CO129-363 - Public Offices & Others - 1909 — Page 219

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

5

A 2 DEC 09

[November 22.]

CHINA RAILWAYS.

CONFIDENTIAL.

[42746]

No. 1.

SECTION 1.

Sir J. Jordan to Sir Edward Grey.--(Received November 22.)

(No. 402.) Sir,

Peking, November 4, 1909. I HAVE the honour to report that the United States chargé d'affaires, in the course of a visit which he paid to me on the 26th ultimo, read to me a telegram which he had received from Washington, giving an account of an interview which the United States Ambassador in London had had with yourself and Sir Francis Campbell, and containing a summary of a memorandum which you had furnished to the Ambassador defining our position with regard to the Hukuang Railway loan.

I explained to Mr. Fletcher the reasons which necessitated the rearrangement of the engineering sections of the Ichang-Chengtu line and the contribution by the German group of their share towards the loss occasioned by American participation. If the Germans agreed to give up the section of 200 kilom, from Kuangshui to Hsiang- yang, an equitable arrangement could probably be made which would satisfy all parties.

Mr. Fletcher seemed to regard our attitude as reasonable and natural, and said my explanations would enable him to contradict the assertions of the Chinese, that it was the British who were obstructing a settlement.

that

Two days later I called at the American Legation to ascertain if any further developments had taken place. Mr. Fletcher told me that he had communicated the substance of our conversation to Mr. Straight, who had seen Mr. Cordes, and given him to understand that some concession on the part of the Germans was necessary for the conclusion of the loan negotiations. I understood Mr. Fletcher to say that, after making much difficulty, Mr. Cordes had eventually agreed to recommend his group to give up their engineering rights over the Kuangshui-Hsiangyang section.

Mr. Fletcher had also spoken to the German Minister, Count Rex, who, without committing himself definitely to any course of action, had conveyed the impression that, if consulted, he would offer no objection to the recommendation which Mr. Cordes had agreed to make.

A memorandum which Mr. Straight on the following day handed to Mr. Hillier, and of which a copy is enclosed, gave the arrangement a different complexion. According to this, the German abandonment of the Kuangshui-Hsiangyang section was far from complete, and was to be made in favour of America, and not of the common interests of the three groups. An American chief engineer was to be appointed for this section, but he was to co-operate with and be under the general direction of the German chief engineer of the entire Hupei section, as provided by the terms of the original agreement.

In the event of the railway being extended to Chengtu, the first section of 500 kilom. was to be constructed by a French engineer, the second section of 600 kilom. by an American engineer, and the third section of 500 kilom. by a British engineer,

I authorised Mr. Hillier to inform Mr. Straight that the arrangement differed considerably from the description of it given to me by the United States chargé d'affaires, and that it did not appear to afford a satisfactory solution of the difficulty.

The Americans were receiving an actual 200 kilom. of construction for the abandonment of a potential 200, but that was a small point. What seemed more important was that the disposal of the section abandoned by the Germans should be given either to the Chinese Central Railways or be left to the decision of the three groups.

The accompanying extract from a private letter from His Majesty's consul- general at Hankow shows the effect which the provincial agitation against a foreign loan is having upon the Board of Communications here.

I have, &c.

ise

-June

[2486 y-1]

J. N. JORDAN.