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of the Shanghai organisation. It was therefore thought well to re- -consider the whole matter thoroughly. Searches were made at Mr. Munton's office, and Mr. Munton and his solicitors had two inter- -views with the Attorney-General on the matter. The two agreements referred to above were discovered or produced in the course of the searches and as a result of one of the interviews with the Attorney-
-General Mr. Manton wrote to the Attorney-General a letter dated
the 30th. March, 1916, of which I enclose a copy. This letter pur-
-ports to give the terms of the agreement with the Shanghai Manager of the Siemens China Co. in January, 1915, and also a copy of a
letter which was written by Mr. Munton to the Shanghai Office in
July, 1915.
9.
The consideration expressed in the agreement
between the Siemens China Co. and Mr. Munton appeared to be so
inadequate that it was thought that there might be some secret agrae.
-ment or understanding in existence, and that the agreement was purposely worded in such a way as not to exclude hereafter evidence
of such collateral agreement. The solicitors, however, who drew up the agreement have stated that they had no instructions to that
effect, and I am fully prepared to accept that statement. Mr. Munton states that he has not bound himself in any way except as
stated in his letter of the 30th. March, 1916, to the Attorney-
-General. The main point about the agreement in January, 1915, is that Mr. Hunton promised to give the Siemens China Co. the first
option of "buying back" the undertaking at the close of the war.
There is little doubt, however, I think, that
10.
at the close of the war the Siemens China Co. will expect Mr.
Munton either to re-transfer the business to them or to transfer to
the English Siemens Companies. It should also be pointed out that
Mr. Munton's use of the word "Siemens tends to keep the name alive
in the market amongst the Chinese. It appears to me that if any
adverse action is to be taken, it must be on the ground that one or
both of these two results would be so undesirable as to justify
such action.
action:.
It could easily be arranged that any proceeds
which