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13.- The point at issue has arisen out of the non-settlement of the Macao boundary Lestion, a question of some 40 years standing.
The present situation developed on the Chinese authorities requesting the Governor of Macao to stop work on the Harbour works now in progress, that these works are essential to the contamase of
The Portuguese contend Macao as a port, the Chinese that the works are encroaching on waters under diapute in the old boundary question and that they object to the work continuing
ntil the boundary question is finally settled. The Chinese threatened to use force, moving about 3,000 troops from Canton to the vicinity of the blony, but the danger of an attack was averted, temporarily at any rate, by the Governor giving instructions for the suspension of work. A conference between delegates from Magão and the Southern Government's Commissioner for Foreign Affairs resulted in a deadlock, and the maintenance of peace hangs on the Portugese not resuming work on the reclamation pending a satisfactory solution of the difficulty.
14.- I did not at first consider it necessary or desirable to send a ani.oat to Macao as such action might be construed by the Portugiese as sympathetic and by the Chinese as the reverse, and only tend to precipitate matters. "OORHEN" was, however, ordered to Castle Peak Bay, kept with steam at one hour's notice and finally ordered to laoso on the 25th January when I became aware through the Cons 1 General at Canton that Foreign Office was anxious for a ship to watch proceedings at lacas, and that a Consular Officer had already been sent there. A gunboat will be nad ntained at lagao while the present state of uncertainty and unrest contin:02.
(sd.) A..L. DUFF.
VICE-ADIRAL,
COMMANDER-IN-CHIEF, CHÍNA STATION.
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