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

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questions in issue to arbitration was eminently reasonable, but I was informed in reply that the Chinese Government had decided that arbitration was not acceptable, and this reply I duly communicated to His Majesty's Secretary of State.

I am now in receipt of telegraphic instructions from Sir E. Grey to state to your Highness that His Majesty's Government have learned with great regret the refusal of the Chinese Government to submit the dispute with Portugal to arbitration. This refusal, which Sir E. Grey trusts is not irrevocable, places Great Britain in a position of much difficulty in view of treaty engagements with Portugal, under which His Majesty's Government are bound to protect Portuguese possessions from unprovoked attacks.

His Majesty's Government are ready and willing to support China whole- heartedly and effectively in any reasonable demands they may put forward for the prevention of smuggling from Macao and to ensure that Portuguese territory is not used to the prejudice of Chinese interests, but they cannot conceal from the Chinese Government that they will be compelled to intervene forcibly in favour of Portugal in the event of China resorting to any aggressive action after having refused arbitration. In order that the Chinese Government may be convinced that any such intervention would arise from the necessity of the ease and not from any desire to interfere, I am instructed to communicate to your Highness a copy of the text of the original treaty of the 23rd June, 1661, between Great Britain and Portugal. His Majesty's Secretary of State has always heard that Chiua sets a high value upon the honourable observance of engagements, and he hopes that an examination of the enclosed treaty will enable your Highness's Government to understand the delicate position of His Majesty's Government in this matter. He is most anxious that the obligations therein recorded, which cannot be disregarded, should not be allowed to lead to a misunderstanding between our two countries, and it was with the object of avoiding the possibility of such an unfortunate contingency that His Majesty's Government encouraged the proposal for arbitration. Ilis Majesty's Government feel that by refusing to entertain this proposal China not only places Great Britain in a position of difficulty, but also, in the circumstances, lays herself open to the charge of doubting the justice of her own case, and it is earnestly requested that the matter may be reconsidered by your Highness's Government, in the interests of peace and harmonious relations,

I avail, &c.

J. N. JORDAN.

AFFAIRS OF CHINA.

CONFIDENTIAL,

(2873]

No. 1.

3502

(January 31

SECT REGE 3 FEB 10,

Sir J. Jordan 10 Sir Edward Grey.-(Received January 25, 1910.)

(No. 497.) Sir,

Peking, December 31, 1909. IN continuation of my despatch No. 493 of the 29th instant, I have the honour to transmit to you herewith copy, in translation, of the reply which I have received from the Wai-wu Pu to my note of the 24th December, on the question of submitting to arbitration the difference between Portugal and China regarding the delimitation of Macao.

The Wai-wu Pu repeat the arguments which they employed in their note of the 30th November to the Portuguese chargé d'affaires in declining acceptance of his offer to have the matter decided by The Hague tribunal, and they theu go on to state that although there is a temporary suspension of negotiations, the main object of China and Portugal is still to coine to an arrangement by amicable discussion. The reference which was made in my note to the possibility of aggressive action on the part of China they regard as not justified by the facts, and they declare that the treaty of 1661 has no connection whatever with the question.

In conclusion, they request me to bring the contents of this communication to your knowledge, so that the matter may be carefully investigated and misunder- standing avoided.

The meaning of this last passage is not altogether clear, but it seems intended to convey the impression that the Wai-wu Pu consider that you have been misinformed on the subject of the Chinese intentions with regard to Macao. The question of arbitration is scarcely seriously dealt with in the note, which secks to divert attention to the fear of aggressive action as not being supported by the facts, and consequently not calling for the application of the treaty of 1661.

The language of his Excellency Na-t'ung at my interview of the 24th instant, as reported in my despatch No. 493, indicated the possibility of friendly mediation in some other form being acceptable to the Chinese Government, but the present note is silent upon that point. If any idea of the kind is still entertained, it is likely that it will be communicated direct to General Machado, who arrived on the 25th instant, and will visit the Wai-wu Pu shortly. General Machado himself, however, with whom I have had several interviews, is not very hopeful that the Chinese will accept arbitration, and thinks that they will prefer to prolong the present situation indefinitely,

I have, &c.

J. N. JORDAN.

Enclosure in No. 1.

Prince Ch'ing to Sir J. Jordan.

Your Excellency,

December 30, 1909.

I HAVE the honour to acknowledge the receipt of your Excellency's note to the effect that the Portuguese request to submit the question of the boundaries of Macao to arbitration was eminently reasonable, and that the British Government learnt with great regret of China's refusal to arbitrate, and pointed out that Great Britain had treaty engagements with Portugal which bound them to protect Poringnese possessions from unprovoked attacks. A copy of the Anglo-Portuguese treaty was enclosed for

examination.

In the negotiations between China and Portugal regarding boundary matters the main object sought by both countries is peace. The views of the Delimitation Commissioners being divergent, no decision was come to, and the Portuguese chargé d'affaires, M. Brederode, wrote proposing arbitration instead of negotiation. To this the Wai-wu Pu replied that China and Portugal had maintained amicable relations for hundreds of years; that the boundaries of Macao, being the affair of China and Portugal, and affecting the interests of the peoples of China and Portugal, could not be decided by third parties, and should throughout be arranged by friendly negotiation

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