File No. 493.11A/6.

Minister Calhoun to the Secretary of State.

[Telegram—Paraphrase.]

Mr. Calhoun says report from consul general at Hankow includes all claims, unless the revised claim of Standard Oil Co. sent September 13. Says there are two questions involved in the claims: 1. Reasonableness of damages claimed. 2. The right to claims for loss sustained by native servants. The first question, Mr. Calhoun says, can be decided by the consul general in the negotiations for settlement, but that the second is regarded as one of precedent or policy, and department is expected to decide it. Recommends that consul at Hankow be instructed to effect a settlement on equitable terms.