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[This Document is the Property of His Britannic Majesty's Government]
CHINA RAILWAYS.
CONFIDENTIAL.
[47078]
No. 1.
[January 3.]
SECTION 2.
45
Your Excellency,
Sir Edward Grey to Count Benckendorff.
Foreign Office, January 3, 1910. I HAVE the honour to acknowledge the receipt of the memorandum left here by M. Etter ou the 28th ultimo, stating that the United States Ambassador at St. Petersburgh had handed M. Isvolsky a note of certain proposals, with a view to preserving the undisturbed enjoyment by China of all political rights in Manchuria, and to promoting the development of the province under a practical application of the policy of the open door and equal commercial opportunity.
The United States Government were further of opinion that, should the above suggestion not be found feasible in its entirety, the desired end would be attained by the Powers in favour of the principle of the commercial neutralisation of Manchuria adhering to the agreement established between the United States, Great Britain, and China to carry out in common the construction of a line from Chenchow to Aigun, and of other lines, the construction of which would become necessary as a result of the commercial development of Manchuria.
As some misunderstanding appears to exist in regard to the attitude of His Majesty's Government towards this latter project, I have the honour to bring the following facts to your Excellency's notice :--
Some time ago I was approached by a British firm with a request that I should overcome the opposition which they implied the Japanese Government were making to a proposed railway from Sinmingting to Fakumen, which, it was alleged, would compete with the South Manchurian Railway. The proposal for this line has, as your At the time I Excellency is no doubt aware, been put on one side for the moment.
took up the position that it would be unreasonable and contrary to the policy of the open door if the Japanese Government were to oppose all railway enterprise in Manchuria and to claim a monopoly for their own railway; on the other hand, I frankly admitted that it was reasonable that they should in their discussions with the Chinese Government stipulate for proper safeguards against undue competition by the building of new railways in Southern Manchuria.
The United States Ainbassador in London informed me in October last that his Government were anxious to see the so-called Hukuan loan for the building of a line from the Yang-tsze to Szechuan concluded, as an American and British group were negotiating with the Chinese Government for the construction of a railway from Chenchow to Aigun via Tsitsihar, which could not be proceeded with until the Hukuan question was settled.
The British group in question, which turned out to be the one interested in the Sinmingting-Fakumen scheme, approached this Department on the subject at about the same time.
I told his Excellency that I was glad that American and British enterprise should be engaged together in the Far East, but that I had not so far taken any action in connection with the undertaking in question, and went on to explain what had passed unofficially between myself and the Japanese Ambassador with regard to railways in Manchuria. M. Kato had informed me that in the opinion of the Japanese Government the Tsitsihar line would probably be prejudicial to the South Manchurian Railway, as it might tap the through traffic and thus starve their line. They had, however, adinitted that they could not oppose the project in principle, but would ask for participation in it.
The United States Ambassador has recently made proposals to me of a similar character to those now made to the Russian Government. My reply was to the effect that the general principle involved in the larger scheine, that is to say, the bringing of the Manchurian highways and the railroad under an impartial administration by some plan vesting in China the ownership of the railroads through funds furnished for the
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