CO129-538-1 Hong Kong University 31-12-1931 - 6-8-1932 — Page 212

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not denying the benefit to British Industry which

should issue from the spending on British material of

something like £8,000,000 which will eventually pass

to the Purchasing Commission in London, but I cannot

see that the Chinese Government has any serious inten-

tion of guaranteeing interest either on the money

which the Commission will spend or on the half instal-

ments which will be paid to the Trustees but the spend- ing of which the Chinese Government apparently claims

to control. Even if the Chinese Government have a

genuine desire to carry out their undertaking to treat

the whole indemnity as an endowment on which incident-

ally they subsequently promised interest at 5% how

can they possibly get this interest out of railways, the bondholders having the first claim on the profits ? Besides, all sorts of other schemes are being matured, such as a factory in Nanking for the manufacture of

electrical machinery. Thus nothing certain will be

forthcoming from about £8,000,000 of the available cap- ital, and if the other three millions odd are to be MW spent by the Chinese Government in the same way, there will be no income at all available for education. In

fact, so far as I can see, the British surrender of the indemnity will in no way tend to improve British prestige in China- quite the X contrary..... The point I wish to make here is that there is no hope of en- hancing general British influence in China, or of turn- ing the eyes of Young China to Britain, if not in gratitude at least with interest, as the result of this last act of British generosity." (Pp. 13-14.)

We understand that nothing has occurred since the date of the minute from which these words are quoted to make Sir William Hornell take a more hopeful view of the situ- and at the time when our delegation left Hong Kong for

ation;