CO129-348 - Governor Sir Lugard - 1908 [7-10] — Page 234

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matter the Secretary of State has lost sight of the fact that

the Loan Agreement atipulates that "the line shall be bullt

and equipped in accordance with the best modern system" (Article

2) and the Engineer-in-Chief is responsible for its "efficient

construction" (Article 6). Emphasis is laid on the fact that as

the Railway itself forms the lat. mortgage security of the

and

British/Chinese Corporation it is essential to their interests

that it should be thoroughly officient. That they will safe-

-guard those interests is the guarantee to this Government. As

regards a change of gauge, I should maintain that such an act

would be a violation of Article 18 which plodges the Chinese to

the Joint Working of the two lines as two sections of the same

line. It will moreover hå essential to their interests that

their line should have access to the sea. In the natter of

efficient and economical construction, I have every confidence

in the Chief Resident Engineer, Kr. Grove, Hitherto at any rate

he has received support from his colleague, Ar. Wei Yun, and I

have no reason to think that the Chinese Authorities are

inclined to interfere with his technical work, or to bring

pressure to bear upon him to make it of a less efficient

character.

wah or eutha

8.

There is, however, a danger which appears to

me to be of a more tangible and real character. The Chinese

Government are offering what appear to be exorbitant prices

for the land required. In this connection I enclose a Memorandum

regarding the rates offered in the British and Chinese Sections

respectively. Since it is alleged that the peasants refuse even

thone offers it is conceivable that they may be increased or

purchase indofinitely postponed and since all land has to be

paid for out of the Loan, the contingency is not remote that the

available capital would be insufficient for the completion of

the construction. The raising of further capital whether by Chinese subscriptions or by a further loan from the British and Chinese Corporation would probably afford opportunities for

interminable