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[This Document is the Property of His Britannic Majesty's Government0327
CHINA RAILWAYS.
CONFIDENTIAL.
[31566]
No. 1.
Papers communicated by Mr. Addis, August 19, 1909.
(1.)
GR 11 SEP 09
[August 19.]
SECTION 1.
412
!
Dear M. de la Chaume,
Mr. Addis to M. de la Chaume.
Hong Kong and Shanghae Banking Corporation,
31, Lombard Street, London, August 19, 1909.
I HAVE your letter of the 18th instant with an interesting enclosure from M. Casenave, for which I thank you.
I trust that the enclosed telegram to Hillier, a copy of which has already been dispatched to you by wire, meets with your approval.
With regard to the inter-bank agreement now being negotiated at Peking, I believe that we are agreed as to the principle, namely :-
(a.) That we should pay our own auditors;
(b.) That the Americans should pay a quarter of the preliminary expenses; and (c.) That the American portion of the loan should not be quoted in London, Paris, or Berlin, but be limited to New York.
So much for the principle, but I confess I do not see how the details are to be settled without a second conference in Europe.
Preliminary expenses, for example, have mopped up pretty well the entire capital of the Chinese Central Railway Company. Are preliminary expenses, then, vis-à-vis the Americans, to include the cost of the survey beyond Ichang (about 4,000l. to 5,000%), office expenses and salaries of representatives (about 2,0001. a-year) during the past five years, &c. ?
Again, as regards internationalisation of the loan, it would clearly be inequitable to grant America for no consideration whatever the opportunity, which would be immediately availed of, to dump her portion of the loan upon this market. On the other hand, the British group, as you will understand, would not like to be put in the position of being held up to obloquy for having discriminated against the United States in granting to France and Germany what they had denied to America.
The whole question, in fact, bristles with difficulties, which, in my opinion, can only be properly thrashed out on this side.
I shall be glad to know that the line we have taken up with regard to the appointment of engineers is in accord with your views.
Believe me, &c.
C. S. ADDIS.
Mr. Addis to Mr. Hillier, Peking.
(Telegraphic.)
Hong Kong and Shanghae Banking Corporation, London, August 19, 1909.
RE your wire of 18th, Americans must pay their own issue expenses. Their issue is limited to American market. Americans must pay one-fourth preliminary expenses. We do not propose to ask them to pay auditor. Banque de l'Indo-Chine and Deutsch-Asiatische Bank agree.
In reply to your telegram of 19th, Chinese Central Railways and French. group assume that nomination of chief engineers for Ichang-Chengtu line will remain as arranged at Berlin 14th May. Please inform Americans.
[2389 (-1]