PUBLIC RECORD OFFICE
سساتيا
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CO. 882
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PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
COPYRIGHT PHOTOGRAPH-NOT TO
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operation of the joint railway. In the event of the railway being worked at a loss, such loss shall be borne by the respective Govern- ments in the like proportions.
"(f) The agreement to be capable of modification and deter- mination by mutual consent but not otherwise, nor, while any Chinese Government railway bonds and net profit certificates issued in connection with the loan to construct the Chinese section are outstanding, without the con- currence of the British and Chinese Corporation."
11. It will be seen that these proposals put on one side the suggestion made by the Colonial Office that the Hong Kong Government should construct its own section, and lease it to a British company who would work the whole line; and I think we are bound to abandon that idea. It has been pointed out to me at the Foreign Office that while His Majesty's Government could, and doubtless would, successfully press the Chinese Government to complete the final agreement with the Corporation to which they are already committed by their preliminary agreement, the position would be entirely different if a totally new proposal were presented to the Chinese. At the least, very great delay would ensue; and I do not see how we could force the Chinese Government to hand over to a British company a railway which the existing agreement contem- plates as remaining Chinese in character. British railway company would doubtless be the best solution from our point of view; but if it is impracticable, and to press it would be to defeat our objects, we had better fall back on the more feasible plan if it is likely to give us most of what we want. Our objects are twofold:- (1) To get a railway which will increase the prosperity of the Colony, (2) to prevent the con- struction of a line which might injure the Colony; and of these the second is even more important than the first. We could certainly secure the second on the basis of the last proposal made by the Corporation, and I see no reason why the first should not also be obtained with proper management.
A
12. It should be our policy to keep, in appear- ance, entirely aloof from the details of the tran- sactions between the Corporation and the Chinese Government; though we should take care that our share of the profits is not injuriously affected by any fictitious addition to the cost of con- struction. Ostensibly our share in the negotia- tions should be confined to diplomatic pressure to secure the acceptance by the Chinese Govern- ment of the Loan Agreement with the Corpora-
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tion and the scheduled working agreement with the Colony; and we have a special locus standi inasmuch as the agreement under which we hold a lease of Kowloon stipulates that "when, hereafter, China constructs a railway to the boundary of the Kowloon territory under British control, arrangements shall be discussed."
13. I therefore submit that we should proceed on the following lines, which are in the main those suggested by the Corporation, as stated in paragraph 10 above :—
(a) Conditions B (with reasonable reserva- tions) and C of the Colonial Office letter of 24th June (see paragraph 7 above) to be accepted by the Cor- poration.
(b) The Hong Kong and Chinese sections to be constructed and owned by the respective Governments.
(c) The working of both sections as one undertaking to be provided for by agreement between the two Govern- ments.
(d) The general terms of such agreement to be arranged between the Colonial Office, on behalf of the Colonial Government, and the Corporation.
(e) Negotiations then to be opened with the Chinese Government by the Corporation, with the assistance and support of the British Government, for the final Loan Agreement for the Chinese section; such agreement being on the lines of the Shanghai- Nanking Final Loan Agreement, but modified so as to meet the present circumstances and to admit of the proposed working agreement.
(f) The Corporation to obtain the con- currence of the Colonial Government in the Loan Agreement proposals before submitting them to Chinese Government and before accepting any important modifica tions in them.
the
() The Chinese and Colonial Governments reciprocally to undertake in their joint working agreement not to allow their respective sections to pass under the control of any third Power or subjects thereof; and not to grant any concessions in their terri- tories which would compete with or injure either section of the line, without the previous consent of the other party.