CO882-(3-4) — Page 78

PUBLIC RECORD OFFICE

Reference -

TTIC.O.

882

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PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH—NOT TO

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"blockade " of Hong Kong, and conveying the Earl of Carnarvon's desire that I should offer my observations thereon.

2. Sir Julian Pauncefote's very exhaustive memorandum leaves me little to say.

3. I would desire to preface iny remarks by a reference generally to my despatch dated 25th August, 1874 (printed papers, page 4), and expressing a hope that the Earl of Carnarvon will not conclude from my remarks that I am more disposed to raise than to remove the difficulties which surround the question submitted to me.

4. I feel bound to place all the difficulties which occur to me in the fore-ground, before I offer an opinion as to the remedies best calculated to modify or remove them.

5. I have ever thought, and still think, that the cause or causes for complaint against the action of the Chinese and Canton Governments have been greatly exaggerated, and complicated by inaccurate statements and unwise councillors.

6. The general tendency of the agitation has undoubtedly been encouraging to the smuggling and least creditable portion of the community, whose hopes of immunity from ali legal and equitable restraint have been raised by the discussion.

7. I shall comment on these papers on the assumption that Lord Carnarvon has mastered their contents, and thus avoid writing at any great length.

8. Mr. Hart's proposal is comprehensive and satisfactory from his point of view. He however, confines himself mainly, if not altogether, to the question of collecting the duties on opium, and Sir Julian Pauncefote leans to the belief that the settlement of that point would induce the Hoppo of Canton to give up the blockade.

9. I cannot share in this belief. It must be remembered that the import and export of opium forms a very small part of the trade of Hong Kong, and is in the hands of less than half-a-dozen firms; whereas the general trade in all other articles of commerce is shared by the whole community, Chinese and European. It is, I think, therefore highly improbable that the Hoppo would forego his legal and international right of search, as at present exercised and complained of, in consideration of Mr. Hart's proposal being complied with regarding the opium traffic alone.

10. Opium, in point of bulk, must ever form a very minute portion of any cargo, and chop" while the larger portion is how is the one to be shipped with a duty-paid pass or without any such passport?

11. Whatever be done, the same rules and procedure should and must apply to all cargo carried in the same junk or ship.

12. The adoption of a system for receiving duties on opium alone within the limits of our jurisdiction would, I think, undoubtedly prove what Sir Julian Pauncefote aptly terms the "thin wedge" menacing the independence of the Colony.

13. With regard to the collection of any Chinese revenue by English officials in British territory, I feel very confident that the Chinese Government and the Canton Hoppo would never accede to it. It would deprive the collection of the revenue of all the advantages which it at present possesses for Chinese officials-peculation.

14. In following the courses of Sir Julian Fauncefote's lucid and able memorandum, I now come to his suggestion regarding "the licensing and regulating the sale of prepared opium" in Hong Kong.

15. I have for a long time had the far from satisfactory system at present practised under my consideration; and, faulty as it confessedly is, I have been unable to devise a better.

16. If a direct duty were levied on the import of the raw material, instead of the indirect revenue now obtained by granting a monopoly to manufacturers, Hong Kong would Any quantity of opium be assailed by hordes of smugglers, as the Chinese coast is now. could be shipped from Singapore, and introduced to Hong Kong without the possibility of prevention. Our geographical peculiarities, and the genius of the people, would render protection impossible.

17. Our proximity to Macao must also be considered, and the danger of driving trade from Hong Kong (especially opium) to Macao must always be kept in view; indeed this is a danger which might be readily realised by any system of collecting dues or duties (whether Chinese or British) at Hong Kong.

18. Sir Julian Pauncefote remarks very truly that while the levy of direct duty on unprepared opium, and the establishment of boiling-houses by the Government, contains a correct principle, its application would be attended with much risk and expense, in addi- tion to other objections no less weighty.

19. I have the pleasure of the personal acquaintance of Mr. Hart, and I highly appreciate the ability and success with which he has discharged the trusts confided to him, but the knowledge of these facts cautions me against being led away by what I may, without offence, term the sentimental parts of his scheme.

20. I am glad that Mr. Hart's proposals have elicited the unfortunately just remarks

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of Sir Julian Pauncefote as to the unenviable reputation of Hong Kong in past times, and the opinion entertained by those in authority who came in contact with its Government.

21. My reading of the history of the Colony leads me to think that this evil reputa- tion resulted from the dissensions of public officers both within and without the Colony, and that the difficulty I am now troubling Lord Carnarvon to adjust might long since have been reasonably settled, or altogether avoided, if harmony and singleness of purpose had been more thought of

22. These drawbacks no longer exist, and the very few fault-finders now in the Colony would be little heeded better known.

23. Having, I fear, dwelt at too great length on the difficulties of the question, and the objections to Mr. Hart's proposal, I shall offer my suggestion for its settlement in a shorter compass.

24. It is impossible to expect the Chinese Government to forego its legal and inter- national rights in protecting its revenue, but on the other hand British subjects and Chinese dwelling and trading under our flag have a right to know what the legal revenue dues are: where and to whom they are to be paid; and that they should have some easy and simple redress if cheated or squeezed.

25. If these points are firmly insisted upon and conceeded by the Chinese Govern- ment and Canton Hoppo, and a joint Board appointed to investigate all alleged illegal seizures (vide paragraphs 21, 22, of my despatch, 25th August, 1874, p. 4 printed papers) I believe it would satisfy the ends of justice and all reasonable men, and that the agitation would die out.

26. I may here remark that I have repeatedly applied for a copy of the tariff of dues levied or leviable by the blockaders, and could never obtain one. The reason is obvious. The exaction of legal dues only would not justify the maintenance of an extensive block- ading squadron, and the blockade would be greatly relaxed or altogether cease. no longer pay.

&c,

Robert G. W. Herbert, Esq.

&c.

&c.

(No. 71.) Sir,

No. 4.

It would

I have, &c. (Signed)

A. E. KENNEDY.

The Earl of Carnarvon to the Officer Administering the Government.

Downing Street, August 9, 1875.

I HAVE the honour to acknowledge the receipt of your despatch No. 66 of the 9th of June last, in which you reported that, although no further complaint had been made against the proceedings of the Chinese Revenue steam cruizers since they have been placed under the Foreign Collectorate of Customs, the traders of Hong Kong are still harassed and molested by a class of armed vessels equipped by the farmers of the Chinese revenue, and you furnish the particulars of cases in which acts of violence and spoliation are alleged to have been committed by these vessels even in British waters, for which you had been unable to obtain any redress through the intervention of Her Majesty's Consul at Canton.

2. I have transmitted a copy of your despatch to the Earl of Derby, and I have invited his Lordship's co-operation and assistance in devising some means of relieving the Colony from the action of these vessels, and of inducing the Chinese Government to protect its legitimate revenue by better regulated and less vexatious measures.

3. With regard to the 5th paragraph of your despatch, unless you are prepared to show that the Chinese revenue steam cruizers are not public armed vessels of the Chinese Government, I am at a loss to perceive on what ground the privileges accorded by the law of nations to ships of war can be denied to them.

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4. In my despatch of the 22nd of March last,† I suggested the reconsideration, under existing circumstances, of the proposal originally made in 1869 for the appointment of a Chinese Consular Officer who should be entrusted with such powers in respect of the issue and collection of receipts for Chinese export and import duties as would substantially protect the Chinese Government against the contraband trade carried on by their own subjects with Hong Kong, and remove the grounds of complaint on which they justify the arbitrary and unusual system to which they at present resort.

5. The progress of steam and telegraphic communication between China and all parts of the world, the vast influx of foreigners, and the general increase of commercial intercourse during the last ten years, have materially altered the conditions under which

+ No. 8 of Command Paper [C. 1189], April 1875.

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* No. I. (574)