[This Document is the Property of His Britannic Majesty's Government.] 368
CHINA RAILWAYS.
CONFIDENTIAL
(19661]
No. 1.
[June 14.]
SECTION 2.
C
23671
f
Sir,
British and Chinese Corporation to Foreign Office.-(Received June 14REC
TRG 4 JUL 07 22, Abchurch Lane, London, June 11, 1907. IMPERIAL Railways of North China and Chinese-Japanese Agreement. We beg to acknowledge the receipt of your letter of the 4th instant informing us, in reference to our letter received by you on the 23rd ultimo, that before com- municating with His Majesty's Minister at Peking on the subject Sir E. Grey would be glad to know whether the Corporation's views would be met if arrangements could be made to effect a compromise on the basis suggested by Mr. Bland, viz., that it should be clearly understood that the jurisdiction of the Chinese Railway Administra- tion shall extend north-eastwards only to the Liao River, which is understood to be about 8 miles from Sinminting, and that Japanese control shall be limited to the east of that river.
Under the Loan Agreement we have no authority to consent to any compromise on behalf of the Bondholders, and we trust that Sir E. Grey may see his way to object to the Chinese-Japanese Agreement so far as it infringes the rights of the Railway Administration, of the Bondholders, and of the Corporation under the Loan Agree- ment, as set out in our letter to which you refer.
Should, however, Sir E. Grey detormine to agree to a compromise on the basis suggested by Mr. Bland, or otherwise, as to which we can take no responsibility, we beg leave to express the hope that before opening negotiations His Majesty's Minister may at least be instructed to discuss such basis with Mr. Kinder, and to enlarge it to such extent as His Majesty's Minister may consider reasonable after hearing Mr. Kinder's views.
It appears to us that, even if the 8 miles of line between Sinminting and the Liao River be constructed by the Northern Railway, the control of the through traffic between the system of the Imperial Railways of North China and the Eastern Chinese and Siberian Railways would still be in the hands of the Japanese South Manchuria Railway Company, who would probably desire to divert all this traffic to the port of Dalny, rather than to facilitate its passage over the Northern Railway system. The only advantage that would accrue to the Northern Railway Administration if the construction and control of the 8 miles of line to the Liao Ho were in their hands would be that, by this means, it would be possible to tap some of the traffic brought down by the river.
We are, &c. (For the British and Chinese Corporation, Limited), (Signed) W. KESWICK, Chairman.
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