CO129-371 - Public Offices - 1910 — Page 206

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

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CHINA RAILWAYS.

CONFIDENTIAL.

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No. 1.

[January 26.]

SECTION 1,

(No. 40.) Sir,

Sir A. Nicolson to Sir Edward Grey.--(Received January 26.)

St. Petersburgh, January 22, 1910.

I HAVE the honour to transmit herewith translation of an official communiqué published to-day, on the subject of the Russian reply to the American proposals as to the internationalisation of the Manchurian railways.

Enclosure in No. 1.

I have, &c.

A. NICOLSON,

Extract from the "Official Messenger" of the 9th (22nd) January, 1910.

Communique.

THE Minister for Foreign Affairs, on the 8th (21st) January, hauded to the Ambassador of the United States of North America at St. Petersburgh a memorandum, containing the reply of the Russian Government to the proposal of the United States Government respecting the "trade neutralisation of the Manchurian railways.”

The substance of the Russian reply, in its general features, is as follows: "The Imperial Government affirming their attachment to the principle of inviolability of the sovereignty of China, to the policy of the open door,' and equal commercial privileges in Manchuria, are, however, convinced that nothing is threatening these principles, and therefore the raising of the questions advanced by the Federal Government as a more effective method of defending these principles is not justified by the position of affairs in Manchuria.

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Referring further to the highly important state and private interests obtained by us in Mauchuria at the price of enormous material sacrifice and moral efforts, on which the establishment of an international control and administration of the Manchurian railways must reflect unfavourably, the memorandum proceeds to detail the considerations which instigate our adverse attitude to the American proposal so far as it has reference to the internationalisation of the railways already existing in Manchuria. First of all it is pointed out that the Chinese Eastern Railway Company in proceeding to the realisation of its gigantic enterprise was given definite rights and privileges for the whole term of the concession, namely, eighty years, with the sole reservation to the Chinese Government of the right, if they should so wish, to purchase the railway upon the expiry of thirty-six years. It was only on the basis of these lengthy periods that the company was enabled to invest considerable capital in the project; and to compel it to forgo its rights now would be an unjust violation of its interests. Moreover, the Chinese Eastern Railway has given life and organisation to a whole series of separate institutions having various connectious with it, and has also caused many private undertakings to spring up, the fate of which is closely bound

up with the existence of the company. The Chinese Eastern Railway has an even greater significance from the point of view of the State. This line serves as the principal route for our relations with our Far Eastern possessions, and forms an uninterrupted link of the Great Siberian route. This consideration has impelled the Russian Government to incur very considerable expenditure in guaranteeing building capital for the railway, and in covering deficits arising from its working; for the Government, therefore, it is extremely important to retain the closest control over the railway, and the power to regulate its tariff which, of course, would not be possible with its transference into the hands of an international syndicate. Finally, from a purely

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