C.--I suppose there will be no necessity now to obtain the areca-nuts as ordered in the Instructions from Colombo of March 23, 1695, but that these nuts are included among the articles open to free trade, so that they may be now brought from Jaffnapatam through the Wanni to Tondy, Madura, and Coromandel, as well as to other places in Ceylon, provided the payment of the usual Customs duty of the Alphandigo, [69] which is 7 1/2 per cent. for export, and that it may also be freely transported through the Passes on the borders of the Wanni, and that no Customs duty is to be paid except when it is sent by sea. I understand that the same will be the rule for cotton, pepper, &c., brought from the Wanni to be sent by sea. This will greatly increase the Alphandigo, so that the conditions for the farming of these must be altered for the future accordingly. If the Customs duty were also charged at the Passes, the farming out of these would still increase, but I do not think that it would benefit the Company very much, because there are many opportunities for smuggling beyond these three Passes, and the expenditure of keeping guards would be far too great. The duty being recovered as Alphandigo, there is no chance of smuggling, as the vessels have to be provided with proper passports. All vessels from Jaffnapatam are inspected at the Waterfort, Hammenhiel and at the redoubt Point Pedro. D.--In my opinion the concession of free trade will necessitate the remission of the duty on the Jaffnapatam native and foreign cloths, because otherwise Jaffnapatam would be too heavily taxed compared with other places, as the duty is 20 and 25 per cent. I think both the cloths made here and those imported from outside ought to be taxed through the Alphandigo of 7 1/2 per cent. This would still more increase the duty, and this must be borne in mind when these revenues are farmed out next December, if His Excellency the Governor and the Council approve of my advice. The duty of 25 per cent. is far too high, and it must be remembered that this was a duty imposed with a view to prevent the weaving of cloths and to secure the monopoly of the trade to the Company, and not in order to make a revenue out of it. This project did not prove a success; but I will not enter into details about it, as these may be found in the questions submitted by me to the Council of Ceylon on January 22, 1695, and I have also mentioned them in this Memoir under the heading of Rents.