Your telegram S.C.4. 
1. I saw the Vice Minister for Foreign Affairs yesterday and spoke as instructed.  I stressed the fact that while you were anxious to abrogate extra-territoriality, H.M. Government in the Commonwealth of Australia was not prepared to go beyond this at the present time. Articles 5, 6 and 7 were concessions asked by the British and Americans, but we thought it would be better to consider these together with all related matters in a comprehensive treaty. We did not see why we should be asked to deal with them now. There was a significant difference in the drafting of Article 5 in the Chinese draft from that settled in the British treaty and it would certainly arouse unfavourable comment in Australia. As this treaty made no specific plan for the future, present negotiations might well be restricted to non- contentious articles.
2. Dr. Wu, who was accompanied by the Director of the Treaty Department , expressed great regret at our inability to accept Articles 5, 6 and 7. He said he imagined the immigration question was the stumbling block, and emphasized that the Chinese did not wish to raise this issue. The treaty provided for the abolition of the old regime and begins a new one. They intended to open the whole of China to foreigners and it would be unfair if we did not do the same for the Chinese living in Australia. I said that there were only a few restrictions on the movements of Chinese living in Australia but these were in the State Laws and an attempt to remove them would cause trouble. He pressed that Australia should associate herself with promises for the future by the signing of the additional articles. The Director also pointed out as the British treaty specifically excluded us from privileges in regard to commerce etc., unless we signed Article 6, the Chinese Government would be at liberty to deny to Australians the right to travel, reside and carry on commerce. China felt that she had made great concessions in these Articles and they had aroused considerable uneasiness amongst the Chinese people. If the treaty was signed omitting the Articles to which we objected, it would immediately draw attention to the omission and cause unfavourable comment.
3. Both the Vice Minister and the Director then strongly urged me to study a redraft of Article 5 which they would prepare on the lines of the American treaty and transmit it to you. I said that I would consider this but indicated that my instructions had been most definite and that I could hold out no hope that your attitude would be modified and would consider whether I should submit the Article to you when I had studied it. 
4. The question of Article 1 clause (2) was then raised and I pointed out that the inclusion of contentious Articles would require a definition of Chinese nationals on the same lines as the definition of Australian nationals. The Vice Minister said he believed the Chinese Government would be prepared to accept the definition of Chinese subjects as those whose domicile or home was in China.
5. Regarding the Exchange of Notes I said that I had no instructions but that my personal view was that the abrogation of rights by reference was undesirable and that any Exchange of Notes should be more specific.
6. Glad of instructions on this point. It would also be of great assistance if I knew the lines of the Canadian treaty. 
7. I do not think there is any doubt that the Chinese Government will draw attention to our failure to agree to Articles 5, 6 and 7 so while ready to make a stand when the time comes I consider it best to keep up friendly parley for the time being. Meanwhile I am drafting (a) the note abrogating extra-territoriality and to be used if the Chinese refuse to sign the treaty if clauses omitted and (b) the note to be attached to the treaty if signed and will send them to you when finished.