Abstract
This study examines the initiation and administration of Mercy Hospital in Republican Shanghai. It explains the protracted negotiations that underpinned the collaboration between the Chinese founder Lu Bohong, the Shanghai Municipal Council (SMC) of the International Settlement and the Municipal Administration (FMA) of the French Concession. Despite mutual needs for a psychiatric hospital, the collaboration was undermined by disputes over funding shares and administrative direction. While Lu expected a symbolic modern philanthropy, the SMC and FMA saw it as an economic tool to relieve the responsibility of regulating refugees and the increasing mental patients. They repeatedly forced Lu to make concessions with financial instruments, but ended up non-cooperation, leading the patrons to compromise to keep their problem solver. However, after Lu's murder and the subsequent dysfunction of the Chinese municipal government, the SMC and FMA could not help but take on this task to protect their settlements from the threat.