78
do so. If you are prepared to take the responsibility of advising me that there is a reasonable prospect of the line paying to this extent (and for the purposes of your calculation it would apparently be safe to take the cost of the line, exclusive of land, at £750,000), I shall be prepared to instruct the Crown Agents to take the necessary steps for sending out an engineer. The line would doubtless be built on the departmental system, under which the consulting engineers would be requested to nominate a resident engineer.
1218
I shall be glad to learn your views on this point by telegraph.
No. 54.
I have, &c.,
ALFRED LYTTELTON.
79
and I was unable to give way. His objection has, moreover, led to the clause being examined afresh, and I am instructed to let you know that we cannot agree to the retention of the last sentence of it. Our view-and I think you will admit that it
is reasonable is that it is neither usual nor even seemly that two Governments in concluding an agreement between themselves should bind themselves not to make any modification or alteration in it without the consent of a private company.
It appears to us that your position will not be affected by the excision of the sentence. By Article VII of your Loan Agreement. (p. 18 of the print) the Chinese Government give you the same pledge, though in it you take up a less absolute position than in Clanse 18, for you there say "without the consent in writing of the Corporation, which shall only be given if, in the opinion of the Corporation, the interests of the bondholders will not be affected."
I shall be glad to hear that your directors concur in this view, and agree to the omission of all words in Section 18, after "opened for traffic."
PUBLIC RECORD OFFICE
Reference :-
TILITIC.O. 882
6 PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
MR. G. V. FIDDES to MR. W. KESWICK, M.P.
DEAR Mr. KESWICK,
January 21, 1905. IN your letter to me of the 17th instant, you observe that "if the firm of Sir John Wolfe Barry and Partners only are appointed Consulting Engineers, Mr. Arthur Barry would have no connexion with the undertaking."
I do not understand this. It appears to me that the arrangements which you make for the construction of the Chinese section are altogether independent of those which the Crown Agents may make for the building of the Hong Kong section. The Crown Agents would be willing to accept Sir John Wolfe Barry as their Consult- ing Engineer for this purpose; but they would have no need of a second firm.
Of course there is advantage in having a connecting link between the two constructions, as it will facilitate decisions on points common to the two, such as the junction at the frontier and the type of rolling stock; but we get this link if Sir J. Wolfe Barry is associated with both, and you remain free to employ Mr. A. Barry for your purposes just as if we had never come into the matter.
I send you herewith a copy of your draft agreements† showing the alterations which I suggested to you verbally. I need only make two remarks on them:-
3562
(1) You spoke of consulting Sir J. Wolfe Barry as to the feasibility of inserting "first class line" (vide Section 4 of working agree- a specification of a ment). It might be useful if you or he were to see the Crown Agents on the point, as they might be able to furnish you with a skeleton specification.
(2) The definition of net profits in Art. 12 of the Loan Agreement is thought to be objectionable from our point of view, as throwing on revenue capital charges, and thereby decreasing the divisible share of profits. We do not want to interfere as between you and the Chinese Govern- ment, but we would suggest that for the purposes of the Working Agreement it is desirable to insert in it a definition of net profits which shall exclude such charges.
No. 55.
Yours, &c.,
G. V. FIDDES.
MR. G. V. FIDDES to MR. W. KESWICK, M.P.
DEAR MR. KESWICK,
[Answered by No. 56.]
Downing Street, January 31, 1905.
I HAD an interview yesterday with a member of the firm of solicitors who act for the Corporation (I did not catch his name) on the subject of the amendments which we have suggested in the draft Working Agreement.
On all points but one there did not seem to be much difference of opinion between us, but the rook on which we split was the addition to Clause 18, "Such consent not to be unreasonably refused." He stated that his clients could not consent to this,
• No. 51.
↑ Not printed.
3562
AT
*
No. 56.
Yours, &c.,.
G. V. FIDDES.
MESSRS. STEPHENSON, HARWOOD AND COMPANY to MR. G. V. FIDDES.
DEAR SIR,
(Received February 3, 1905.)
[Answered by No. 57.]
Canton-Kowloon Railway.
31, Lombard Street, London, February 2, 1905. Mr. KESWICK has handed us your letter to him of the 31st ultimo.* We enclose herewith a fresh print of the agreement,† in which you will see that the alterations you suggested in the previous draft have been embodied. We have also made a few other alterations which we think will make the intention of the parties clearer. To meet your point on page 44, that it was not provided how the net profits as between the two Governments should be ascertained, we have inserted some words and have altered the wording on page 24 to correspond accordingly. In Clause 6 of the Working Agreement we have added some words providing for any improvements required in the rolling-stock. The wording in Clause 12 of the Working Agreement was also not quite as clear as it might be, and we have slightly altered it. It might be inconvenient to carry out some improvements over the whole railway. In Clause 16 we have also included a reference to Clause 6, which should obviously be included.
In regard to the terms of your letter, in order to meet your views as far as possible, we have omitted the words to which you object and merely added in the third recital a reference to the obligation of the Chinese Government not to make alterations in accordance with the provisions of the Loan Agreement to which you referred us. We presume there will be no objection to the inclusion of an article corresponding to the first paragraph of Article 14 of the Loan Agreement. As the Chinese Government is to be asked to allow all materials for the construction and working of the railway or branch lines to enter free from Customs Duty in order to diminish the cost of the railway, we presume the Hong Kong Government will do the same.
We therefore suggest the addition of a clause in the following terms:- "All materials of any kind that are required for the construction and working of the Hong Kong section or of any branch lines shall be exempted from Hong Kong Customs Duty." This might be made a separate clause or added to one of the original clauses, as you think best.
G. V. Fiddes, Esq., C.B.,
Colonial Office.
We are, &c., STEPHENSON, HARWOOD AND COMPANY.
• No. 55.
↑ Not printed.
80