Mr. A. HENDERSON
The conversations of last June between His Majesty's Minister and the Chinese Minister for Foreign Affairs were inconclusive. The Chinese Government expressed the desire to invest the bulk of the funds in the completion of the Canton-Hankow Railway. This proposal brought to the fore questions of pre-existing agreements and obligations which have required careful consideration and have delayed progress towards satisfactory arrangements regarding the indemnity. New proposals are now under discussion between His Majesty's Minister and the Chinese Government.