C
[This Document is the Property of His Britannic Majesty's Government.]
CHINA RAILWAYS.
CONFIDENTIAL.
[40339]
[No. 1.
200
[November 2.]
SECTION 1.
30215
2 DEC 09
Sir,
Messrs. Pauling and Co. to Foreign Office.-(Received November 2.)
26, Victoria Street, Westminster, London,
November 1, 1909.
I AM directed by my board to ask you to bring at once, confidentially, to the notice of His Majesty's Secretary of State for Foreign Affairs the enclosed copy of a preliminary agreement entered into by us with the Chinese Government, providing for the construction and operation of a railway from Chenchow to Aigun, the latter town being the Chinese settlement opposite the Russian town of Blagoveschensk.
The agreement also provides for the financing of the construction of the line in question by an American group, composed of Messrs. J. P. Morgan and Co., Kuhn, Loeb, and Co., the First National Bank, and the National City Bank of New York, represented in China by Mr. Willard D. Straight. This gentleman has been on intimate terms with Lord ffrench for a long time.
The agreement in question has been signed and sealed by the Viceroy of Manchuria and by the Governor of Fengtien, and the viceroy has communicated to Lord flrench and Mr. Straight a copy of the Imperial edict sent to the viceroy by telegram from Peking, and dated the 3rd October, 1909, of which I also beg to enclose a copy.
In reference to this edict, Lord ffrench informs us, in a letter just received, dated the 6th October, as follows:-
"The edict is of the same nature as is always issued previous to a final edict. This is a very great step forward, and our work now lies in getting the Wai-wn Pu into line.
"Na Tung will, however, oppose and try to delay it, so that we are not out of the wood yet."
Lord ffrench tells us that Na Tung, as Joint Minister for Foreign Affairs with Prince Ching, is in control of the Wai-wu Pu, and that he is notoriously pro- Japanese.
Lord ffrench also informs us in this letter, and it is to this point that we desire respectfully, but most earnestly, to draw the immediate attention of His Majesty's Secretary of State for Foreign Affairs :-
Sir John Jordan says he has no definite instructions and refuses to give any assistance whatever. He has had some new instructions, because a fortnight ago he was quite prepared to assist. Personally he is very keen on the project, but says he cannot move without instructions. He even refused to wire to the British consul at Mukden to assure the Viceroy that Straight and I were working in harmony."
As His Majesty's Government are aware, Messrs. Pauling and Co. already hold agreements, signed by the Viceroy of Manchuria, for the construction of a line from Chenchow to Taonan-fu, dated September 1908, and for the construction of a line from Fakumen to Tsitsihar, dated November 1907, and therefore that portion of the new line from Chenchow to Tsitsibar, covered by the present agreement, is without doubt a substitution of a new route for the two prior agreements referred to above.
I am also desired to point out, for the information of His Majesty's Government, that we are informed by Lord ffrench, while his Excellency Tang Shao Yi was in New York some twelve months ago, he then signed a financial agreement with the American group, granting them the financing of a line from Tsitsibar to Aigun. The present agreement, therefore, but increases the extent of American financial interest in railway construction in Mongolia.
My board desire me to point out that, once again, there is a unique opportunity of obtaining for British subjects a contract for railway construction in China.
At the interview which His Majesty's Secretary of State for Foreign Affairs was good enough to give recently to Mr. George Pauling, the latter set forth fully
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