with the vital unemployment problem here; that an
agreement on these lines was on the point of being
reached when Ministry of Communications intervened
with suggested modifications which would have
nullified stipulation that orders for railway
materials should be placed in this country, while,
27
at the same time, it became known that the Chinese
Government desired to use whole or greater part of
the funds for completing Canton-Hankow railway; that
this project, though desirable in itself, appears
to be subject to a pre-existing agreement, viz:
Hukuang Railway loan agreement of 1911; that the
effect of this agreement and of subsidiary agree-
ments between the parties interested (other than
China) appears to be that orders for materials for
the completion of the line if placed abroad would
have to be put up to open tender; that a deadlock
had therefore arisen and in order that progresa may
may be made following contradictory principles have
a omehow to be reconciled:-
(a) Desire of His Majesty's Government that
their part in the "mutual benefit" shall take the
form/