2
preference in regard to certain railways, and throughout the recent negotiations the representative of the British and] Chinese Corporation was repeatedly assured that in the event of more acceptable terms being offered by another nation, His Majesty's Minister at Peking would be informed, and the refusal of those terms given to British financiers before the offer of the other country was accepted.
Ilis Majesty's Government consider that his Excellency Chang Chi Tung has treated his obligations to them with scant regard in the past, and they are afraid that he may display a like disregard and want of consideration in the case of the Hankow- Szechuan Railway Loan, for which it is understood a German group is now competing. By an Agreement between the Chinese Government and His Majesty's Minister at Peking in 1903 the former undertook-should it be desired to construct a line from Hankow to Szechuan, and Chinese capital was insufficient for the purpose-to obtain all the necessary capital from this country and the United States of America. Moreover, in the assurances given by his Excellency Chang Chih Tung to Mr. Fraser in 1905, in connection with the Ilankow-Canton Railway, it is provided that if within the jurisdiction of Hupei and Hunan other railways were contemplated which likewise necessitated loans from abroad, they should all be dealt with on the system set forth in the Agreement as applicable to the Canton-Hankow line.
His Majesty's Government are greatly disappointed and surprised at the way in which they have been deprived of the advantages of the 1905 Agreement, owing to the Chinese Government contracting a loan on terms not contemplated when that Agreement was made.
They can only regard the attitude of the Chinese Government in this matter as a serious breach of the spirit of their Agreement with this country, which must unfavourably affect relations between the two Governments which have hitherto been so friendly. They trust that it may not yet be too late for the Chinese Government to reconsider their attitude towards this country in the matter of their undertakings as regards railways, as persistence in these methods will undoubtedly lead the British nation to feel that it is useless to conclude business arrangements with China. China's credit in this country will be ruined, and her interests must suffer.
Foreign Office, April 8, 1909.
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[This Document is the Property of His Britannic Majesty's Government.
C.0. 15123
RECO
MAX OG
CHINA RAILWAYS.
CONFIDENTIAL.
[April 8.]
SECTION 2.
217
[13501]
No. 1.
Sir Edward Grey to Sir J. Jordun.
(No. 72.) (Telegraphic.) P.
CANTON-HANKOW Railway loan.
Foreign Office, April 8, 1909.
A telegram from Mr. Hillier has been communicated to us by Mr. Addis. In it Mr. Hillier reports an interview on the 6th instant at the Wai-wu Pu, and as to the possibility that the Chinese Government will come to an arrangement with the Hong Kong and Shanghae Bank instead of with the British and Chinese Corporation.
Mr. Addis will recommend the Board to give a free hand to Mr. Hillier if the Chinese Government come to him with proposals to modify the terms so that all parties may be admitted.
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