CO129-360 - Public Offices - 1909 — Page 525

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[This Document is the Property of His Britannic Majesty's Government.]

C.O.

2

The cost of reconstruction is put at about 2,500,0001-roughly speaking, 15,0007, per mile. I am informed that the Company intends to float the remaining 2,000,000/ worth of bonds of its original loan, and that it still has in hand 1,150,000, making altogether 3,150,000l. to pay for the reconstruction of the Antung line, and its share of the cost of the Changchun-Kirin Railway.

The Company does not expect that the Antung line will prove a source of revenue for many years to come. However, it is a necessary link between the Chinese and the Corean railway systems, and a considerable mail and passenger traffic is anticipated, as it will be the quickest route between Japan and North China, and should also attract a large number of people travelling between Japan and Europe. With an efficient service of trains two days should be saved, as compared with the Vladivostock route, and those who do not like the sea will appreciate the advantage of a crossing of only twelve hours.

The time for completion of reconstruction is given as three years, and work is to be started at both ends. This seems very short, and, in view of the extensive tunnelling required, five years would be a more likely period. However, as the bridge over the Yaln is to be completed during 1912, no doubt every effort will be made to hasten the completion of the Antung-Mukden line, without which the former would be valueless. 'The existence of the present light railway will also facilitate the procuring of the necessary materials.

I have, &c.

(Signed)

E. N. S. GORDON.

CHINA RAILWAYS.

CONFIDENTIAL.

[3585]

No. 1.

7798

[January 27.]

Rec

SECTION 3. REGP 4 MAR 09!

Hong Kong and Shanghae Banking Corporation to Foreign Office.--(Received January 27.)

My dear Sir Francis,

31, Lombard Street, London, January 27, 1909.

I SEND you herewith, for your information, copy of letter received this morning from Addis, together with a copy of his Memorandum re the new China loan,

Yours, &c.

A. M. TOWNSEND.

(Signed)

Inclosure 1 in No. 1.

Mr. Addis to Mr. Townsend.

My dear Townsend,

January 26, 1909. THE inclosed Memorandum defines the objective of my negotiations. The French group appear disposed to accept all three propositions without material modification.

Nor do they seem inclined to press for Belgian participation, which I have insisted from the first must be a matter of arrangement between the French and the Belgian

groups.

Caillaux, with whom we had a long and stormy discussion last night, does not apparently contest the proposed financial arrangements of 1, 2, or 3, except as regards German participation.

The question is thus narrowed down to the purely political. It was to be discussed at a Council of Ministers this forenoon, and we are to hear the result from Pichon later this evening.

Judging from Caillaux' demeanour last night, I am not hopeful. At the moment it looks as if, after having weathered the financial rocks, our proposals are going to founder in the shoals of politics.

If so, we can but revert to the status quo, and explain to the Germans that it is not we who exclude them, but the French.

Will you please send a copy of my Memorandum to the Foreign Office and also to the British and Chinese Corporation. Any suggestions either may have to make should be wired to me through the British Ambassador, Berlin, by favour of the Foreign Office, to whom please mention my Berlin address, Hôtel Bristol.

I have told Caillaux I shall leave for Berlin to-morrow by the 1 F.M. train.

Yours, &c. (Signed)

C. S. ADDIS.

Inclosure 2 in No. 1.

Memorandum.

THE Hong Kong and Shanghae Banking Corporation, the Banque de l'indo- Chine, and the Deutsch-Asiatische Bank, having obtained the consent of the British group represented by the British and Chinese Corporation, agree to authorize Mr. Hillier to negotiate by himself the conditions of the Hankow-Canton Railway Loan and to sign the Agreement on behalf of the Hong Kong and Shanghae Banking Corporation alone.

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