[This Document is the Property of His Britannic Majesty's Government.] 336
CHINA RAILWAYS.
CONFIDENTIAL.
[June 124463
SECTION 2,
[19882]
No. 1.
21 JUL 07
,
(No. 198.) Sir,
Sir J. Jordan to Sir Edward Grey.--(Received June 17.)
Peking, April 27, 1907. IN a letter, copy of which I have the honour to inclose, the agent of the British and Chinese Corporation has drawn my attention to certain points on which he considers that the recent Railway Agreement between China and Japan, the text of which was forwarded to you in my despatch No. 185 of the 16th instant, conflicts with the provisions of the Shanhaikuan-Newchwang Railway Loan Agreement of the 10th October, 1898, and Agreement (B) with regard to the same railway signed at Peking on the 29th April, 1902.
After a careful study of clauses 1 (3) and 3 (2) of the former and Article 5 of the latter Instrument, I am inclined to think that a strict interpretation of the documents would probably support Mr. Bland's contention, but, for reasons to which I shall refer later, it would, in my opinion, be impolitic to press it at present,
The Agreement of October 1898 appears to me to bind the Chinese Government, in the event of the Railway Administration being unable to find the money, to apply to the British and Chinese Corporation for the funds required for the extension of the railway beyond Hsin Min Tun."
If this interpretation of the Agreement is correct, the further point remains to be decided as to whether in entering into the present arrangement with Japan the Chinese Government can be considered as undertaking an extension of the line in the sense contemplated by the 1898 Agreement. That Agreement is applicable to
branch lines or extensions connecting with the lines therein named."
The existing Japanese line from Hsin Min Tun to Mukden does not actually connect with the Chinese northern line at the former place, the two stations being, I believe, some 300 or 400 yards apart. But to all intents and purposes the line must, I think, be regarded as an extension, and the connection will doubtless take place in course of time.
But the extension is not one which China undertook as a free agent. It was made in the first instance by a foreign Power as a military necessity, and was subsequently utilized by the Japanese for general purposes. The work of reconstruc- tion implies, I understand, little more than the conversion of the gauge to the standard measurement and the building of the bridge across the Liao River, and what China is practically doing is taking over a ready-made railway and placing it under a system of administration similar to that on which the Northern Railway is conducted. Any protest on our part which retarded the consummation of this object would probably be resented by the Chinese Government, and meet with little acceptance from the Japanese, who could point to the railway claims which we have asserted in other parts of the Empire.
Nor does the point seem to be of sufficient practical importance to justify inter- vention at the risk of possibly affording the Chinese a pretext for opposing railway development in other places where a conflict of foreign interests might be expected to arise.
Mr. Bland's suggestion that Japanese interests and control should be limited to the line east of the Liao River is one which, having regard to all the circumstances, we might perhaps reasonably ask the Japanese to accept.
I have, &c. (Signed)
J. N. JORDAN.
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