CO882-6 — Page 553

PUBLIC RECORD OFFICE

Reference :-

C.O. 882

6

PUBLIC RECORD OFFICE, LONDON

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

1218

76

No. 50.

THE BRITISH AND CHINESE CORPORATION, LIMITED, to COLONIAL

OFFICE.

(Received January 13, 1905.)

[Answered by No. 52.]

Canton-Kowloon Railway.

SIB,

I BEG leave to acquaint you, for the information of Mr. Lyttelton, that the Board have considered your letter to me of the 16th ultimo,* and that they accept for submission to the Chinese Authorities the conditions therein specified as a basis of the terms for a final agreement.

3, Lombard Street, London, EC., January 13, 1905.

Several of the conditions, and in particular the conditions in Clause L, are pretty certain to be objected to by the Chinese Railway Administration, but, in the desire to raise no obstacle to the negotiations of terms which must necessarily be discussed and settled by the Colonial and Chinese Governments, the Board, who have no mandate to commit the Chinese Authorities, acquiesce in the insertion of the conditions.

The Board gather that Mr. Lyttelton will not consent to any reconsideration of the basis on which the net profits or losses are to be divided between the two Governments, but they hope he will recognise that in the cost of the railway the discount at which the Chinese are obliged to place their loan bonds should be included. Experience has made it absolutely clear that an issue cannot otherwise be successfully made, and the Chinese will object to the principle of their discount being regarded as dead capital.

I am, &c.,

C. P. Lucas, Esq., C.B.,

Downing Street, S.W.

Colonial Office,

Attached to 1218

No. 51.

W. KESWICK,

Chairman.

MR. W. KESWICK, M.P., to MR. G. V. FIDDES. (Received January 18, 1905.)

DEAR MR. FIDDES,

[Answered by No. 54.]

3, Lombard Street, London, E.C., January 17, 1905. On returning here yesterday, after my conference with you in the afternoon, I gave directions for two more copies of the draft Canton-Kowloon Railway Loan Agreement to be sent to you.

My present object in writing to you is in reference to the consulting engineers, as I wish to point out that if the firm of Sir John Wolfe Barry and Partners only are appointed consulting engineers, Mr. Arthur Barry would have no connection with the undertaking.

I could not contemplate this without very great regret, as Mr. Barry has been associated with his uncle from the commencement, and has given a very large amount of time and attention to the railway business in China, including several visits to the East.

On the other hand, if Mr. Arthur Barry's firm of Barry and Leslie are appointed joint consulting engineers with Sir John Wolfe Barry and Partners, the continuity will be preserved and a very common practice followed, and I see no reason to doubt its working quite smoothly.

If you would desire any information as to the joint working of the two firms, I am sure Mr. Leslie, one of Mr. Barry's partners, will be pleased to call upon you.

Yours, &c.,

W. KESWICK.

G. V. Fiddes, Esq., C.B.,

Colonial Office,

Downing Street, S.W.

1218

77

No. 52.

COLONIAL OFFICE to THE BRITISH AND CHINESE CORPORATION, LIMITED.

SIR,

Downing Street, January 20, 1905. I AM directed by Mr. Secretary Lyttelton to acknowledge the receipt of letter of the 13th instant, respecting the arrangements for the construction and your working of the proposed railway from Canton to Kowloon.

I am to state that while Mr. Lyttelton is not prepared at present to commit the Government of Hong Kong by any definite expression of opinion on the suggestion made in the last paragraph of your letter, it may be observed that if it were found expedient hereafter to accept such an arrangement it would be necessary to apply the principle so as to include the case of a Hong Kong loan for the construction of the British section being raised at a discount.

1218

No. 53.

I am, &c.,

C. P. LUCAS.

MR. LYTTELTON to GOVERNOR SIR M. NATHAN. [See No. 66.]

(Confidential.)

SIR,

To Corporation, 16th December, 1904. British and Chinese Corporation, 13th

January, 1905.

Downing Street, January 20, 1905. WITH reference to your telegram of the 1st ultimo,† I have the honour to transmit to you a copy of correspondence with the British and Chinese Corporation, from which you will learn the nature of the proposals made To Corporation, 20th January, 1905. by me for the construction and working of a line of railway from Canton to Kowloon, and of the views of the Corporation thereon. Negotiations with the Corporation are actively proceeding as to the draft working agreement, which should be submitted to the Chinese Government, and I hope to be able to send you an approved copy of the draft at an early date. I understand that Mr. Ross, who is in the service of Messrs. Jardine, Matheson and Company, will be entrusted by the Corporation with the task of negotiating their final loan agreement with the Chinese Government, and that he has already left this country for the purpose. He will probably wait on you on his arrival in Hong Kong.

The Corporation have intimated that Sir John Wolfe Barry and Mr. A. J. Barry, of the firm of Barry and Leslie, have been acting as their joint engineers in China, and they have suggested that these gentlemen should be accepted by the Crown Agents as consulting engineers for the Hong Kong section of the proposed line. It is being made clear to the Corporation, by my instructions, that while I am willing, on behalf of the Hong Kong Government, to agree to the selection of Sir J. Wolfe Barry as the consulting engineer of the Crown Agents for this purpose, I see no advantage in associating with him a second firm. I observe from your telegram of the 11th instant& that you have had an interview with Mr. A. J. Barry, and I therefore think it well to put you at once in possession of my views for your guidance in any further communications with him.

I have not lost sight of the suggestion made in your telegram of the 3rd Sep- tember, that an engineer should be sent out as soon as possible to prepare plans for the Hong Kong section. I would, however, point out that it would not be safe to assume at this stage that the Chinese Government will build their section, or agree to proposals for the joint working of the whole line. It is therefore necessary, before adopting your suggestion, to decide whether it would be expedient to build the Hong Kong section, even if the line were not continued beyond the frontier, as otherwise the expenditure which you propose to incur might be wasted.

I have no data at my disposal to enable me to form an opinion whether such a line would pay its working expenses and interest and sinking fund on the cost of construction, and I am not aware if you are in a more favourable position to

• No. 44.

• No. 50.

† No. 40.

Nos. 44, 50 and 52.

No. 48.

I No. 31.