[This Document is the Property of His Britannic Majesty's Government.]
CHINA RAILWAYS.
CONFIDENTIAL.
[6018]
No. 1.
[February 20.]
SECTION 1.
Memorandum given to Mr. Addis by M. Franqui (on behalf of French Syndicate).--Communicated by Mr. Addis to Foreign Office, February 20, 1908.
IN order to thoroughly understand the proposal made to-day, it is important for Mr. Addis to remember the terms of the Agreement concerning the Hankow-Canton line, which Agreement has been signed by him, acting on behalf of the British and Chinese Corporation, and Mr. Simon, acting on behalf of a French group. The principal conditions of this Agreement are---
1. Eventually, the constitution of an Anglo-French Company on the basis of the Chinese Central Railways.
2. The sharing between the English and the French groups of the whole of the financial and industrial advantages, each group being entitled to one-half of them.
3. The sharing between the two groups of the recruiting of the staff, each group doing one-half.
4. Organization of an office in London and an office in Paris.
The proposal now made is the following:--
The British and Chinese Corporation should negotiate directly with the Chinese Government the granting of the Peking-Canton Railway, reserving, however, in the Agreement which would be eventually signed, the right of transferring this contract to a new British Company to be formed according to the arrangements agreed by the French and English groups, the principal conditions of which are mentioned above. If this proposal were accepted, it should be understood that the London office of the new Company to be formed would have the exclusive management of the Hankow-Canton line, which it would manage on behalf of the new Company, and that the Paris office would have the exclusive management, under the same conditions, of the Hankow-Peking line, each of them consequently having to appoint for their respective line the staff necessary in China, the orders for the material and the financial advantages being, however, shared between the two groups.
The Hankow-Peking line being now under the control of a Company partly managed by the French group, it is clear that the proposal hereinbefore stated implies serious advantages to the English group, since the French group only asks for the maintenance of the present situation re the staff in the Hankow-Peking concern, and since it yields also to the English group half of its rights re material and financial advantages in the Hankow-Peking line. Moreover, in the Hankow-Canton concern the French group waives the right of appointing the staff, although half of this staff, according to the arrangements between Messrs. Addis and Simon, ought to be appointed by the Paris office.
Such being the case, and in compensation for these very material advantages granted by the French group to the English group, the former merely requests that the English group bind themselves to support the negotiations which the French group may enter upon with the Chinese Government in order to obtain contracts for two railways which are entirely outside the scope of the English group, namely---
(a) The extension of the Yunnan Railway as far as the Szechuan.
(b) Another line to join Canton to the Indo-Chinese frontiers.
Moreover, it would be understood that these two concerns would be eventually transferred to a Franco-British Company formed under the French law, the British group subscribing one-half of the capital, as in the Chinese Central Railways, but with the only difference that the British group should have in this new Company the situation now occupied in the Chinese Central Railways by the French group.
If special arrangement should exist for the Hankow-Peking line between the British and Chinese Corporation and the Peking Syndicate or any other British group, by virtue of which the Hankow-Peking line, being situated north of the Yang-tsze,
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[This Document is the Property of His Britannic Majesty's Government.]
CHINA RAILWAYS.
CONFIDENTIAL.
[6018]
No. 1.
[February 20.]
SECTION 1.
Memorandum given to Mr. Addis by M. Franqui (on behalf of French Syndicate).-- - Communicated by Mr. Addis to Foreign Office, February 20, 1908.
IN order to thoroughly understand the proposal made to-day, it is important for Mr. Addis to remember the terms of the Agreement concerning the Hankow-Canton line, which Agreement has been signed by him, acting on behalf of the British and Chinese Corporation, and Mr. Simon, acting on behalf of a French group. The principal conditions of this Agreement are ¦---
1. Eventually, the constitution of an Anglo-French Company on the basis of the Chinese Central Railways.
2. The sharing between the English and the French groups of the whole of the financial and industrial advantages, each group being entitled to one-half of them.
3. The sharing between the two groups of the recruiting of the staff, each group doing one-half.
4. Organization of an office in London and an office in Paris.
The proposal now made is the following:--
The British and Chinese Corporation should negotiate directly with the Chinese- Government the granting of the Peking-Canton Railway, reserving, however, in the Agreement which would be eventually signed, the right of transferring this contract to a new British Company to be formed according to the arrangements agreed by the French and English groups, the principal conditions of which are mentioned above. If this proposal were accepted, it should be understood that the London office of the new Company to be formed would have the exclusive management of the Hankow- Canton line, which it would manage on behalf of the new Company, and that the Paris office would have the exclusive management, under the same conditions, of the Hankow-Peking line, each of them consequently having to appoint for their respective line the staff necessary in China, the orders for the material and the financial advantages being, however, shared between the two groups.
The Hankow-Peking line being now under the control of a Company partly managed by the French group, it is clear that the proposal hereinbefore stated implies- serious advantages to the English group, since the French group only asks for the maintenance of the present situation re the staff in the Hankow-Peking concern, and since it yields also to the English group half of its rights re material and financial advantages in the Hankow-Peking line. Moreover, in the Hankow-Canton concern the French group waives the right of appointing the staff, although half of this staff, according to the arrangements between Messrs. Addis and Simon, ought to be appointed by the Paris office.
Such being the case, and in compensation for these very material advantages granted by the French group to the English group, the former merely requests that the English group bind themselves to support the negotiations which the French group may enter upon with the Chinese Government in order to obtain contracts for two railways which are entirely outside the scope of the English group, namely -
(a) The extension of the Yunnan Railway as far as the Szechuan. (b.) Another line to join Canton to the Indo-Chinese frontiers.
Moreover, it would be understood that these two concerns would be eventually transferred to a Franco-British Company formed under the French law, the British group subscribing one-half of the capital, as in the Chinese Central Railways, but with the only difference that the British group should have in this new Company the situation now occupied in the Chinese Central Railways by the French group.
If special arrangement should exist for the Hankow-Peking line between the British and Chinese Corporation and the Peking Syndicate or any other British group, by virtue of which the Hankow--Peking line, being situated north of the Yang-tsze,
[2850 u-1]
87
Page 90Page 91
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