1
[This Document the Property of His Britannic Majesty's Government.]
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Enclosure in No. 1.
Note communicated to Russian Legation by Chinese Government, March 27, 1911.
THE Imperial Chinese Government has received Russia's communication of the 24th March, in which it is said that China's reply of the 18th March mentions the establishment of a consulate only at Kobdo, and says nothing about Chinese monopolies, and leaves unnoticed the rights of Russian subjects to trade in the New Dominions without payment of duty or taxes. The Russian note further mentions that only after formal confirmation of the Russian views can Russia agree to an exchange of views about the introduction of customs duties and other questions. The Chinese Govern- ment wishes to say in reply that it has already given in detail its views on these very questions in communications dated the 19th February and the 18th March. China considers that these expressions should not require any further confirmation; but if Russia desires it the Chinese Government is willing to give further confirmation in order to avoid any misunderstandings.
In regard to the establishment of consulates at Kobdo, Hami, and Kuchen, China, in her first answer, mentioned article 10 of the treaty of 1881, and fully agreed to the sending of consuls to those towns. In her second reply China only agreed to the establishment of a consulate at Kobdo, because Russia's second note only mentioned Kobdo, and China has not refused to admit Russia's right to establish consulates at the other places.
In regard to Chinese monopolies in Sinkiang province, in their second reply the Chinese Government stated that Russian subjects in all the regions to the north and the south of the Tienshan range shall be under the same conditions as Chinese without any further restrictions; and in this statement the words "under the same conditions and without any further restrictions" prove that China does not aspire to any monopoly.
Dealing with the first answer-as regards freedom of trade in Mongolia and western China-the Chinese Government stated that they strictly conform to the principles of article 12 of the treaty of 1881. By this answer the temporary right of Russians to trade free of duty in Mongolia and western China is clearly recognised. Such recognition can by no means be called "leaving treaty rights without
attention."
Speaking generally, the relations of the two countries have been friendly for a very long time: in all questions affecting the frontier both countries conform to the treaty stipulations and confirm the mutual friendly relations. Proceeding with this point of view the Chinese Government do not put forward any objection to of
any the points contained in the Russian note of the 16th February, for they wish to act in conformity with the action of Russia, based on treaty stipulations. In such manner the exact conformity of Russia's claims to treaty stipulations is formally admitted.
CHINA RAILWAYS.
CONFIDENTIAL.
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Rec
No. 1.
Mr. Addis to Sir Edward Grey,-(Received April 1.)
[April 1.]
SECTION 1.
Hong Kong and Shanghai Banking Corporation, Sir,
31, Lombard Street, London, March 31, 1911. I ENCLOSE copies of letters from the German and American groups, setting forth the terms upon which it is agreed to compensate the latter for waiving their right to appoint a sub-engineer upon the abandoned Chingmen-Hanyang section of the Hukuang Railway.
These terms are satisfactory to the British group, and, if approved by His Majesty's Government, I have to request that His Majesty's Minister in Peking may be instructed to associate himself with his French, German, and American colleagues in presenting, on behalf of the groups, to the Chinese Imperial Government, for their immediate acceptance, the terms of compromise proposed in Messrs. Hillier, Cordes, Casenave, and Straight's joint telegram of the 10th March, namely:-
Amount and other terms of original and supplementary agreements to remain unaltered. Chingmen-Hanyang branch line to be constructed with native funds by provincial companies within three years, at the expiration of which, if it is not yet completed, same to be completed under German chief engineer with supplementary loan borrowed from group.
I have, &c.
Dear Sir,
Enclosure I in No. 1.
Messrs. Morgan Grenfell and Co. to Mr. Addis.
C. S. ADDIS.
22, Old Broad Street, London, March 31, 1911. WE beg to hand you herewith copy letter received from the Deutsch-Asiatische Bank to-day, setting forth the arrangement which they have come to with the American group regarding engineering rights for the Chingmen-Hanyang section. This arrange- ment is entirely satisfactory to the American group, and we shall be obliged if you will confirm that it is also agreed to by the British group.
Yours, &c.
MORGAN GRENFELL AND Co.
Enclosure 2 in No. 1.
Dear Sirs,
Deutsch-Asiatische Bank (Berlin) to Hong Kong and Shanghai Bank (London).
Berlin, W., March 29, 1911. WITH reference to our letter of the 21st instant we beg to inform you that we have agreed with the American group upon the following statement regarding our engineering rights for the railway section Chingmen-Hanyang-
"The German group agree to waive their engineering rights on the Chingmen- Hanyang section in case this section should be constructed by a Chinese company or with Chinese funds. Consequently, the American group waive their right to appoint a sub-engineer for a section of 200 kilom., being a portion of about 800 kilom. granted formerly to the German group.
"The German group are prepared to make the sacrifice in consideration of being allowed engineering rights on an equivalent length of line in any subsequent railway business to be concluded by the four groups as long as it can be done without con- flicting with the provisions of article 10, sub-section (A) of the Inter-group Agreement
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