CO129-501-2 Chinese situation- Boxer indemnity 5-2-1927 - 14-12-1927 — Page 111

112

3.

-2-

(4) It would enteil resignation of Advisory

Committee here and much justifiable criticism,

(5) It would break down the scheme of the

Advisory Committee which by providing for close Chino-

British co-operation in non-contentious matters ought

to contribute in itself to better relations in

future, especially with the intelligentzia and pro-

gressive class,

(6) The existence of a large sum ready and waiting

for useful expenditure ought to be a concrete argument

with the Chinese in favour of friendship and co-opera-

tion with us.

I would much prefer at present to leave the

money untouched. Perhaps you could while at Shanghai

discreetly sound such representative persons as

Doctor Tsai and others as to desirability of post-

poning or expediting any further action and possibility

of getting a satisfactory provisional board.

If you

see no objection, would you personally press Tsed

to join the Board? But for the present you should

on no account let it be hinted that His Majesty's

Government are considering any modification of policy

with regard to the Indemnity Fund. Possibly our

best course for the moment is to continue leisurely

with the constitution of the Provisional Committee and

wait on events which may in time compel us to take

a definite decision as to the future employment of the

fund.

Please telegraph your views on the whole

question.