CO129-361 - Public Offices - 1909 — Page 290

288

about the Hankow-Canton line.

As the Hupei section of the Hankow-Szechuan line

is nearly as long as the Hankow-Canton line without

the Canton section, and as there is no question of a

foreign loan for this section, it is clear that the

preliminary arrangement gives the Germans more than

their share of engineer and material rights.

It is known to the Chinese that the Chinese Cen-

tral Railways is half French and that if not arranged

now the questions of material and engineers must in

the future be settled with them, and it appears to me

to be only too probable that if no arrangement is

made we shall then be at a great disadvantage in deal-

ing with such questions, since the Germans will have

constructed the railway as far as Ichang and will

naturally do all they can to secure the Szechuan ex-

tension.

Neither am I of opinion that matters will be im-

proved if Mr. Addis as suggested mentions the question

of the Szechuan extension and drops it because he finds

that the Germans are ill disposed. I feel myself that

(Private)

if we fail to arrive at a satisfactory understanding

as to the extension it might be better if we retained

what we had got the Hupel section of the Hankow-

Szechuan line, and as regards the Hankow-Canton main-

tained our position and protests.

In their anxiety to conclude a financial bargain

the HongKong Bank are too much inclined to ignore the

political side of the matter. At present I think

that the Germans should realize that they have done

quite well enough with a third of all the financial

issues for both railways and materials and engines for

the Hupel section of the Hankow-Szechuan.

if

re