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[This Document is the Property of His Britannic Majesty's Government.]
CHINA RAILWAYS.
CONFIDENTIAL.
[20787]
616
C.O. 22029
[June 7.]
Rece
SECTION 2.
Rege 2 JUL 09
No. 1.
Memorandum communicated to Mr. Whitelam Reid, June 7, 1909.
WHILST agreeing with the statement of the arrangements entered into in 1903 by the Chinese Government for the construction of the proposed Hankow-Szechuan railway line, as set forth in the first two paragraphs of Mr. Whitelaw Reid's note of the 3rd instant, it appears to His Majesty's Government that the subsequent features of the case bave escaped the attention of the United States Government. The point of view of His Majesty's Government will perhaps be best elucidated by a brief recapitulation of these events, as they are recorded in the archives of the Foreign Office.
In July 1905 the question of raising a loan for the purpose of building this line arose, and His Majesty's Ambassador at Washington was instructed to enquire whether American capitalists still desired to participate, and to request that, if American capital were forthcoming, the American group might be put into communication with the Chinese Central Railways (Limited) in London.
Sir M. Durand was informed in reply that, notwithstanding the publicity given to the matter, no intimation had been received at the State Department as to any intention on the part of American capitalists to take the matter up.
In the meantime an agreement regarding railway construction in China was being discussed between certain British and French financial groups, and Sir M. Durand was instructed by a telegram, dated the 16th October, 1905, to inform the United States Government verbally that, as the conclusion of this agreement admitted of no further delay, the British and French groups had decided to proceed in the matter on the assumption that American capitalists did not desire to participate in the loan.
On the 26th October of that year His Majesty's Ambassader reported by telegraphi that he had made a verbal communication to Mr. Root in accordance with his instructions. No objections were raised at Washington to the course proposed, and on the 7th December, 1905, a copy of the Anglo-French agreement was communicated privately to Mr. Carter, of the United States Embassy in London, at his request, under cover of a letter stating that, as the offer of a share of the loan to be reserved for American capital had not been taken up, that offer must be regarded as having lapsed. No reply appears to have been returned to this letter.
The negotiations entered upon in 1905 turned out to be of a complicated nature, and have occupied the attention of the legations and the financial groups concerned almost continuously since that date. It is only in the last few weeks that a settlement has appeared in sight, as the result of much labour and considerable expense. The fact that these negotiations were proceeding has been a matter of common knowledge, and at no period since their inception has any intimation been received of a desire of American financiers to take part in them.
In these circumstances the United States Government will readily understand that His Majesty's Government would scarcely feel justified in interfering with the arrangements concluded, after such protracted and arduous negotiations, and under their auspices, by the British financial group interested in the matter.
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