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1

405

I am to point out further in order to dispose

of any further possible source of misconception that the Memoran- -dum by Colonel Lewis which introduced the principle of nominal

rentals for "Reserves" dealt only with outstanding controversies,

and did not affect the application of the conditions laid down. by Mr. Chamberlain in the despatch quoted in so far as future arrangements should be concerned.

3.

His Excellency trusts that when this mis-

-conception has been removed you will concur with him that the procedure proposed is correct, but if you consider that the

valuation is too high, he will be glad to suggest to His Excellency

the General Officer Commanding that he should nominate a competent

officer to confer with the Colonial Valuer on the matter and should

any difference of opinion then exist, to nominate by mutual agres-

-ment an Arbitrator to settle the matter.

The Chief Engineer,

South China Command.

I am etc.,

(Sd.) F. H. May,

Colonial Secretary.

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