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terms, I gave him a brief outline of the conditions, which he admitted were far more favourable to China than he had believed possible, and would provide much needed means of communication economically, and quite without encroachment on sovereign rights. He promised to suggest to the Viceroy the advisability of informing the provincial council of the true terms of the loan agreement, which did not of course preclude native subscriptions for railway development.
The agreement was not sent to me confidentially, and the late Grand Secretary Chang's refusal to disclose its contents to the provinces concerned was based merely on official etiquette regarding a question not yet passed upon by the throne. The present agitation appears to draw whatever vitality it possesses from the popular belief in the loan terms alleged by the delegates from Japan, and in the corollary that these are a means towards the partition of China. Such a belief must tend to foster an anti-foreign spirit in the province. I trust, therefore, that my action will not appear to you indiscreet.
I have, &c.
E. H. FRASER.
This Document is the Property of His Britannic Majesty's Government.]
CHINA RAILWAYS.
CONFIDENTIAL,
[46373]
No. 1.
Sir Edward Grey to Sir C. MacDonald.
[December 21.]
SECTION 1.
(No. 214.) Sir,
Foreign Office, December 21, 1909. I TOLD the Japanese Ambassador on the 17th instant that Sir Charles Hardinge had heard indirectly, through unofficial sources, that the Chinese Government would probably soon issue an edict authorising the Tsitsihar Railway. I had as yet had no reply from the United States Government to my enquiry as to their view respecting Japanese participation, but I heard, also indirectly through unofficial sources, that they were not opposed to it in principle. In these circumstances, it seemed to me that the Japanese ought to be ready to state exactly the amount and form of the participa- tion which they wished. My desire in this matter was to promote agreement, because I was afraid that if there was a deadlock, the Americans supporting and the Japanese blocking the railway, the Chinese might turn to other Powers, and the question might assume a political complexion.
The Ambassador told me that he had heard nothing from Tokyo since I last spoke to him, but the Japanese Legation in Peking had been informed that Prince Tsai, brother of the Regent, had come to the conclusion that the expenditure required for this railway was greater than would be justified, and that the Board of Communications were of the same opinion, and were opposed to the railway. He would telegraph to his Government what I had said.
I am, &c.
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E. GREY.
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