272
two appointed by China, two by Hong Kong, and one by the Corporation, the sixth being the General Manager of the railway, to be selected by agreement between the two contracting Governments. Mr. Fraser suggests that it might be possible to meet the Viceroys' objection by combining in one the representation of the Hong Kong Government and the Corporation. I am not sure, however, that he fully appreciates the fact that the interests of the Corporation who are to receive 20 per cent. of the profits of the Chinese section of the railway may at times be at variance with the interests of Hong Kong. Even with the arrangement as stands the members representing the Hong Kong section could be outvoted by the members representing the Canton section unless the General Manager had a casting as well as an original vote. At any rate, I am not prepared to make, at the present time, any concession
in the matter.
6. Though the action of the Wai Wu Pu, as stated in Sir Ernest Satow's tele- gram of the 28th of October, shows that there is some probability of negotiations being now started for the conclusion of a loan agreement with the British and Chinese Corporation, I see as yet no reason to change the opinion expressed in paragraph 5 of my despatch of the 18th of October* that our best chance of getting the Canton section of the Canton-Kowloon Railway completed at the same time as the Hong Kong section, and the subsequent joint working of the two sections settled by a satis factory agreement, will be by the surrender by the British and Chinese Corporation of their concession on the conditions I specified.
I have, &c.,
Enclosure 1 in No. 181.
M. NATHAN,
Governor.
278
poration would provide funds as required to an amount not exceeding £2,000,000 in actual issues of bonds of not more in any single case than half or three-quarters of a million?
They also object to the heavy foreign predominance on the Board of Management, seeing that the Kuang Tung section is four times as long as the Hong Kong section; can that be met possibly by combining in one the representation of the Hong Kong Government and the Corporation?
Chang let these points drop at odd times while protesting that he has no locus standi, and I fancy they represent Ts'en's views as telegraphed to him.
43304
No. 182.
FOREIGN OFFICE to COLONIAL OFFICE. (Received December 7, 1905.)
(Confidential.)
The Under Secretary of State for Foreign Affairs presents his compliments to the Under Secretary of State for the Colonies, and is directed by the Secretary of State to trans mit, for the information of Mr. Secretary Lyttel- ton, the accompanying coples of telegrams, as marked in the margin, relating to the Hankow- Canton Railway.
To Sir E. Satow, Telegram No. 185, December 3, 1905.
Sir E. Satow, Telegram No. 230, December 5, 1905.
Foreign Office,
December 6, 1905.
Paraphrase of CYPHER Telegrams.
CXXXI.
HIS BRITANNIC Majesty's MinISTER, Peking, to HIS BRITANNIC Majesty's CoNSUL-
GENERAL, Canton.
(October 28, 1905.)
No. 23. I have received information, confidentially, that the Wai Wu Pu have requested the Viceroy to negotiate with the British and Chinese Corporation re- garding the Canton-Kowloon Railway. Please ascertain if this is true.-SATOW.
CXXXII.
GOVERNOR, Hong Kong, to H18 BRITANNIC MAJESTY'S MINISTER, Peking. (Despatched 11.45, November 1, 1905.)
I have received the following telegram from His Britannio Majesty's Consul- General at Canton for transmission to you:-
"No. 8. Your telegram, No. 23. The Wai Wu Pu have urged the Viceroy to open negotiations and he agrees, but insists that Sheng, who made the original agreement, should be appointed to negotiate.-SCOTT."
I am inclined to think, for reasons stated in your despatch to the Foreign Office of the 11th of September, that more finality would be obtained if the Viceroy himself could be induced to conduct the negotiations.--NATHAN.
Enclosure 2 in No. 181.
EXTRACT from a Semi-official Letter from Mr. E. H. Fraser to Sir E. Satow. (Dated Kuling, October 5, 1905; received October 17, 1905.) Chang and Ts'en both object to the amount of the Canton-Kowloon railway loan d3 excessive; could their views be met to any extent, say by a provision that the Cor-
• No. 168.
Enclosure 1 in No. 182.
The MARQUESS of Lansdowne to Sir E. SATOW (Peking).
(No. 185.) (Telegraphic.)
Foreign Office, December 3, 1905, 11 a.m. French Government have asked that French financiers may participate in loan for construction of Hankow-Canton Railway, and British and Chinese Corporation
are not averse to the idea.
We are informed by Colonial Office that Governor of Hong Kong shares your view, and would prefer to adhere to terms of Agreement with Wuchang Viceroy.
Unless, however, you have strong reasons to urge to the contrary, it is undesir able on grounds of general policy that we should reject advances of French, whose participation will probably facilitate the completion of Hankow-Canton line, which Colony desires to have finished by the time Canton-Kowloon line is completed.
In present mood of Chinese Government, there seems little prospect of our being able to secure that the concession, or loan, shall be purely British.
(No. 230.) (Telegraphic.)
Enclosure 2 in No. 182.
Sir E. SATOW to the MARQUESS OF LANSDOWNE. (Received December 5, 6 p.m.)
Peking, December 5, 1905, 5.50 a.m.
Your telegram, No. 185 [3rd December: Hankow-Canton Railway]. The following are the main points of the opinion I expressed to the Governor of Hong Kong :-
The suggestion that the French should share with us emanated from the French Minister at Peking, who, on hearing that Chang proposed to borrow British money supported the Belgian pretension, that Belgium was entitled to build the railway in consequence of the American concession having fallen through. He informed me of this himself.
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