This Document is the Property of His Britannic Majesty's Government,]
2
further alteration foregoing proposal received concurrence of Chinese and provisional concurrence of American chargé d'affaires, but latter has received since then instruc- tions insisting upon that participation must include all rights with regard to materials, engineer, auditor, and any other benefit which would naturally accompany one-fourth interest in entire loan, placing America on same footing as signatories as this precludes all prospects compromise as it is certain Chinese Government cannot contest further in the face of American President's action, our position is hopeless unless actively supported our Government. Demand of Russia probably to be followed by Japan, demonstrates the increasing danger of present situation which must result in collapse of loan unless prompt steps taken. Advise foregoing to Deutsch-Asiatische Bank, Banque de l'Indo-Chine.
(4.)
Telegram despatched to Peking, August 11, 1909.
Referring to your telegram of 11th, are we to understand that Americans do not claim appoint engineer and (or) auditor.
(5.)
(B.) Memorandum by Chinese Central Railways (Limited).
The suggestion made in the German bank's letter to Mr. Addis of 7th August, appears to be that the Chinese Central Railways (Limited) should give up one-tbird of the Szechuan line in favour of the American group--thus reducing the Anglo- French interest in the line from two-thirds to one-third. This is a proposition which the Chinese Central Railways (Limited) cannot entertain.
The arrangement between the British, French, and German groups was negotiated, and concluded on the assumption that the loan agreement, as initialled at Peking. would go through. If by reason of American intervention the loan cannot be carried through except by admitting the American group on equal terms, then there ought to be an equitable readjustment of sections and engineers, so as to allow the Americans to come in. No one party can be called upon to sacrifice more than the others, secing that the sacrifice is for the common good, i.e., to enable the loan to go through at all.
It is true, as stated in the German bank's letter, that they relinquished their rights in the Canton Agreement, but the consideration for that was a fair and equal participation of one-third in the Hukuang loan and future loans. By common consent the Hupeh section was allotted to the German group just as the middle section was allotted to a French engineer, and the western section to a British, but it was never intended to give the German group any special or privileged position vis-à-vis of the other groups.
CHINA RAILWAYS.
CONFIDENTIAL.
[30501]
No. 1.
360
C.O 19364
[August 13.]
SECTION 1.
Y
Mr. C. S. Addis to Foreign Office.-(Received August 13.)
Dear Mr. Langley,
31, Lombard Street, London, August 12, 1909. IN reply to your enquiry, whether we were to understand from his telegram of the 11th instant that the Americans no longer claim to appoint an engineer of their own on the Hankow-Szechuen line, Hillier sends the enclosed somewhat guarded reply. It is sufficient, however, to show that so far as the present proposal is concerned the claim to appoint an American engineer need not be taken into account.
Accordingly, if you approve, we propose, with the consent of our French and German friends, to authorise Hillier to conclude negotiations with the Americans on the basis of his telegram of the 11th instant.
Yours truly,
(Telegraphic.)
Inclosure in No. 1.
Mr. Hillier to Mr. Addis.
C. S. ADDIS.
Peking, August 12, 1909. REFERRING to your telegram of the 11th present proposal does not contemplate American claiming appointment chief engineer and (or) auditor, but it is understood that this will not exclude appointment of American as subordinate engineer by the director-general, who has sole power in this respect.
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