CO129-363 - Public Offices & Others - 1909 — Page 275

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

[B]

CHINA RAILWAYS.

30899

E

Atef 9 DEC 09

CONFIDENTIAL.

[41251]

No. 1.

[November 25.]

SECTION 1,

Your Excellency,

Sir Edward Grey to Mr. Whitelaw Reid.

Foreign Office, November 25, 1909. I HAVE the honour to acknowledge the receipt of your Excellency's note of the 9th instant making certain proposals with a view to preserving the undisturbed enjoy- ment by China of all political rights in Manchuria and to promoting the development of the province under a practical application of the policy of the open door and equal commercial opportunity.

The first of the proposals made by your Excellency is to the effect that the Man- churian highways and the railroad should he brought under an economic and scientific and impartial administration by some plan vesting in China the ownership of the rail- roads through funds furnished for the purpose by the interested Powers willing to participate, and you add that the execution of such a plan would require the co-opera- tion of China and of Japan and Russia, as well as of the United States and Great Britain, whose special interests rest upon the existing contract relative to the Chenchow-Aigun Railroad.

Your Excellency goes on to say that should the above suggestion not be found feasible in its entirety, the desired end would be approximated, if not attained, by Great Britain and the United States diplomatically supporting the Chenchow- Aigun arrangement, and inviting interested Powers, friendly to the complete commer- cial 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 may be offered for inclusion in this system.

The general principle involved in the first of your Excellency's two suggestions entirely commends itself to His Majesty's Government so far as the preservation of the

open door policy and equal commercial opportunity are concerned, and would in their opinion be well adapted to securing to China full control in Manchuria. I am, however, of opinion that, until the pending negotiations for the Hukuang loan have been completed, it would seem undesirable to consider the question of another inter- national loan for China's railway undertakings, and I would suggest therefore that, for the present at any rate, it would be wiser to postpone consideration of the first scheme.

As regards the alternative proposal contained in your Excellency's note, I observe with satisfaction that the co-operation of interested Powers forms part of the scheme, and I have the honour to suggest, for your Excellency's consideration, that, as a preliminary step towards attaining this desirable end, the two Governments should unite in endeavouring to persuade the Chinese Government to admit the Japanese to participation in the Chenchow-Aigun line as being the parties most interested.

The question of supplying funds for the purchase by China of existing lines to be connected with the Chenchow-Aigun line could be considered subsequently.

I have, &c.

[2486 bb-1]

E. GREY.