My telegram S.14. [1]

(1) I have now studied the text of the Chinese counter proposals.

Preamble and Articles one to four are almost identical with my
proposals and I therefore recommend that they should be accepted.

I am telegraphing the text in order to save time later. [2]

(2) Following is the text of Article 5.

BEGINS-
Each of the high contracting parties shall accord to the Nationals
of the other the right to travel, reside and carry on commerce
within his territory. Each high contracting party will endeavour
to accord in his territories to nationals and companies of the
other high contracting party, in regard to all legal proceedings
and in matters relating to administration, justice and levying of
taxes and requirements in connection therewith, treatment not less
favourable than that accorded to his own nationals and companies.

Ends.

You will note that this does not contain even the safeguard of the
British Treaty but whether it is intended to raise the immigration
issue or not I do not know but the Vice-Minister for Foreign
Affairs says not. (3) The text of Article 6 is identical with
Article 7 of the British Treaty. I see no objection to it in
principle. The Chinese counter proposal for Article 7 is identical
with Clause 1 of Article 8 of the British Treaty and your
acceptance or rejection of this clause depends on your willingness
to commit yourself to negotiating a commercial agreement.

(4) Article 8 of the counter proposals is identical with my draft
and I suggest it should be accepted together with the closing
sentences.

(5) In my view there is no necessity for additional Articles, but
should the Chinese continue to insist our only recourse is to
refuse to sign the Treaty. I should like to know Canada's attitude
to Clause 5. It seems to me undesirable to accept say Articles 6
and 7 of the counter proposals and reject Article 5. I should be
glad of early instructions.

See my immediately following telegram re exchange of Notes. [3]

EGGLESTON