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during his absence and he suggested that the introduction of an ordinance in the Colony would be construed as an act of bad faith on the part of the Hongkong Government. The Imperial Government, under whose orders the Hongkong Government had acted, was obviously the responsible party, and, if it desired to make certain of its position, it should do so by means of the Imperial legislation.

Mr. Fletcher heard nothing further until his return to the Colony on the 15th December, 1921, when he found that the Indemnity Bill had been read a first time. He re-opened negotiations with the owners, which finally ended in the proposal as to divi- sion of profits, which the Unofficial Members of the Legislative Council rejected. The Unofficial Members at the same time advised that the Indemnity Bill should be proceeded with.

It seemed to Mr. Fletcher that he could not usefully do anything more on behalf of the owners, and he reported to the Attorney General on the 27th July, 1922, that he had interviewed Mr. Williamson and Mr. Shenton and that "I took the attitude that the question of future action was now out of my hands and the correspondence should be between the Solicitors."

The Indemnity Ordinance became law on the 18th August, 1922.

25th July, 1923.

A. G. M. FLETCHER,

Colonial Secretary,

Ex-Chairman, Vital Requirements Committee, Shipping Control Committee.