This Document is the Property of His Britannic Majesty's Government)
CHINA BAILWAYS.
CONFIDENTIAL.
[September 17.1
35776
276
SECTION 1.
READ
REC
OCT 07
[30665]
Dear M. Geoffray,
No. 1.
Foreign Office to M. Geoffray.
Foreign Office, September 17, 1907. ON the 26th June last M. Cambon communicated to Sir E. Grey a Memorandum regarding the financial negotiations of the Viceroy of Hukwang with reference to the question of French participation in the proposed Canton-Hankow Railway Loan.
By Sir E. Grey's desire I now forward the inclosed Memorandum dealing with the points mentioned in his Excellency's communication. It seems clear that nothing more can be done in the matter at present.
I have, &c.
(Signed) F. A. CAMPBELL.
Inclosure in No. 1.
Memorandum communicated to the French Ambassador, September 17, 1907.
ON the 27th June the French Ambassador communicated to Sir Edward Grey a Memorandum regarding the financial negotiations of the Viceroy of the Hukwang with special reference to the proposed Canton-Hankow Railway Concession.
With regard to the proceedings of Mr. Hillier, who, in the absence of Mr. Bland, was acting as representative of the British and Chinese Corporation, this gentleman appears throughout to have acted consistently in accordance with the engagements which devolved upon the Corporation as a result of their Agreement with the French group, but when the Viceroy declined to admit French participation the matter practically passed out of his hands and the question became one rather for diplomatic treatment, as M. Cambon has stated.
Mr. Hillier's endeavours were directed towards finding a way out of the deadlock, and it was only with this object in view that be suggested the conclusion of a contract in the name of the British Syndicate alone, subject to a division of results between the various parties interested.
It must be pointed out that although the French group form part of the Chinese Central Railways and will share in any business or enterprise undertaken by that Syndicate, their association with the British and Chinese Corporation is so far limited to the Canton-Hankow Railway, a preference in regard to which was granted to British capital by the Viceroy in consideration of China's having been furnished from British sources with the funds required for the repurchase of the Concession for this railway from the American Syndicate, who previously held it.
It is not, moreover, quite clear what is the extent of the claim of the French Government in this matter. M. Cambon was informed in the Memorandum com- municated to him on the 24th January, 1906, that His Majesty's Government would be glad if an arrangement could be made for the co-operation of a French financial group in the Hankow-Canton Railway enterprise, but that they would prefer to leave the settlement of the details to the financiers of the two countries; that His Majesty's Government understood that the capital of the proposed British Company was to be at the disposal of the British and Chinese Corporation and of the French group in equal moieties; and that the Chairman of the Company was to be a British subject appointed by the British group and that he would have a casting vote. His Majesty's Government adhere to this attitude, which is based, as in the case of the Agreement arrived at in October 1905 as to British and French co-operation in the railway projects of the Chinese Central Railways, Limited, on the principle of the employment in equal proportion of British and French engineers and of British and French materials for railway construction.
While His Majesty's Government are sincerely desirous of continued co-operation between the French and British groups in carrying out the enterprise, there would
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