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group in the summer of 1909 in any way affected the situation either in regard to the Hankow-Canton line, which was placed on an absolutely distinct footing as long ago as February 1908-a position which was defined by the arrangement come to by the French and British groups in that month, and which received the sanction of M. Caillaux, the then Minister of Finance, and of the French Government-or in regard to the allotment of sections on the Hankow-Szechuan line, where all three groups have been called upon to make identie sacrifices.
Another objection to the scheme from the point of view of His Majesty's Government is, that the United States group propose to hand over 100 kilom. of their section not to the Chinese Central Railways, but to the French group. Apart from the fact that by an arrangement of this kind the British group would be placed in a position less advantageous than that accorded to any of the then remaining groups, it also violates the homogeneity of the Chinese Central Railways, which, so long as it exists, must clearly receive entire equality of treatment as between its two component parts. Any attempt on the part of one group or the other to obtain specific advantages for itself would make co-operation impossible, and render the dissolution of the society inevitable.
I should be glad if your Excellency would be so good as to inform me whether I am to understand that the Government of the Republic formally repudiate all the arrangements arrived at by the British and French, or by the British, French, and German groups prior to the participation of the United States group last summer.
His Majesty's Government are still of opinion that the only equitable arrange- ment is the one already proposed by them, viz., the division of the Hankow-Szechuan line in four equal parts and the maintenance in other respects of the Agreement of the 14th May, 1909.
I have, &c.
E. GREY.
1910
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