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they believe, be readily effected without the maintenance of any Customs stations or Collectorate within the Colony. The chief article which requires special protection for the Chinese Government is opium, and the Committee are of opinion that, in connection with this import, more could perhaps be done than is at present by the Hong Kong Government in safeguarding the Chinese revenue. The present system of licensing an opium farmer leaves much to be desired, and the Committee would suggest that the Government should give its consideration to the formulation of some other scheme, which will not only provide an effective check on the import of the drug, but will trace it also to consumption or exportation.

While, however, the Committee are prepared to sanction some sacrifice in revenue in order to secure in perpetuity the freedom of the port, they would point out that in addition to, and apart from, the objections already named to the proposals of the Chinese Imperial Maritime Customs, the damage to British prestige in China, and in the Far East generally, by the practical conversion of this Colony into a Chinese treaty port would be most serious, and in the eyes of the Cantonese, at any rate, would reduce Hong Kong into a dependency of the China Empire. Rather than accept an arrangement so humiliating, so derogatory to Great Briain, and so detrimental to the Colony's best interests, the Committee would be disposed to recommend the abrogation of the Convention and a reversion to the previous conditions.

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complained of would be put an end to. In negotiating such an arrangement we might be in a position to prevent the levy of heavier duties on the trade of the Colony, and the arrangement would involve the publication of a definite tariff, if that has not already been done. In making this suggestion I assume that the sum to be paid for the collection of the duties would be sufficient to cover the expense.

5. I observe that under the agreement the existing landing place near Kowloon shall be reserved for the convenience of Chinese men of war and other Chinese vessels. The terms of this section would seem to indicate that this landing place is outside the boundaries of Kowloon City and within British territory. The exact limite of the landing place will have to be very clearly defined.

Myrtle Grove, Youghal, 15 September, 1898.

21255.

H. A. BLAKE.

PUBLIC RECORD OFFICE

Reference:→→

TEC.O. 882

5

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH—NOT TO

The Hon. T. Sercombe Smith,

21194.

Acting-Colonial Secretary.

No. 27.

I have, &c.,

R. CHATTERTON WILCOX,

Secretary.

MEMORANDUM BY SIR H. BLAKE.

(Received September 19, 1898.)

It would

appear from Sir R. Hart's demands, as regards the Customs facilities, and from the proclamation issued by the Viceroy, that the Chinese Government regard the lease of Kowloon rather as an extension of Chinese jurisdiction than an enlargement of British territory. I have no personal knowledge of the conditions existing in Hong Kong, but I have had experience in Newfoundland of the great mischief arising from the persistent assertion of rights assumed to have been derived under treaty, and the exercise in a British Colony of powers that go far beyond the terms of the treaty with France as interpreted in the early part of the century.

2. From the memorandum of Mr. Justice Russell, who in 1882 went very fully into the question, it seem clear that the Chinese Government, or the Chinese officials dealing with the Customs duties, took advantage of the facilities for preventing smuggling from Hong Kong, and for the collection of revenue, by levying heavier duties upon exports and imports to and from that port than the duties levied on Chinese trade with other ports, such as Macao and the Philippines, thereby placing the trade of Hong Kong at a disadvantage. No doubt the position of Hong Kong as regards Chinese trade is peculiar, and, while it is primarily the duty of every State to protect its own revenue, we are by our assurances morally bound to assist, so far as we fairly can go, in the prevention of smuggling. But I do not see that we are called upon to permit the illegal collection of Chinese Customs duty by Chinese officials, and the equally illegal action of Chinese Government vessels in Colonial waters to prevent either Chinese or British subjects in Hong Kong from freely leaving that port with such cargo as their vessels may legally carry.

3. The preamble of the Convention recites that it is necessary to enlarge British territory. The jurisdiction within the leased territory is in the hands of the British Government, through the Colonial officials, and the grant to Chinese authorities of the right to exercise any jurisdiction whatever within the Colony, or to maintain Chinese custom houses, will inevitably lead to friction and trouble in the future.

4. If we are to effectually assist in the protection of the Chinese revenue, it is a question whether it might not be more convenient to undertake the collection of those duties on terms to be agreed upon-either a fixed sum, or a percentage upon the duties collected. Such collection would be fairly carried out, and the injustice and oppression

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No. 28.

MEMORANDUM by SIR Q. C. SMITH. (Received September 20, 1898.)

[Acknowledged by No. 35.]

THE Government of Hong Kong is, in my opinion, quite justified in objecting entirely to any such proposals sa have been put forward by Sir Robert Hart.

When it is remembered that the Chinese Customs is divided for all practical purposes into two distinct parts, it is difficult to understand how those proposals could have been suggested by the Inspector General, who must know that those affecting the purely Chinese service could not possibly be adopted by Her Majesty's Government. There is the "Imperial Maritime Customs" Service with responsibilities as regarde foreign vessela, no matter whether owned by foreigners or Chinese, and there is the Chinese Customs Service with responsibilities as regards native craft. The Inspector-General is at the head of the former, while over the latter are Chinese officials, either Imperial, like the Hoppo at Canton, or local and provincial. I mention this because up to the present time, since the Russell Agreement of 1886, there has been in Hong Kong a branch or agency of the Imperial Maritime Customs, but there has never been allowed any office or agency of the purely Chinese Customs. Sir R. Hart now proposes, not simply the officia! recognition of the establishment of the office of the Foreign Inspectorate (which division of the Chinese Customs was alone mentioned in the Russell Agreement) with increased facilities for carrying on its duties, but he asks for the privilege of setting up "the Chinese Customs" at Hong Kong, which would include both the Foreign and Native divisions, and giving to them the right to collect duty and likin on opium and "similarly dues and duties on general cargo shipped on any native vessel to or from Chins."

It must, I hope, be wholly unnecessary even to discuss such a proposal. It is not stated that "the Chinese Customs" are even to be under the Foreign Inspectorate. But whether the native officials were or were not to be so placed it would mean, apart from other and graver considerations, the establishing in the "Colony of a number of petty officials belonging to the most corrupt service, probably, in the whole world.

I concur, therefore, in the recommendations of the Government of Hong Kong as to the proposals Nos. 1, 2 and 3 in Sir R. Hart's letter, and I sympathise with the view that the status of the Commissioner of Customs a member of the Foreign Inspectorate— should not be officially recognised as that of a Chinese official. I place, however, no great weight on this point, because if the Commissioner of Customs is to be allowed at all to carry on the duties attached to his appointment within the jurisdiction of the Colony, it seems to me immaterial whether he is officially recognised or not.

Regarding the 3rd proposal, it should not be overlooked that Sir R. Hart uses the words"

may continue to exercise functions" with reference to the customs cruisers. General Black does not explain what the existing practice is or what privilege such vessels at present enjoy. Presumably only vessels belonging to the Foreign Inspectorate have any privileges of any kind, and such privileges relate solely to opium. Were any privileges granted, for example, to the Hoppo's cruisers, the iniquities committed in the past would at once revive.

I need not add anything about proposals Nos. 4, 5 and 6. They are sufficiently dealt with in the Administrator's despatch, while as regards No. 7, I will only mention

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