CO129-371 - Public Offices - 1910 — Page 168

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between the two countries; that if mutual concessions could be made, though negotiations had now been stopped, there would be ample opportunity in the future to appoint officers to continue the discussion; and that there was no necessity to submit the case to The Hague tribunal for arbitration.

It is evident from this that although there is a temporary suspense of negotiations the main object of both China and Portugal is still to arrange the matter by amicable discussion. The reference in your Excellency's note under acknowledgment to aggressive action is therefore in no way consonant with the facts, and the enclosed. treaty has no relation whatever with the question.

In making the above communication to your Excellency I have the honour to request that you will be so good as to inform the Secretary of State, so that careful investigation may be made and misunderstanding avoided.

I avail, &c.

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

CHINA RAILWAYS.

CONFIDENTIAL.

(1/1910]

No. 1.

3302

REC?

Rro 3 FEB 10

[December 31.]

SECTION 1.

Sir A. Nicolson to Sir Edward Grey.--(Received December 31.)

(No. 521.) (Telegraphic.) P.

St. Petersburgh, December 31, 1909. PROPOSED railway from Chinchow to Aiguu. Your telegram No. 1375 of the 30th December.

I will explain to M. Isvolsky, whom I hope to see to-morrow, the present situation with regard to this project. There may be difficulty with regard to the exchange of notes in 1899, but even if this question can be cleared off the ground, I shall still have to explain to M. Isvolsky's satisfaction why a project which he regards as of great importance to Russia was only revealed to her at so late a stage. Moreover, the fact that we are urging China to allow Japan to participate in the scheme will, I much fear, only serve to increase rather than to modify M. Isvolsky's opposition, and the dislike which he entertains for the whole project. The public here has barely recovered from the scare about the aggressive preparations of Japan, and although that scare was unfounded, its revival in an intensified form would not be at all impossible if it were known that active steps were being taken by Great Britain and the United States to advocate the participation of Japan in a railway which might prove to be of importance strategically, and might therefore be held to constitute a menace to the frontiers of the Empire.

In my conversations with M. Isvolsky, I have so far not made any allusions to Japanese participation in the line, and M. Isvolsky's attitude has been that before taking up his position," as he himself expresses it, he awaits information on the two points mentioned in my telegram No. 520. I do not know what that position will be, but that it will be friendly to the project is scarcely likely.

I consider it my duty to submit these considerations, as it is possible that, in the event of my fears proving well-founded as to the impression which may be produced on the Russian Government and on the Russian public, a reaction may ensue by which our entente generally will be unfavourably affected.

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