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Government, and there is every desire on the part of your Lordship to prevent, so far as is consistent with the preservation of recognised rights, Hong Kong being utilised in any way for the purpose of affording undue facilities to the Chinese in carrying on the war.

We have, &c.

(Signed)

The Right Hon. the Earl of Granville, K.G.,

HENRY JAMES. FARRER HERSCHELL. J. PARKER DEANE.

21617/92.

&c.

&c.

&c.

No. 40B.

(Hong KoNG.)

MY LORD,

LAW OFFICERS to FOREIGN OFFICE.

We were honoured with your Lordship's commands signified in Mr. Currie's

Royal Courts of Justice, April 16, 1885. letter of the 9th instant, stating that, with reference to our report of the 2nd instant on the subject of the export of arms from Hong Kong, he had the honour, by direction of your Lordship, to acquaint us that a draft reply to M. Waddington's note of the 18th ultimo was prepared in accordance with the suggestions contained in that report.

That the draft had been submitted to the Lord Chancellor, and that Mr. Currie was to enclose his Lordship's remarks thereon, and to request that we would again take the subject into our consideration, and favour your Lordship with our opinion as to any alterations which we might think desirable to make in the draft reply, and with any general observations which we might have to offer on the case.

In obedience to your Lordship's commands we have the honour to

Report-

That we agree with the observation of the Lord Chancellor that the question involved depends upon considerations of policy rather than of law.

In writing our opinion of the 2nd instant we were influenced by the views which we gathered were entertained and expressed by several members of the Cabinet. when we met your Lordship and others in Mr. Gladstone's room in the House of Commons some three weeks ago, and we fortified those views by our own.

one upon

But we feel that the question of policy, apart from legal considerations, which we are scarcely competent to offer an independent opinion which would be of any real value if weighed against that expressed by the Lord Chancellor, and we suggest that the determination of the course which will be most advantageous to the commercial interests of England, consistently with the maintenance of friendly rela- tions with the belligerent Powers, is eminently for the members of the Cabinet.

We, however, think it right to point out that we believe the question of the exercise of the power to prohibit export of arms from this country under the provisions of the Customs Act was considered during the French and German War, and that this country then contended, in answer to the application that such power should be exer- cised, that the restriction should only be imposed when, in our own interests, we desired to retain the arms in this country, and not because we wished to prevent their reaching the belligerent State.

It must also be borne in mind that the restrictive order against any exportation, if now given without warning, may impose grave commercial loss upon those who have been engaged in a trade hitherto of a perfectly legitimate character.

We have, &c. (Signed) HENRY JAMES.

The Right Hon. the Earl Granville, K.G.,

&c.

&c.

&c.

0 70451,-36.

25.-11/92.

FARRER HERSCHELL.

IN

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C.O.885

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