C
126
with the Loan Agreement, and in consequence discussions
were held with the British and Chinese Corporation as to
its terms. As matters now stand the British and Chinese
Corporation are eliminated from any control in the line
beyond the limited powers which they possess under the
Loan Agreement to safeguard the interests of their Bond-
-holders. The Chinese Central Government has assumed
entire control, and it is probable that they dislike and
resent the termination of what will be the main trunk line
from Peking to Canton having its outlet at any but a
Chinese Port. They regard the Hongkong Section merely as
the final link of an all Chinese Railway over which accord-
-ing to Mr. Pope they would be justified in demanding
running powers or instead of which they would, in Mr.
Butler Wright's view, be alternatively entitled to claim the
management. In the event of the Colony proving obstructive
or unreasonable, they would probably consider that they
could starve out the Kowloon Section, (while their own
will pay well without entering British Territory) and
compel the Colony to accept their terms, or in the alter-
-native, they can serve their line by shallow draught
vessels and possibly by creating a deep-water port at
Whampoa. In this connection I enclose correspondence
from the
delcoure 3.
August
11908.
september.