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and Shanghai Bank's other commitments would not debar it from
receiving subscriptions.
On receipt of your telegram in reply, I returned to
Canton and placed myself in communication with the Tutu. He at
once instructed Kr. Li Hsin-ling, an officer of the Kinistry of
Finance, sent down from Peking to enquire into the local financial
situation, to see me and to show me the draft agreement entered
into with the British engineer, originally referred to in the
newspapers, who turned out to be a Mr. John Wilkie of the Hongkong
firm of Macdonald & Co., engineers and contractors. It was in
effect a repetition of the proposal laid before, and rejected by,
Mr. Hillier, and did not contain any provision as to control. The
principals were not disclosed, and lir. Li informed me that, unless
they were, and he was satisfied as to their standing, he would,
although authorised by the Ministry of Finance to sign, break off
negotiations. I told him that frankly I did not consider that r.
Wilkie would be able to raise money on the terms, and that I could
not, in any case, endorse an sreement of the kind without
reference to you. I then discussed with him, as an alternative,
the scheme of Sir Henry May and myself, pointing out the absolute
necessity of foreign supervision, but also calling attention to
the fact that it would be for the lenders i.e. Chinese to say to
what extent they wished it to be exercised. The imposition thereof
would not be the same as a demand made by foreign bondholders, it
would be a quite intelligible demand by Chinese, in their own interests, previous domestic loans having notoriously not command-
-ed the confidence of the public. I added that for purposes of
face, however, they would in all probability require to have it imposed on them by the Central Government, the genius of the Cantonese being distinctly averse from anything sevouring of
foreign interference. Mr. Li pronounced himself in favour of the
scheme and stated that, should Mr. Wilkie, who was expected to
arrive that evening, fail to disclose his principals and not be prepared to sign at once, he would proceed to Hongkong and
discuss the matter with all concerned, kr. Wilkie did not, as a
matter
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