CO129-326 - Foreign Office - 1904 — Page 698

The paragraph admits that the trade "will be inevitably diverted to Yunnan-fu if the French railway reaches this city, and nothing is done on our side to counteract its attraction." It is argued, however, that, as "Hsiakuan is approximately midway between Bhamo and Yunnan-fu, if a railway is made to T'engyueh, the route through British territory must retain its superiority, since T'engyueh is nearer to Hsiakuan than (is Hsiakuan) to Yünnan-fu." But it is hardly correct to place Hsiakuan midway between Bhamo and Yunnan-fu as matters now stand, since there are twenty stages from Bhamo to Hsiakuan, and only thirteen from Hsiakuan to Yünnan-fu. Hsiakuan is, for a mule caravan, as nearly as possible half-way, in point of time, between T'engyueh (not Bhamo) and Yunnan-fu; a railway, therefore, from Bhamo to T'engyueh would, if this were all, be, what Mr. Litton calls it, "commercially an almost complete answer to the French line" from Laokai to the capital.

But this is not all. Mr. Litton, in the same paper, declares that "any prolongation of a line beyond T'engyueh towards Yungchang is quite hopeless"; whereas he would readily admit that the prolongation of a line beyond Yunnan-fu towards Tali is entirely practicable. What is more, the French contemplate such prolongation towards Tali; and as soon as they hear that we are proposing to move on Tengyueh they will, I cannot doubt, hasten to secure it.

So far, then, from the railway to T'engyueh "placing us on more than an equality with the French in the struggle" for the commercial command of Tali, the commencement of that railway would be the signal for a French advance on Tali itself. This we can prevent by forestalling them in the demand for the Tali-Yunnan-fu Concession; but, as far as I can see, in no other way.

Commercial command, moreover, is only one element in the problem before us. We have to consider our approaches to the Upper Yang-tsze—in other words, the connection between India and Ssuchuan: and we may have to safeguard interests in South-Eastern Thibet. The key in both cases is, as before, Tali. A French railway from Tonquin to Tali might cause us grave embarrassment, even if we had already connected Tali by rail with Burmah. A French railway to Tali while our lines stop short at T'engyueh and Lashio, would effectually cut off India from Ssuchuan and close one door into Thibet.

The policy, then, that I would again venture to urge is: Let a demand be, at once and first of all, made of the Chinese Government (either on behalf of the Indian Government or of some British Company) for the concession of a railway from Burmah via Tali to Yünnan-fu. That demand granted, and it cannot well be refused, let us then—but not before—arrange for the local line to Tengyueh. Both concessions obtained, we may at once complete the local line; while for the railway we content ourselves for the present with that "examination of the country between the Salween and the Mekong (or rather, from the Salween across the Mekong) suggested by the Secretary of State.

This examination should not, if I may be permitted to say so, be a rough survey, but, as Mr. Brodrick proposed, an exhaustive exploration by a thoroughly competent party of British engineers, to enable a judgment to be formed of the best alignment." We should then at last be in a position to decide whether a Kunlong-Tali Railway is too large a scheme for any prudent Company to undertake. At the same time it should not be forgotten that considerations of expense and difficulty were not allowed to stand in the way of the rival scheme from Laokai to Yunnan-fu, and that if we are to engage successfully in a struggle with France for trade and influence in Yünnan, we, too, must not grudge the cost.

What I now advocate, however, is not a policy of adventure, but a measure of imperative precaution. I do not suggest a heavy draft on the Indian revenues, or immediate expenditure from any quarter; but merely to claim, without loss of time, from China a concession which need cost us nothing except the moderate expenses of a survey, and which, if the survey proves it to be impracticable, we can at any time abandon without loss of prestige.

[This Document is the Property of His Britannic Majesty's Government.]

Page 53

# SOUTH-WEST CHINA,

## CONFIDENTIAL.

### No. 1.

## Foreign Office to India Office.

694

[November 23.]

### SECTION 1.

Sir,

Foreign Office, November 23, 1904. WITH reference to your letter of the 6th August last, I am directed by the Marquess of Lansdowne to transmit to you herewith, for the observations of the Secretary of State for India, a copy of a telegram from His Majesty's Minister at Peking relative to the delimitation of the Burmah-Yunnan frontier.*

In accordance with the suggestion contained in the penultimate paragraph of your letter, Sir E. Satow informed the Chinese Government that in order to secure a friendly settlement of the question His Majesty's Government are willing to send officers who would accompany Representatives sent by the Chinese Government for the purpose from the eastern side of the frontier, and point out to them the true position of affairs.

Sir E. Satow calls attention to the terms of the reply of the Chinese Government, who appear to understand that the officers on both sides will be on the same footing in conducting the boundary inquiry and to believe that those officers should be regarded as forming a Joint Commission appointed to examine the proposed boundary line.

As stated in his telegram, His Majesty's Minister nevertheless believes that there would be no harm in accepting this arrangement.

Lord Lansdowne would be glad to be favoured with an expression of the views of Mr. Secretary Brodrick on the subject.

I am,

[2269 -1]

(Signed)

F. A. CAMPBELL.

* Sir E. Satow, No. 249, Telegraphic, November 19, 1904.

I have, &c.

(Signed)

W. H. WILKINSON.