CO129-365 - Governor Sir Lugard - 1910 [1-3] — Page 454

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I would, however, remind Your Lordship that in the Pre-

-liminary Agreement entered into between Sheng Director-

-General of the Imperial Chinese Railway Administration

and the Agents of the British and Chinese Corporation,

Limited, on March 28th., 1899, (which formed the basis of

the Joint Railway undertaking) it was provided "that both

parties agree to make reciprocal and satisfactory working

arrangements in connection with the Canton-Hankow Railway".

This clause is therefore merely a re-affirmation as between

the two Goverments of a pledge already existing as bet-

-ween the British and Chinese Corporation and the Chinese

Government. Should there be any difficulty in providing

the funds estimated I am told at about £40,000

for

this connection (since neither Railway has any funds to

spare) it would probably be to the interest of this

Government to provide them on adequate security and thus

obtain an additional claim in respect of the management

of the whole line.

5.

In brief I submit to Your Lordship

that if it should eventuate that in consequence of the

intervention of other Powers, the preferences promised to

Great Britain by China, in return for the Loan by Hongkong

should be found to have undergone diminution, His Majesty's

Minister