CO129-344 - Public Offices & Foreign Office - 1907 — Page 406

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

CHINA RAILWAYS.

CONFIDENTIAL.

C

404

[June 4463 1 SECTION 7. JUL 07

(21221]

No. 1.

Draft of proposed Cable from Corporation to Mr. Hillier.--(Communicated by

Mr. Bland, June 26, 1907.)

IN view of present unfavourable position of the money market, and possible detrimental effect on Chinese credit in concluding loan for provincial purposes on terms as proposed by Chang Chih Tung, we consider advisable proceed very cautiously.

Upon mature reflection, and considering, firstly, the views of His Britannic Majesty's Minister, as stated in Mr. Bland's telegram of the 23rd May; secondly, Viceroy's evident intention promote Japanese interests by help of this loan; thirdly, difficulties with French partners, the Board is of opinion we should do well under existing circum- stances to insist that the Viceroy strictly fulfil his engagements, treating railways as distinct from other industrial purposes.

If the Viceroy's authority is insufficient to overcome provincial opposition for foreign railway loans, it appears advisable to postpone the question until a more favourable opportunity. At the same time maintain British right finance railway loans whenever required.

We further suggest you inform Viceroy that Corporation is prepared to negotiate loan for industrial purposes, exclusive of railway, if he so desire, or loans for railway; but the latter must be specific, definite, and of adequate amount.

[2525 cc-1]