19
£4,000,000.
approximately four million pounds, will be entrusted
to the Board of Trustees in China, a body set up by the
Chinese Government, which is at liberty, under the terms of
the agreement concluded between His Majesty's Government in
the United Kingdom and the Chinese Government, to spend the
proceeds of any loans raised on the security of the funds thus
placed at their direct disposal on material manufactured in the
United Kingdom or in any other country, subject to any
obligations, such as Consortium agreements, outside the
indemnity agreement. It will not be open to His Majesty's
Government to induce the Board to give preference to United
Kingdom or Dominion manufacturers.
4. If, as is presumably the case, the tender in question
has not been placed through the London Purchasing Commission
it would seem that the Nanking-Pukow railway ferry is to be
financed either from the remitted indemnity funds under the
control of the Board of Trustees, or, possibly, from other
sources. In either case there is nothing in the terms of the
China Indemnity Act or the agreement with the Chinese
Government which would necessarily prevent the acceptance by
the Ministry of Communications at Nanking of a tender from the
Hongkong Whampoa Dock Company.
I am
5. The desired assurance can therefore be given to the
company but such an assurance is not necessary under the terms
of the Act, and might indeed create a false impression.
accordingly to suggest, for Lord Passfield's consideration,
that it might be preferable to explain the position briefly as
outlined above, and so to avoid the possibility of a
misunderstanding which might arise if the assurance desired
by the Company were given without any such explanation.
I am,
Sir,
Your obedient Servant,
Gw.arde