CO129-362 - Public Offices - 1909 — Page 482

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

CHINA RAILWAYS.

CONFIDENTIAL.

[33305]

No. 1.

[August 30,]

REGP 25 SEP 09

486

SECTION 2.

Question asked in the House of Commons, August 30, 1909.

Mr. Ginnell,To ask the Secretary of State for Foreign Affairs whether the British Government has authorised the Government of Hong Kong to advance to the Chinese Government 1,100,000l. to repurchase from an American-Belgian com- bination the concession for building the Hankow-Canton Railway for the purpose of preserving from foreign control a railway of which the southern terminus was to be at Canton, whether Chang Chi-tung, in return, gave the British Government on the 9th September, 1905, an undertaking that British capital and materials should have the preference whenever China decided to construct the line; and whether Germans have since succeeded in securing for themselves the contract for building and financing the railway; and, if so, whether any, and, if so, what stops were taken by the British Government to secure the performance of the undertaking given by Chang Chi-tung and the interests in respect of which the advance of 1,100,0007. was made.

Answer by Mr. McKinnon Wood (for Sir Edward Grey).

The reply to the first point in the question is in the affirmative. It is true that Chang Chi-ting gave an undertaking that British capital and materials should have the preference whenever China decided to construct the line, but only if the terms offered by foreign financiers were not more favourable. A German group offered China in the spring of the present year terms which the Chinese considered more advantageous, and which they consequently accepted. It was to recover at any rate some portion of the Hankow-Canton Railway loan that the British and French groups, who were working together, decided to admit the German group to participation in the Hankow-Szechuan line, each group having an equal share in the loan and the material, but the British group supplying the chief engineer on the Hankow-Canton line and the chief engineer for one-third of the Hankow-Szechuan line. safeguard the control of the loan funds by the lenders certain modifications were effected in the terms originally offered by the German group. Subsequently an American group expressed a wish to participate in the Hankow-Szechuan loan, and the negotiations with regard to the share to be allotted to this fourth group are still proceeding.

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