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correspondence, is devoted to a repetition of the facts which go to prove the claim of Portuguese sovereignty to the Islands of Lappa, D. João, and Vongeam, and to show that the territorial waters are an integral part of Macao and its dependencies.
On the The negotiations came to a practical deadlock shortly afterwards. 30th October General Machado informed the Chinese commissioner that he was unable to make any concession beyond the minimum claim which he had already indicated, and the Chinese commissioner, in a memorandum presented on the following day, stated that the maximum which he could concede was recognition of Portuguese rights over the Peninsula, without the harbour or territorial waters, and a grant of servitude without sovereignty over the inhabited parts of Taipa and Colowan.
During the progress of these negotiations at Hong Kong I was in daily communi- cation with the Portuguese chargé d'affaires here, and made verbal representations from time to time to the Wai-wu Pu, with a view to facilitating the work of the delimitation commission. But it was evident throughout that the Chinese Government were not prepared to deal firmly with the agitation which had arisen at Canton or to consider the question impartially in the spirit of the treaty of 1887.
This impression was confirmed by an interview which I had with the Grand Secretary Na-t'ung on the 27th October. His Excellency scarcely attempted to conceal his belief that the negotiations were unlikely to lead to a successful issue and showed, as his colleagues had done on previous occasions, that he had not studied the question with the care and attention which its international importance deserved.
I endeavoured to convince him that China would do far better to come to a settlement with Portugal, whose claims appeared to me to be reasonable and well- founded, than to have the issue decided by other means which it was open to Portugal to invoke. His Excellency, however, only remarked that China could never consent to cede an inch of territory.
I had no hesitation, therefore, when you enquired in your telegram No. 173, whether the moment had come for proposing arbitration, in replying in the affirmative.
There is one incident in connection with these negotiations which requires to be mentioned.
On the 17th October the Portuguese consul-general at Canton telegraphed to the chargé d'affaires here that he had received reliable information, the source of which he was not in a position to disclose, to the effect that China was secretly accumulating, through the foreign customs, large quantities of munitions of war at Bocca Tigris in preparation for some eventuality. The Portuguese Government were much exercised by this news, and I was asked to ascertain, through His Majesty's consul-general at Canton, if there was any truth in the report.
Mr. Jamieson, to whom I telegraphed on the subject, could obtain no confirmation of the Portuguese consul-general's suspicions, although a man-of-war was specially sent to Bocca Tigris and spent two nights there in making an investigation. Mr. Jamieson thought that his Portuguese colleague's informant was the Portuguese commissioner of Customs at Kongmoon, and added that the preparation might be defensive, and not offensive, as the Chinese believed that the Portuguese garrison at Macao was being increased.
I have, &c.
J. N. JORDAN..
[This Document is the Property of His Britannic Majesty's Government.]
[B]
CHINA RAILWAYS.
CONFIDENTIAL.
268
39899
Rec
Ref 9 DEC 09
[41251]
No. 1.
Memorandum by Mr. Whitelaw Reid.
[November 9.
SECTION 3.
NOW that there has been signed and ratified by an unpublished Imperial decree an agreement by which American and British interests are to co-operate in the financing and construction of the Chin-Chou-Tsitsihar-Aigun railroad, the Government of the United States is prepared cordially to co-operate with the British Government in diplomatically supporting and facilitating this, so important alike to the progress and the commercial development of China.
The Government of the United States would be disposed to favour ultimate participation to a proper extent on the part of other interested Powers whose inclusion might be agreeable to China, and which are known to support the principle of equality of commercial opportunity and the maintenance of the integrity of the Chinese Empire.
However, before the further elaboration of the actual arrangement, the Government of the United States asks the British Government to give their consideration to the following alternative and more comprehensive projects :----
1. Perhaps the most effective way to preserve the undisturbed enjoyment by China of all political rights in Manchuria, and to promote the development of those provinces under a practical application of the policy of the “ open door" and equal commercial opportunity, would be to bring the Manchurian highways and the railroad under an economic, and scientific, and impartial administration by some plan vesting in China the ownership of the railroads through funds furnished for that purpose by the interested Powers willing to participate. Such loan should be for a period ample to make it reasonably certain that it could be met within the time fixed, and should be upon such terms as would make it attractive to bankers and investors. The plan should provide that nationals of the participating Powers should supervise the railroad system during the term of the loan, and the Governments concerned should enjoy for such period the usual preferences for their nationals and materials upon an equitable basis inter sese.
The execution of such a plan would naturally require the co-operation of China, and of Japan, and Russia, the reversionary and the concessionaries respectively of the existing Manchurian railroads, as well as that of Great Britain and the United States, whose special interests rest upon the existing contract relative to the Chin-Chou-Aigun railroad.
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The advantages of such a plan to Japan and to Russia are obvious. Both those Powers desiring in good faith to protect the policy of the "
'open door
and equal opportunity in Manchuria, and wishing to assure to China unimpaired sovereignty, might well be expected to welcome an opportunity to shift the separate duties, responsibilities, and expenses they have undertaken in the protection of their respective commercial and other interests for impartial assumption by the combined Powers, including themselves, in proportion to their interests. The Government of the United States has some reason to hope that such a plan might meet favourable consideration on the part of Russia, and has reason to believe that American financial participation would be forthcoming.
2. Should this suggestion not be found feasible in its entirety, then the desired end would be approximated, if not attained, by Great Britain and the United States diplomatically supporting the Chin-Chou-Aigun arrangement, and inviting interested Powers friendly to the complete commercial neutrality of Manchuria to participate in the financing and construction of that line, and of such additional lines as future commercial development may demand, and at the same time to supply funds for the purchase by China of such of the existing lines as might be offered for inclusion in this system.
The Government of the United States hopes that the principle involved in the
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