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The Chinese delegation having requested the British delegation to put in writing their loan proposal made at the last meeting, the latter then read the following state-
ment :-
"The Chinese delegation have asked for a written statement on the loan proposal put forward at the meeting of 21st July.
"The details of the necessary formal agreement would take some time to settle and would be outside the duties of this conference, but the main features of the proposal can and should be indicated now.
"The proposal is made to show the sincere good will which Hongkong feels to- wards Canton, and in order that Hongkong may assist in the development of Kwangtung in some way which may be of mutual benefit to the province and to the Colony. We realise that the prosperity of Kwangtung and the prosperity of Hongkong are inseparably bound up together.
"The object of the loan would of course have to be mutually agreed upon.
We have suggested a loan for the development of the port of Whampoa, because while we think that that object would benefit Hongkong only indirectly we are anxious to show our good will by selecting an object which we understand is favoured by the people of Canton. We are quite prepared to consider any similar object of mutual benefit which may be sug- gested by the Chinese delegation.
"The adoption of the Whampoa proposal would be subject to both parties being satisfied that a scheme sound from the engineering point of view is possible at a reason- able cost. The amount which we have in mind is a sum of about $10,000,000.
"One object of the loan, whatever main object be chosen, would have to be the construction of the loop line to connect the Canton-Hankow and the Canton-Kowloon railways.
"Adequate safeguards for the proper expenditure of the funds and for repayment of capital would have to be provided.
"A condition of the loan would be the complete cessation of the boycott and of all other anti-British manifestations throughout the territory controlled by the Canton Govern-
ment."
In reply to questions on the point, the British delegation stated that by "adequate safeguards for the proper expenditure of the funds and for repayment of capital," they had in mind the usual provisions in Railway agreements made in China regarding in the case of British capital a British Engineer-in-chief and a British Chief Accountant and other safeguards as well as the mortgage of the works constructed and the revenues as security.
Before the adjournment of the Conference, the Head of the British delegation ex- pressed appreciation of the courtesies that had been extended to them and of the friendly tone that had characterised the proceedings of the Conference and hoped that the same would continue to prevail until the Conference had ended its labours. The Head of the Chinese delegation reciprocated this sentiment and trusted that, as a result of the work of the Conference, a new page would be opened in the history of Chinese-British relations.
The Conference then adjourned, pending the British delegation's consultation with their Government regarding the Chinese proposal for a Commission of Enquiry and the Chinese delegation's consultation with the Nationalist Government on the subject of the British loan proposal.