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FOREIGN OFFICE. S.W.1.
22nd December, 1928.
Dear Sir Charles,
You have no doubt seen in the newspapers that the Chinese are
talking about using the British Indemnity funds for the completion of
the Canton-Hankow Railway. We have not been officially approached in
the matter, but it is clearly appearing on the horison, and the pro- ject has already been commended in the Report of Lord Willingdon's
delegation.
Would you kindly let me have your views on this project in rela-
tion to (1) the Hukuang Railway Agreement of 1911; and (2) the
Consortium Agreement?
•
As regards (1). I understand from the Agreement that the missing
link in the Canton-Hankow line is a section that was definitely as-
signed to the British and Chinese Corporation. Indemnity funds could
therefore, so far as the 1911 Agreement is concerned, be utilised for
the missing link, provided that the actual construction was carried out
by the British and Chinese Corporation, and there could be no objection
on the part of the French and American co-signatories to the Agreement
if all constructional material and rolling stock were to come from
Great Britain.
But how about our position as regards the Comsortium? From the
point of view of finance I suppose there would be no objection so long
as there was no public issue of bonds to pay for the construction of
the railway, but I am rather doubtful regarding the supply of railway
material and rolling stock. Would our partners in the Consortium
Agreement object to our making a special case of this section of the
Canton-Hankow line, to our agreeing to its being financed from the
Indemnity and equipped with British material? If, on the other hand,
our Indemnity money were to be used for buying American material and
rolling stock, I hardly think the proposal would be looked upon with
favour here.
Sir C, Addis, K.C.M.G.
Yours sincerely,
(Sa) F. ASHT ON- WWATKIN.
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