C.O. 5230/73
Memorandum of points for discussion between His Excellency the Officer Administering the Government at Hongkong and the Chief Manager of the Hongkong and Shanghai Banking Corporation in connection with the proposed Canton-Kowloon Railway.
1. The advantage the Railway would be to the Colony.
2. The very serious effect it would have on the trade of the Colony, should a Railway Line be constructed South of Canton terminating outside this Colony.
3. If the Hongkong Government would guarantee % yearly for a certain number of years, it would ensure the success of a loan being floated to raise the necessary funds for construction. Is there not a precedent for this? Did not the Indian Government give a similar guarantee for the Burmah Railway?
4. There is the question of whether or not the proposed line would pay in competition with the River traffic, and the consequent risk of the Government being called upon to pay any deficiency in the interest but this risk would be very small for the following reasons:-
(a) During the first 2 or 3 years whilst the line is under construction, interest would be paid out of capital.
(b) The Chinese Government would give their own guarantee in addition to the security of the Line, therefore the Chinese Government would have to default before any call could be made on the Hongkong Government guarantee.
(c) There would be the earnings of the Railway Line between ... and the loss of the amount guaranteed.
(1) If the Hongkong Government suffered any loss through ...