417
2
their powers under the loan agreement over the whole railway, and while there was a reasonable prospect of the fulfilment of the board's anticipation I was not unwilling to recommend the corporation's representative to exercise patience. He informs me now, however, that, according to the information received by him recently from the board, no definite arrangements have yet been made for giving effect to the loan agreement, and that it is considered probable that several months must still elapse before any change in the situation can be expected.
The prospect of further indefinite delay is most inacceptable to the corporation, which has exercised great patience during the past two years, and has shown the utmost consideration for the difficulties of the Chinese Government, but which can hardly be expected to submit to the continued disregard of the loan agreement without remonstrance.
It appears to me that the time has come for the active intervention of the central Government in this matter. The loan agreement was contracted with the Wai-wu Pu and the Board of Communications under the sanction of an Imperial decree of the 6th March, 1908, and your Highness is no doubt well aware that a covenant of this nature cannot be openly infringed or set at nought by agitators of one province for more than two years without serious menace to the peace and credit of the whole Empire. In my view, the simple solution is the issue of an Imperial decree instructing the Board of Communications to resume control of the Shanghai-Ningpo Railway, and I have the honour to request your Highness to memorialise the throne in this sense at an early date.
The favour of a reply is requested.
I avail, &c.
W. G. MAX MÜLLER.
[This Document is the Property of His Britannic Majesty's Government]
CHINA RAILWAYS.
CONFIDENTIAL.
[24641]
Sir,
No. 1.
23223
Rece
128 10
SECTION 1.
Mr. Whitelaw Reid to Sir Edward Grey.--(Received July 8.)
American Embassy, London, July 7, 1910. REFERRING to our conversation at the Foreign Office on the 27th June, when I ventured to suggest an apprehension lest one paragraph in your note of the 7th June relative to the Hukuang loan implied an extension to which my Government had not committed itself, I beg to say that I am now instructed to call your attention to an apparent discrepancy between the actual text of the agreement signed at Paris on the 23rd and 24th May, 1910, by representatives of the several financial groups, and the recital thereof in your note. The discrepancy relates to the provision of article 4 of the agreement of the 23rd May "in regard to the appointment of chief engineers and sub-engineers for the lines contemplated by the original loan agreement."
Your note seems to regard the agreement as to any additional engineering rights (up to 600 kilom.) to refer to a possible extension of the line beyond Chengtu. Now, both the text of the agreement of the 23rd May and that of the 11th May between Mr. Addis and M. Simon show that the reference was to any surplus over and above the 1,600 kilom. (estimated length of a possible extension from Ichang or Hsiangyang) to Chengtu, and not beyond that point.
The understanding of my Government is that the actual distance from Ichang or Hsiangyang to Chengtu by any route to be surveyed is unknown. If it should prove to be less than 1,600 kilom., the division into sections of 400, 600, and 600 kilom. "shall abate proportionately." On the other hand, "if the extension of the line above referred to should exceed in length 1,600 kilom., then the appointment of chief engineers of the excess between 1,600 and 2,200 kilom, shall be apportioned equally between the American, British, and French groups.”
The point we have wished to make clear is that the United States has not approved of
any arrangement for a possible extension of the line beyond Chengtu. My Government also saw no reason for reminding the Chinese Government of the promise given by Prince Ching to British and American representatives in 1903, except to record the willingness of the United States, Great Britain, and China to admit German and French capitalists to participation in the loan. We have entered into no agreement as to the financing of any future loans that may be needed for the extension of the line to or beyond Chengtu.
We should be gratified if you could advise us of your understanding on these different points. My Government has taken pleasure in giving its approval to the agreements as signed, and, when informed that the other Governments interested have expressed their approval, will request the Chinese Government, through its represen- tative at Peking, to complete the original and supplemental loan agreements.
I have, &c.
WHITELAW REID.
[2813 h-1]
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