C.O.

[This Document is the Property of His Britannic Majesty's Gover24067

ד.ב

CHINA RAILWAYS.

CONFIDENTIAL.

[16358]

No. 1.

Rece

Bro 26 JUL 09

[April 30.]

50

SECTION 2.

Sir J. Jordan to Sir Edward Grey.-(Received April 30.)

(No. 80.) (Telegraphic. P.)

CANTON-HANKOW Railway.

Peking, April 30, 1909.

In reply to your telegram No. 79 of yesterday's date, I am of opinion that we may yet hope to secure terms of a more satisfactory nature than those of the Tien-tsin- Pukow Railway. Even should we have to accept the latter we might at any rate ensure that such terms should be safeguarded so as to provide for an efficiency in the working equal to that which the Germans have by their own exertions secured on their section of the Tien-tsin-Pukow line.

The Chinese delegates have invited Hillier to meet them this afternoon for the purpose of discussing the Hankow-Szechuan line. As Hillyer has hitherto confined his negotiations to communications through the agent of the German bank here, he will, at my advice, take advantage of to-day's meeting to put the delegates in full possession of the condition of affairs on the southern section of the Tien-tsin-Pukow Railway, which prevents our accepting similar terms in the present instance. Our arguments on this point have been duly communicated to the Wai-wu Pu, who have failed to make any reply as yet to my last note of protest.

Of the two alternatives, withdrawal from the negotiations or co-operation with the Germans, I would in the last resort recommend the latter. The interests of political consistency seem to me, however, to demand that we should do our utmost to avoid. having recourse to such an expedient.

[16366]

No. 2.

!

Sir J. Jordan to Sir Edward Grey.--(Received April 30.)

(No. 82.) (Telegraphic. P.)

RAILWAY uegotiations.

Peking, April 30, 1909.

Hillier is telegraphing home the result of the meeting referred to in my telegram No. 80 of to-day's date, and his report will be communicated to you for your information.

The Chinese delegates, who emphasised the necessity for producing a détente in our relations, submitted terms on which it would appear that a satisfactory arrangement might be founded. These terms justify us in our refusal to agree to an arrangement similar to that arrived at in the case of the Tien-tsin-Pukow line, in that they give to the bank the vital power of withholding the loan funds if necessary.

An alternative proposal submitted by the Chinese, which would seem to be of German origin, and is objectionable in itself, was to the effect that the matter should be compromised by our taking the Canton-Hankow and the Germans the Hankow- Szechuan line.

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