S
C.O.
This Document is the Property of His Britannic Majesty's Government 33552
CHINA RAILWAYS.
CONFIDENTIAL.
RECE (REG 12 OCT 091
[September 13.]
598
SECTION 3.
[34377]
No. 1.
Count de Salis to Sir Edward Grey,-(Received September 13.)
[By Post.]
(No. 97.) (Telegraphic.) En clair.
Berlin, September 11, 1909. YOUR telegram No. 323 of the 7th September. Hankow-Szechuan Railway. Herr Stemrich has made the following reply to the communication which I made to him in compliance with your instructions :—
The Imperial Government are of opinion that official intervention in the loan negotiations should if possible be avoided. As, however, in the present case difficulties have arisen which prevent the business from coming to a conclusion, the Imperial Government are happy to approach the German group so as to bring about an under- standing with the others. They have therefore acted on the communication made by the English group.
On this the German financial group have expressed their complete readiness to come to a friendly understanding with the other groups, but they remark at the same time that by the present English proposal their rights acquired by the agreement of the 14th May of this year are curtailed in a one-sided manner. By the preliminary contract with China of the 7th March of this year the German group were to have the engineer for the Hankow-Canton line, and they only gave up this right on the condition that the engineer for the section of 800 kilom. of the Hankow Szechuan already granted by the Chinese should be their nominee. In these circumstances the English proposal appears to them to be unfair and incompatible with the agreement of the 14th May, since it obliges them to give up acquired rights on the first 800 kilom. of the Hankow-Szechuan line, while the English group retain without any curtailment their rights on the Hankow-Canton Railway which are derived from the sam agreement. According to the views of the German financiers it would be only fair that should the Hankow-Szechuan line be divided into four the Hankow-Canton line should also be divided.
I have, &c.
[2413 n-3]
J. DE SALIS.
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