said that the latter had told him that he had offered

to come to an amicable arrangement with the Green

Island Cement Company, but that the Company would keep

harping on an alleged breach of Treaty and on a claim

for compensation. I told Mr.Liang Shih-yl that if

my

Mr.Kwan had so represented the case, the description

was not accurate.

why a breach of Treaty was involved and why the

Company had a valid olaim for compensation,

After explaining to Mr.Liang

he

said that, after the conversations he had had with

the Governor-General and the Commissioner of Industrie s

on this matter, he felt sure an amicable arrangement

would be arrived at.

3. As Mr.Liang Shih-yi did not seem disposed

to volunteer any more information as to the condition

of the administs of the Province, I asked him

how the note issue would be dealt with. He answered

that $22,000,000 would be devoted from the Sextuple

Loan in order to establish a new note issue, secured

by a reserve of silver dollars, with which to redeem

the old issue. I did not think it worth while to

comment on the inadequacy of the proposed arrangement.

4. Mr.Liang then asked me what effect the

opening of the Panama Canal would have on the shipping

of this. Port. I said that it would tend to increase

the tonnage entering and clearing, but that I did

not anticipate that the increase would be very material.

He next asked me for a copy of the Colonial Estimates

and Statistical Reports.

He Aten took his leave.

In sending him the same day the Estimates

for 1913 and Administrative Reports for 1911, I asked

him if

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