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interest the money required for the construction of the Chinese section of the line. The Yuunan syndicate, I said, being a commercial undertaking, would require probably at least 5 per cent. interest on any money it might lend; but, in the case of à Government lending the money, the rate of interest was more or less a matter of indifference so long as the capital was repaid. His Excellency appeared to think the suggestion practicable, and I proceeded to ascertain the amount of a possible loan. Bhamo-Tengyuch (Momein) Taking the sum of 1,27,52,165 rupees given in the " Railway Project Report," dated Rangoon, the 5th January, 1907, as the total cost of the line, the cost of the portion on Chinese territory, which is almost exactly two-thirds of the whole, would be about 85 lakhs of rupees, or, at 2 rupees to the tael, 4,250,000 tacls. I suggested the sum of 4,500,000 taels, or 90 lakhs of rupees, as the amount of the loan, and that the interest should not exceed 2 per cent., and the Viceroy signified his assent.
I then suggested that the Chinese section of the line, as well as the British, should he constructed according to the specifications laid down in the Railway Project Report of the 5th January, 1907, and the Viceroy agreed after some hesitation, during which he hinted at the necessity of an independent Chinese survey. The Administrator of Foreign Affairs here gleefully interposed that, by the existing British specifications being followed, not only would time be saved, but China would be the gainer through being spared the expense of an independent survey.
The only question remaining to be settled was that of the construction staff and labour. It was of course understood that Chinese labour should be employed on the Chinese section if the climatic conditions permitted, the overseers being, if necessary, Indians or other British subjects. I laid stress on the employment of British engineers if, as is probable, Chinese engineers should not be available; and I let the Viceroy know that the British Government would view with disfavour the employment of engineers of any other nationalities.
I suggested that the simplest plan would be to allow the same party of engineers to construct the whole line from Bhamo as far as Tungyueh, and the Viceroy agreed with me, merely remarking that this was a question of detail which could be settled afterwards.
I was very careful to let the Viceroy understand that all my suggestions emanated solely from myself and could only at the utmost form the basis for future negotiations between our two Governments. His Excellency stated that he too would have to report to Peking the arrangements we had arrived at, and that they would have to be confirmed by the metropolitan authorities.
I have, &c.
P. E. O'BRIEN-BUTLER.
foreign Office
1910
Sept
Last provious Paper.
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HONG KONG
EASTERN
28648
Opium
Pruits of
GiAd-Hannj
corres »
20613
REC? Reet 16 SEP 10
:
The punois prints (279144) show that
the Conference at the stague her been postponed.
? Prints & Ith
Strank Conf 13.
JR19/9
67.479/9
(16,865) W21,050—1. 40,000,
1103. A.E.W.
Next subsequent Paper.
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