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administration. The present condition is therefore a very serious one for this Colony which commercially is so closely connected with Canton that from that aspect the two cities may be considered to be one. The shipping trade of the Colony and its railway are also involved. The Chinese section of the latter is so short of rolling stock that unless some £25,000 can be spent on new engines etc., or other assistance is forthcoming the through service to Kowloon must be suspended in about six months time. I am addressing you separately on this subject.
12.13. In these circumstances I had a confidential
conversation with the two Chinese members of Council on the 12th.
instant with a view to ascertaining whether the opposition of the Provincial Authorities to the conditions upon which the Six Powers
were prepared to lend money to the Chinese Government could not
be removed. Sir Kai Ho Kai expressed the opinion, in which Mr.
Wei Yuk concurred, that if financial aid could be given to the
Canton Government it would accept local supervision by English- -men of the expenditure and their advice in matters of administra- -tion. I said that if the Provincial Government were really of that
mind it was open to them to inform the Central Government to that
effect and thus obtain an instalment of the proposed Six Power
Loan. It was argued that the other Provinces would not agree; that the negotiations would therefore take much time; and that a local arrangement would be much more easily made. I said that if the Canton Government asked for such assistance I would place the matter before His Majesty's Government and I ventured to express the opinion that until the Provincial Government accepted the assistance of foreign advisers, as the Japanese had done when they began to re-organise their administration on Western lines, I could see little hope for any real and lasting improvement.
I was asked whether I would receive the Governor-General if he came down to Hongkong to call upon me and to ask my advice in the critical situation in which he found himself. I said that I
could
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