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with those of the Shanghai-Nanking railway, and they appear to provide for exemption "from any special taxes" only until the loan has been paid off. I am also in doubt, seeing that Kowloon is not a Treaty port, whether "exemption certificates" may be claimed for goods consigned to Canton or eventually to Hankow. The question of likin charges would of course form one of the matters for negotiation under the Joint Working Agreement, but I confess that I am at present at a loss to see what rights this Government possesses which would be violated by the imposition of likin dues, or what lever it can use to prevent such action on the expiry of the loan agreement.
To put the matter bluntly this Government has embarked on a project costing probably about £1,000,000 sterling, but has no agreement of any kind with the Chinese Government with whose railways it is to connect. Such few and unsatisfactory safeguards as it possesses (such as the stipulation for no competing line) are contained in the loan agreement between the Chinese Government and the British and Chinese Corporation to which this Government is not a party, and which I presume could be modified by mutual consent, and in any case lapses 25 years after the line is completed if the loan is duly paid.
In these circumstances I feel I have but little to negotiate upon in framing the Joint Working Agreement, beyond the terms of Article 18 which binds the Chinese Government to make an agreement "for the joint-working of the two sections".
I shall be grateful to Your Excellency for any information on the subject of railway likin, and any suggestions which you may be able to offer as to the conditions in this matter which this Government could reasonably ask, both during the continuance of the loan agreement and subsequently, and the arguments by which claims could be supported.
77. The third point to which the Secretary of State invites my attention is that "it is conceivable that the line may