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regard to (5) I showed Mr. Cito's letter on the day it was received to Mr. C. H. Ross, of Messrs. Jardine, Matheson and Company, who was proceeding to Pekin and wrote to Sir Ernest Satow on the subject on the following day. I am sending to Sir Ernest a copy of this despatch.

3. It has occurred to me that the telegram from the China Association of Hong Kong, of which a copy was only shown to me after its despatch, may bear an inter- pretation which was certainly not intended, namely, that the Americans were endeavouring to acquire special privileges with a view to making Whampoa an American port in the same way as Hong Kong is a British one. I have absolutely no reason to believe that such a scheme has been put forward. The object of the Association's representation was no doubt to hasten the commencement of the Canton- Kowloon Railway which would set at rest rival projects.

I have, &c.,

M. NATHAN.

P.S. Since writing the above my attention has been recalled to a paragraph in the "Wa Tsz Yat Pó-a Chinese newspaper, published in Hong Kong-of which a translation is attached. It bears on the Chinese project for a railway which is referred to in Mr. Cito's letter of March 24th.

April 6.

Enclosure 1 in No. 86.

M. N.

EXTRACT from "An American Engineer in China," by Wm. Barclay Parsons. Page 45.

The concession covers 900 miles of railway, together with mining and other privi- leges, which make it in value and in national importance second to no other concession granted by the Chinese Government. The projected route of the railway itself is from Hankow, the metropolis of the interior or as it is sometimes called "The Chicago of China to Canton, the great port in the south, and thence with rights to go to any selected point on the coast if desired.

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is an air of mystery about all their movements, but you may be certain that these men are not in Canton for the benefit of their health, and that the development of railway concessions is their object. I give you all these particulars in strict confidence, not that there is much in them, but they will show at least how the land lies and which way the wind is blowing."

Enclosure 4 in No. 86.

TRANSLATION of a paragraph in the "Wa Tsz Yat Po" of February 16, 1905. PROPOSED RAILway from CANTON TO WHAMPOA.

Cheung Pat Sz, Commissioner of Agriculture, Public Works, Railways and Mines for the Fuk-kien and Kwang Tung Provinces, who holds the rank of Tai Puk, has opened a central office outside the Tseng Hoi gate in Canton for the purpose of con- structing a railway to run from the east gate of the City to Whampoa. will eventually be connected with the Canton-Hankow line. It is proposed to make This railway a port of Whampoa, and the place will be opened up for general trade by China. Mr. McKay, an American, has been engaged as Engineer, and Mr. Yeung Wing Chung, an Expectant Sub-Prefect, has been deputed to act as Interpreter; while Mr. Cheung Kai Meng, a Sub-Magistrate, has been appointed to superintend the purchase of the land required. These three are to proceed at once to survey and map out the route of the line, under the escort of Captain Kwong Shing Yan and a company of soldiers.

The District Magistrate of Pun Yu will be asked to furnish two police officers for the further protection of the party, as the railway will be built in his district; while instructions are to be issued to him not to grant titles to, nor to permit transfers of, land along the proposed route, to prevent unprincipled persons from buying it up and then demanding an exorbitant price for it.

As all thinking persons must see, the building of railways has been a benefit to China, when carried out by the people, but an inquiry when done by foreigners, as has been the practice hitherto, owing to the imperfect sympathy between the officials and the people; as lately, for instance, no Chinese would undertake the building of the Canton-Hankow line. Now that they want to get it back there is much trouble over the matter; and Cheung's idea is to secure the control of the branch lines as the first step towards the control of all.

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PUBLIC RECORD OFFICE

Reference →→

C.O. 882

6

PUBLIC RECORD OFFICE, LONDON

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

Enclosure 2 in No. 86.

EXTRACT from a Letter from Mr. Cito, dated March 24, 1905.

I suppose you have learned from Chang the new Director of Railways, Mines and Telegraphs of Kwang Tung and Fokien Provinces, is preparing to build, himself, a branch line from Canton, East Gak, to Whampoa. This line is not to connect with the Canton-Hankow Railway. An American Engineer, Mr. McGee, is in charge of the survey of the line.

Enclosure 3 in No. 86.

་

EXTRACT from Letter, dated Canton, March 30, 1905. "There is something in this Whampoa scheme: the American Syndicate, who hold the Canton-Hankow Railway Concession, claim that they have the right in terms of the concession to operate their line from a deep water port. The new American Consul, who boasts that he has special instructions to further American interests has openly given out that the American Syndicate intend to connect Whampoa and Canton, without which the railway could not be properly operated. Recently there have been certain parties surveying between Canton and Whampoa; and the current opinion here is that (1) Gray, the late Chief Engineer of the Canton Railway and a Belgian named Cito are here engaged in some negotiations on the subject. There

(1) Wilson E., who eventually had some dispute with the direction of that concern.-M. N.

(Confidential.)

No. 87.

COLONIAL OFFICE to FOREIGN OFFICE. [Copy to Governor, May 11, 1905. Secret. L.F.]

SIR,

I AM directed by Mr. Secretary Lyttelton to acknowledge the receipt of your

Downing Street, May 8, 1905. letter of the 20th ultimo, respecting the project for connecting Canton by railway with a deep-water port near Whampoa.

2. I am to invite the attention of the Marquess of Lansdowne to the telegram of the 5th ultimo† from the Governor of Hong Kong which was enclosed in the letter from this Department of the 7th ultimo. Mr. Lyttelton understands that the British and Chinese Corporation would not attach much importance to the report even if it should turn out to be correct, and he considers that the most effectual way of safeguarding British interests in this connection will be to obtain the assent of the Chinese Government to the proposed arrangements for the Railway with as little delay as possible.

Canton-Kowloon

1

I am, &c.,

C. P. LUCAS.

• No. 82.

↑ No. 79.

L.F.