CO129-347 - Governor Sir Lugard - 1908 [4-6] — Page 306

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and regarded the right of the British Group to appoint a

Chairman with a casting vote as a concession for which they

were entitled to a quid pro quo. The inclusion of the

French had produced a deadlock since the Governor-General

of the Hukuang absolutely refused to accept a loan except

from purely British sources. The French after a strenuous

show of opposition agreed that the British Chinese Cor-

-poration should appear alone in the transaction, and with

much skill they introduced into the negotiations the

question of redemption of the Peking-Hankow Line (on which

their control was to be predominant). Since however the

advantages accruing to them under this arrangement were

judged inferior to those secured by the British Group,

they founded a second claim thereupon for a further quid

pro quo. It is of essential importance to observe that the

Foreign Office supported the first claim (in spite of the

fact that the "participation" had been stated to be a

purely company matter relative to the raising of capital)

and Sir F. Campbell in his Despatch of July 25th., 1907,

stated that in the view of the French Government participa-

-tion included "general control", and that Sir E. Grey

considered that there could be no question of repudiating

the participation agreed upon, and inferentially concurred

in