2.
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if nothing concrete emerges we shall have shown our
goodwill in secking a settlement, and thus be on
strong ground if we have later to make public our
case, and in the meanwhile it may at least keep
Southern government's "foot on the soft pedal" as
Chen admitted they had done during my own visit to
Hankow.
One of our big difficulties will be the problem
of the rest of China if we proceed forthwith to go
ahead with the South. I do not profess at the
moment to see solution of this but Chen's latest
formila (see my telegram No. 27) which amounts in
fact to de facto regional recognition may possibly
contain the key. Might we not, on lines of Saburi's
scheme, (see my telegram No. 16), reverse procedure
I have hitherto had in mind and proceed from the
particular to the general rather than the other way
round? Whether Chen would agree to thin is un-
certain but it would have the advantage that the
question of recognition might for the present
tacitly drop into the background and become theoret-
ical rather than practical. For example O'Malley
might go down to discuss possibilities of some
agreement, say tariff autonomy with consequent
conventional tariff agreement, and some of tho
other less contentious problems. If this method of
procedure appealed to you it would involve immediate
study of what it is essentiel to retain in the
treaties and what we can sacrifice, and I propose to
go into this point with legation staff at Peking, and to submit suggestions later.
By