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[This Document is the Property of His Britannic Majesty's Government.]
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CHINA RAILWAYS.
CONFIDENTIAL.
>
[6924]
No. 1.
[February 19.]
SECTION 2.
726
C.O.
11287
Pcco
1909 APR OS
British and Chinese Corporation to Baron d'Erlanger.- (Communicated by Mr. Addis
February 19.)
3, Lombard Street, London, February 19,
Dear Baron d'Erlanger,
REFERRING to the meeting here yesterday between yourself and the Board of the Corporation, I have, on behalf of the Board, to thank you for the frank and clear statement which you made of Messrs. Pauling and Co.'s recently concluded Agreements with and obligations incurred thereby to the Régie Générale des Chemins de Fer of Paris, and the Société d'Études Belge, in regard to railway construction in China.
It is evident that these obligations must render impossible the unconditional acceptance by Messrs. Pauling and Co. (Limited) of the Agreement which the Board of the British and Chinese Corporation were willing to make with Messrs. Pauling and Co. (Limited),
On the other hand, the Board of the Corporation are not prepared to make any Agreement with Messrs. Pauling and Co. (Limited) which would debar the Corporation from issuing a Chinese loan for railway construction unless there was attached to the Loan Agreement a contract for the construction of the railway by Messrs. Pauling and Co. (Limited), notwithstanding that, although declining to agree to a construction contract, the Chinese might be ready to consent to conditions which would secure the proper expenditure of the proceeds of the loan.
Under these circumstances, the Board have resolved that they must adhere to the decision communicated in their letter to Messrs. Pauling and Co. (Limited) of the 22nd ultimo, and, as stated in that letter, to revert to the position specified in the Board's letter to Messrs. Pauling and Co. (Limited) of the 13th June, 1907, a copy of which is annexed hereto.
Accordingly we are forwarding a copy of this letter to Messrs. Pauling and Co. (Limited), as a rejoinder to their letter to the Corporation of the 27th ultimo.
I am, &c.
W. KESWICK, Chairman.
(Signed)
Inclosure 1 in No. 1.
British and Chinese Corporation to Messrs. Pauling and Co.
Dear Sirs,
3. Lombard Street, London, June 13, 1907. YOUR letter of yesterday's date, with the accompanying Memorandum, was considered by the Board at their meeting to-day, and I was instructed to inform you that they are entirely in favour of the principle that Chinese railways for which the Corporation may have to issue loans on behalf of the Chinese Government, should be constructed by contract, and, further, that such contracts should be carried out by you in preference to others.
The Board, however, are not prepared to enter into any Agreement such as is suggested in
your Memorandum.
Yours faithfully, (Signed)
Cher Mr. Addis,
Inclosure 2 in No. 1.
A. N. FREWER, Secretary.
M. St. Simon to Mr. Addis.
Banque de l'Indo-Chine, le 13 février, 1909. J'AI bien reçu vos deux lettres d'hier et je suis très sensible à la bonne grâce que vous avez mise à tenir compte des idées que j'avais exposées en ce qui concerne le prix à offrir aux Chinois.
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