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No arrangement could be contemplated which would allow Chinese Officials any right to operate in British Territory—for this, by their extraordinary genius for intrigue, would speedily give rise to attempts at illegitimate influence and to serious political friction. The Colony would, I think, be well off if it succeeded in paying all working expenses and interest on capital (including rent on Crown land) and looked for the reward of its enterprise in the increased business of the Port which must follow the opening of the Railway.
5.
In order to realise this modest ambition it will be essential that the rates charged on through traffic over the very costly British Section shall be higher than those charged on the Chinese Section. It is probable, however, that the Chinese will impose the highest rates they can, and the total through rate must be very low as the Railway will be in competition with the Steamer transport from Canton, and with the junks which have monopolised the carrying trade from time immemorial. The rates charged for sea-borne traffic are as in Annexe 3.
6.
The general conditions on which a Joint Agreement can be concluded may, I believe, be divided into 4 classes:—
(a). To work the whole line as a single concern under a Joint Board,
(b). To place one Section under the Working Management of the other.
(c).