-20~
322
returned indemnity funds in British workshops. Otherwise it
is difficult to understand why the British Government, which
in 1926 had fully accepted the principles recommended by the
Willingdon delegation and Lord Buxton's Advisory Committee,
was ready in 1930 to cast them aside and adopt a new policy. A reference has already been made to the explanation offered by Mr Arthur Henderson (then Foreign Secretary) in the memo- randum of November 14, 1930, prefixed to the Exchange of Fotes. That explanation is to the effect that the emergence of a re- constructed National Government which desired to cultivate friendly relations with Great Britain had changed the aspect of the indemnity question. "His Majesty's Government were no longer dealing with a China distracted by civil war and by the claims of rival governments." (This reads curiously in the light of the events of the following year, и when a rival government, claiming to be the true National Government of China, was set up in Canton. Moreover a civil war of unusual severity, which nearly brought about the collapse of the Nan- king Government, was being waged against rebellious Northern leaders at the very time when the indemnity settlement was being negotiated at Nanking!)
~Says Mr Henderson,
His Majesty's Government had
recognised the significance of the nationalist movement "and had declared their intention to meet it with sympathy and under- standing. This question of the Indemnity provided a test case. It would clearly have been inconsistent to revert to the pro- visions of the 1925 Act and insist upon these important revenues being controlled in London. Nor did the compromise measures Suggested in 1926 appear to be suitable to the altered circum- stances, for although the organisation and administration of the funds would be carried out in China, the control in the last resort would still remain with His Majesty's Government. In the event of differences of opinion arising between the Board of Trustees and the British authorities, friction and ill-will might be engendered out of an act which aimed at promoting friend- ly relations and a good understanding between the two peoples. The only logical alternative appeared, therefore, to consist in