CO129-349 - Governor Sir Lugard - 1908 [10-12] — Page 131

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the Commodore regarding the possibilities of creating a

Chinese deep water harbour. My predecessor considered

that the local traffic on the Kowloon Section would alone

be sufficient to pay interest and sinking fund, running and

maintenance expenses" (13th.February, 1905: Eastern No. 88,

page 89). I do not share this view even on the much smaller

capital cost which at that date it was anticipated the

line could be built. Even as a part of the through line to

Canton, Hankow and Peking under the most favourable

Agreement we can hope to negotiate it will have very

serious obstacles to surmount (vide Mr. Scott's Despatch

enclosed in No. 96 paragraph 'd': Eastern 88, page 127) and

I doubt whether under the most favourable circumstances it

will pay its way for very many years

though it

may perhaps bring a great and indirect benefit to the

Colony by preventing another port from becoming a rival to

Hongkong.

7.

The circumstances of today have

therefore materially altered from those which obtained at

the time that the draft Working Agreement was prepared.

As the Loan Agreement has been

(a).

negotiated (with the assistance of His Majesty's Minister,

and Sir M. Nathan) this Government no longer possesses any

hold