[This Document is the Property of His Britannic Majesty's Government, and should be returned to the Foreign Office if not required for official use.]

From CHINA.

Decypher. Sir M. Lampson (Peking).

November 28th 1927.

D.

8.00 p.m.

November 28th 1927.

R. 3.50 p.m.

November 28th 1927.

No.1673.

A

30

Your telegram No.626.

I have every sympathy with the natural feeling

in many quarters that this money should be used for

reimbursement of bona fide British claims against

Chinese, more especially such claims as those arising

out of damage to life and personal property at Nanking

and the like. It is on the face of it absurd and even

wrong voluntarily to return to the Chinese a huge

sum; in itself a reimbursoment of former actual British

expenditure; more or less in the nature of a free

gift of 11 million pounds to the Chinese at expense

of British tax payer and local British claimant here, who has otherwise scant prospects of ever receiving

compensation; compare the case of Mrs. Smith of

Nanking.

Nevertheless my feeling is that having gone so far and advertised our intention urbi et orbi it

would be hazardous and difficult to go back on our promise now.

There seems to me only one way and even as to that I am doubtful, in which it could be safely done and that would be by a free vote in House of

Commons

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