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the Under Secretary of State for the Colonies, and, by direction of the Secretary of State, transmits herewith copy of the under-mentioned paper. Foreign Office,

November 1, 1908.

DESCRIPTION OF ENCLOSURE.

Name and Date.

Sabject.

PUBLIC RECORD OFFICE

Reference :-

LC.O. 882

6PUBLIC RECORD OFFICE, LONDON

(No. 181.)

Enclosure 1 in No. 304.

TELEGRAM to Sir J. JORDAN, Peking.

(Foreign Office, October 25, 1906, 3.25 p.m.)

Canton-Kowloon Railway.

Hong Kong and Shanghai Bank state that rate of exchange for the service of the loan is now the only question outstanding, and that they hear you do not consider point worth fighting for. They consider that to admit Chinese contention would create a most injurious precedent, and they cannot give way.

They are telegraphing to Bland to offer to Chinese the option to settle rate of exchange at any time within six months prior to date of payment of each instal- ment.

You may support this proposal which is as much as Corporation can be expected to concede.

Enclosure 2 in No. 304.

Sir J. JORDAN, sent from Peking, 12.50 p.m., October 27, 1906.

(Telegram No. 198.)

(Decypher.)

Canton-Kowloon Railway.

Your telegram No. 181 [of October 25].

Matter has been arranged to the satisfaction of the Bank.

Agreement has been practically settled, and only awaits the concurrence of the Governor of Hong Kong.

40067

No. 305.

THE EARL OF ELGIN to GOVERNOR SIR M. NATHAN.

(Sent 5 p.m., October 31, 1906.)

TELEGRAM.

[Copy to Foreign Office, November 8, 1906. L.F.] [Answered by No. 309.]

In answer to your telegrams, October 27, October 30,* matter left to your discretion.

40315

No. 306.

FOREIGN OFFICE to COLONIAL OFFICE. (Received November 1, 1906.)

[Copy to Governor, November 15, 1906. Confidential. L.F.]

The Under Secretary of State for Foreign Affairs presents his compliments to

/Nos. 301 and 303.

Mr. Carnegie, Peking, No. 368, September 5, 1906 Canton-Whampoa Railway Scheme.

SIR,

(No. 368.)

Enclosure in No. 306.

Peking, September 5, 1906. WITH reference to my despatch, No. 335, confidential, of August 8th, I have the honour to enclose copies of two notes which I addressed to Prince Ch'ing on August 13th and to-day, on the subject of the Chinese project to build a railway from Canton to Whampoa.

On August 17th, at the Wai Wu Pu I pressed for a reply to my note of August 13th. After some discussion, in which Mr. Tong Shoa-yi appeared to think that this question should form part of the Canton-Kowloon negotiations, he promised to consult with Prince Ch'ing.

I have not yet succeeded in obtaining the interview with Prince Ch'ing which is referred to in my despatch, No. 358, confidential, of August 23rd. His Highness is still with the Court at Wan Shou Shan, and has been much occupied by a confer- ence on government reform, which has followed the return of the Special Commis- sioners from Europe; but yesterday, at the Wai Wu Pu, His Excellency, Lien-fang, promised to remind him of his obligation to receive me, and last night I mentioned by letter that I would be glad to call on His Highness to-morrow at his residence near the Summer Palace, at any hour convenient to him.

The Right Honourable

Sir E. Grey, Bart., M.P.,

&c., &c.,

YOUR HIGHNESS,

&c.

I have, &c.,

LANCELOT D. CARNEGIE

Mr. CARNEGIE to PRINCE CH'ING.

Peking, August 13, 1906. In a note of May 12th, which I had the honour to address to Your Highness, I stated that I had received a telegram from the Governor of Hong Kong to the effect that the Canton Provincial Authorities were taking active steps in furtherance of a scheme for constructing a railway from Canton City along the right bank of the East River through Whampoa. It was pointed out that as such a line would follow the proposed route of the Canton-Kowloon Railway, the Preliminary Agreement of March, 1899, would be infringed, and Your Highness was requested to impress this fact upon the Viceroy of Canton by telegraph, and to move His Excellency to drop the scheme.

On July 16th I again wrote to Your Highness stating that I had received tele- graphic enquiries on this subject from Sir E. Grey, and requested that I might be informed whether the Chinese Government had communicated with the Viceroy in the sense desired by my note of May 12th. In reply to verbal representations at the Wai Wu Pu, I was informed that the Chinese Government had no information of the project to construct a railway from Canton City through Whampoa, but that enquiries were being made, and a reply would be sent to me later.

I have recently received more precise information from His Majesty's Consul- General, which places it beyond any reasonable doubt that the Board of Commerce has sanctioned this scheme; that large funds have been subscribed to carry it out;

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