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PUBLIC RECORD

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C.O.885

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in preserving the Convention if Great Britain should cease to be a Party to it, and M. Delatour, the French Delegate to the Commission, in the course of private conversation, expressed to me the hope that it would still survive for the other Parties, even if it were denounced by Great Britain. In that event, he said, the remaining Contracting States, which are all more or less Protectionist, would have to consider what to do to meet the altered circumstances, and one of the first steps might be to require from British exporters of sugared products certificates of origin proving that such goods did not contain sugar coming from any factory or refinery which used bounty-fed sugar. Such certificates might be very difficult to procure in the United Kingdom if bounty-fed sugar were once more admitted. This plan could apparently be carried out without infringing any most-favoured-nation stipu- lation. for if certificates of this description were required for sugared goods from every country, they would present no difficulties to the States which still remained Party to the Convention, and which consequently took precautions against the entry of bounty-fed sugar.

I believe that some British confectioners and makers of sugared goods antici- pate that if the Convention is denounced by Great Britain they would derive advantage from a consequent increase in the price of sugar for domestic consump tion in Germany, France, and other Contracting States, where the effect of the Convention has undoubtedly been to lower the price of sugar. They would then, they suppose, being able themselves to procure cheap sugar in England, be in a better position to compete for the supply of European markets with jam, preserves, and other sugared products, because, on the termination of the Convention, the cost of sugar for domestic consumption in Continental countries would rise, and make the home production of sugared goods more costly.

Such a hope is probably illusory, for it is not certain that if Great Britain denounces the Convention the other States will cease to adhere to it, and, if the Convention subsists for the other States, there is no apparent reason why the cost of sugar for domestic consumption in Continental countries should rise, because the surtax will remain at the present low figure for all of the then Contracting States, rendering impracticable the formation of any effective Trusts or cartels for the enhancement of the price of sugar for domestic consumption. Moreover, whether the Convention should survive or not after Great Britain had denounced it, there can be little doubt that steps such as those indicated by M. Delatour, coupled with increased Customs duties, might be adopted to check the importation of British sugared goods.

After the session of the Commission had closed, M. Capelle, the President, again expressed to me privately his anxiety that His Majesty's Government should not denounce the Convention on the 1st September next. He begged me to point out that the omission to give notice at that date was not really a very grave step, for it would only mean the prolongation of the Convention for one year more certain, since notice of termination could still be given one year later, or subse- quently on any 1st September. It was not as if failure to give notice on the 1st September next implied the retention of the Convention for another period of five

years.

In case, however, His Majesty's Government should not desire to renew the Convention as it stands, even for so short a period, I beg leave to refer again to what M. Capelle said to me at the last session of the Commission, as reported in my confidential despatch of the 16th May last.*

It is quite evident that there is a general feeling amongst the Parties to the Convention that an abrupt denunciation by Great Britain is undesirable, and that, if His Majesty's Government should finally decide not to remain bound by the Convention as it stands, some preliminary discussion would be welcomed.

Any overtures for an amicable arrangement would, no doubt, be regarded by the other Contracting States as giving evidence of a friendly desire to reconcile, if possible. British interests with those of other countries, and, even if the attempt should be unsuccessful, and an unconditional denunciation of the Convention on the 1st September next became necessary, the mere fact of such an attempt having been made might have a beneficial effect.

I have, &c..

H. G. BERGNE.

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No. 15.

HONG KONG,

THE ACTING GOVERNOR to THE SECRETARY OF STATE.

(No. 8.)

(Received February 7, 1907.)

[Answered by No. 17.]

MY LORD,

Government House, Hong Kong, January 8, 1907. I HAVE the honour to state that enquiries have been addressed to this Govern- ment by a local firm of sugar refiners regarding the probability of the continued adhesion of His Majesty's Government to the Brussels Sugar Convention of 1902.

2. The question is one of some importance to this Colony, and I shall be glad if I may be informed whether it is proposed to take any action under Article X. of the Convention during the current year.

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SIR,

I have, &c.,

F. H. MAY,

Officer Administering the Government.

No. 16.

BOARD OF TRADE to FOREIGN OFFICE. [Communiented by the Foreign Office, March 12, 1907.] [Answered by No. 20.]

Board of Trade, February 13, 1907. I AM directed by the Board of Trade to acknowledge the receipt of your letter of the 17th ultimo, forwarding copy of a Confidential despatch* from the British Delegate to the Permanent Sugar Commission with reference to the question of the denunciation of the Sugar Convention by His Majesty's Government, and inviting an expression of the Board's views on the matter in the light of the considerations mentioned in your letter and in Sir H. Bergne's despatch.

In reply, I am to ask you to be good enough to inform Sir E. Grey that the considerations referred to have for some time been fully in the mind of the Board of Trade, and that, in their opinion, they involve in some respects matters of general policy of a nature which can only be decided by the Government.

From a purely Departmental point of view, however, and apart from such questions of general policy, the Board are inclined to think that there might be considerable advantage in not refusing M. Capelle's informal invitation to negotiate before taking the extreme step of denouncing the Convention; but I am to add that, should any such negotiation be entered into, they consider that it should be a condi- tion sine qua non that this country should be completely released from the provisions of the penal clause of the Convention, so that the United Kingdom should be enabled to obtain supplies of sugar freely from any source.

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SIR,

No. 17. HONG KONG.

I am, &c.,

H. LLEWELLYN SMITH.

THE SECRETARY OF STATE to THE ACTING GOVERNOR. (No. 40.)

Downing Street, February 21, 1907.

I HAVE the honour to acknowledge the receipt of your despatch, No. 8, of the 8th ultimo, t on the subject of the Brussels Sugar Convention, and enquiring

• See No. 5.

• No. 14.

† No. 15.