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Subject to the comments and suggestions made below and to the results of consultation with the Goverments of the Dominione and iniia which is now taking place, His Majesty's_Government in the United Kingdom would be ready to sign with China a treaty following milatia mitandis the draft treaty" enclosed in Kr. Binant's letter of Getober 5th.
1.
Nia Majesty's Government attach importance to the following points:-
Article Three. At the end of paragraph 2 His „ajesty'a Government suggest that the last two or three lines should run as follow: -- "and will make provision for the assumption of the official obligations and liabilities of those settlements and for the recognition and protection of all legitimate rights therein". It is desired by the addition of the word "liabilit to cover in particular the liabilities of the settlements as regards pensions to their employees.
It should also be explained that the Municipal Council of the International Settlement at Shanghai (and perhaps also at ^may, though this is not certain) has vested municipal assets in the hands of trustees for the purpose of securing the due discharge of certain municipal obligations such as loan debenture issues and pensions for the municipal staff. In order to safeguard the creditors of the respective councils in this respect, Hia kajesty's Government would be grateful if the United States Government would consider adding the following sentence to article Ji- "It is understood that where the obligations and liabilities of municipal souncils of these settlements are secured upon assets in China, the security and the existing rights of the holders of the obligations to enforce the security will be maintained.*
Article Four.
His Majesty'a Government in the United Kinguos would like to draft the end of the paragraph as follows: -
"Except upon proof, established through due process of law, that such rights have been acquired by fraud or as the result of confisestory action during the Japanese occupation, in which case the property shall be restored on such terus na justice shall require to ite previous owners."
Article Five.
Kim
His Majesty's Government would desire to mid a sentence running me follows – "In all legal proceedings and in all matters relating to the administration of justies,
lery of taxes or require:mats in connexion therewith andi the carrying on of commerce, nationale of Hin linjesty in China and nationals of Chine in the territories or His Majesty shall enjoy treatment not lase favourable than that secorded in those territories to nationals of Chine or nationals of His Kajesty
the case (aay be, In this prevision the expression "nationals of His Majesty" includes companies incorporated under the law of any of His majesty's territories and the expression "nationale of Chine" includes companies incorporated under Chinese law.
the right to carry on commerse shall only be restricted in time of war ami 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."
His/