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Mr. Mayers added that I could take it that no move would come from the Chinese side. I told him that we had prepared a draft. He said Mr. Gresson had already told him this, and had suggested that he should ask me for a confidential copy of it. I replied that I thought it would be better to communicate it in the first instance to the Secretary of State and His Majesty's Minister, Peking, and as soon as I had done so I should be glad to give him a copy. I said that as the representative of the British and Chinese Corporation bondholders, his one and only interest was to endeavour to make the line pay, that to achieve this it was essential that it should be worked very economically as a single line, with a minimum of Staff, and under reliable foreign management especially of accounts, in order to prevent pecula- -tion and illegal appropriations ('squeeze'). With this he agreed. I added that as regards the financial arrangements between the two Sections, and generally speaking as regards the whole basis of the Agreement, it would be necessary to take a wide outlook, looking to the future and not to the immediate present. If each side were engaged in baggling over immediate profits we should be worsted in the competition with water transport. Coming to actual details, I said that since he agreed that the real management must be British it would be essential that we should nominate the General Manager. He agreed but said he ought to be a man known to the Chinese, and asked if we would accept Mr. Grove. I said that as the appointment would not be made in all probability for some 18 menths, by which time Mr. Lindsey's time would be nearly expiring, I thought it possible we might accept Mr. Grove though he was not a Traffic Manager, prided it were understood that when he left the nomination of a successor lay with us. (See note attached.)
dinton,
4
He referred to the deepening of the harbour
at Canton, and the former project (which he considered to be quite dead now) of making a branch line to Whampoa. He said "that at the Legation at Peking, although they had supported
my predecessor's protests they could not share his views that
such
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