CO129-331 - Public Offices - 1905 — Page 17

16

the two sections would come nearer together than at

present we expect.

The Chinese however may not raise the question

at all, and in order to prevent further delay in

commencing this line, the Corporation's present feel-

ing is to fill in two millions as the amount which

the loan is not to exceed.

The importance of fill-

ing in a safe figure is that the Agreement specifies

a maximum amount, but does not provide for what is

to be done in the event of the loan proving insuffi-

cient, and in this case it is not only the comple.

tion of the line which has to be provided for but

also the provision of the working capital from time

to time and for improvements.

Therefore as they

view the situation at present they think two mil-

lions should be provided for, but of course they

would not think of issuing it all in the first in-

stance.

Another point which may or may not be

worthy of consideration is the probability that the

Chinese would value their proposed partnership with

Hongkong more highly and prove easier to work with

hereafter

hereafter if they found from a short experience that

their own section of the railway was by itself un-

profitable.

With regard to section 16 this is a clause on

Our own experi- which I anticipate much discussion.

ence however in dealing with Chinese officials is to

ask for more than we expect to get, so as to leave a

margin for concessions later on, and possibly the

Colonial Office in passing this clause held somewhat

similar views.

I have wired to Hongkong for the Engineer's report

on the proposed line, and it should reach me within

the next ten days, meanwhile I am engaged on the short

summaries of the Loan Agreement and Schedule,

which

I must confess I do not find as easy a matter as I an-

ticipated.

$2,

Yours truly

(Signed)

Charles H. Ross,

1