Exloanne 3. to Seed Despabei, 4 31/i9/06,
in no
CO.
4456
548
RECE Reef 1 DEC 06
12th October, 1906
I have the honour to acknowledge the receipt of your letter No 150 dated the 18th ult., forwarding a memorandum of a conversation between you and M'Kinnon, Chief Engineer of the Canton Hankow Railway, on the subject of Engagement of British firms for the construction of that line.
You are, no doubt, aware of the circumstances in which I felt it my duty to intervene in this matter. You will remember that a year ago, and during the final quarter of that financial year, this Government was approached with the suggestion that it might render valuable service to that of China by enabling it to redeem the Canton Hankow Railway, which had passed into foreign hands, and in which it was considered to be in the interests of China that it should remain. And being anxious, on that account, to do a service to China and strengthen the friendly bonds between this Colony and that country, as a result, the railway in question was redeemed by means of a loan from this Government granted on terms more favourable than those of any previous loan of this kind. The pecuniary advantage which was anticipated would accrue to Hong Kong, and which is already becoming very marked and considerable, has been an inducement to the Talung loan syndicate, Viceroy Chang Chih-tung, who negotiated the loan, responded to the favourable attitude of the former, and when it was made a condition that the first application for any further loan required for purposes of construction should be made to England, and if England lent the money, half the Engineers should be British. In so far as no application has been made to England for funds for construction, as to half the Engineers being British has not come into force. The loan was only granted on condition that Chinese money was used and only Chinese Engineers were employed in the construction of the Canton Hankow Railway, and have nothing to say beyond expressing the hope that the undertaking may be carried out successfully.
I think that if, after the action of the Hong Kong Government in assisting the railway to be constructed as a Chinese undertaking, an attempt is made to get other than British Engineers for it, I am justified in looking on the Chinese as ungrateful and to feel that they are acting in this matter as simply ungrateful.
I observe that M'Kinnon draws a distinction between what the railway is now that it is in the hands of a Chinese Company and what it could have been as an Imperial line. It seems to me that this is an illustration of what the Chinese Company has only become possible through the action of the Hong Kong Government in lending the money required for the redemption of the railway, the Imperial loan to which I have referred would not be more marked if the Company gives a preference to other foreigners over British Contractors.
I do not believe that I should have much difficulty in finding a Deputy Chief Engineer and a capable Executive Engineer. British Engineers are anxious to help in this matter. A salary of $1250 per month for his Deputy Chief Engineer would be considered reasonable, though by no means excessive, while an Executive Engineer might be obtained for $750 and an Assistant Engineer...