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PUBLIC RECORD OFFICE

Reference :-

TIC.O. 882

132

Chinese project to connect Whampoa with Canton by railway, I have the honour to transmit, for your Lordship's information, a copy of a private letter received this morning from the Consul-General at Canton, in which Mr. Mansfield states that in his opinion the matter is likely to be dropped altogether.

I have, &c.,

M. NATHAN.

Enclosure in No. 281.

LETTER from CONSUL-GENERAL, Canton, of August, 8, 1906.

DEAR SIR MATTHEW,

Canton, August 8, 1906.

I HAVE, what I believe to be, a quite trustworthy source of information as to the doings of Chang Chien hsün, the promoter of the Canton-Whampoa Railway. As you probably know, Chang, a very rich Hong Kong merchant with official rank, came here last year as a Special Imperial Commissioner to watch trade. The Viceroy proposed the Whampoa Railway. Chang said he could raise the funds, and promised, if necessary, to advance them himself. He paid for a survey of the line as far as Whampoa, which was made some five or six months ago. Whether this was un- favourable or not I do not know, but since then Chang has been in Hong Kong, and nothing further has been done. In fact, Chang, who is in bad health, is very busy over starting some cement works, on which he is spending much money. My own opinion is that he sees that there is not any profit in the railway scheme, and, as the Viceroy is no longer keen on it, but only wants to get away, the matter is likely to be dropped altogether.

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I am keeping a careful look out on this subject, and shall communicate anything may hear to you, but as I mention above, since my arrival here, no steps have been taken. Chinese newspaper reports are, as a rule, quite unreliable. On receipt of copy of your despatch to Mr. Carnegie of July 27th, which I asked for by wire this morning, I shall wire the gist of what I now write to Peking.

Yours sincerely,

R. W. MANSFIELD.

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the basis of the Viceroy's proposals which were contained in Enclosure 3 to my Secret despatch of the 6th April, 1906, they will lead to an arrangement less profitable to the Corporation than that to the draft of which the draft Joint Working Agree- ment was appended, and to one which will largely eliminate the Corporation's future interest in the working of the line. They will argue that for this reason they should be permitted to conclude their agreement in the manner most advantageous to their financial interests and independently of any that may be entered into by the Hong Kong Government. Possibly assistance given to the Corporation in their other undertakings in China may furnish Your Lordship with grounds for meeting this argument, which I admit has force.

4. With regard to the Joint Working Agreement, which will require to be modified from the draft, at any rate so far as may be necessary to meet modifications from the draft Loan Agreement, the Viceroy has on several occasions stated that it should be based on the arrangements that govern the working of other railways that traverse parts of two independent countries. It may be convenient that I should have information with regard to these arrangements, and I should be obliged if Your Lordship could procure it for me. Possibly the regulations for the joint working of the lines connecting Switzerland and Italy would be the most useful guide, as the capital expenditure incurred on the parts of those lines in Switzerland must have greatly exceeded that incurred on the parts in Italy, in the same way that the capital expenditure per mile on the Hong Kong section will greatly exceed that per mile on the Canton section of the Canton-Kowloon Railway.

5. I take this opportunity of acknowledging the receipt of Your Lordship's Confidential despatch of the 6th July,† forwarding copies of correspondence with the Foreign Office on the subject of the Canton-Kowloon and Soochow-Ningpo Railways.

6. Since the date of my last despatch to Your Lordship, I have also received from Mr. Carnegie a copy of his of the 23rd July to Sir Edward Grey on the same subjects. This has doubtless been communicated by the Foreign Office to the Colonial Office. §

I have, &c.,

M. NATHAN..

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ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH-NOT TO

PUBLIC RECORD OFFICE, LONDON

33510

(Secret.) MY LORD,

No. 282.

GOVERNOR SIR M. NATHAN to THE EARL OF ELGIN.

(Received September 10, 1906.)

[Answered by L.F. transmitting copy of No, 297.]

Government House, Hong Kong, August 10, 1906.

IN continuation of my Secret despatch of the 26th of July* on the subject of negotiations for the completion of a Loan Agreement and of a Joint Working Agreement in connection with the proposed Canton-Kowloon Railway, I have the honour to enclose, for information and record, a paraphrase of further telegraphic correspondence with His Majesty's Representative at Peking.

2. Your Lordship will see from this correspondence that I have not felt justified in acceding to Mr. Carnegie's suggestion to disassociate the negotiations for the two Agreements. Any departure from the terms of the Preliminary Loan Agreement of the 28th March, 1899, is a concession to the Chinese Government, and unless this concession is made as a quid pro quo for a Joint Working Agreement satisfactory to this Government, I see little chance of securing such an agreement. It was, moreover, the intention of His Majesty's Government when the draft Joint Working Agreement was settled in London in 1904 with the British and Chinese Corporation, that this agreement should be entered into by the Chinese Govern- ment at the same time as the Final Loan Agreement. I have received no indication that this intention has been, nor do I think it ought to be, abandoned.

3. No doubt the British and Chinese Corporation will state, as their repre- sentative Mr. Bland-has already stated, that if negotiations for the Final Loan Agreement are carried on, as I have recommended they should be carried on, on

• No. 276.

Enclosure in No. 282.

XXXIX.

HIS BRITANNIC MAJESTY'S CHARGÉ D'AFFAIRES, Peking, to GOVERNOR, Hong Kong- (July 30, 1906.)

(Paraphrase.)

(Despatched 4.45 p.m. Received 6.30 p.m.)

TELEGRAM.

Following telegram sent to Secretary of State for Foreign Affairs :—

"146. My immediately preceding telegram. Kowloon Final Agreement. I understand that the instructions of the Corporation to Bland are still as stated in enclosure 7 of the Governor of Hong Kong's Secret despatch to the Earl of Elgin, dated April 6th, see print section two, May 24th. Doubtless the Chinese counter draft will be based on the proposals of the Viceroy in enclosure 5 of the despatch. Bland does not conceal that the Corporation attach little importance to the Kow- loon line and much more to the Suchow line, of which the construction would be far more profitable to them. He is aware that the Governor, Hong Kong, is in favour of the Viceroy's above-mentioned proposals being accepted by the Corporation as a basis for further negotiations, provided that a Joint Working Agreement satisfactory to the Hong Kong Government is concluded simultaneously with the Loan Agree- ment, but I am persuaded that he will make no attempt to meet the wishes of Hong Kong, and will continue to endeavour to keep the two questions of Suchow and Kowloon, together, his aim, no doubt, being

‡ Nos. 263 and 264. § Enclosure in No. 290.

• No. 246.

† L.F.

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