CO129-345 - Public Offices & Foreign Office - 1907 — Page 186

[This Document is the Property of His Britannic Majesty's Government] 163

C O

CHINA RAILWAYS.

CONFIDENTIAL.

[25524]

No. 1.

Foreign Office to Colonial Office.

[August 1734181

SECTIO

er 25 SEP 27

(Confidential.) Sir,

Foreign Office, August 17, 1907. I AM directed by Secretary Sir Edward Grey to acknowledge the receipt of your letter of the 30th ultimo, in which you advance certain considerations which deter the Secretary of State for the Colonies from concurring in the proposal of Sir E. Grey to communicate to the French Ambassador a Memorandum regarding French participa- tion in the Hankow-Canton Railway, the draft of which was inclosed in the letter from this Department of the 25th ultimo.

In paragraph 3 of your letter you state that Lord Elgin cannot see how an arrange- ment between two financial groups (which had been officially represented to the Chinese Government as "internal and purely financial ") can be held to impose on His Majesty's Government the obligation to accept French participation of the nature described by M. Cambon.

I am to remind you that on the 20th November, 1905, a letter was addressed to you from this Department inclosing a copy of the Agreement between the British and French groups of "Chinese Central Railways (Limited)," which provides for absolutely equal participation on the part of the two groups as regards personnel, matériel, and practical control during construction, except that the common Chairman must be a British nominee with a casting vote. The views of the Secretary of State for the Colonies and of the Governor of Hong Kong were asked for before a decision was reached as to allowing French participation in the Hankow-Canton Railway on the same terms as in the case of the Chinese Central Railways.

In your reply, dated the 29th November, 1905, a copy of a telegram from the Governor of Hong Kong was inclosed opposing the proposed French participation, but you stated that the Secretary of State for the Colonies was not convinced by the arguments therein put forward, and asked to be informed of any action which Lord Lansdowne might finally decide to take.

Subsequently copies were sent to you in print of a letter from this Department to the British and Chinese Corporation, dated the 6th January, 1906, stating that Sir E. Grey was disposed to inform the French Ambassador that His Majesty's Government agreed in principle to the proposal that a French group should co-operate on equal terms except for the British Chairman's casting vote, but would prefer to leave "the arrangement of the details to the groups themselves. The reply of the Corporation, dated the 11th January, 1906, expressing concurrence in this view, and referring to the fact that an Agreement had already been reached by the groups, was also communicated to you. In view of the previous correspondence, and the known views of the French Government in the matter, this Agreement could only have been reached upon the basis of equal participation; and as at that time no protest was raised by your Department, it was assumed that the Secretary of State for the Colonies concurred in what had passed, and a communication was made to the French Ambassador expressing the concurrence of His Majesty's Government in the Agreement. Sir E. Grey regrets that a copy of this Memorandum was not communicated to your Department at the time, but he considers that at the present stage it is impossible, without risk of an imputation of bad faith, to depart from its terms, which were intended to convey to the French Government the acquiescence of His Majesty's Government in the principle of equal French participation and control, and which were by them interpreted in that sense.

Sir E. Grey agrees with Lord Elgin in his view that the claim of the French Ambassador exceeds the promises given to His Majesty's Consul-General at Hankow by the Wuchang Viceroy on the 9th September, 1905, but M. Cambon no doubt bases his claim on the assumption that His Majesty's Government are advancing similar pretensions. In any case this question appears to be one which can be settled later, and to be independent of the question of Anglo-French participation.

With regard to the point raised by Lord Elgin that the Wuchang Viceroy might accuse Ilis Majesty's Government of bad faith, I am to point out that the Viceroy,

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