CO129-507-1 Proposal to dispose of Boxer Indemnity funds- claim by Hong Kong university 21-12-1927 - 24-7-1928 — Page 146

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Hong Kong University.

After the Secretary of State for Foreign Affairs

and the Chancellor of the Exchequer had made statements from their respective points of view, it became clear that the pros and cons of the decision to be reached were very

evenly balanced. From the financial point of view it was felt to be hard on the heavily-burdened Eritish taxpayer that the considerable funds accumulated from the Boxer

indemnity could not be appropriated to the cost of the Shanghai Defence Force, seeing that the necessity for that force had arisen solely owing to the continued disorders in China, and that it was due to these disorders that the said indemnity could not be expended, as intended,

for the benefit of the Chinese. On the other hand the

Cabinet were deeply impressed by the consensus of expert

views 98 to the bad effects on Chinese and international

cpinion which would result from the appropriation of these funds to the maintenance of the Shanghai Defence

Force. It was felt that this would be particularly

inadvisable at a moment when Communism - being overthrown

in China, sccompanied by a progressive disappearance of the

anti-British sentiments which had formerly prevailed. In

this connection the Secretery of State for Foreign Affairs

warned the Cabinet that to use the funds as proposed would

probably