CO129-371 - Public Offices - 1910 — Page 45

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

[B]

CHINA RAILWAYS.

CONFIDENTIAL

[47103]

No. 1.

[January 3.]

SECTION 1.

Your Excellency,

Sir Edward Greu to Mr. Whitelaw Reid.

Foreign Office, January 3, 1910. I HAVE the honour to acknowledge the receipt of your Excellency's memorandum dated the 29th ultimo, stating that it had been represented to the United States Government that the French Government would withdraw their objection to the signature of the Hukuang loan agreements provided that the French group received engineering rights on an additional 100 kilom. of the Chengtu extension, and expressing the willingness of your Government, if the report was well founded, to share equally with His Majesty's Government in making such sacrifice of engineering rights provided certain conditions were fulfilled.

I have the honour to state, in reply, that no information to the effect that the French Government would be satisfied if their group received engineering rights on an additional 100 kilom. of the extension has so far reached His Majesty's Government. My latest information, which is contained in a note from the French Embassy dated the Stu ultimo, is to the effect that the French group are unable to accept a share of the Szechuen line inferior to that allotted to the other groups, or to agree to any reduction of the line given them by the Anglo-Franco-German arrangement of the 14th May last.

I expressed my regret at the decision of the French Government to allow the slight and comparatively unimportant difference between the share allotted to the American and German groups and that allotted to the Anglo-French group to interfere with the settlement of the whole question, and I added that I observed with surprise that the Hankow-Canton line should be mentioned on an apparently equal footing with the Haukow-Szechuen line, as if the two lines formed part of one undertaking. I said that in the circumstances it would appear that the only solution of the question now remaining was the division of the Szechuen line into four equal parts among the four groups with the internationalisation of the bonds as desired by the United States Government, and that I was prepared, subject to the concurrence of the French Government, to put this proposal before the United States and German Governments. I am now awaiting the reply to the above communication.

I have, &c.

[2581 c

1]

E. GREY.

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