessels, direct inland trade to non-open
places will be permissible only to Chinose-flag vessels; but
it should be clearly understood that without some such
Agreement as the one now under discussion, even Chinese-
flag vessels, coming from Hongkong, would be debarred from
such privileged trade. Seeing that the Chinese Coastal-
trade is in necessaries of life and industry, it follows
that any impediment would be mrious. And while no reason-
able person can properly question China's right to protect
and encourage her own shipping, it must be admitted that
for years to come the supply of purely Chinese-omed v98-
sele will not equal the demand, and for this reason
transfer of flag on the part of the foreign Companion
saans to me to be inevitable.
And if such a course would
be likely to prove profitable in Ching, it would doubtless
be equally advantageous to foreign intereata in Hongkong.
Furthermore, in regard to Chinese produce from a chinose
Treaty-port transhipped in Hongkong on toute to anothe
Treaty-port, I am now in a position to extend this pre-
visional concession to the extent of permitting such goods
to be transhipped in K ̧ngkong inte junks er railway trains
without farfeiture of status. This would prove a vary
considerable stimulus to junk traffic to and fres Hong-
kong as it would enable me to make arrangements by which
Chinese goods transhipped at lengkong and conrayed thance
by junk shall not, as now, come under the now Eational
import Tariff.
I trust that Your Exosilenay will permit me to
hope that the Chinese Government's attitude in commeation
with Article V., as described above, will not close the
doar to further discussion? In the general interests of
the Colony and of China.
especially South China - it
seems to me that a ravision of the existing Maritime Custome
system