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His Document is the Property of His Britannic Majesty's Government.]
CHINA RAILWAYS.
CONFIDENTIAL.
[7660]
No. 1.
[March 5.]
SECTION 1.
Sir,
British and Chinese Corporation to Foreign Office.-(Received March 5.)
22, Abchurch Lane, London, March 4, 1908.
IN the letter which we took leave to address to you on the 19th ultimo, re Imperial Railways of North China, we quoted a portion of a Memorandum which Mr. Bland, our representative in Peking, had submitted to His Majesty's Minister in Peking last December, in which he contended that the statement of the Japanese that the proposed extension to Fakumen would be detrimental to the South Manchurian Railway, could not be sustained.
We now beg leave to submit an extract from a letter which the Directors of the Corporation have lately received from Mr. Bland, dated Peking, the 10th February, and we beg that it may be submitted to Sir Edward Grey :-
"In reference to this matter, it is claimed by the Japanese Government that a supplementary Article of the Manchurian Convention of 1905, formally accepted by the Chinese Government, debars the latter from undertaking any extension of the Northern Railways, and the Japanese Minister has definitely stated that, if the work is begun, it will be forcibly stopped. The clause on which the Japanese Government relies reads as follows:-
"The Chinese Government engage, for the purpose of protecting the South Manchurian Railway, not to construct, prior to the recovery by them of the said railway, any main line in the neighbourhood of and parallel to that railway, or any branch line which might be prejudicial to the interests of the above-mentioned railway.
"The Wai-wu Pu do not deny the authenticity of this supplementary Article (publication whereof, according to the Japanese Minister, was withheld at the request of the Chinese Government), but they hold that it is not applicable to the proposed extension of the northern line on the grounds (1) that the Manchurian Convention was never intended to be effective outside the sphere of Japanese military occupation or to the west of the Liao River; (2) that, as the Northern Railways were first in the field, and have suffered severely from the competition of the South Manchurian line, it were absurd to apply this prohibitory clause to the long-established Chinese Government line, or to prevent the legitimate development of Chinese territory in a thickly populated country where no means of communication exist; (3) that the Russians objected to the Sinminting extension on political, not on economic grounds, and subsequently withdrew their opposition; and, (4), that the proposed extension cannot in any case seriously compete, since the Liao River forms a natural barrier between the country to be traversed and that served by the South Manchurian Railway."
We are, &c.
Per pro. the British and Chinese Corporation (Limited),
(Signed) W. KESWICK, Chairman.
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