98
-General of Customs to allow the matter to develop al ong
these lines, and to instruct the Kowloon Gommissioner,
wr. Osborne, to initiate discussions with the represen❤
tatives of the Government of the Colony.
3.
Although the atmosphere surrounding the ques-
tion had not been improved, either by a misleading as-
count of the Hongkong attitude published by the Kuo kin
News agency early in y, or certain leading articles of
a provocative nature in the "North China Daily News"
later in the month (see my despatch Number 767 of June
10th last), the Inspector-General of Customs finally
agreed to allow kr. üsborne to collaborate informally
with Mr. Lloyd in the endeavour to evolve a scheme accep
table to both parties, on the understanding that anythin
to which ar. úsborne might agree would not be held bind-
ing on Mr. Haze and that Mr. Osborne would be told at
the outset that China could never agree to the inland
water and privileged factory treatment previously demand
ed. I informed Sir William Peel of this decision, and
expressed/