[This Document is the Property of His Britannic Majesty's Government447
CHINESE LOANS AND CONCESSIONS.
[March 8.
CONFIDENTIAL.
SECTION 1.
[F 852/255/10]
No. 1.
Sir B. Alston to Earl Curzon.-(Received March 8.)
(No. 38.)
HIS Majesty's Minister, Peking, prosents his compliments to His Majesty's Principal Secretary of State for Foreign Affairs, and transmits herewith copies of despatches, numbered 100 and 102, from His Majesty'a consul-general at Canton, dated the 16th and 18th November, 1920, respectively, and telegram No. 54 from this Embassy to His Majesty's consul-general, Canton, dated the 3rd Dece.uber, 1920, respecting consortium policy as regards uncompleted portion of Canton-Hankow Railway.
Peking, January 24, 1921.
Enclosure 1 in No. 1.
Consul-General Goffe to Mr. Clive.
(No 100. Confidential.) Sir,
Canton, November 16, 1920. 1 IIAVE the honour to refer you to your despatch No. 67 of the 15th ultimo, enclosing copy of your despatch No. 695 of the 11th October to the Foreign Office, on the subject of Messrs. Loxley and Co's proposed contract with the late Military Government for the construction of the uncompleted portion of the Canton-Hankow Railway.
Yesterday I had a long interview with Mr. Frank Lee, who has now assumed office as Commissioner of Foreign Affairs, and he showed me a copy of the preliminary contract for railway construction which Mr. Paget, an American citizen, had made with Ta'en Chun Elsuan, which was referred to in my despatch No. 05 of the 29th ultimo. It is a vague document, providing for loans for the construction of over 4,000 miles of railways in the eight provinces for which Ts'en termed himself Minister of Communi- cations. Mr. Lee is sending me a copy in the next few days, and I will then forward a copy to you. It had been arranged that, as a preliminary measure, Mir. Paget should hand to Ts'en 500,000 dollars for "survey and office expenses," but the Military Government was dissolved before any payment was made. Mr. Lee said he thought it most unlikely that the contract would be recognised by the present administration.
He then went on to say that they intended to build certain railways in the province at once, and he would like the work to be done by British firms. The railways in question were: (1) Canton to Macao; (2) Konymoon to Fatshan, with extension to Sunning, Yeungkong and Hoiping; (3) the extension of the present Yuet Han Railway far enough to enable them to develop the Pingshek coal-mines. I urged that these enterprises seemed to me to fall within the province of the new consortium, but he was not prepared to accept this view-purely provincial matters, he said, as the first two lines were not national matters and should be undertaken and worked by the province concerned The Yuet Han Railway, which was an inter- provincial line, might well come within the province of the consortium, but to that there were two serious objections at present: (1) that the consortium could not operate here until after the reunion of north and south; and (2) that even then, so far as he knew, there was considerable opposition throughout China to the consortium as at present constituted, and it might be a long time before its conditions were accepted by the Chinese Government. The extension of the Yuet-Han Railway could not be delayed, as the coal from the mines at Pingshek was essential for the economic development of the province. They were at present paying 30 dollars a ton for Japanese coal, whereas they could procure it from Pingshek-with railway communi- cation at 10 dollars per ton. Père Robert has approached him with regard to all these undertakings, but, in pursuance of the policy of the present administration of working closely with Hong Kong and the British, they would like us to take up the work. He said that, in the event of it being decided that inter-provincial lines came
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