1
P
Enelers & in no.
E-WO,
PEKING.
572
17th April 1905.
Dear Sir Ernest Satow,
Your note which was addressed in error to
the Hotel Wagons-Lits has just reached me. I am living at our new bungalow in Legation Street, which has been built on the site of
the one destroyed in 1900. I merely mention this in case you may hereafter have occasion to communicate with me on railway matters
and to save any possible delay.
>
In accordance with your request I enclose a copy of the rough
lo 2 mm No 197013 estimate of amount of Loan required' for the Canton-Kowloon Railway. In this estimate you will observe the nominal amount of the Loan is placed at £1,500,000, but the Chinese would actually get only £1,350,000. In previous Railway Loans, so far as I am aware nothing has ever been provided for "working capital" or "margins", whereas in the enclosed estimate to comply with clause 10 of Schedule and leave a margin for contingencies these amount to £133,822, a sum al- most sufficient to provide for the two additional years' interest
which may be required in event of the Hongkong section taking four years to build. In discussing this matter with Sir Matthew Nathan, he seamed to think that the Hongkong section might be built more expeditiously and possibly the Chinese section might take a little longer than anticipated, in which case the opening of the two sec- tions would come nearer together than at present we expect.
The Chinese however may not raise this question at all, and in order to prevent further delay in commencing this line, the Corpora- tion's present feeling is to fill in two millions as the amount which the Loan is not to exceed. The importance of filling in a
safe figure is that the Agreement specifies a maximum amount,
but