[This Document is the Property of His Britannic Majesty's Government.]
CHINA RAILWAYS.
CONFIDENTIAL.
[16782]
No. 1.
303
[May 23.]
SECTION
23671
4 JUL 07
A
Sir,
>
British and Chinese Corporation to Foreign Office.—(Received May 23.) |RECZ
22, Abchurch Lane, London, May WE now beg leave to reply to your letter of the 2nd instant (the receipt of which we acknowledged on the 3rd instant) and to support the contention of our representative in China that the Agreement between the Chinese and Japanese for the reconstruction of the Sinminting-Mukden Railway under Japanese auspices and with Japanese financial assistance is an infringement of both the original Loan Agreement of the 10th October, 1898, and of the supplemental Agreement (B) of the 20th April, 1902, which in clause 5 specially confirms clause 3 of the original Agreement in the following terms:-
"Under clause 3 of the Agreement dated the 10th October, 1898, it is stipulated that the construction of branch lines or extensions shall be undertaken by the Northern Railways Administration, and the intent of this stipulation is hereby confirmed in order to secure the existing interests of the railways. It is therefore agreed that the construc- tion of any new railway within a distance of 80 miles of any portion of the existing lines, for which Concessions have not been signed previous to the date of this Agreement, shall be undertaken by the Administrators-General of the Imperial Northern Railways...
Sir Edward Grey remarks that the Northern Railway was not constructed to Sinminting when the Agreement (B) of the 29th April, 1902, was signed, but we beg leave to point out that Kaupantze, the junction on the railway from which the line was continued to Newchwang to the south-east, and to Sinminting to the north-west, is less than 80 miles (actually 70) from Sinminting, and that as early as 1900 practically all the earthwork between Kaupantze and Sinminting bad been constructed and the rails laid to within 45 miles of Sinminting. The Kaupantze-Sinminting section had therefore become part of the Northern Railway system, although owing to the Boxer rising the actual completion and opening had not taken place.
Apart, however, from these facts, we submit that the term " existing lines," in clause 5 of the Agreement of the 29th April, 1902, must necessarily cover the lines contemplated in the Loan Agreement, which the Chinese were under express obligation to the bondholders to construct, and it is to be noted that Sinminting was one of the objective points specially provided for in the Loan Agreement.
When the Sinminting-Mukden line is reconstructed it will constitute a connecting link between the Northern Railway and the Eastern Chinese Railway, and also with the Siberian route to Europe. It is important therefore that it should be of the same gauge as the Northern Railway, and that the Northern Railway Administration's control of the working of it should be unfettered, for if the line were in any way under Japanese influence, there is a great risk of the tendency being to divert passenger traffic to the port of Dalny, and thence by sea to Tien-tsin, Shanghae, Hong Kong, and other places, rather than to afford facilities for it to find its way over the Northern Railway system to Peking, Hankow, &c., and later on to Canton and Hong Kong, or to Tien-tsin, and later on to Nanking, and thence over the new railway to Shanghae.
As regards goods traffic, any obstruction as regards facilities afforded for this class of traffic to find its way over the Northern Railway in the ordinary way would prejudice the interests of Tien-isin in favour of those of Dalny, and deprive the Northern Railway of legitimate traffic,
Sir Grey refers to the Agreement with the Russian Government, that His Majesty's Government would not ask for any extension beyond Sinmintung, and observes that although His Majesty's Government are not similarly bound to the Japanese Government, the latter may be considered in a sense the successors of the Russian Government in title. As to this, we venture to remark that it would, it appears to us, be unfortunate for the Northern Railway if the Agreement were enlarged to include the Japanese Government, as it would prevent the construction of an important and valuable extension long advocated by Mr. Kinder, viz., to Tie-ling on the bank of the Lia Ho. If the Northern Railway system were extended to this place, it would tap at
[2481 z-3]