2.
98
regards D. Chinese objections seemed to centre on the
fear that the purchase of Chinese material would be
excluded and we eventually reached agreement by making
it plain that clause only referred to materials pur-
chased abroad and that it was subject to terms of
existing contracts. Another point in Chinese draft
to which, in view of your telegram No. 7 to Hankow and
your telegram No. 18 to Nanking I did not feel justified
in raising objection, was that clause regarding purchase
of British material only applied directly to re-condition
ing of existing lines and not to new construction (see
last paragraph of note A.)
As regards subsidiary notes,regarding grants to
Hongkong University China committee under which
Minister for Foreign Affairs had included in his draft
the proposal for an additional grant of £15,000 to pay
debts to Hongkong University as coming from me and
objected absolutely to it coming from Chinese side,
after much discussion he proposed to drop the question
of this additional grant altogether but I demurred
seeing that it had been raised and discussed with
Hongkong and at length we agreed to incorporate it in
separate exchange of letters not forming part of and
not to be published with indemnity settlement.
My following telegramn gives texts of the whole
series of notes etc. As agreed upon between Minister
for Foreign Affairs and myself ad referendum to our
respective governments texts are approved.
I
I trust that having got Chinese up to this point it will not be necessary to make any alterations. request earliest possible instructions.
Addressed to Foreign Office No. 98; repeated to Peking and Hongkong.