- 2m
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beneficial to Great Britain as well as to China.
Assurances therefore must carry the unquestionable
authority of the Chinese government and must make
clear in what way money will be spent so as to pro-
vide for the mutual benefit of both countries
provision upon which whole policy of His Majesty's Government has been based from the beginning.
long as funds were to be under British or partly British control this point was safeguarded, but if funds are to be transferred to complete control of the Chinese these assurances must be given in order to safeguard this essential point.
So
Existence of Belgian arrangement in consequence af which I learn that orders are already being placed in Belgium is ample precedent for our present proposal. His Majesty's Government consider that the
suggestions conveyed by Mr. Newton to Dr. Wang were made on liberal lines and had hoped they would have been received by Chinese in the same spirit in which they were made.
Although I do not think it would be expedient to make any threats at present of the nature indicated
in your telegram No. 389, you may if necessary tell Dr. Wang that his apparent reception of our proposele has made a bad impression in influential circles here and will not facilitate Parliamentary action.
As regards points of detail in telegrams under reference, (1) adoption of Haiho scheme is desirable; it would not however of course take precedence of the railway rehabilitation scheme, nor should amount at of money allotted thereto be disproportionate to the total amount of the fund, especially if it cannot be made into a productive investment such as would provide for future educational endowment.
(2) As regards Parliamentary procedure, if agree- ment is reached, the probable procedure would be (1) to lay before Parliament a White Paper dealing with the unpaid instalments; and (2) to submit to Parlia- ment an Amending Bill dealing with the deposited funds.