129
co-operation shows signs of increasing rather than of
diminishing. There is no question of the first magnitude at
issue at the present time and the Minister would be able
to press British interests in this Railway without pre-
-judicing other negotiations.
9 •
The first point for decision is
the question of control. Mr. Butler Wright points out
(page of Memorandum) that under the Loan Agreement (refer-
•7
-ring no doubt to the words "and management" in Article
6) the Engineer-in-Chief (of the Canton Section) and the
Chief Accountant must be Britishers a probable guarantee
that British interests will be safeguarded". But it is
obvious that the. British interests safeguarded by the Loan
Agreement are limited to the Bond-holders' interests in
the Canton Section, and may and probably will be divergent
from Hongkong interests. In his final paragraph he assume s
that the "General Manager at Canton" will be British and
sees no objection to placing the Kowloon Section under his
control. Sir M. Nathan proposed that a Board of Management
-
should be formed consisting of 4 Members two appointed by
each Government - with a General Manager selected by agree-
-ment between them. I have no reason to believe that the
Chinese would consent to such an arrangement, nor do I
think