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COPY.
Enclosure 2.
Memorandum.
C.O
17018 RECP 424
TR19 MAY 13
His Britannic Majesty's Consul-General presents his compli-
-ments to the Tutu and would beg reference to his memorandum of
April 16 last on the subject of likin charges on goods carried by
the Canton Kowloon Railway. The comments thereon by the Treasury
Department in June last were duly received through the Bureau of
Foreign Affairs and transmitted to the Hongkong Government. The
latter consider these comments unsatisfactory and desire again to
renew their protest against a levy distinctly contrary to the terms
of the Working Agreement.
The arguments made use of by the Treasury Department display a
lack of knowledge of pre-existing conditions, and the analogies
cited by it do not apply in the case of this particular railway. In
order to make the position clear it will, therefore, not be out of
place to review the past history of Kowloon and Lappa. These two
stations were opened in 1886 and placed under the control of the
Maritime Customs for the purpose of carrying out the provisions of
the Agreement with regard to opium, and the prevention of smuggling
into and out of foreign waters. Opium apart, they did not dis-
-charge, in respect of trade with Hongkong and Macao, the functions
of the ordinary Customs house at a Treaty Port, nor did they
enforce the Treaty Tariff, but all trade by junk was placed under
their supervision and on it they collected dues according to the
supervision scale of the native Customhouses. To this day such is
the procedure at Lappa, and until the railway between Kowloon and
Canton was completed, was it the procedure at Kowloon. The re-
-presentatives of the late Imperial Government and that of Hong-
however -kong, having met to discuss a working arrangement in respect of
connected the joint interests with the railway, it was agreed upon that, in
consideration of an undertaking on the Chinese side not to
establish likin stations along the line, the British side would
consent to an imposition of the full Tariff duty on exports from
and imports into Hongkong. This mutual undertaking was embodied in Schedule D of the draft Working Agreement a document subsequently
submitted to Peking for ratification.
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