This Document is the Property of His Britannic Majesty's Government.]

CHINA RAILWAYS.

CONFIDENTIAL.

[26396]

No. 1.

[July 29.]

SECTION 1.

(Extract.)

Sir Edward Grey to Sir C. MacDonald.

Foreign Office, July 29, 1908. COUNT KOMURA came to see me on the 24th instant, before leaving to take up the post of Foreign Minister at Tökiō.

I told him there were two or three questions the importance of which I should like to urge before he left.

Lastly, I spoke of the relations with China. I told Count Komura that we would respond to his desire, and do all in our power to promote good relations between Japan and China. I realized, in the case of the Fakumen Railway, that Japan was reasonable in contending that there should be no competition which would inflict an injury on the South Manchurian Railway. I understood that China now wished to know what the Japanese Government considered the necessary limits to secure this object, and I thought it was only fair to China that the Japanese Government should not press the contention to such a point as to prevent the development by China of other parts of Manchuria.

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