CO129-363 - Public Offices & Others - 1909 — Page 217

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

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CHINA RAILWAYS.

CONFIDENTIAL.

[42494]

No. 1.

2 DEC 09

[November 20.]

SECTION 1.

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(No. 312.) Sir,

Sir C. MacDonald to Sir Edward Grey.--(Received November 20.)

Tokyo, October 23, 1909. ON the 5th October Sir John Jordan repeated to this Embassy his telegrams Nos. 161 and 163 to you, reporting that a preliminary agreement had been signed at Mukden by the Viceroy and governor, with an American group and the British firm of contractors, Messrs. Pauling, for the financing, construction, and operation of a railway from Chinchow to Aigun on the Amur.

By the preliminary agreement the English firm are entrusted with the appointment of the chief engineer, and the contracting of the line generally; the American syndicate are to do the financing, but their associates are admitted to participation to the extent of 40 per cent. of the whole.

The railway is to be operated by a company composed of British, Americans, and Chinese to the exclusion of persons of any other nationality, unless approved of by the Chinese Government. An Imperial Edict of the 3rd October orders the Wai-wu Pu, Board of Finance, and Board of Communications jointly to memorialise the throne after consulting the Viceroy and governor at Mukden.

In passing, it may be noted that this railway was first projected between Chinchow and Taonan-fa, and then to Tsitsihar; it has now reached Aigun on the Amur.

As the above report was a marked step in advance on the somewhat vague and tentative negotiations which have been proceeding for some time past regarding this railway, which, as you are aware, the Japanese Government state they are not prepared to oppose, provided they were allowed a share in the financing and appointment of engineers, I took an early opportunity of sounding Count Komura on the subject. His Excellency said that the Japanese Government had no fresh news from Mukden or Peking. It was clear from the manner in which bis Excellency spoke that the information contained in Sir John Jordan's telegrams had not reached the Japanese Foreign Office. In the course of a conversation which followed, his Excellency stated that the Japanese Government considered that the railway was parallel, and would compete with the South Manchurian; still they were prepared to raise no objectious to its construction, provided the conditions which I have mentioned were consented to by the Chinese Government. I asked his Excellency what steps would be taken by the Japanese Government should the Chinese Government decline to consider these conditions, and excluded the Japanese from participation in any form. Count Komura said that his Government would wait until such information were officially notified to them, when they would lodge a strong protest with the Chinese Government. They would also lay the matter before the British and American Governments, and ask for their friendly assistance. I had the honour to telegraph the above information to you the same day (my telegram No. 56).

Since the above conversation took place, the newspapers have published reports stating that Mr. Straight, who represents the American syndicate, has signed some sort of agreement with the Chinese Government for the construction of the railway from Chinchow to Tsitsihar, but the details are not known; although the matter is attracting considerable attention, it has not been taken very seriously at present.

I have seen Count Komura several times since the interview I have mentioned; he is personally inclined to think that the railway will never be built; I venture to think that if tho Japanese Government can help it, it never will. His Excellency is of opinion that even if Mr. Straight has signed, as the newspapers say, a preliminary agreement, it will most likely not receive the Imperial sanction. It would seem that three Boards, Foreign Affairs, Communications, and Treasury have to come to an agreement on the matter before the throne can be memorialised, and his Excellency is of opinion, from his own experience of Peking, that these Boards will take a consider- able time to agree, if they ever do.

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