[This Document is the Property of His Britannic Majesty's Government.]
[B]
CHINA RAILWAYS.
CONFIDENTIAL.
48254
RECR RrGP18 FEB 10
[January 29.]
SECTION 2.
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(1696]
No. 1.
Note communicated to M. Cambon January 29, 1910.
SIR E. GREY has carefully considered the memorandum of the 13th instant, which the French Ambassador was good enough to communicate to Sir F. Campbell on the following day, relative to the Hukuan loan negotiations, and he notes with satisfaction that the proposed division of the Szechuan line into four equal parts among the four groups is not unacceptable to the French Government, on the understanding, however, that the principle of equality, which formed the basis of the agreement between London and Paris in regard to Chinese railways, be extended to the Hankow-Canton line by the appointment of a French sub-engineer in accordance with the French proposal of the 8th December.
The French Government stipulate, moreover, that, as compensation for that portion of the Szechuan line which the French group are surrendering to the Americans, they will receive the fourth, or most westerly, section, which is at present allotted to Great Britain, in the event of China granting the concession for the extension of the Hankow-Ichang Railway. Sir E. Groy has the honour to observe that, by the agreement of the 14th May made at Berlin between the Chinese Central Railways and the Banque de l'Indo-Chine, which was afterwards ratified in London, this section was allotted to the British group. It was then laid down between the two parties that, in respect of the portion of the Szechuan line for which the chief engineer was to be appointed by the Chinese Central Railways, that company should appoint a French engineer for the first, or eastern, section of the extension to be constructed of such portion up to about 800 kilom., but not exceeding one-half of such portion, and a British engineer for the second, or western, section to be constructed. There was no mention in that or any subsequent inter-group agreement of the appointment of a French sub-engineer on the Hankow-Canton line.
Sir E. Grey sees no reason for departing from the understanding arrived at last spring, as the inclusion of the American group, involving as it does equal sacrifices on the Szechuan line for all three groups, cannot be held to affect the distribution of engineering sections on either line in the manner suggested by the French Govern- ment. Indeed, the reopening of this question is, in the opinion of His Majesty's Government, to be greatly deprecated, tending as it does to the conclusion that there is to be no finality in any of these negotiations.
The French Government also enquire as to what would be the share of the respective groups in the event of the Chinese Government refusing to grant the extension of the Szechuan line for which a joint application is proposed.
Should the Chinese Government refuse to grant the extension of the railway to Chengtu, His Majesty's Government would certainly raise no objection to the division of the first, or Hupeh, section of this line (Hankow-lehang) into four equal parts if such a step would facilitate an agreement, but it is feared that this course would scarcely commend itself to the German Government, who originally held the whole 800 kilom.; and His Majesty's Government would hardly feel disposed themselves to make such a suggestion at Berlin.
Foreign Office, January 29, 1910.
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