CO129-371 - Public Offices - 1910 — Page 44

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

CHINA RAILWAYS,

CONFIDENTIAL,

[December 30.]

SECTION 1.

43

[47122]

(No. 1375.)

No. 1,

Sir Edward Grey to Sir A. Nicolson.

(Telegraphic.) R.

Foreign Office, December 30, 1909. YOUR telegrams Nos. 518 and 520 [of the 27th and the 29th December]: Chin- chow-Aigun Railway.

A communiqué has been received from the Russian Embassy stating that the alternative American proposals in regard to Manchurian railways have been submitted to the Russian Government, and that the United States Ambassador at St. Petersburgh has alluded, in conversation, to an "agreement already arrived at " between Great Britain, the United States, and China for a loan for the construction of the Chinchow-- Aigun line--a matter which would directly affect Russian rights and interests-and that M. Isvolsky had expressed doubts as to whether the notes exchanged between Great Britain and Russia in 1899 with regard to railways in China did not exclude British participation.

I am replying to the effect that no agreement has been arrived at between the three Governments mentioned, explaining frankly the attitude of His Majesty's Govern- ment towards the American and British enterprise engaged (see China Railways print the 26th October, section 2), and saying that as it was not a question of a railway concession, as contemplated in the notes of 1899, but one of provision of funds for railway purposes, it appears to His Majesty's Government hardly to come within the scope of that agreement. I shall also point out that we made no objection when the Russians expressed a desire to participate in the loan which is under negotiation for the Yangtsze Valley line, to which, according to Russian interpretation, the 1899 agreement would equally apply.

The above will furnish your Excellency with material for replying to M. Isvolsky, but you should make it clear to his Excellency that although I informed the United States Ambassador, when approached by him in October last, that I should be delighted to see American and British finance co-operating in railway enterprise, I explained that I had not been able to take any action yet with regard to the Aigun Railway, and, as a matter of fact, so far the British financiers have acted entirely independently of us, and without our having taken any action on their behalf,

This is still the situation, and we have not heard that concession has yet been actually granted. 1 need hardly add that I should be very pleased to see provision made for Russian and Japanese participation in the undertaking. It is Chinese unwillingness to admit the latter which has hitherto prevented us from giving any support, even when I did not know that Russia was likely to take any interest in the project.

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