CO129-529-3 China- Boxer Indemnity (Application) Bill 21-2-1931 - 21-2-1931 — Page 19

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£4,000,000.

approximately four million pounds, will be entrusted

to the Board of Trustees in China, a body set up by the

Chinese Government, which is at liberty, under the terms of

the agreement concluded between His Majesty's Government in

the United Kingdom and the Chinese Government, to spend the

proceeds of any loans raised on the security of the funds thus

placed at their direct disposal on material manufactured in the

United Kingdom or in any other country, subject to any

obligations, such as Consortium agreements, outside the

indemnity agreement. It will not be open to His Majesty's

Government to induce the Board to give preference to United

Kingdom or Dominion manufacturers.

4. If, as is presumably the case, the tender in question

has not been placed through the London Purchasing Commission

it would seem that the Nanking-Pukow railway ferry is to be

financed either from the remitted indemnity funds under the

control of the Board of Trustees, or, possibly, from other

sources. In either case there is nothing in the terms of the

China Indemnity Act or the agreement with the Chinese

Government which would necessarily prevent the acceptance by

the Ministry of Communications at Nanking of a tender from the

Hongkong Whampoa Dock Company.

I am

5. The desired assurance can therefore be given to the

company but such an assurance is not necessary under the terms

of the Act, and might indeed create a false impression.

accordingly to suggest, for Lord Passfield's consideration,

that it might be preferable to explain the position briefly as

outlined above, and so to avoid the possibility of a

misunderstanding which might arise if the assurance desired

by the Company were given without any such explanation.

I am,

Sir,

Your obedient Servant,

Gw.arde