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the two sections would come nearer together than at present we expect.
The Chinese however may not raise the question at all, and in order to prevent further delay in commencing this line, the Corporation'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 does not provide for what is to be done in the event of the loan proving insufficient, and in this case it is not only the completion of the line which has to be provided for but also the provision of the working capital from time to time and for improvements.
Therefore as they view the situation at present they think two millions should be provided for, but of course they would not think of issuing it all in the first instance.
Another point which may or may not be worthy of consideration is the probability that the Chinese would value their proposed partnership with Hongkong more highly and prove easier to work with hereafter if they found from a short experience that their own section of the railway was by itself unprofitable.
With regard to section 16 this is a clause on which I anticipate much discussion. Our own experience however in dealing with Chinese officials is to ask for more than we expect to get, so as to leave a margin for concessions later on, and possibly the Colonial Office in passing this clause held somewhat similar views.
I have wired to Hongkong for the Engineer's report on the proposed line, and it should reach me within the next ten days, meanwhile I am engaged on the short summaries of the Loan Agreement and Schedule, which I must confess I do not find as easy a matter as I anticipated.
$2,
Yours truly
(Signed)
Charles H. Ross,
16
the two sections would come nearer together than at
present we expect.
The Chinese however may not raise the question
at all, and in order to prevent further delay in
commencing this line, the Corporation's present feel-
ing is to fill in two millions as the amount which
the loan is not to exceed.
The importance of fill-
ing in a safe figure is that the Agreement specifies
a maximum amount, but does not provide for what is
to be done in the event of the loan proving insuffi-
cient, and in this case it is not only the comple.
tion of the line which has to be provided for but
also the provision of the working capital from time
to time and for improvements.
Therefore as they
view the situation at present they think two mil-
lions should be provided for, but of course they
would not think of issuing it all in the first in-
stance.
Another point which may or may not be
worthy of consideration is the probability that the
Chinese would value their proposed partnership with
Hongkong more highly and prove easier to work with
hereafter
hereafter if they found from a short experience that
their own section of the railway was by itself un-
profitable.
With regard to section 16 this is a clause on
Our own experi- which I anticipate much discussion.
ence however in dealing with Chinese officials is to
ask for more than we expect to get, so as to leave a
margin for concessions later on, and possibly the
Colonial Office in passing this clause held somewhat
similar views.
I have wired to Hongkong for the Engineer's report
on the proposed line, and it should reach me within
the next ten days, meanwhile I am engaged on the short
summaries of the Loan Agreement and Schedule,
which
I must confess I do not find as easy a matter as I an-
ticipated.
$2,
Yours truly
(Signed)
Charles H. Ross,
1
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