CO129-384 - Public Offices - 1911 — Page 473

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Chinese, to which Lord Li replied that his final offer must be a division in the proportion of 30% to 709, but he con- sented at the same time to lay before my observations on British policy before his colleagues in the Ministry, with whow, he alleged, must rest the responsibility of allowing sentiment to outweigh business.

I at once informed the Governor of the position

and enquired whether in the last resort a further reduction of

the British claim to 321⁄2 could be considered.

On the 31st. of July Lord Li sent me a message

to the effect that he was prepared to accept the British offer

of a division in the proportion of 35% to 65% provided that

the arrangement were made provisional for one year only.

This modification was duly communicated to the

Governor by telegraph who replied on the 2nd. instant that a

provisional agreement was not satisfactory and that a division

in the proportion of 35% to 65% was the irreducible minimum

which the British section could accept as applicable to all

through traffic. This division, His Excellency added, could

be proved to be alightly in favour of China as it was, and any

further reduction would result in carriage at a loss over the

British section. As a final alternative Sir Frederick Lugard