[This Document is the Property of His Britannic Majesty's Government.]
154
CHINA RAILWAYS.
CONFIDENTIAL.
[13464]
No. 1.
C.O. [May 18314
SECTIO RE
IR 24 MAY 071
Foreign Office to British and Chinese Corporation.
(Confidential.) Sir,
I AM directed by Secretary Sir E. Grey to inform you that a telegram has been
Foreign Office, May 2, 1907. received from His Majesty's Minister at Peking on the subject of the proposed railway between Hsin-min-tun and Mukden.
It appears that the recent Railway Agreement between China and Japan, of which a summary was published in the issue of the "Times of the 20th April, stipulates that the existing light railway between Hsin-min-tun and Mukden shall be converted by the Chinese Government into a line constructed by themselves, and that half the cost of construction of the part on the east side of the Liao River (about 26 miles), shall be raised by a loan from the South Manchurian Railway. The loan is to be for eighteen years, during which the chief engineer is to be Japanese, and the other conditions follow generally the line of the Chinese Northern Railway Agreements.
The local agent of the British and Chinese Corporation is raising the point whether the foregoing provisions conflict with paragraph 2 of clause 3 of the Northern Railways Loan Agreement of the 10th October, 1898, and Article 8 of Agreement (B) of the 27th April, 1902; and Mr. Bland thinks that it should be clearly understood that Chinese railway administration extends only to the Liao River (about 8 miles from Hsin-min-tun), and that Japanese control is limited to the east of that river.
In Sir E. Grey's opinion it cannot be maintained that Agreement (B) of 1902 has been infringed, as the Imperial Northern Railways Administration only has the right to the Concession in the case of "any new railway within a distance of 80 miles of any portion of the existing lines," and it would be straining a point to include the line from Hsin-min-tun to Mukden within that radius, having regard to the fact that when Agreement (B) was signed Newchwang was the farthest eastern point of any then existing railway. Moreover, the words "within a distance of 80 miles of any portion of the existing lines clearly point to branch or lateral lines which would be detrimental to the existing lines, and are not therefore applicable to such a line as that from Hsin-min-tun to Mukden.
On the other hand, the present China-Japan Agreement might be held to be an infringement of the British and Chinese Corporation's Agreement of 1898, as this Agreement mentions also extensions connecting with the existing lines.
A further point, however, to be considered is that His Majesty's Government agreed at the time with the Russian Government that they would not ask for any extension beyond Hsin-min-tun; and though it is true that they are not similarly bound to the Japanese Government, the latter may be considered, in a sense, the successors of the Russian Government in title. Moreover, it would not appear that the British and Chinese Corporation's interests would be adversely affected."
In view of all these circumstances, unless the Corporation's interests are practically affected in some manner of which the Secretary of State is unaware, Sir E. "Grey does not propose to raise the question with the Chinese or Japanese Governments.
I have, &c. (Signed) F. A. CAMPBELL.
[2481 b-2]
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