COPY
Memorandum giving the views of His Majesty's
Government in the United Kingdom on the observations of the United States Government
dated 18th October regarding the draft treaty with China on extraterritoriality.
228
(A)
Article 3. The additional sentence proposed by Hla Majesty's Government to Article 3 only covers existing assets already vested in trustees as security for obligations and liabilities. Trustees have at present the right in case of default upon obligations to take over the assets (for instance, the municipal waterworks at Tientsin; in Shanghai similar arrangements have been made) and apply the revenues to payments due upon the obligations. His Majesty's Government's desire is that these rights of the trustees should be left unchanged. In the light of this explanation we hope the United States Government will find it possible to adopt this sentence.
(B) Article 4. In the opinion of His Majesty's Government the effect of the first paragraph of Article 4 of the American draft is to render all existing rights and titles to real property indefeasible except upon proof of fraud. Consequently a title acquired as the result of Japanese confiscation would be made undefeasible and it was for this reason that the addition was proposed by His Majesty's Government. In any case there seems no reason to suppose that the Chinese Government would object to this addition and His Majesty's Government would propose to retain it but hope that on reconsideration the United States Government may also see its utility.
(c)
Article 5. In deference to the views expressed by the United tates Government the sentence The right to carry on commerce shall only be restricted in time of war and national emergency and then shall only be restricted to such restrictions as are necessary in the interests of national security and which are imposed upon all foreigners" is being deleted. On the other hand, His Majesty's Government still attach great importance to retaining the sentence beginning "In all legal proceedings" etc. They note that the United States Government are continuing their study of this suggestion and suggest that on this point it would be sufficient if both the American and British draft treaties contained some sentence along these lines and that it would not be necessary that the sentences in the two drafts should be identical. On this point it is possible that a sentence which suits the position in the United Kingdom might not exactly suit the position in the United states, and vice versa.
(D) Article 7. His Majesty's Government note with pleasure that the United States Government have accepted the addition of the word "navigation" and also the phrase "abrogated by or inconsistent with" and the substitution of the words "in future for the previous phrase. For their part His Majesty's Government will now be prepared to adopt the American draft of this article with these three changes.
(E)
Article 1. In view of the United States Government's observations, the proposed amendment is dropped.
/(G)
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