CO129-362 - Public Offices - 1909 — Page 752

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expenditure for previous quarters, I understand such have been prepared with the especial object of forming the quarterly statement of capital expenditure and account called for by the loan agreement.

I have been furnished with no statement of general expenditure since the 30th June, 1908, and I am therefore at present (22nd July) in entire ignorance of the progress of expenditure as compared with the progress of construction, and if called upon to certify as to the necessity for remittances from home, could only do so on the general statement that bank balances are not sufficient to carry on the work, I understand that explanations have been offered by the chief accountant as to the causes of delay.

750

C. O.

$4965

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

CHINA RAILWAYS.

CONFIDENTIAL.

(36442]

No. 1.

[September 30.]

SECTION 1.

Minutes respecting Hukuang Loan Agreement, September 30, 1909.

Rec 25 OCT 09

THE German councillor of embassy called to say that his Government wished to recommend to our favourable consideration a suggestion of their financial group that the agreement with the Chinese for the Hukuang loan should be concluded at once. leaving the disputed question as to the engineers for the different sections to be settled later, as they feared that the illness of Chang Chih Tung might at any moment terminate fatally, and that then the whole matter would be postponed indefinitely.

Mr. Addis called this afternoon and we discussed this suggestion.

The point is that the Germans admitted the participation of the Americans in the extension beyond Ichang, and that it is only fair that all three should give up something in order to allow of this participation. We only agreed to let them have the Hupeh section on their agreeing that the extension beyond should be shared between ourselves and the French. The Hupel section was to be the Gorman share. If we are now to sign they get this--their whole share; whereas we and the French will not get ours, as we have to give up some in order to provide for the Americans. Therefore it is not we who are blocking the way.

Explain to German Embassy.*

Foreign Office, September 27, 1909.

F. A. C.

C. H.

I indicated to the councillor of the German Embassy to-day what the lines of our reply on this point would be. It should now be given. Sir F. Campbell could give it verbally. I also told Count Kühlmann that it appeared to me that the German group expected ours not only to make a sacrifice as regards the engineers on the Szechuan line, but also to make another sacrifice on the Canton line to compensate the German group for what they gave up on the Szechuan. The British would thus be making a double sacrifice and the Germans none. I understood that Mr. Addis was now trying to arrange another conference of the three groups.

Foreign Office, September 30, 1909.

[2413 gg-1]

* Private letter to M. de Kühlmann, October 1, 1909

E. G.