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3. The Treaty stated that it was mutually understood that the Chinese Government would " in taking over these settlements and concessions together with their official assets and obligations, nako provision for the assumption and discharge of their official obligations and liabilities. A copy of the rolevant Articles of the Treaty is attached. The settlements and concessions

were physically recovered by the Chinese Government at the end of the Japanese war, and the Chinosc Government then appointed Liquidation Commissions to determine their official assets and their official obligations and liabilitics. As unilateral

determination by an interested party was not

satisfactory to the foreign Governments concerned, agreement was reached after negotiation for the

appointment by the foreign governments concerned of forcign Advisors to the Commissions.

No

decisions of the Commissions are valid unless

agreed to by the Advisers.

4. The progress made by the Commissions

has been slow and disappointing.

In Shanghai

it has not yet been possible to agree on

oven an interim payment of the suns due to ex- cmployees of the Shanghai Municipal Council, the former governing body of the International Settlement, owing to a dispute between the Chinese Commissioners and the forcign Advisers about the currency in which certain items should be paid. A serious difference

has/

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