CO537-(33-34) — Page 986

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Confidential.

Copy.

32

Canton,

7th December 1897

My dear Sir William,

I have written down part of a conversation I have had with the official who for all our purposes controls the Viceroy.

I should say that now is a good moment to ask for anything that may be required to complete the defences of Hong Kong. China has had her absolute impotence brought home to her and she is probably willing to make a virtue of necessity by granting as a favour what may be worsted from her at any time. Perhapa a feeler might be put out by asking for a site on the Chinese side of the Lyemoon Pass for the erection of a battery.

I expect we should have to give a pledge that the site should be used for military purposes only no mercantile establishments

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with the possibility of smuggling. I should be glad to see Hong Kong made impregnable during your Administration,

Yours very truly,

(sd) Fyron Frenan.

8.3

When talking yesterday with Wang-Toun-Shan, the Viceroy's Foreign Secretary and right hand man, he referred to the German occupation of Kisochou and expressed a fear that other Powers would follow suit. This brought him round to the extension of Pritish Kowloon and he told me that while unwilling to cede any territory, he thought the Viceroy would entertain favourably any proposal on the part of Great Britain to lease one or more sites for the erection of batteries.

He saw a great objection to giving away territory or selling it, for the French or other Powers would use this as a pretext for making similar demande.

As he put the forts would be the joint property of England and Chins, the site would belong to China and the armaments to England.

He explained that he was speaking quite unofficially and had not the authority of the Viceroy to make any sort of promise; but he thought the Viceroy would be quite willing to assist us by reporting favourably to Pekin if we put forward any proposals in the sense indicated.

The renewal of the order forbidding the exportation of arms and the facilities for extraditing criminals under the new

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