CO129-344 - Public Offices & Foreign Office - 1907 — Page 595

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

CHINA RAILWAYS.

CONFIDENTIAL.

C.

593

¡July 1428491

REC & SECTIONREE 10 AUG 07

[23648]

No. 1.

Sir,

Chinese Central Railways to Foreign Office.-(Received July 16.)

110, Cannon Street, London, July 12, 1907. I HAVE the honour to refer to my letter of the 8th April last, and to your letters of the 17th idem and the 4th instant, in regard to the negotiations for the Tien-tsin- Yangtsze Railway. From the latter communication the Board of Directors learns with satisfaction that Sir John Jordan is actively pressing for the conclusion of these negotiations, and it is sincerely hoped that the Chinese Government may now be led to fulfil its obligations, and to discontinue the policy of evasion and delay which has characterized its proceedings in this matter for the past five years.

In this connection, and in justification of my Board's earnest request that the importance of this enterprise and its present situation may be recognized by His Majesty's Government, I am directed to point out that these negotiations, based on a Preliminary Agreement sanctioned by Imperial Edict, have brought the question to a point where the Imperial Chinese Government must either conclude the Agreement or stand convicted of deliberate and flagrant bad faith. The conditions which the British and German representatives of the Syndicate have put forward for the final contract are practically those which the Chinese Government's formally appointed Delegates have stated to be acceptable to public opinion in China, and they involve important modifications of the rights conceded under the Preliminary Agreement. Under these circumstances, and having regard to the protracted period during which the question has been under discussion, my Directors feel that the time has come when the Chinese Government should be given to understand that the matter must be concluded or the Preliminary Agreement definitely repudiated, and compensation paid for its non-fulfil- ment. It is evident, from the recent action of that Government, that further obstruction and evasion are contemplated in the transfer of negotiations from Peking to the provincial Viceroys, and unless the British and German Ministers can obtain the annulment of this transfer and the resumption of bond fide negotiations on the basis of the draft Agreement finally submitted, my Directors feel that any further efforts to secure their rights will be of no avail,

In this connection I am directed to state that the Chinese Central Railways, in common with their German associates, have incurred, and are still incurring, large expenses in connection with the preliminary surveys of this railway, and with the maintenance of representation and work necessitated by these negotiations. These expenses have reached a point where it becomes imperative for the Syndicate seriously to consider the situation, and to determine whether in justice to its shareholders further expenditure in this direction is justifiable; for unless a reasonable prospect exists of concluding the Agreement it would evidently be better for all concerned to withdraw from further negotiations, and place the matter, with its resultant claim, in the hands of His Majesty's Government.

I am further to observe that the non-conclusion of this Agreement involves prejudice to the interests of the Chinese Central Railways' French associates, who, although excluded from the negotiations, are financially interested in their results. Until the contract is concluded, moreover, nothing can be done towards negotiating the Pukou-Sinyang line, and, generally speaking, the success with which the Chinese Government has continued to evade its formal undertakings in regard to the Tien-tsin- Yangtsze line has reacted, and is reacting, to the detriment of all railway enterprise in China. My Board has recently received inquiries from the French group as to the prospects of an early conclusion of these negotiations, and it is assured that, if His Majesty's Government consider it advisable, the active support of the French Minister at Peking would be forthcoming to bring pressure on the Chinese Government, and to convince them that the matter is one which the Powers concerned are no longer disposed to treat lightly. My Directors are taking no immediate steps in this direction, but they suggest for your consideration that in case of serious necessity united action might be beneficial, should the British and German Ministers consider it advisable.

[2571 q-1j