CO129-423 - Governor Sir May - 1915 [7-8] — Page 377

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and we knew we could not pay, we should have told Krupp and asked

for a respite exactly as if it had been the acceptance of a bill by a bank. It is to be hoped that you succeeded in making amenda with the half of an advance from the R.A.B. (Russo-Asiatic Bank) in Tientsin, which I arranged so that sen will not bear a grudge against us in this matter. In future nothing of a similar nature should occur, as it can easily be avoided, because all such obliga- -tions are dealt with in themselves exactly as acceptances and are

entered in the bill-book.

Then we could confidently leave it to Krupp as to whether they had determined to withdraw the representation from us. I can hardly imagine that. For my part I think it is bluff when the

people in Essen now talk of new contract conditions. See that we do not allow ourselves to become anxious but let us keep our end up, and then the decision will be postponed for a year in order to

see how things turn out in China. For nobody in Essen really be- -lieves that they can manage without Carlowitz and Co. We must therefore conduct ourselves properly but should put up with no bad treatment from Essen. I find that the things which Essen has been doing lately go somewhat too far. In my answer of the 18th.instant re the inhui loan I have referred to the unwarranted attacks which

are contained in Krupp's letter to you. I also regard the attitude of Krupps (according to their letter of October 5th.) as very mean in the question of interest re the Nanking battery, in which Krupp makes an extra profit of H. 20,000 (presumably at our ex- -pense, since we cannot treat the Chinese so unfairly) so that he makes 8% per annum on the whole amount of the order from and after the day on which the order was placed. Unfortunately I cannot do anything in this matter, for Hamburg has already agreed to it. Baur is also beginning to act like Essen but as

ho

is quite wrong in this case wrote him yesterday re enclosure ( original goes direct to Kiel).

As regards Krupp we must show more spirit and not put up with such treatment as without Krupp's agency we stand as the first firm in the East. It is exclusively Government business