This Document is the Property of His Britannic Majesty's Government.]
2
of a group of private bankers in the one against undertaking to dispose of rights which the other Government still holds for its nationals.
Outside the question of pure right I ventured to suggest, besides, certain obvious advantages in the accession of the American group of financiers to the combination already united on the railway concession. I did not think there was a banker in either the British, French, or German groups who would question the additional strength and prestige brought to their undertaking by the accession to their numbers of the houses of J. P. Morgau and Co., Kuhn, Loeb, and Co., the City National Bank of New York, and the First National Bank. No one of these houses has an actual capital invested in their ordinary business of less than 50,000,000 dollars, and behind most, if not all, of them are accumulations of capital amounting for each to many times as much. In fact, it seemed questionable whether a more powerful combina- tion of four banks could be got together for such a purpose in any one of the other three nations concerned.
It seemed to me that the circumstances of the agreement with China, as under. stood by my Government, furnished an admirable and easy opportunity for admitting the American group without prejudice to the interest of any of the others. I spoke with a little hesitation about the different concessions, since the Chinese names furnished us did not seem to fit in with yours. Our understanding, however, is that it is only the Hupeh portion of the Tankow-Szechuan line which has now been undertaken, and it is only for this that the respective shares of capital to be immediately raised have been allotted. If so, nothing could be simpler than to let the arrangement now made include the capital for the whole line, and thus permit equal American participation.
I understood you to say on this point that you believed an allotment for the whole line had already been signed and that Germany had been permitted to participate with the rest; but I did not learn on what terms you had assented to the participation of Germany. I did not undertake to depreciate in any way the force of your remark that there was the less reason to suppose American capitalists still cherished a desire to carry out the concession of 1904, held jointly with Great Britain, on account of the action of the Calvin-Brice Syndicate in voluntarily withdrawing from another Chinese line, or of your suggestion that this certainly seemed to give some reason for the readiness with which the British group were led to think that they were not warranted in waiting longer for some sort of an answer to enquiries often made and continuously ignored. But I insisted that however much this might help to explain the willingness of British financiers to conclude that they must go on without waiting longer for the co-operation of their joint concessionnaire, it gave them no authority for assuming to decide that the American delay had terminated the life of the American share of the concession.
I have, &c.
WHITELAW REID.
CHINA RAILWAYS.
CONFIDENTIAL.
[22667]
No. 1.
29
June 17.]
SECTION 1.
The
M. Urbig to Mr. Addis.-(Communicated by Mr. Addis, June 17.)
Dear Mr. Addis,
Unter den Linden 35, Berlin, June 14, 1909. THE British Government will have received, the same as the German Government, the note which the Government of the United States of America has delivered through the mediation of its Ambassador, and which has in view a participation of American interests in the Chinese railway transactions of our international group. Ambassador of the United States of America in this city, when asked, has expressly stated that the notes delivered to the Governments interested are not to be considered as a protest against the business lately concluded. It would appear that the Ambassador of the United States of America at Peking has made the same statement to the Chinese Government. We may
therefore be entitled to the hope that the American cut-in into this affair will not delay the issue of the Imperial Edict for the Hunan and Hupeh business.
Our Government will announce to-morrow to the Ambassador of the United States of America that the intention of a future co-operation expressed on the part of the United States has been noted with satisfaction, and that the interested financial circles of this city have been notified of this intention, it being left to them to take any steps which they may think necessary in the matter.
If we
An
Sooner or later we shall therefore have to face the question what position we are to assume towards the Americans. I must admit that the idea of a participation of the Americans in future business transactions is very little attractive for me. can find some means to keep the Americans shut out, we should make use of it. American group can do nothing for the placement of the loans, and it will therefore become a competition in this respect only in case it finds English allies who will undertake it to make the issue. As far as the supply of railroad material is concerned, the Americans must be regarded as a competition which we should not underrate. Their materials are cheaper than the English and German products, but on the other hand the quality is considerably inferior, a fact which it is to be regretted still escapes to the eye of the Chinese at the time being.
I shall be pleased to hear from you in what manner the wishes of the United States of America have been treated on your part, and what your personal ideas are about this American co-operation.
Awaiting your good news, I am, &c.
F. URBIG.
[2317 r-1]
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