89
88
4
of Commons; such remission would, however, have to be in form spontaneous and unconditional.
This procedure can be adopted far more rapidly than action by Act of Parlia- ment; and I would accordingly be glad to have your early views on the following points, which would arise for consideration before a solution on these lines could be envisaged
(1.) Are there indications that the Nanking Government are so far stabilising themselves as to justify our handing over to them moneys which are specifically to be devoted to work covering the whole of China and not certain provinces only?
(2.) If or when this is the case, would it be reasonably safe to hand over to that Government the unpaid instalments unconditionally, but on the under- standing that when we see what use they put them to, and are satisfied that they deal with these sums in accordance with our stated intentions, we will take steps to refund to them the sums already paid? (3.) Would such a proposal be acceptable or the reverse? Would the Nanking Government appreciate being placed upon their mettle in this way, or would they merely take the occasion of our friendly action to clamour for the immediate remission of the whole fund paid and unpaid? (4.) In the event of their spending the remitted instalments in a manner which did not satisfy us, would our retention indefinitely of the amount already paid cause more friction and bad feeling than the delay involved in proceeding on the lines hitherto contemplated, viz., establishment of a Board of Trustees in China by Act of Parliament?
(5.) Have you any other suggestions to offer for the disposal of these as yet unpaid instalments, bearing in mind that they could under this procedure only be remitted unconditionally and without allocation by ourselves in advance to any specific purposes, though it would be open to the Chinese Government at the time of remission to give any unilateral assurances or undertakings in regard to the expenditure of the fund?
(No. 1158.)
ANNEX II.
Sir M. Lampson to Lord Cushendun.-(Received October 18.)
(Telegraphic.)
YOUR telegram No. 256.
Peking, October 18, 1928.
I will first endeavour to answer specific questions in paragraph 4. (1.) Rumours of all sorts are rife and no one can possibly foretell prospects of durability of present Government. But I see no signs so far of their weakening— indeed, rather the contrary. Feng Yu-hsiang remains the enigma. If they do fall, the odds are that their successors will represent much the same thing as they do. It looks as though Manchuria were gravitating towards Nanking, and but for the Japanese she would have joined up ere now. fancy, therefore, that Nanking or its successor are likely to represent all China, at least in name, for some time, but I do not pretend that there is a chance of their exercising effective control over the provinces for a long time to come.
39
(2.) If by "safely is meant: "Would Nanking Government necessarily adhere to any understanding of the kind indicated," the answer is in the negative. No Chinese Government can be trusted to keep their word if it happens to suit them to break it.
(3.) I should say, undoubtedly acceptable. It might appeal to men like Soong and C. T. Wang to be put on their mettle, but it is quite likely that they might also press for return of all funds. It is the nature of all Chinese to ask for more; give an inch and they ask for an ell.
(4.) Impossible to say, but probably not.
My general comment follows in my immediately following telegram.
5
ANNEX III.
Sir M. Lampson to Lord Cushendun.—(Received October 18.)
(No. 1159.) (Telegraphic.)
MY immediately preceding telegram.
Peking, October 18, 1928.
In favour of proposal, main arguments seem to me: (a) That it would save much future potential friction, and once we have made up our minds to hand the money back, we should do well to do it thoroughly and be quit of all future responsi- bility for method of its expenditure. This argument greatly attracts me.
It is emphasised by the fact that America at this very moment is having violent friction with Nanking over that portion of her return of indemnity known as China founda- tion. A record of a conversation on this with United States Minister went to you in my despatch No. 1200 of 8th October. (b) Political effect, if just at this time when order may be said to have evolved out of chaos and Nationalist Government established itself we were to show them this startling act of generosity.
2.
In short, there may be a strong case for more or less unconditional remission both in consideration of long view and avoidance of future friction and of immediate effect, which could hardly fail to be favourable throughout all China.
3.
Arguments against the proposal are also strong. They centre really on undesirability of returning vast sum of money to unfettered control when we know from painful experience in the past how hopelessly dishonest and inefficient all previous Chinese Governments have been in matters of finance. That there is thus little likelihood of money being devoted to objects of mutual Anglo-Chinese benefit, and that finally, with so many British debts outstanding, so generous free gift to Chinese of British taxpayers' money would be unjustifiable and would raise a storm of criticism throughout all the British community.
4.
I cannot at the moment pretend to say which line of argument has it, and would much prefer to let the matter stand over until I have visited Nanking, when my mind would become clearer. For instance, knowledge that this offer was a practical possibility might give me an invaluable lever if it becomes later a question of general commercial treaty negotiations. Again, if it were a question of practical politics some assurance from the Chinese that they would place big orders in Great Britain for inevitable reconstruction work, such as railway materials, &c., would, imagine, take the sting out of much criticism of an unconditional remission. These, however, are ideas which I only throw out tentatively pending seeing things for myself at Nanking if I succeed in going there.
5. At the back of my mind I feel we might be able to do a favourable deal over our various treaty difficulties if we had this bait in reserve. At the moment Nanking is desperately in need of money.
(Repeated nowhere.)
ANNEX IV.
Minute of Conversation with Lord Buxton, October 18, 1928.
I SHOWED a draft of the department's memorandum on the proposed unconditional remission of the unpaid instalments of the Boxer Indemnity to Lord Buxton this morning.
Lord Buxton stated that he would, of course, much prefer that the recom- mendations of the Advisory Committee should be carried out, yet if there was no real immediate prospect of the introduction of an Amending Bill in the House of Commons, his first impression was that the proposal had much in its favour. He agreed that the remission of the instalments, if made, should be absolutely unconditional. As regards the accumulated £2 million of paid indemnity, he did not consider that it would be worth while, nor indeed easy, to create a Board of Trustees to deal only with this reduced amount of the fund. The proposals of the committee were founded on the assumption of £11 million, and it would be very difficult and invidious to cut them down to £2 million. It would be better, he thought, to treat the remaining £2 million more or less in the same way as the
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