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IV.

Letter from Mr. O'Malley, on behalf of Mr. Lampson, to Mr. Chen.

I have the honour to assure you that the British authorities concerned will do all that lies in their power to implement and ensure the successful operation of the agree- ment signed to-day relative to the British concession area at Hankow, and that as far as the British authorities are concerned, Chinese citizens will enjoy and be entitled to the same rights as British subjects in the said area.

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may have no alternative but to place a part of the troops outside the actual limits of the international settlement. It is, however, contrary to the policy of His Majesty's Government to become involved in any armed conflict between contending Chinese forces, and His Majesty's Government will continue to maintain a strict neutrality in the civil war in China.

(NOTE. It is not clear from Mr. O'Malley's telegraphic reports whether the above represents the precise form in which this communication was made to Mr. Chen. Mr. O'Malley merely stated that his aide-mémoire was in the words of the Foreign Office telegram from which the foregoing sentences are drawn.

This aide-mémoire was communicated to Mr. Chen before the signature of the Hankow Agreement. As, however, Mr. Chen said that its communica- tion to him before signature would embarrass him, he and Mr. O'Malley agreed to pretend that signature had taken place prior to such communication").

V.

Letter from Mr. Chen to Mr. Lampson handed to Mr. O'Malley.

I have the honour to acknowledge the receipt of your letter of to-day's date, in which you assure me that the British authorities concerned will do all that lies in their power to implement and ensure the successful operation of the agreement signed to-day relative to the British concession area at Hankow, and that, as far as the British authorities are concerned, Chinese citizens will enjoy and be entitled to the same rights as British subjects in the said area.

I have the honour to assure you in return that the Chinese authorities, for their part, will likewise do their utmost to implement and ensure the successful operation of the agreement in question, and that, so far as they are concerned, there will be no discrimination against British interests in the administration of the new district.

VI.

Declaration by Mr. Chen.

The Nationalist Government declare that the arrangement made respecting the status of the area hitherto known as the British concession at Hankow has been concluded by them with special reference to the facts of the new status quo in the said area, and is not intended by them to serve as a precedent for the settlement of the future status of any British or other concession elsewhere in China.

VII.

Statement by Mr. Chen.

The Nationalist Government take note of the statement made by Sir Austen Chamberlain in the House of Commons on the 10th February. The modification in the original plan for the concentration of British forces at Shanghai announced by him is regarded by the Nationalist Government as a concession which now makes it possible to proceed to the conclusion and signing of an agreement relative to the British concession area at Hankow. As, however, the landing at Shanghai of British troops even in reduced number and for the strictly limited purpose stated by the Secretary of State is without legal justification, the Nationalist Government have to protest against the landing and presence of such British troops in the international settlement at Shanghai.

VIII.

Aide-mémoire handed by Mr. O'Malley to Mr. Chen.

In view of recent military developments in the region of Shanghai, which in the view of His Majesty's Government are calculated to increase the danger to the security of British subjects in the international settlement, His Majesty's Government may find it necessary in the near future to give orders for the landing of further troops at Shanghai. In such a grave emergency the responsible British authorities at Shanghai

IX.

Declaration by Mr. Chen.

Reports reaching the Nationalist Government from many quarters appear to make a restatement of Nationalist policy regarding concessions and international settlements necessary and timely in order to avoid misapprehension and prevent needless appre- hension and fear.

In the manifesto of the 22nd January the Nationalist Government declared their intention and their immediate readiness to have all questions outstanding between Nationalist China and the foreign Powers settled by negotiation and agreement. This implicitly applied, and it was intended to apply, to changes in the status of all concessions and all international settlements in China.

This necessarily means that the policy of the Nationalist Government is not to use force or to countenance the use of force to effect changes in the status of any or all concessions and international settlements.

The Nationalist Government have to lay it down that changes in the status of concessions and international settlements wherever situate in China are of such vital and national importance that no local or other Chinese authorities save and except the Nationalist Government can negotiate with the foreign Powers concerned in respect thereof.

X.

Aide-mémoire" handed by Mr. O'Malley to Mr. Chen.

His Majesty's Government take note of Mr. Chen's declaration that in the manifesto of the 22nd January the Nationalist Government declared their intention and their immediate readiness to have all questions outstanding between Nationalist China and the foreign Powers settled by negotiation and agreement; that this implicitly applied, and was intended so to apply, to the question of the status of British and other concessions and international settlements in China; and that this necessarily means that the policy of the Nationalist Government is not to use force or to countenance the use of force to effect changes of status of any or all concessions and international settlements.

As regards the last paragraph of the declaration, His Majesty's Government cannot bind themselves to refuse to enter into negotiations with Chinese officials in any part of China with regard to matters arising in areas where such officials are actually exercising de facto authority.

(NOTE.It is not clear from Mr. O'Malley's telegraphic reports whether the above represents the precise form in which this aide-mémoire was communicated to Mr. Chen. Mr. O'Malley merely stated that he communicated to Mr. Chen an aide-mémoire in the words of the Foreign Office telegram from which the foregoing sentences are drawn.)

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