CO129-362 - Public Offices - 1909 — Page 457

31420

This Document is the Property of His Britannic Majesty's Government.]

RECR

LEGE 22 SEP 09

CHINA RAILWAYS.

CONFIDENTIAL.

[32299]

No. 1.

455

[August 27.]

SECTION 1.

Dear Mr. Greg,

Mr. C. S. Addis to Foreign Office.-(Received August 27.)

Hong Kong and Shanghae Banking Corporation,

31, Lombard Street, London, August 25, 1909.

I ENCLOSE copy of the memorandum, referred to in our conversation of last night, which was sent to the Germans in reply to their proposal that we should, as regards our right to appoint an engineer, abandon one-third of the Szechuen Railway extension in favour of the American group,

The memorandum was sent to Berlin on the 11th August, but so far has elicited no reply.

Yours, &c.

C. S. ADDIS.

Inclosure in No. 1.

Memorandum by Chinese Central Railways.--(Forwarded by Mr. C. S. Addis to German group in reply to their letter of the 7th August, 1909.)

THE suggestion made in the German Bank's letter to Mr. Addis of the 7th August appears to be that the Chinese Central Railways (Limited) should give up one-third of the Szechuen 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, seeing 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 further 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.

London, August 11, 1909.

[2389 dd-1]