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of a conversation between Sir Charles Addis, K.0.1.0., and

Mr. Charles F. Whigham at the office of the Hongkong and

Shanghai Banking Corporation London on November 23rd, 1922.

1. The fundamental basis of Mr. Stevens'limmorandum appeari

to be the alleged existence of a Treaty between Great Britain

and China, designed to prevent the connection of the Canton

Hankow Railway with the river and to check the development

of Canton harbour,

2.

After exhaustive search of his own records and after

reference to the Government Departments concerned, Sir Charles

Addis is unable to trace any such Treaty or Agrement. If Mr.

Stevens can give identifying particulars Sir Charles Addis

will be glad to make further enquiries. He is, however, convin-

ged that it has no existence.

3.

As pointed out in the last paragraph of Mr. Jones' letter

of August 17th, the Canton-Kowloon Railway Loan Agreement

contains the provision that the Chinese Government shall not

build another line competing with that railway to its

detriment. This is a clause common to all Railway Agreements,

and refers to the construction of parallel competing lines

and not to lines connecting with the river.

4. Apart from the question of the existence of the treaty

referred to in Paragraph 1, Mr. Stevens suggests that the

British purpose is definitely directed to restricting the

development of Canton Harbour, and, as one of the means to

this end, to preventing the connection of the line with the

river.

5. Sir Charles Addia categorically denies that this is or

ever has been the purpose of the British Group. On the

contrary, it has always been their policy to preserve to

the Chinese Goverment complete freedom of action.

Incidentally,

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