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Hong Kong University.
After the Secretary of State for Foreign Affairs
and the Chancellor of the Exchequer had made statements from their respective points of view, it became clear that the pros and cons of the decision to be reached were very
evenly balanced. From the financial point of view it was felt to be hard on the heavily-burdened Eritish taxpayer that the considerable funds accumulated from the Boxer
indemnity could not be appropriated to the cost of the Shanghai Defence Force, seeing that the necessity for that force had arisen solely owing to the continued disorders in China, and that it was due to these disorders that the said indemnity could not be expended, as intended,
for the benefit of the Chinese. On the other hand the
Cabinet were deeply impressed by the consensus of expert
views 98 to the bad effects on Chinese and international
cpinion which would result from the appropriation of these funds to the maintenance of the Shanghai Defence
Force. It was felt that this would be particularly
inadvisable at a moment when Communism - being overthrown
in China, sccompanied by a progressive disappearance of the
anti-British sentiments which had formerly prevailed. In
this connection the Secretery of State for Foreign Affairs
warned the Cabinet that to use the funds as proposed would
probably