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Reserved Areas: Final Discussion of May 27: Maximum of Ten Years for
Shanghai and Five for Tientsin tentatively agreed to.
60. On the morning of the following day, the 27th May, Mr. Teichman met Mr. Hsü-Mo, and was able to reach agreement with him on the text of the exchange of notes, as though no deadlock had been reached in regard to the main article. In the afternoon Dr. Wang asked me to see him again privately. We now had before us our joint draft of article 16, as prepared with his own collaboration on the river the day before, and a draft of the attached exchange of notes agreed upon between Mr. Teichman and Mr. Hsü-Mo. The draft article provided for the exclusion of Shanghai for five years, for the initiation of negotiations within those five years on the subject of the arrangements to be made at the end of that period, and, in the absence of a settlement by negotiation and agreement, for the continuance of extra-territoriality at Shanghai for another five years, until its final termination after ten years in all; Tientsin to be excluded for five years and no more; and British subjects in the reserved areas to pay regular Chinese taxation. The attached exchange of notes provided, on our side, in the same formulæ as before, for negotiations regarding the Shanghai extra-settlement roads and the rendition of the British concession at Canton, and, on the Chinese side, that the jurisdiction of the British courts in the reserved areas would continue in force, and, wrapped up in phraseology to meet Chinese susceptibilities, that British subjects in foreign (non-British) concessions would enjoy all such exemptions from Chinese jurisdiction as might be enjoyed by the nationals of any country. Without further argument Dr. Wang accepted these drafts, but somewhat equivocally. He proceeded to explain that, while he was glad to say that his colleagues, including the Minister of Finance, who had previously been the principal stumbling-block, and the President, were now more favourably inclined, the latter was much exercised. regarding the attitude of the Chinese Minister in Washington, and anxious lest, if the terms of article 16, as now drafted, came through him to the knowledge of the Canton leaders, it might be used as a weapon against the National Government. He therefore suggested that, if and when everything else was disposed of, we should initial all the other articles and attached documents, and leave article 16 outstanding, subject to a sort of "gentlemen's agreement,' that, so far as he, Dr. Wang, was concerned, and as long as he remained Minister for Foreign Affairs, the article in its present form would be accepted in due course; or, alternatively, that we should initial none of the articles, and, having reached this stage of practical agreement, let the whole thing stand over for the time being.
,,
Suggestions for exchanging Copies of Agreed Texts: Aggravation of Internal
Chinese Political Crisis.
61. I refrained from immediate comment, saying I must have time to consider this novel situation. Subsequently we explored the possibility of covering the point by private written assurances of some kind, and decided to meet later in the day with our respective experts, Mr. Teichman and Mr. Hsü-Mo, in attendance. At this later meeting, we eventually agreed (on my side ad referendum to you), after much confused argument (because the real point at issue was by no means clear), that, if and when final agreement on all points had been reached, we should exchange copies of the whole draft treaty and attached documents, and that we should cover this procedure by an exchange of unofficial letters stating that the drafts were acceptable to each of us and were being referred for confirmation to our respective Governments. This appeared to me the best course to follow; since, on the one hand, it would to some extent clinch the bargain and confirm as between us the work accomplished; while, on the other hand, it would provide the necessary degree of elasticity to permit of His Majesty's Government now sitting back and awaiting political developments. It was, indeed, becoming increasingly desirable that we should be able to wind up our work and see what was going to happen in the conflict which was now developing between Canton and Nanking. Practically all the important Cantonese members of the National Government had left Nanking to join the recalcitrant Southern leaders at Canton, where plans were being laid for the establishment of a rival National Government under Chen Chi-t'ang, Sun Fo,
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