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fundamental modification in present draft, (ii) that
modification of clause 5 as suggested by Chinese would
react detrimentally on British interests in China for
reasons given in paragraph 5 of your telegram under
reference, (iii) that while article 10 is considered
of minor importance the omission of article 5 might be
considered by China as tantamount to an acknowledgment
that Chinese customs had a right to function in Hongkong
on their own terms.
In view of the above considered and almost un-
animous opinion of joint committee, the terms of Canton
despatch No. 173 and its enclosures and Hongkong tele-
gram of December 13th I do not propose to offer an
opinion except that I gather from conversation with some
members of committee that they feel the matter has now
gone so far that Hongkong cannot withdraw from the posi-
tion they have taken in regard to present draft."
Ends.