(This Document is the Property of His Britannic Majesty's Government.)
# CHINA RAILWAYS.
## CONFIDENTIAL.
[36191]
No. 1.
157
[October 19.]
## SECTION 1.
Sir J. Jordan to Sir Edward Grey.-(Received October 19.)
(No. 380. Confidential.) Sir,
Peking, August 25, 1908.
REFERRING to my despatch No. 292 of the 25th June, I have the honour to inclose copies of correspondence on the subject of difficulties which are being experienced in the construction of the Chinese section of the Canton-Kowloon Railway. The two chief complaints alleged are the excessive cost of the land purchased under Article 7 of the Loan Agreement, and the delay caused in some cases by an undue insistence on the condition in Article 9, which provides that Chinese materials are to be preferred when price and quality are suitable.
At an interview yesterday with his Excellency Liang Shih-yi of the Board of Communications, I made a full statement of these complaints, and pointed out that the extra cost of the Shanghae-Nanking, which was often objected to by Chinese officials, was largely due to difficulties of a similar nature created by the people and officials of Kiangsu Province.
He considered that
Mr. Liang met the complaints frankly and reasonably. Mr. Groves' estimate of the probable total cost of land, as reported in Mr. Fox' despatch, was overdrawn, and thought that it would not amount to much more than 70,000l. He admitted that there had been some local trouble in two cases, but nothing out of the common, and he argued that though the terminal facilities on the reclaimed bund at Canton were costly, they were not excessively so, taking everything into consideration. The Government Bureau of Reclamation had, in the first instance, asked 400,000 taels, or 50,000l., for the ground required by the railway, basing their demand on the price paid by unofficial persons for other portions of the bund, and the Board of Communications, after four months of negotiation, reduced the demand to nearly half. The rest of the land was being acquired at fair prices, in his view, and he is a Cantonese.
With regard to the specific case of delay in ordering materials which is mentioned by Mr. Fox, Mr. Liang explained that some time ago he had asked Mr. Kinder for a list of the articles which the Tongshan works were in a position to supply to the Canton-Kowloon Railway, and in the list provided bridge caissons were mentioned, but when Mr. Kinder was applied to for the caissons he was unable to make them for Canton. Afterwards tenders for the caissons were called for from the principal foreign and native industrial concerns in China. Mr. Kinder informs me privately that he refused to make them because the time given was too short, and because such things should be made as near the site of the bridge as possible, to avoid handling after completion. In his view the caissons can be made as quickly in Hong Kong as in Europe, and no special firm is required to construct them. Mr. Kinder, whose long experience in China gives weight to his opinion, has always favoured the policy of utilizing all materials available in the country, and has avoided ordering things from Europe which could be procured or made on the spot.
There is little doubt that the control of the Canton-Kowloon line being vested in the Board of Communications at Peking, and not in the Viceroy, makes for delay, but it is clear that, as a result of past experience, the Chinese Government are determined that railways shall be national and not local undertakings, and that they are endeavouring gradually to recover control of all provincial railways. Such is the attitude of the Chinese Government on the subject, that I do not think any useful purpose would be served by pressing for general control of the Canton-Kowloon line by the Viceroy, instead of the Board, and, on the whole, I am disposed to consider that, in the long run, the centralization of control over the railways will tend to a more efficient and uniform administration.
In conclusion, I would add that the question of expenditure on railway construction is a very delicate one to discuss with the authorities of the Board of Communications, who are fully aware of the criticisms which have been passed on the outlay which the British section of this particular line has entailed, and who frequently adduce arguments
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