DOMESTIC.
19795
JUN 04
Kowloon to Canton Railway
Encloses vres memo.
On securing concur of G.O. in proposals, will negotiate a final agreement with Chinese auth.. Draft agreement will be sent to Mr Fiddes
(Minutes.)
Before we go further, we ought to settle the form on the: the Kowloon section is to be handed, if & when built. Para: 4 of memorandum herein suggests a division of profits between the Chinese & Hongkong Govt.
It seems that the Govt. contemplates some arrangement with Hongkong generally similar to that with China (which is apparently to follow the lines of the Shanghai-Nanking agreement), but it is very vague.
As the object of Hongkong is not to make a direct profit but to facilitate its communicating with Canton, I incline to think that it would be cautious.
Io vel. If the Corporation will agree to lease the line at a rental, largely line to them out a sum to cover the interest & sinking fund on the capital expended without troubling about the