I called on the Acting Minister for Foreign Affairs yesterday  and spoke as instructed in your telegram S.C.6  and telegram 50.  He appeared to accept our explanation as to why we now considered the exchange of notes would be adequate but emphasised that the Chinese Government was most anxious to have the treaty which would adjust all outstanding questions such as rights of commerce, national treatment for Chinese in Australia and the establishment of Consulates. He agreed that at present the rights of Australians in China in these respects were not safeguarded nor were the rights of the Chinese in Australia and asked whether we realized that China could deny Australians the right to trade, travel and reside.
(2) I replied that you were not prepared to negotiate on these questions at present and had decided to limit the present negotiations to the question of extraterritoriality. Other questions could be left for subsequent negotiations as they were at present of academic importance only. Meanwhile, we were confident that China would not discriminate against Australians any more than Australia would discriminate against Chinese.
(3) The Director of the Treaty Department  who was also present then recapitulated the arguments about the unfavourable effect on Chinese opinion if the Australian Treaty was not on the same lines as the British and the Acting Minister pointed out that the question was of greater importance to China since she had more nationals in Australia than we have in China. They pressed to get clarification of the position by specific reference in the Treaty to Chinese rights.
(4) I again explained your intention to limit the negotiations to extraterritoriality. He asked whether the Commonwealth Government was prepared to enter into negotiations for a commercial treaty at some future date and I replied that I had no instructions. I should, however, be glad to have your views on this point.
(5) I was asked whether the Commonwealth Government was willing to sign a treaty omitting the question of the commercial treaty and Consulates, but including an article ensuring national treatment for Chinese in Justice, Taxation, etc. I replied as in paragraph (4).
(6) Chinese finally agreed to put the proposal before the Government but said they had no copy of the original China Order in Council available and asked if copy could be secured. I am endeavouring to get one here but if unsuccessful it may be necessary to telegraph the text.