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popular view"-in other words, to convince myself of the reality of the alleged desire on the part of the Yunnanese for exclusive Chinese construction of the Tengyueh Railway.

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When telegraphing this to you I stated that I proposed to answer in the sense of the second paragraph of my telegram No. 31 of the 24th--that is to say, that I could not but regard the establishment at this crisis of the so-called "exclusive Chinese Company for the construction of the Tengyueh Railway' as an affront to my Govern. ment, and must therefore decline to recognize any such Company. I added, that the true popular desire in Yünnan is for construction by the British, but that it would be useless to affirm this, as the "Directors" would promptly manufacture false evidence to the contrary. Since delay only encourages their pretensions, while withdrawal would seriously impair our prestige, I ventured to yet again earnestly submit that we ought to at once insist on complete equality with the French. The insensate opposition of these short-sighted literati is playing altogether into the hands of our trade rivals, though I do not for one moment insinuate or believe that French influence has been brought to bear against us. The fact nevertheless remains that if we now yield and abandon our right to construct, should we choose, a British railway from the Burmah frontier to Yunnan-fu, French influence will become paramount in Yünnan.

The telegram of the "Directors" to the Wai-wu Pu professed to be signed by, among others, Ting Yen and Wang Hung-t'u. Now, the latter has been away for some some weeks at his family cemetery, cleven days' journey from Yünnau-fu, and does not return till to-morrow. The authors of the telegram could therefore not possibly have obtained even his sanction to their signing in his name. Ting Yen, again, was at the time (and still is) at Tengyueh. He might, it is true, have been consulted by telegraph, though I could hardly believe that a man of his experience (he was Salt Intendant in Chekiang) would be foolish enough to put his name to a threat. In any case, I tele- graphed to Mr. Ottewill, quoting the Chinese text of the most objectionable passage. Mr. Ottewill replied on the 26th that he had written to Ting Taotai saying that he had heard that he, Ting, had telegraphed to the Wai-wu Pu in the words I had quoted. Ting Taotai answered that he had only associated himself with a Petition to the Governor-General asking his Excellency to move the Wai-wu Pu to consult with you, and that he had had nothing to do with the telegram in question.

go

In short, it is abundantly clear that the authors of this effusion-who, I may say at once, were Yang Chintung and Li K'un-had no right to make use of the names of Wang Hung-t'u and of Ting Yen, and that the statement that it was, in addition, signed by "300 Delegates from all Yünnan" is a deliberate falsehood. As regards the unfortunate Tengyueb Sawbwas, who are also dragged in, I am told that even the feeble Governor-General has been roused to object. I am in hopes that he will further.

After sending off my own telegram of the 24th, I discovered that the telegram of the "Directors" had actually been published, verbatim, in the "Tien-nan Chao-pao," the semi-official" Yünnan Gazette." (I inclose the issue of the 21st containing it, and also my translation.) I accordingly again telegraphed to you, quoting the Chinese characters for the scarcely veiled threat "should they" (the surveyors) "be allowed to cross the frontier, it is to be feared that a grave calamity will ensue." I reported that I was warning the Governor-General, who is playing a double game; and I submitted that his Central Government should be moved to reprimand him for allowing this incite- ment to appear.

At the same time nothing perhaps could have served us better than this step of the "Directors." Once before had they tried the device of a threat of mob violence; but that was in the Governor-General's note (of the 20th October) which I was obliged to refuse to receive, because it contained his denial that he had agreed to the reconnaissance. The "Directors" evidently imagined that the Government of India would take alarm at their throat which they know themselves to be mere bluffand would recall the orders of Mr. Lilley. They never seem to have anticipated our very obvious move--to accuse them, vis-à-vis of the Governor-General, of inciting to a breach of the peace, and by demanding their punishment for contravention of the Treaty, to put them out of court. This I naturally proceeded at once to do. I wrote to the Governor-General the note, of which I inclose copy and translation, attaching it to a postscript calling for the punishment of the signatories to the telegram. In my note I showed how the establish- ment of their so-called Tengyueh Railway Company was an affront to my Government, while the unaccountable opposition to a third reconnaissance impaired friendly relations. In the postscript I warned the Governor-General of the seriousness of any attempt to attack British subjects travelling under passport, and let his Excellency know that I had reported the threat to yourself.

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The result has been almost all that could be wished. The Governor-General sent Tson and Yen, his latest intermediaries, to see me, and to say that instructions should be telegraphed to Tengyueh to protect Mr. Lilley and his party. In order to save his Excellency's face, Mr. Lilley was to be regarded as travelling under passport, but it was understood that he comes to make a reconnaissance. The Delegates at the same time hegged me to ask that his following should, if possible, not include any natives of India, and that the number of Burmese might be limited to ten or a dozen. There would not be the same objection to Englishmen I presume because it is known that we never contemplated sending more than seven. If, again, Mr. Lilley would not, at any rate in the towns, make a parade of his surveying instruments, the pretence of a travelling tour could be better maintained. A copy of the telegram would be sent to me in the course of the afternoon. They incidentally let fall that it was to be concocted with a view to perusal by the "Directors.”

I did not think it was worth while to stand out for something more formal. My own despatch and note are on record, clearly stating that Mr. Lilley's purpose is to make a reconnaissance from Tenygueh to Tali. In the absence of any rejoinder to my note, and in presence of the fact that orders have been telegraphed to protect the surveyors, we may assume that Mr. Lilley is at liberty to conduct operatious as in 1905. Nevertheless, I think it would be as well, at any rate at first, that those operations should be as little ostentatious as efficiency may permit; for example, he should avoid concen. trating the party into one large camp. Its numbers could, later on be gradually increased, should the nature of the work so require-as it almost certainly will.

If, in the meantime, His Majesty's Government has decided to insist that British enterprise in Yünnan shall, in accordance with the Agreement of 1902, receive equal privileges with French enterprise, the right to survey for a line of railway from our frontier to Yunnan-fu will accrue, to the very full extent exercised by the French between 1899 and 1903. That is, our surveyors will be at liberty to examine all possible approaches from Burmah towards Yünnan-fu. Should the result of the present reconnaissance be, as there is too much reason to fear, to confirm the view of Major Davies that an extension of the railway eastward of Tengyueh is hopeless," we should have, unless we are prepared to yield up all central Yännan to French influence and trade, to fall back upon the Kunlong-Mita trace, which the same authority has pronounced to be feasible. But we could not make out so good a case for the Kunlong-Mitu survey as we have been able to do for the Tali reconnaissance. At the least hint of our purpose we should find ourselves confronted with another Chinese paper railway Company, closing to us this time the Namting valley.

Even if we decide that it would be preferable that the main line from the Burmalı froutier to Yunnan-fu should be built by the Chinese, we ought, I submit, to begin by insisting on our own right to build it. Then, as a concession to China (for which we could claim an equivalent elsewhere), we should agree it its being constructed as a Chinese enterprise, on condition that British engineers be engaged, a British loan effected, and a time limit fixed within which the railway must be completed.

I have, &c.

(Signed)

Inclosure 2 in No. 1.

W. H. WILKINSON.

Governor-General Ting to Consul-General Wilkinson,

(Translation.)

December 25, 1906. THE Governor-General has the honour to acknowledge receipt of the Consul- General's despatch stating that he had received on the 9th December a telegram from His Majesty's Minister at Peking saying that he was desired by the Secretary of State for Foreign Affairs to instruct the Consul-General that the present reconnaissance forms an integral part of last year's survey, and is not a new departure, and that protection ought to be accorded as on previous occasions. The Consul-General accordingly asks that instructions may be telegraphed to the Taotai at Tengyueh against the day earlier fixed for the start of the engineers, to direct the local authorities to afford protection as on the two previous occasions. An acknowledgment is requested.

The Governor-General would observe that as a railway Company has been established for exclusive construction of the Tengyueh line, the situation is not the same as before; of this the Consul-General is well aware. On receipt of the despatch

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