(This Document is the Property of His Britannic Majesty's Government.
0.
36392 [October 20.
28
CHINA RAILWAYS.
CONFIDENTIAL.
[38764]
No. 1.
SECTION 1.5" Oy
Dear Sir Francis,
Mr. Addis to Foreign Office.-(Received October 20.)
Hong Kong and Shanghae Bank, 31, Lombard Street, London,
October 16, 1909.
MANY thanks for the extract from M. Pichon's note, which you were so good as to send me last night.
I have jotted down my ideas as to the line to be taken in reply in the enclosed memorandum, which you may care to glance over before I see you at half past two.
Yours, &c.
C. S. ADDIS.
Inclosure in No. 1.
Memorandum by Mr. Addis on M, Pichon's Note.-(Communicated October 14, 1909.)
IT is agreed that it is the redistribution upon an equitable basis of the engineering sections consequent upon the recognition of the American claim which alone presses for solution.
But M. Pichon appears to overlook the fact that the American claim is limited to the Hankow-Szechuan line.
The Americans make no claim to appoint an engineer on the Hankow-Canton line. That is the subject of a separate agreement-the Addis-Simon agreement of the 24th February, 1908-and does not concern either the German or American groups.
The sole question at issue, therefore, is how to redistribute the engineering sections on the Hankow-Szechuan line in such a way as to admit of the American claim to appoint an engineer on one-half of the extension without doing violence to the existing equilibrium of parties.
It must be borne in mind that there are only two, and not, as M. Pichon seems to suppose, three parties concerned in the Hankow-Szechuan railway, namely, the German group on the one hand and the Chinese Central Railways (Limited) on the other.
By the Berlin agreement of the 14th May, one-third of the Hankow-Szechuan line, namely, the Ichang-Hsiangyang-Kuangchui and the Ichang Hanyang line, was allotted to the German group, and the remaining two-thirds, namely, the extension from Ichang or Hsiangyang to Chengtu, were allotted to the Chinese Central Railways (Limited).
There can be no question, then, of rivalry or competition between the French and English. Their interests are merged and amalgamated in a company constructed ad hoc, and the division of engineering interests, so far as they are concerned, is therefore a purely internal arrangement which concerns themselves alone.
It is necessary to emphasise that the Chinese Central Railways (Limited) acts as a sole and independent body, with whose internal arrangements neither the Germans nor the Americans can be allowed to interfere; any attempt by one or the other to resolve it into its English and French constituents should, in the interests of self- preservation, he firmly resisted.
In strict equity, therefore, the German group and the Chinese Central Railways (Limited) should surrender 267 and 533 kilom. respectively, in order to satisfy the American claim to appoint an engineer on one-half of the extension, which is assumed to be 1,600 kilom. in length.
It may be admitted, however, that the German section, as the first to be constructed, is relatively of greater value than the deferred section of the Chinese Central Railways (Limited). It is suggested, therefore, that the Germans should surrender only the Hsiangyang-Kuangchui section to the Chinese Central Railways (Limited), estimated at 200 kilom., as a contribution to the sacrifice of some
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