[This Document is the Property of His Britannic Majesty's Government.]
CHINA RAILWAYS,
CONFIDENTIAL.
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PANO28 OCT '0
[July 22.]
SECTION 2.
Mr. Max Müller to Sir Edward Grey.-( Received July 22.)
(No. 121) (Telegraphic.) P.
Peking, July 22, 1910. I HAVE received the following telegram from His Majesty's consul-general at Yunnan-fu on the subject of the Burmah-Yunnan Railway, dated the 21st July, No. 14:--
"After a long interview with the Viceroy yesterday the following points were agreed upon regarding the Bhamo-Tengyueh Railway:
"Each Government to build the portion of the railway lying in its own territory.
"The railway project report of the 5th January, 1907, to be followed in construction of railway.
"On the Chinese section the workmen to be Chinese if possible. As a fore- warning I stipulated that in case the engineers on that section were other than Chinese they would have to be British, and suggested that it would be best if the whole line were constructed by the same engineers. His Excellency admitted the reasonable nature of this suggestion.
"One tael being reckoned as equivalent of 2 rupees, and two-thirds of railway being estimated to cost 44 million taels, I promised to suggest that a loan of about 9 million rupees be made to Yunnan Government by Government of Burmah at interest not exceeding 2 per cent., to be repaid at fixed dates by instalments which might be anticipated by the Yunnan Government if funds were available. On account of the local notables the Viceroy would prefer that the suggestion of a loan should come from us."
On the 9th instant I was informed by the Wai-wu Pu that an engineer for the survey had been appointed, and that if they could have the loan of the Indian estimates and surveys the Board of Communications would be very grateful.
Consul-general's instructions were to discuss the question with the Viceroy, and, while leaving details for subsequent negotiation, to endeavour to get the principle of joint construction accepted by his Excellency. He was to base his arguments on those contained in Sir John Jordan's despatches No. 204 of the 30th May, No. 400 of the 2nd November, and No. 483 of the 24th of December of last year. Butler would appear to have somewhat exceeded his instructions.
Mr. O'Brien--
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