should be in a better position both morally and legally
if we had, in fact, got an extension of the lease from the present Government, but It was very possible that the
present did not offer a good chance of approaching the
Chinese Government, but at least they felt it was more favourable than any other time was likely to be.
now
we
He felt it was important, however, that up to
had received no suggestion from the Chinese
Authorities that our lease should be extended in return
for a large loan or grant, though they had put forward
many other schemes, some of them quite fantastic, for
giving us some return for such a loan or grant.
It was
probable that such a possibility had occurred to them, and
he could not but feel that it was significant that no
mention of it had been made so far.
An extension of the lease for such a large sum
would of course be most unfavourably received by the
Japanese, as had been
showr
when the recent currency
loan to the Chinese Government had been under discussion.
Mr. Cowell asked whether the reason for the
Cabinet's refusal to grant that loan had been the fear of
might the Japanese reactions, or the fact that we would have been
making a bad bargain. Sir John Brenan replied that it
was difficult to say. Mr. Wardley pointed out that the
wording of the Cabinet resolution laid emphasis on the
possibilities of Japanese retaliation rather than on other
grounds, but it was felt that, particularly in view of the
memorandum submitted to the Cabinet by the Chancellor of
the Exchequer, it there had been other grounds for the
Cabinet decision, e.g. the fact that we might be making a
bad