[This Document is the Property of His Britannic Majesty's Government.]
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Axe 2 DEC 09
CHINA RAILWAYS.
CONFIDENTIAL.
[November 9.]
SECTION 1.
[41197]
No. 1.
Messrs. Morgan and Cv. to Mr. C. S. Addis.—(Cɔmmunicated by Mr. C. S. Addis, November 9.) Dear Sir.
London, November 8, 1909. REFERRING to conversation to-day between yourself and our Mr. Grenfell, we herewith send you copy of proposal which he has received from Messrs. J. P. Morgan and Co., acting for the American banks:---
In order to break deadlock existing between England and Germany concerning Hukuang loan, following compromise has been suggested:
"Original agreement and supplementary agreement to stand, Chinese Government to appoint American chief engineer for Kuangshui-Hsiangyang section, who is to co-operate with and be under general direction of German who is chief engineer entire Hankow-Chengtu-Hupei section. Banks in private agreement, to which Chinese Government no party, to agree if railway extended from Ichang to Chengtn that the first section, about 500 kilom., to have French chief engineer; second section, about 600 kilom., to have American chief engineer; third section, about 500 kiloni., to have British chief engineer."
We are willing to adopt this suggestion, providing it is understood clearly that, in the event that the groups do not join on the lines proposed, our recognised right in regard to one-half of extension shall stand.
However, the American group feel that, before definite settlement, a definite under- standing should be reached as to ultimate interchangeability of bonds between United States and three European markets. American group does not desire immediato opening of such markets, but after some given period bonds should become inter- national, since it appears to be bad policy to have comparatively small loan cut up into four separate slices.
We understand Mr. Warburg, of Hamburg, has received a copy of the above cable, and is in conference with the German banks.
We shall be glad to hear your views and those of the French banks in reference to the above.
[2486 i-1]
انبه رانه
Yours faithfully,
J. S. MORGAN AND Co.
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