CO129-362 - Public Offices - 1909 — Page 663

}

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

2

Any rearrangement, then, necessitated by the subsequent claim of the Americans to participate, must in equity leave undisturbed the relative position of the English, Germans, and French.

As things are at present, it is clear that this can only be done by the sacrifice on the part of the English, Germans, and French of an equivalent portion of their respective thirds of the Hankow-Szechuan line. Any other arrangement must necessarily be to the prejudice of the British, and therefore inequitable.

That is our case. Its cogency might be reinforced, were that considered necessary, by a reference to the fact that the American claim is limited to the Hankow- Szechuan line. The Hankow-Canton Railway is not in question. The Americans do not make any pretensions to an interest in that line.

Then, as regards Government intervention :---

The Americans have suddenly made an unexpected demand on the Chinese Govern- ment, not on the financial groups, to be admitted as signatories to the Railway Agreement. The result is to remove the negotiations from the region of finance to the realm of diplomacy, and to remove our activities to temporary inaction.

Under these circumstances I suggested in a recent letter to M. de la Chaume, a copy of which was sent to you, that the new American demand might be made the occasion for joint diplomatic representation at Peking in order to obtain from the Chinese Government an undertaking following the precedent of 1905, to give a preference to England, Germany, and France and America in the event of foreign capital and material being required in any future extension of the Hankow-Szechuan railway to Chungking as well as to Chengtu.

I do not underrate the difficulties in the way, but I am persuaded that the Chinese Government would not withstand the combined diplomatic pressure of the four great Powers when exercised in favour of a request so reasonable in itself. The result would be to extricate China from the impasse created by the American demand for what would virtually be a new agreement. It is even possible that the prolongation of the Hankow-Szechuan line in the two directions I have indicated might be sufficient to provide an additional engineering section for the Americans without disturbing, at least to any great extent, the sections at present allocated to the Germans, French, and English.

Believe me, &c.

CHINA RAILWAYS.

CONFIDENTIAL.

[34577]

No. 1.

661

[September 15.]

SECTION 1.

Memorandum communicated to Foreign Office by the Hong Kong and Shanghae Bank, London, September 15, 1909,

(1.)

Copy of telegram dispatched to Peking, September 13, 1909.

Matter still in the hands of Foreign WHAT are the American proposals exactly? Office, who do not wish you to take action in the meantime.

(2.)

Copy of telegram received from Peking, September 14, 1909. REFERRING to your telegram of the 13th, we do not understand your enquiry. Americans have made no proposal other than contained in previous telegrams.

[2413 p-1]

C. S. ADDIS.