10
The Chinese delegation having requested the British delegation to put in writing their loan proposal made at the last meeting, the latter then read the following state-
ment:-
"The Chinese delegation have asked for a written statement on the loan proposa! put forward at the meeting of 21st July.
"The details of the necessary formal agreement would take some time to settle and would be outside the duties of this conference. but the main features of the proposal can and should be indicated now.
"The proposal is made to show the sincere good will which Hongkong feels to- wards Canton, and in order that Hongkong may assist in the development of Kwangtung in some way which may be of mutual benefit to the province and to the Colony. We realise that the prosperity of Kwangtung and the prosperity of Hongkong are inseparably bound up together.
We
"The object of the loan would of course have to be mutually agreed upon. have suggested a loan for the development of the port of Whampoa, because while we think that that object would benefit Hongkong only indirectly we are anxious to show our good will by selecting an object which we understand is favoured by the people of Canton. We are quite prepared to consider any similar object of mutual benefit which may be sug- gested by the Chinese delegation.
"The adoption of the Whampoa proposal would be subject to both parties being satisfied that a scheme sound from the engineering point of view is possible at a reason- able cost The amount which we have in mind is a sum of about $10,000,000,
"One object of the loan, whatever main object be chosen, would have to be the construction of the loop line to connect the Canton-Hankow and the Canton-Kowloon railways.
'Adequate safeguards for the proper expenditure of the funds and for repayment of capital would have to be provided.
"A condition of the loan would be the complete cessation of the boycott and of all other anti-British manifestations throughout the territory controlled by the Canton Govern
ment.
In reply to questions on the point, the British delegation stated that by “adequate safeguards for the proper expenditure of the funds and for repayment of capital," they had in mind the usual provisions in Railway agreements made in China regarding in the case of British capitala British Engineer-in-chief and a British Chief Accountant and other safeguards as well as the mortgage of the works constructed and the revenues as security.
Before the adjournment of the Conference, the Head of the British delegation ex- pressed appreciation of the courtesies that had been extended to them and of the friendly tone that had characterised the proceedings of the Conference and hoped that the same would continue to prevail until the Conference had ended its labours." The Head of the Chinese delcgation reciprocated this sentiment and trusted that, as a result of the work of the Conference, a new page would be opened in the history of Chinese-British relations.
The Conference then adjourned, pending the British delegation's consultation with their Government regarding the Chinese proposal for a Commission of Enquiry and the Chinese delegation's consultation with the Nationalist Government on the subject of the British loan proposal.
Enclosure. 2.
NOTE: OF PROCEEDING. N.
RIED FOR
USE
Winters
No. 144
OF
COLONIAL DIFFICE.
¿
at 10/30 c.m.
In "dnesday the 21st. July.
The fourth meeting was held at the Pur-ign Offic.. Arring unt
as bufor..
Mir
Chen stated that he proposed to rod a statuent He then read the statement, a copy
and an "Aide Momoiru“. of which is attached.
350
At the conclusion of rding the st.tement the Consul- General asked whether Mr. Chen proposed to publish; and Mr. Chin
replied that he proposed to publish all three statements together. The Consul General (Mr. Br.nun) asked that the British Delegation might see this last document befor publication, not for the purpose of reply to the points rised but because we might want to explain why no further answer was given. Mr. chin agreed.
Mr. Chen then went through the "Aide Memoire", which appeared to be roughly drawn up. He said that the Shakoo incident was the origin of the boycott, He made to alternative proposals for a settlement. The first was that there should
be on International Judicial Enquiry into the facts of the Shake incident, mich would determine the question of responsibility. If the British lcgation were not willing to accept this proposal of an International enquiry hu md. the following it.rnative proposal. He said that the settlement of the boycott would involv. a surious financial burden, thich he suggested should be shared by us. Three things would be necessary, In the first place, the persons who had sustained the boycott for a year must have guarenteus against a repetition of the vents of 23rd. June. For this purpose it would b. nepustcry to regulate (a) the gurrison cf Shmeen Inc (b) the use of gunbets un the rivers. In the second place, the relatives of those une tere killed at Shakee yould live to be compenuated. In th. third place, the Erg mount of unemployment would m.k. it
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