This Document is the Property of His Britaik
[B]
CHINA RAILWAYS.
CONFIDENTIAL.
599
[June 16.]
SECTION 1.
HEC
21011
Aust 24 JUN 09-
[22451]
(No. 151.) Sir,
No. 1.
Sir Edward Grey to Mr. Bryce.
Foreign Office, June 16, 1909. THE American Ambassador told me on the 10th instant that his Government did not consider that it was within our power to fix a definite date as the time at which American rights in Chinese railways would lapse if the Americans took no action. His Government did not think that any international tribunal, if appealed to, would take the view that we had such a right.
I said that we had had no thought of taking upon ourselves the abrogation of American rights in China. In the case of the particular railway in question, our people had stated four years ago that, as the Americans were not willing to take up the matter, the British financiers must proceed without them, and make the best terms they could. I thought that, in these circumstances, our people were quite entitled to make the agreement they had with the French and Germans. It would introduce a serious complication if the Americans were now to revive their rights in order to upset the agreement. I did not claim that we were entitled to fix the date for the termina- tion of the American rights, but as our people had given the Americans fair notice, saying that they assumed the Americans were not going to exercise their rights, and the Americans had not objected to this statement, I thought our people had had no choice but to make the agreement they had. They had been hard pressed by competition, and had had to make the best terms they could with their competitors.
The Ambassador admitted that it was unfortunate that the American Government had let our statement pass in silence, but he still held to his view that the American rights had not lapsed. He said that the American group interested in these rights was composed of most powerful houses: J. P. Morgan, Kuhn, Koch and Co., and a bank which he named. His Government considered that, in the present unsatisfactory state of China, it was most undesirable that the Chinese should be able to play off one foreign country against another; and they thought that England, America, France, and Germany should form one combination, and act together. The American group was one of such high standing and resources that it could not but be a source of strength. I rather think that he meant to imply, though he did not say so, that its competition might be as damaging as its co-operation would be strengthening. This was the general view of the American Government. As regards the particular railway in question, he understood that arrangements had so far been made only for the Hupci section, and that the American group might be brought in in connection with the other part.
I told the Ambassador my impression was that, though the present loan might cover only the Hupei section, the British, French, and German groups had come to a joint arrangement which covered the whole of the railway.
financial
I asked the Ambassador, however, to put the views and proposals of his Govern- ment in writing. The matter, if it was to be settled, must be adjusted by the and I could not express any opinion with regard to it interested; groups until it had been put in a form which would enable me to put it before these groups. Indeed, any arrangement between the financial groups was one which I desired to leave to them as much as possible. I held that our financiers were not open to reproach for what they had done, but I could not say what views they might have about future combinations.
I am,
&e.
E. GREY.
[2317 9-1]