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and that this Government should be paid the agreed value of $46,258.51 with interest from 1st January, 1911, to date of payment. I should be prepared to accept interest at the rate of 5% which is considerably below the ordinary local rates.

9.

Similarly with regard to the furniture of the Agencies which was valued at $3,185,65. This also should be regarded as having been sold to His Majesty's Government on 1st Jemary, 1911, and interest at 5% per annum should be paid from that date.

10.

There remains the question of the balance due

in respect of the loss on the working of the Agencies in 1910. It would appear that half the loss, which was the sum to be refunded to this Government, amounted approximately to £3,100 and I am prepared therefore, subject to early payment of the claims of this Government in respect of the buildings in Shanghai and of the fittings and furniture in the various Agencies, to accept the two payments of £1,500 in full settlement of this claim.

I have the honour to be,

My Lord Duke,

Your Grace's most obedient

humble servant,

7.2. Statte

Governor, &c.

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