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

AFFAIRS OF CHINA.

CONFIDENTIAL.

[38934]

No. 1.

361

[November 9.]

44174

SECTION 2.

2 DEC 08,

Sir C. MacDonald to Sir Edward Grey.-(Received November 9.)

(No. 263. Very Confidential.)

Tokio, October 4, 1908. Sir,

IN my telegram No. 73, Very Confidential, of yesterday's date, I reported that when the main Agreement in regard to Manchurian telegraphs was signed, which signature takes place to-morrow, the Commissioners representing China would at once telegraph to the Wai-wu Pu and ask that the Russian Minister at Peking should withdraw the note which he had handed in on the 1st November, 1907, cancelling the Russo-Chinese Telegraph Agreement on the 1st November, 1908, unless in the meantime a similar agreement had been arrived at between China and Japan. The above information was given to me by Mr. Dresing, one of the telegraph Commissioners representing China, when he handed me a copy of the main Agreement which I have forwarded to you in my despatch No. 253, Confidential, of the 3rd instant. Mr. Dresing told me that in the Russo-Chinese Agreement, which was being threatened with cancellation as above shown, there was a Secret Article No. 9 of which the Japanese Government were not aware; this Article was to the effect that should at any time the Russian railways of North Manchuria and the Japanese ones of South Manchuria become connected, and their respective telegraph lines joined up, Russia promised that these should only be used for strictly service messages. This is a point of very great importance to the British cable route to the Far East, for should the Russo-Chinese Agreement be cancelled, this clause would of course go with it, and there would be nothing to prevent Russia and Japan from entering into an agreement for cheap rates between Europe and the Far East along the Russian land lines, the disadvantages of which arrangement are pointed out in a letter from the Postmaster-General, which forms an inclosure to your despatch No. 4 of the 9th January last, to me, and in your telegram No. 113 to Sir John Jordan, and No. 40, to me, both of last year.

In the course of conversation, Mr. Dresing said that he did not think that the Russian Government, even if the Russo-Chinese Agreement were cancelled, would enter into an arrangement for such cheap rates, because they would then be running counter to an understanding they had with the Great Northern Company, the greater part of the shares of which Company are held by the Russian Imperial family.

I have, &c. (Signed) CLAUDE M. MACDONALD,

[2029 i-2]

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