CO882-6 — Page 536

PUBLIC RECORD OFFICE

Reference :-

TTIC.O. 882

6

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH NOT TO

PUBLIC RECORD OFFICE, LONDON

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and the Committee of the Chamber were requested to deal with the matter as one of urgency.

For Your Excellency's information, I beg to enclose copy of the report of the proceedings of the meeting as published in the local

press.

The Committee are given to understand that Your Excellency has personally taken considerable interest in the projected railway, and in this belief are emboldened to address you on the subject.

The reasons for the construction of this railway are so well understood that it would appear to be almost superfluous to recapitulate them, but we would especially urge upon Your Excellency the fact that while it is clearly to the advantage of British trade generally that Hong Kong should be in direct railway connection with the main trunk lines of China, a very serious and probably irreparable blow will be dealt to the welfare of this Colony were Canton first connected by rail with the sea at any other point than through Hong Kong.

There are, we consider, several places outside British territory at which a terminus could be established, and we have only too good reason to fear that some of England's numerous commercial rivals may not be disinclined to use their influence in striking a blow at our prosperity.

Unfortunately the Committee have not before them the text of the agreement made with the Imperial Chinese Government for the construction of a railway from Chinese Kowloon (as it was then) to Canton, and are in some doubt, therefore, as to the exact terms of this agreement. We understand, however, that there are certain limitations imposed upon the concessionnaires, and that unless these are complied with the concession can be cancelled.

The Committee give all credit to the endeavours made by the concessionnaires to raise the necessary funds required for the construction of the line, which we understand are estimated at one and a half million pounds sterling, and are prepared to believe that the difficulties in the way have been of such a nature as to preclude the possibility of the necessary sum being obtained on the home market.

Under these circumstances, we would most strongly urge that representations be made to the Foreign Office with a view to securing the guarantee of the Imperial Government on the capital required, and trust that in view of the importance to British trade in China which the construction of the railway implies, Your Excellency will find it possible to endorse our request and submit the matter for the considera- tion of His Majesty's Government.

I would add that with regard to that section of the line which lies inside British territory the Committee are addressing His Excellency the Officer Administering the Government, suggesting that a similar guarantee should be given by the Colony for the interest required on the British section of the line, or that the railway should be constructed by the Colony.

It is estimated that the line through Hong Kong territory will cost in round figures about half a million pounds sterling, one million being required to complete the line to Canton.

So far as it is possible to obtain statistics of the trade of the district through which the projected line will pass it would appear that a large trade in produce and manufactured articles even now exists, while judging from the effects of railway enterprises already carried out in China and other parts of Eastern Asia we believe we are justified in stating that once the line is in working order an enormous Increase will take place in the trade and in all the passenger traffic, with the result that the line should prove a thoroughly sound business undertaking and the risk to the guarantors would be practically nil.

If it is possible to obtain such Government guarantee we believe that the present concessionnaires should have no difficulty in promptly completing their negotiations and commencing the construction of the line at early date.

The Committee are of opinion that the concessionnaires should be given twelve months in which to actually start work on the railway, and if at the termination of this period a start has not been made they consider that the interests of this Colony and of British trade generally, opportunity should be then afforded for other negotiations to be put in train.

In conclusion, I trust that I may be permitted to express the hope that Your Excellency's influence will be employed in furthering the early construction of the

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Canton-Kowloon Railway, upon which enterprise the continued prosperity of this Colony and of British trade in South China so vitally depends.

I have, &c.,

ELBERT A. HEWETT,

Chairman.

To His Excellency

Sir Ernest Satow, G.C.M.G.,

His Britannic Majesty's Envoy

Extraordinary and Minister Plenipotentiary, Peking.

19795

No. 25.

COLONIAL OFFICE to THE BRITISH AND CHINESE CORPORATION,

SIR,

LIMITED.

[Answered by No. 28.]

Downing Street, June 24, 1904.

I AM directed by Mr. Secretary Lyttelton to acknowledge the receipt of your letter of the 3rd of June,* replying to the letter from this Office, No. 13052/1904, of the 3rd of May, which submitted counter-proposals to those previously put forward by the British and Chinese Corporation, Limited, for the construction and mainten- ance of a line of railway from Kowloon to Canton." These counter-proposals were to the effect that the Corporation should secure the construction of the line within Chinese territory under the terms of their preliminary agreement with the Chinese Government, dated the 28th of March, 1899, and that the line within British territory should be constructed by and at the cost of the Government of Hong Kong, subse- quently to be leased to the Corporation upon terms to be agreed upon and to be worked as one undertaking with the Chinese section of the line.

2. From your letter under reply and from a niemorandum of the 31st of May which it encloses, it would appear that the Directors of the Corporation, while accepting the proposal that the Hong Kong section of the line should be constructed by and at the cost of the Government of that Colony, propose that instead of leasing this section to the Corporation the management of the whole line shall be placed in the hands of a Board to which the Corporation should nominate three Europeans and two Chinese, and the Hong Kong Government two European members, and that the revenue derived from the whole railway should be divided between the Chinese Government and the Colonial Government according to mileage or according to such other arrangement as might be found best on investigation.

3. The Corporation will probably agree that if the Colonial Government shares the responsibility for the working of the whole railway they will find it easier to raise the necessary funds for the construction of the Chinese section. They will probably also agree that the success of the line to be constructed by the Corporation is depen dent on its being continued through British territory with a sea terminus in Kowloon; and also that the preliminary agreement between the Corporation and the Chinese Government is of such a nature that it may in certain contingencies be necessary for the Corporation to have recourse to the good offices of His Majesty's Government, in order to ensure this preliminary agreement being replaced by a more definite under- taking on the part of the Chinese Government. They will, therefore, no doubt be prepared, as far as possible, to meet the views of His Majesty's Government, and these views I am now to recapitulate.

4.) It will be an essential condition of any agreement that may be entered into between the Hong Kong Government and the Corporation that in the event

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