CO129-501-2 Chinese situation- Boxer indemnity 5-2-1927 - 14-12-1927 — Page 114

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paid off by 1950, under this scheme taels 50,000 is

to be set apart annually from revenue for redemption

a similar sum will be required for redemption of new

issue.

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For reason stated in my despatch above-mentioned

I am particularly anxious to do everything in my power

I properly can to mitigate the undoubted effect which

(gr.omit.) British concession at Tientsin to what is

virtually Chinese control has had on financial positior

and prospects of british community in that port, the

second most important British interest in China and I

therefore should like to see the possibilities of this

proposal explored in as helpful a spirit as possible

by advisory committee and His Majesty's Government.

The objections seem to be (1) that by investing

Indemnity Funds as proposed we create a precedent which

may be used later on by Chinese members of the Board

of Trusts to seek to invest the Funds in unsuitable

Chinese enterprises, (2) that pending establishment of

Board His Majesty's Government may reasonably hesitate

to invest Indemnity Funds in the manner suggested

especially as adoption of this proposal would almost

certainly be followed by similar applications from Hankow and Shanghai municipalities and even from

Chinese controlled municipalities in Shanghai and elso-

where.

On the other hand by making this loan it would se that we should (a) be within the recommendation of In

demnity Delegation (see page 163 of report) that Funds

should be invested in some constructive work beneficial

to Chinese people, (b) relieve ourselves of criticism

that we are allowing a sum of nearly 2,000,000 pounds

which....