[This Document is the Property of His Britannic Majesty's Government.]
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CHINA RAILWAYS.
CONFIDENTIAL.
[19772]
Sir,
No. 1.
[June 15.]
C
527
SECTION 17192
IREC
30 JUL 07
British and Chinese Corporation to Foreign Office.--(Received June 15.)
22, Abchurch Lane, London, June 14, 1907. WE beg leave to reply to your letter of the 28th ultimo, in which you are so good as to inform us, by direction of Sir Edward Grey, that in a despatch received from His Majesty's Minister at Peking on the subject of the Soochow-Ningpo Railway negotiations "Sir J. Jordan states that a line of railway direct from Shanghae to Kashing and ending there would not, in his opinion, injure by its competition either the Shanghae-Nanking or Soochow-Ningpo Railways, and that he cannot see how its construction could be construed as constituting an infringement of the Agreements concluded by the Chinese Government with the British and Chinese Corporation respecting those two railways. He points out that an examination of the map will show that such a railway can in no sense be regarded as a rival or a parallel line to the Shanghae-Nanking or Soochow-Ningpo lines, and any objections made to its construction could not fail, in the present temper of the Chinese, seriously to prejudice the interests of British railway enterprise. It would be tantamount to telling the Chinese that they were to be debarred from building lines to connect with railways in which we are interested, and such an intimation would tend to exclude us from further participation in the construction of railways in China.
"On the other hand, any prolongation of the Shanghae-Kashing line beyond Kashing in the direction of Hangchow or Soochow would, Sir J. Jordan admits, form a legitimate ground of protest."
Sir John Jordan's views have received our careful and respectful consideration, and we are so far in accord with His Majesty's Minister that equally with him we deprecate any discouragement or obstruction of legitimate native railway enterprise, and, but that we regard the projected Shanghac-Kashing Railway as a flagrant and serious interference with the Shanghae-Nanking Railway and the Soochow-Ningpo Railway, we should not have intervened in the matter.
We beg leave to submit the following points in justification of our contention :- When the railway from Soochow to Kashing, Hangchow, and Ningpo is opened, a heavy traffic between Shanghae, Hangehow, and Ningpo may be expected, and, in the absence of a direct line from Shanghae to Kashing, such traffic must pass over 534 miles of the Shanghae-Nanking Railway to Soochow and thence over 46 miles of the Soochow-Ningpo Railway to Kashing, from whence it will continue to Hangchow and Ningpo by the Soochow-Ningpo Railway.
But if a direct and competitive line be built from Shanghae to Kashing, as shown in the accompanying sketch-map, it will be seen that none of the Shanghae-Hangchow- Singpo traffic will go viâ Soochow, as by a direct line from Shanghae to Kashing there would be a saving of approximately 45 miles as compared with the route via Soochow, and consequently the Shanghae-Nanking Railway must lose all share in such traffic, and the Soochow-Ningpo Railway also between Soochow and Kashing.
In the interests of the bondholders and net profit certificate-holders in the Shanghae-Nanking Railway, we feel bound to object to the construction of the Shanghae-Kashing Railway, and also because of its interference with the prospects of the Soochow-Ningpo Railway, for the financing of which we hold a preliminary agreement.
[2525 p-1]
We are, &c.
(Per The British and Chinese Corporation, Limited),
(Signed) W. KESWICK, Chairman,
Inclosure in No. 1.
Sketch Map of Railway from Shanghae to Nanking.