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about the Hankow-Canton line.
As the Hupei section of the Hankow-Szechuan line
is nearly as long as the Hankow-Canton line without
the Canton section, and as there is no question of a
foreign loan for this section, it is clear that the
preliminary arrangement gives the Germans more than
their share of engineer and material rights.
It is known to the Chinese that the Chinese Cen-
tral Railways is half French and that if not arranged
now the questions of material and engineers must in
the future be settled with them, and it appears to me
to be only too probable that if no arrangement is
made we shall then be at a great disadvantage in deal-
ing with such questions, since the Germans will have
constructed the railway as far as Ichang and will
naturally do all they can to secure the Szechuan ex-
tension.
Neither am I of opinion that matters will be im-
proved if Mr. Addis as suggested mentions the question
of the Szechuan extension and drops it because he finds
that the Germans are ill disposed. I feel myself that
(Private)
if we fail to arrive at a satisfactory understanding
as to the extension it might be better if we retained
what we had got the Hupel section of the Hankow-
Szechuan line, and as regards the Hankow-Canton main-
tained our position and protests.
In their anxiety to conclude a financial bargain
the HongKong Bank are too much inclined to ignore the
political side of the matter. At present I think
that the Germans should realize that they have done
quite well enough with a third of all the financial
issues for both railways and materials and engines for
the Hupel section of the Hankow-Szechuan.
if
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