CO129-507-1 Proposal to dispose of Boxer Indemnity funds- claim by Hong Kong university 21-12-1927 - 24-7-1928 — Page 99

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supporters.

I think, therefore, that an effort should

be mude to include the loop line in the major scheme

in the hope that it will be accepted in return for immediate

financial assistance. But if it appears that the resistance

offered is likely to wreck the whole project, it would be

better to finance the main line and leave the loop question

in abeyance for the present. Too much pressure will only

defeat our own ende, as it is fatal for any Chinese

administration to appear to be acting at foreign dictation.

When the main line is build, economic reasons will sooner

or later convince the Chinese of the necessity for linking

it with the other railway, and they may be left to realise

the practical merits of this in their own time. Even without

the Junction, the completion of the main line is bound

to benerit Hongkong with the additional traffic that it

will bring. at all events there can be no disadvantage to

British interests, for although there is no reason to

suppose that the railway will be better managed than other

lines in South China, in this case the defaults and losses

will have to borne by Chinese educational institutions

and not by British bondholders.

5. As regards the Chinese mentioned in Mr. Giles

despatch, Mr. Chu said that Mr. Li Yuk Tong was a

Hongkong merchant known to the authorities in Canton,

but not in close touch with them. He did not appear to

Anow any of the others.

I have, eto.,

(Sgd) J..Brenan.

Loting Consul-General.