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TELEGRAM from the Secretary of State fox Dominion Affairs

to the Secretary of State for External Affairs, Canada,

the Prime Minister of the Commonwealth of Australia, the

Governor General of New Zealand, the Minister of Extemal

Affairs, Union of South Africa, and the Minister for External

Affairs, Irish Free State (by bag).

(sent 8.10 p.m., 5th June, 1931)

Circular B. No.80.

Secret.

My telegram 27th May Circular B. No.76 secret.

Extraterritoriality in China.

Position now is that after

prolonged negotiation provisional agreement has been reached

on all points outstanding. As regards duration it has been

agreed that treaty shall remain in fores for ten years but that the Chinese Government shall be at liberty to teminate the special provisions of Articles 2 and 3 at the end of five

years. It is proposed to insist on perpetuity for the

provisions of Article 18. As regards reserved areas, His Majesty's Minister abandoned the claim to reserve Hankow and Canton and agreed to make arrangements for the rendition of the Shameen Concession at the latter place. In return for this the Chinese on their part agreed to the exclusion of Greater Shanghai and Tientsin for the period of five years. Within this period negotiations were to be entered into with regard to the question of jurisdiction at Shanghai and, failing a settlement by negotiation at the end of five years, the transfer to Chinese jurisdiction would take place at the end of further period of five years.

There are obvious disadvantages in the imposition of

fixed time limita, but in view of the favourable terms aecured

in

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