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Hongkong which they have placed on their agenda for
subsequent withdrawal in China proper. Surveyed solely
from the standpoint of Nanking and Canton, the stand
thus adopted is intelligible and logical, however dis-
appointing it may be to us.
In connexion with what precedes, I am now authoris-
ed to approach Your Excellency once more, and enquire
whether there is any other concession which China can
offer to Hongkong, in lieu of the original Inland Waters
privilege outlined in Article V. of the Agreement' And
I may add that I myself have been asked by the Govern-
ment to endeavour to effect a modified settlement on
the main lines already drawn up. The matter has engaged
my careful attention, and I believe that it is un-
necessary for me to emphasise that no one is more
anxious to find a satisfactory solution of the question
than I am. The amended plan in regard to Article V.
that I now submit, with the approval of the Minister
of Finance, for your consideration is as follows:-
In view of the delicate Chinese political situa-
tion and the extreme difficulty of co-ordinating and re-
ducing to a common factor the various interests of Nan-
king and Canton, I suggest that Article V. be deleted
altogether, on the clear understanding, to be ratified
by a formal exchange of notes, that Hongkong vessels
flying the Chinese flag, like Chinese junks, may trade
freely under Inland Waters rules to and from Hongkong
and Chinese "Inland" places, etc. If Coastal-trade
privileges are withdrawn in China it is conceivable -
in fact it is commonly asserted - that most of the
foreign....