52 C.O.
[This Document is the Property of His Britannic Majesty's Government24967
CHINA RAILWAYS.
CONFIDENTIAL.
[17313]
No. 1.
IRECR
RrG 26 JUL 09,
[May 7.
SECTION 3.
Sir J. Jordan to Sir Edward Grey-(Received May 7,)
(No. 86.) (Telegraphic.) P.
Peking, May 7, 1909. A JOINT telegram has been sent home to-day by Hillier on the subject of the railway negotiations. Please refer to same.
The weak point in Hillier's provisional arrangement with the agents of the German and French banks is that no definite provision is made for the extension of the Hankow-Szechuan line beyond Ichang. Without some clear understanding on this point, we would find ourselves in an inferior position to the Germans at Ichang; they having for a base the terminus of the Hupei section of the line at that place, while we would be committed to the French and, owing to the latter's unpopularity in Szechuan, greatly handicapped in any endeavour to secure the extension of the line in the face of German competition. The political disfavour into which the French have fallen is evidenced by the great difficulty which Hillier had to face before he finally persuaded the Chinese to accept French participation in the loan agreement.
I have accordingly told Hillier that, before the loan agreement now under negotiation is signed, he must arrange with the French and German groups for a clear and satisfactory understanding as regards the Hankow--Szechuan extension, or else they should agree to conclude a general arrangement on the lines of the draft enclosed in your despatch No. 78 of the 18th March; otherwise I would be unable to support his provisional arrangement.
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