My telegram S.14. 
(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) 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.
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.