I have the honour to report that this morning I presented to the Minister for Foreign Affairs a draft treaty for the abolition of extra-territoriality between His Majesty's Government in the Commonwealth of Australia and the Republic of China.
On receipt of your telegram No. SC. 1 of the 16th January, 1943 , I at once prepared a fresh draft of the Treaty and immediately asked for an interview with the Minister for Foreign Affairs, whom I saw at 11.00 a.m. on Wednesday 20th January, 1943.
The draft treaty which I presented to Dr. Soong included Articles I, II, III, IV and VIII of the draft which I had the honour to telegraph to you in my Telegram No. S.149 of the 28th November, 1942. 
I interpreted your instructions to negotiate these articles on the lines of my draft as giving me some liberty in the matter of verbage and I therefore decided to adopt the wording which had been accepted in the British Treaty  where it differs from mine only in the matter of drafting. I did this because I felt that the Chinese, after having had a long bout with the British and Americans, would resent discussing alternative drafting and might be more disposed to make this the occasion for introducing new matters and thus the negotiations would be prolonged and less satisfactory.
It is necessary to strike while the iron is hot and while they are in the mood. There is to be a celebration for three days, commencing on the 5th February, on the abrogation of extraterritoriality and the Unequal Treaties and I hope that our treaty will be completed before this date.
I enclose a fair copy of the draft I have presented. Your amendment to Article I (1) is included.  Mistakes seem to have crept into the original draft from my manuscript.
With regard to Article I (2), the words 'domicile or home' are inserted in the definition of Australian nationals. I feel sure that this definition would have been questioned in the case of Chinese nationals because the Chinese claim to protect Chinese who have lived overseas for generations and they have the doctrine of dual nationality. This would have raised a point and might have caused some trouble. As the phrase 'Chinese nationals' does not appear in the Treaty as now presented, it seemed unnecessary to define it so I have omitted it and the same thing applies to Article I (3). My Telegram No. S.9  explains the position of other amendments suggested or made.
In Article III of the Sino-British Exchange of Notes, the Chinese Government agreed to give the British power to acquire land in a very guarded form-it is subject to Chinese laws and regulations and about this as you are averse to discussing the matters in Article V now omitted and the same questions would be raised.
There is no doubt in my mind that the Chinese intend to raise the question of equality of treatment at some stage and their withdrawal of Article I in their draft  only suggests to me that they believe a more convenient occasion will arise. They probably have the peace negotiations in mind. Here, if the precedent of 1919 holds, they will most certainly get a majority behind them. This is the reason why I put it to you, as I did to Mr. W. M. Hughes  in 1919, that such a general clause would do good in satisfying the Chinese with a formal declaration provided that you get a positive admission that immigration is a matter of domestic jurisdiction; this would give Australia a very definite advantage. The latter proposition is one which I think will almost certainly secure a majority in a peace conference. I regard the question as postponed.
When I presented the draft, I explained to Dr. Soong that it had always been the intention of His Majesty's Government in the Commonwealth of Australia to associate itself in some way with the abrogation of the 'Unequal Treaties', an act which we had long felt must be taken. I had now been instructed to ask for the negotiation of a treaty on this matter and to this end had prepared a draft which I handed to Dr. Soong. I pointed out that the draft followed closely on the British and American Treaties.
Dr. Soong expressed his pleasure at the decision of His Majesty's Government in the Commonwealth of Australia. He added that Australia was in the position of a successor state to one of the signatories of the original Treaty and it was, therefore, desirable, from the point of view of completeness, that we should be a party to the abrogation. He enquired whether the Exchange of Notes had been included in the draft and I explained that it had not, as most of the matters with which we wished to associate ourselves were covered in the Treaty. He promised to study the draft.
Copies of this despatch are being sent to His Majesty's Australian Ministers at Washington and Kuibyshev and the Australian Minister to the Netherlands.
[F. W. EGGLESTON]