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PUBLIC RECORD OFFICE

Reference :-

6

muminpinim TILLHC.O. 882

6 PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH-NOT TO

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between my predecessor and the Tsungli Yamen of 21st August to 14th September, 1898 (given at pp. 287-289 of China. No. 1, 1899) by which the Chinese Government undertook to give to British capitalists for the Canton-Kowloon, Soochow-Hangchow and Puk'ou-Sinyang lines, terms not inferior to those of the Luhan Railway con- cession.

The Marquess of Lansdowne, K.G., *&c., &c., &c.

(Translation.)

YOUR EXCELLENCY,

I have, &c.,

ERNEST SATOW.

September 3, 1905, 5.8.XXXI.

I HAVE the honour to acknowledge the receipt of Your Excellency's note respecting the question of the Canton-Kowloon Railway, and enquiring what officials would be appointed by the Chinese Government to enter upon negotiations in regard to the construction of this line. (Note of August 30th quoted in extenso.)

In reply, I have the honour to observe that the Preliminary Agreement for a Canton-Kowloon Railway defines its scope as from Canton City to British Kowloon. The memorandum which Your Excellency gave this Board describes the line as falling into two sections, one the Kowloon section, which the Hong Kong Government will construct themselves, and one the Canton section, which the British and Chinese Cor- poration is prepared to construct for China under a loan agreement--an arrangement which is not in accord with the Preliminary Agreement.

As regards the line within the territory of Kuangtung, the Chinese gentry and merchants are now desirous of raising the necessary capital and constructing this line themselves, so there is no need for the above-named Corporation to raise funds on behalf of China for the construction of this railway. This course corresponds, more- over, with the altered conditions whereby the Hong Kong Government propose to undertake the construction themselves of the railway in British territory.

Some time ago we received a telegram from the Viceroy at Canton reporting that he had already informed His Britannic Majesty's Consul-General of this con- clusion to raise the capital ourselves for the construction of this line. So this matter should be gone into by His Excellency, and this Board sees no reason for appointing any official to enter into negotiations with the Corporation's representative. I trust, therefore, that Your Excellency will take note of our views and direct the Corporation to comply therewith.

I avail, &c..

Sir E. Satow, G.C.M.G.,

&c.,

&c..

&c.

September 11, 1905.

YOUR HIGHNESS,

I HAVE the honour to acknowledge the receipt of Your Highness's note of Sep- tember 3rd on the subject of the Canton-Kowloon Railway. In this it is objected that the proposals sketched in my memorandum of April 26th, according to which the line falls into two sections, one to be built by the Hong Kong Government and the other by the British and Chinese Corporation on behalf of the Chinese Govern- ment, are at variance with the terms of the Preliminary Agreement of March 28th, 1899. Your Highness states that, as regards the railway within Kuangtung territory, - Chinese notables and merchants desire to raise capital and construct the line them- selves, and that there is consequently no need for the British and Chinese Corporation to borrow money on China's behalf for this purpose. Your Highness also mentions that, according to a telegram received from the Viceroy at Canton, His Majesty's Consul-General was some time since informed of the conclusion to raise capital locally, and that you saw no reason therefore for appointing an official to enter into negotiations with the representative of the British and Chinese Corporation.

I confess that the contents of this note surprise me. As Your Highness is aware, there is a 'reliminary Agreement in regard to this matter which was concluded by the British, and Chinese Corporation with His Excellency Sheng Hsuan-huai, on behalf of the Chinese Government, on March 28th, 1899: and what I am asking for is the

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fulfilment of this Agreement. Yet, unless I misjudge the contents of Your Highness's note, both you and the Viceroy of Canton, on the pretext that the proposals contained in my memorandum of April 26th do not accord with the Preliminary Agreement, consider its provisions null and void, clearly because some Cantonese notables and merchants wish you to do so. Am I to understand that Your Highness and the Viceroy of Canton seriously think that in deference to the wishes of local persons anxious to profit themselves it is open to the Chinese Government to repudiate a solemn agreement regardless of the views of the other party to the agreement? I am aware that opinions of this nature are ventilated in the Chinese press, but if they are held by the Chinese Government or by the Viceroy of Canton with the approval of the Chinese Government, I should be glad to be told so officially for the information of His Majesty's Government.

It is, moreover, astonishing to me that Your Highness should seriously allege any portion of the contents of my memorandum of April 26th, which are mere pro- posals, as a sufficient reason for abrogating the Preliminary Agreement of 1899, which is a signed and sealed contract.

Your Highness says that the division of the railway into two sections-the Kow- loon section, to be built by the Hong Kong Government, and the Canton section by the British and Chinese Corporation for the Chinese Government under a loan agree- ment-is at variance with the terms of the Preliminary Agreement. That is not so.

The Preliminary Agreement refers to railways from Canton to the leased territory of British Kowloon, that is to say, from Canton City to the border of British jurisdiction. The Kowloon section was mentioned in my memoran- dum of April 26th, because that will be built by the Hong Kong Government, and it is obviously important and advantageous that it should connect with the Canton section in order to secure continuous traffic. It stands to reason that neither His Excellency Sheng nor the British and Chinese Corporation, which is a private Com- pany of British merchants without any official character, were competent to bind the British Government in regard to the section of railway to be constructed in British territory. If that portion of the line had been comprehended in the Agreement the fact would have been clearly stated and a representative of the British Government would have been a party to the document.

Your Highness having stated in the note under acknowledgment that the Viceroy of Canton is the proper person to take this matter into consideration, I have the honour to request that the instructions of the Imperial Chinese Government may be sent forthwith to His Excellency to enter into negotiations with a representative of

the British and Chinese Corporation, with a view to the fulfilment of the engagements

of the Chinese Government in regard to the Canton-Kowloon Railway.

The favour of an early reply is requested,

I avail myself of this opportunity to renew to Your Highness the assurance of my highest consideration.

His Imperial Highness

40822

Prince Ch'ing, &c.,

&c.,

&c.

No. 165.

FOREIGN OFFICE to COLONIAL OFFICE.

(Received November 16, 1905.)

ERNEST SATOW.

[Copy to Governor, November 17, 1905. Secret. L.F],

(Confidential.)

SIR.

Foreign Office, November 15, 1905.

I LAID before the Marquess of Lansdowne your letter, 37732/1905,* of the 3rd instant, respecting the loan by the Government of Hong Kong to the Viceroy

at Wuchang, and the question of the Canton-Kowloon Railway.

• No. 158.