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[This Document is the Property of Her Britannic Majesty's Government.]

CHINA AND JAPAN,

CONFIDENTIAL.

948

No. 1.

420

[November 28.]

SECTION 2.

C.O.

21946 1

(No. 289.) My Lord,

Sir E. Satow to the Marquess of Salisbury.--(Received November 28.)

Tokió, October 23, 1895. WITH reference to your Lordship's despatch No. 63 of the 18th July, inclosing copy of a letter from the Board of Trade respecting the Commercial Treaty which is about to be negotiated between this country and China, and remarking that we are as yet without any information as to the modifications of the Treaty of Shimonoseki, consequent upon the retrocession by Japan of the Liao-tung Peninsula, I have the honour to report that, as far as I can learn, the draft prepared by the Japanese Govern- ment is based upon the British Treaty with China, but that some new proposal has been introduced with regard to the li-kin duties.

I have some hopes that I may be able to obtain a copy of this draft.

The negotiations have not up to the present gone beyond the examination of the respective full powers, and Mr. Hayashi has been instructed not to make any difficulties on this point, ratification by the Emperor of China being considered of more practical importance than the grant of full powers on the European model to the Chinese Plenipotentiary, Li Hung-chang.

As your Lordship is aware, the conditions on which the peninsula is to be reacquired by China are limited to the payment of an extra indemnity of 30,000,000 taels, which the three Powers, it is understood, will urge China to pay, and a stipulation that this territory is not to be ceded to any third Power. No attempt will be made to obtain any further commercial or other advantages, the Powers having objected to this question being mixed up with that of the execution of the Treaty of Peace.

I have, &c.

(Signed)

ERNEST SATOW.

No. 2.

(No. 296.) My Lord,

Sir E. Satow to the Marquess of Salisbury.—{Received November 28.)

Tokió, October 26, 1895. WITH reference to my despatch No. 289 of the 23rd instant, I have the honour to forward a copy of the draft of the Treaty of Commerce and Navigation between Japan and China, as well as of a draft Tariff, which were yesterday furnished to me confidentially by the Acting Minister for Foreign Affairs.

A hasty examination seems to show that the most important Articles seem to be Articles VI, VII, X, XIII, XIV, XV, XVI, XVII, XVIII, XIX, XXI, XXXIII, and XXXV.

Article VI is an elaboration of paragraph 4 of Article VI of the Treaty of Peace. stipulating that Japanese subjects shall be free to engage in manufacturing industries in all the open cities, towns, and ports of China.

Article VII provides that Japanese vessels shall have the right to touch, for the purpose of landing and shipping passengers and merchandize, at all the ports, cities, and towns of China which are now, or may hereafter be, made ports of call. This is taken from the Chefoo Convention somewhat amplified.

Article X exempts all kinds of Japanese property, including ships, from Chinese

interference.

Article XIII, and Tariff annexed, contains reductions of duty in favour of certain Japanese articles of production, and certain exemptions from duty, the most important

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