CO129-344 - Public Offices & Foreign Office - 1907 — Page 475

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enterprise in Yunnan would also be accorded to British enterprise. It will also he within the recollection of the Board that when I produced this correspondence at the Wai-wu Pu on the 11th December, its language was described by the Grand Secretary Ch'u as very strong.' Your Highness was reminded of this circumstance in my previous note of the 14th January, and I am entirely unable to accept the present explanation that the note of the 16th March, 1902, only intimated that the Governor. General had been communicated with. It stated distinctly that he had been com- municated with in accordance with the terms of Sir Ernest Satow's note, and I must strongly protest against any attempt on the part of your Highness' Board or the Provincial Government to recede from this definite and binding engagement.

I avail, &c.

(Signed) J. N. JORDAN.

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

CHINA RAILWAYS.

CONFIDENTIAL.

[July 6.]

SECTION 2. C

1

26320

(22229]

No. 1.

Mr. H. Lowther to Sir Edward Grey.--(Received July 6.)

IRECT (REG 23 JUL 07

(No. 121. Confidential.) Sir,

Tokió, May 31, 1907. WITH reference to your telegram No. 21 of the 29th May, I have the honour to transmit herewith copy of the note which I have to-day addressed to the Minister for Foreign Affairs with regard to the Anglo-Chinese Agreement on the subject of railway construction in China.

(Confidential.) M. le Ministre,

for

I have, &c.

(Signed)

HENRY CROFTON LOWTHER.

Inclosure in No. 1.

Mr. H. Lowther to Viscount Hayashi.

Tokió, May 31, 1907. HIS Majesty's Government having learnt that an attempt is being made by the Yokohama Specie Bank to induce the Viceroy of Wuchang to turn to Japan for a loan purposes of railway construction, I have the honour, in accordance with instructions from His Majesty's Principal Secretary of State, to call the attention of the Japanese Government to the terms of an engagement entered into by China with His Majesty's Government regarding railways south and west of Hankow.

A definite assurance was given by China in 1905, in consideration of the services of His Majesty's Government in granting the Chinese Government a loan on advan- tageous terms for the redemption of the Canton-Hankow Railway, that if, in the future, a foreign loan were required in connection with that railway, British capital should have the preference, provided the terms offered were as favourable as those that could be obtained in other countries.

Similarly, if England supplied the funds for construction, British firms should have the option of supplying any machinery and material required for the line, if such had to be purchased abroad.

Moreover, an assurance was given that, if within the jurisdiction of Hupei and Hunan any railway projects should necessitate foreign loans, the preference would in like manner be given to British capital.

The loan now desired by China is for the railway south and west of Hankow, respecting which the above assurance was given.

The intention of raising a loan elsewhere with which the Viceroy of Wuchang has has been credited, nominally for industrial purposes, though in reality for purposes of railway construction, would, if carried into effect, produce a very unfortunate impression.

In these circumstances I am instructed to express to your Excellency the hope of His Majesty's Government that no loan may be granted by Japan which would be prejudicial to British interests in regard to railways in China.

I avail, &c.

(Signed) HENRY CROFTON LOWTHER,

His Britannic Majesty's Chargé d'Affaires.

(2571 ƒ-2]