CO882-6 — Page 560

PUBLIC RECORD OFFICE

Reference :-

EPIC.O. 882

6

PUBLIC RECORD OFFICE, LONDON

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

90

instant, of a Loan Agreement between the Imperial Chinese Government and the British and Chinese Corporation, Limited, and of an Agreement between the Government of Hong Kong and the Chinese Government for the working of the railway.

I trust that these drafts will be found in order, in which case the Corporation will be prepared to instruct its agents to seek the assent of the Chinese Government to the Agreements. Our agents, Messrs. Jardine, Matheson and Company (Hong Kong), propose to entrust the negotiations with the Chinese to Mr. Charles H. Ross, who occupies a very responsible and confidential position in the house, and is specially acquainted with Chinese railway loan business.

The good offices of His Majesty's Foreign Office and Minister at Peking are, I am satisfied, absolutely essential to the success of the negotiations, and I therefore beg leave to express the hope that Mr. Lyttelton will consider the question and see fit to make a representation to that effect to the Foreign Office.

C. P. Lucas, Esq., C.B., Colonial Office,

4889

Downing Street, S.W.

No. 82.

I am, &c.,

W. KESWICK,

Chairman.

COLONIAL OFFICE to THE BRITISH AND CHINESE CORPORATION,

LIMITED.

[Answered by No. 65.]

SIR,

Downing Street, February 17, 1905. I AM directed by Mr. Secretary Lyttelton to acknowledge the receipt of your letter of the 13th instant, submitting drafts of two Agreements for the construc- tion and working of a line of railway from Canton to Kowloon.

Mr. Lyttelton has not considered the draft Agreement between the British and Chinese Corporation and the Chinese Government, except in so far as it may affect the interests of the Government of Hong Kong, and from this point of view he has no objection to offer to it. He concurs in the terms of the draft working Agree- ment between the Chinese and Hong Kong Governments, and he is prepared to recommend it for adoption by the latter if and when the Chinese Government give their assent to the two Agreements.

You will remember that it was agreed in the letter from this Department of the 16th December last,† and your reply of the 13th January, that the Corporation would obtain the concurrence of the Colonial Government in the loan Agreement proposals before submitting them to the Chinese Government and before accepting any important modifications in them. It would therefore be advisable that you should instruct Mr. Ross to put himself in communication with the Governor of Hong Kong (to whom copies of the Agreements will be sent by the outgoing mail) before opening negotiations with the Chinese Government, and to keep him fully informed as to their progress.

Mr. Lyttelton is communicating the draft Agreements to the Marquess of Lansdowne, with a request that His Majesty's Minister at Peking may be asked to give every assistance in his power in the negotiation of the Agreements. You will doubtless direct Mr. Ross to wait on Sir E. Satow before approaching the Chinese Government, and to be guided by his advice, as it is clear that the working Agreement cannot be negotiated without the active participation of His Majesty's Minister from the outset.

In conclusion, I am to observe that it seems important that the nature of the Agreements should not be publicly known until the views of the Chinese Government have been ascertained. The Governor of Hong Kong will be instructed to treat the matter, as far as possible, as confidential in the meantime, and the Corporation will doubtless see the propriety of following the same course.

I am, &c.,

C. P. LUCAS.

• No. C1.

† No. 44.

‡ No. 50.

4889

SIR,

91

No. 83.

COLONIAL OFFICE to FOREIGN OFFICE.

[Answered by No. 69.]

Downing Street, February 17, 1905. WITH reference to the letter from this Department of the 29th December,* respecting the proposed construction of a line of railway from Canton to Kowloon, I am directed by Mr. Secretary Lyttelton to transmit to you, to be laid before the Marquess of Lansdowne, copies of correspondencet with the British and Chimese Corporation on the subject.

2. Lord Lansdowne will observe that an understanding has been arrived at with the Corporation as to the Agreements which the Chinese Government should be asked to enter into for the purpose. His Majesty's Government are not directly concerned with the Loan Agreement between the Corporation and the Chinese Government, but the draft now submitted by the former appears to be in general accordance with the preliminary Agreement of the 28th March, 1899, and Mr. Lyttelton presumes that Lord Lansdowne will concur with him in thinking that the Corporation should receive the support of His Majesty's Government in its negotiation.

3.

The terms of the proposed Working Agreement between the Governments of China and Hong Kong have been very carefully considered, and Mr. Lyttelton is of opinion that the two Agreements, taken together, will provide a satisfactory machinery for carrying out the objects in view, to which he attaches great import ance. The general lines of the Working Agreement were unofficially communicated to the Foreign Office at an earlier stage, and it is understood that Sir E. Satow was consulted by telegraph on the subject. Mr. Lyttelton therefore trusts that Lord Lansdowne will agree to issue instructions to His Majesty's Minister to do all in his power to promote the success of the negotiations.

4. It is highly probable that the Chinese Government will raise difficulties with regard to some of the provisions of the Working Agreement, and Mr. Lyttelton. hopes that Sir E. Satow will use every means of overcoming their objections, and that he will keep the Governor of Hong Kong fully informed of the progress of the negotiations.

5. It will probably be useful to Sir E. Satow to peruse the official and unofficial correspondence which has taken place on the subject, and if Lord Lansdowne concurs in this view, copies will be forwarded to you for the purpose as soon as they are received from the printers.

4889

No. 64.

I am, &c.,

C. P. LUCAS.

MR. LYTTELTON to GOVERNOR ŠIR M. NATHAN. (Confidential.)

SIR,

WITH reference to my confidential despatch of the 20th ultimo, I have the

Downing Street, February 17, 1905. honour to transmit to you copies of correspondence† with the British and Chinese Corporation respecting the proposed line of railway from Canton to Kowloon. I also enclose a copy of a letters which I have caused to be addressed to the Foreign Office on the subject.

The circumstances for which provision is made in the two draft Agreements|| now forwarded to you are, so far as I am aware, without precedent. The arrange ments contemplated are, of course, not such as I should have been able to approve had the Hong Kong Government alone been in question. But it is necessary to take into account the position of the Chinese Government and of the British and Chinese Corporation, and to recognise that without the co-operation of both it will be practically impossible to obtain the main object aimed at, viz., the construction of a through line from Canton to the British seaboard. Nevertheless, I have no

| Not reprinted.

• No. 45.

18885

† Nos. 61 and 62.

‡ No. 53.

f No. 63.

* 2