CO129-376 - Governor Sir Lugard - 1911 [3-4] — Page 67

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11. Daring his leave of absence in 1910 Sir F.

Lugard discussed with Sir J. Jordan[and myself] the

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policy to be pursued with regard to the negotiations for . a policy of joint management on the Canton Kowloon Railway. He and Sir J. Jordan agreed that this question of telegraphs, in which the Chinese are keenly interested,

hit he has would be a valuable weapon in the negotiations: We now

Amer wported that

know that]joint management cannot be arranged.

12. On the 29th March 1911, the Foreign Office sent to the Colonial Office copies of despatches showing that the Chinese Government have definitely taken over the Janton-Hong Kong telegraph line. Sir F. Lugard in his Confidential despatch of the 13th of March, now urges that early action should be taken on the lines proposed by Sir M. Nathan and submits a draft bill.

13. From the foregoing pracis and this despatch the following facts emerge:-

(1) Under the agreement between the Tastern Extension Company and the Telegraph Administration the interests of the Company are very closely connected with the Chinese administration and it is possible that any strong action taken by Hong Kong to the prejudice of the Chinese Government may react very unfavourably on the Company. But the Company renewed its wreement without any reference to Hong Kong so that there is really no very strong reason why the interests of the Colonial Government should be made subservient to those of the Company.

we seem

(2) The position is altered by the fact that the Chinese Government now owns the line. A nominally or partially private Company might be tolerated but I think]it[is] highly undesirable that any foreign power should own and

work

[ Jomit

X

See my binutel 30173/10.

10242/11

242/11.

11946/11.

"probably unge a

tia in 1904.

Mrchnson's

utafon

376/04.

work lines in a British Colony. Whatever the exact status

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of the new territories may be, the terminal office is in Hong Kong itself, [I imagine that this position [is] without precedent.

In time of war Hong Kong would certainly have to commandeer the line or else an impossible burden would

be placed on the censorship and in that case China would probably have, and would certainly prefer, a claim for compensation.

The

(3) The Colony is badly in need of fresh revenue. traffic on the existing line is considerable or was in 1904; and a profit might be made for the Colony is

(a) (Government constructed and worked the lines and

the cable from Hong Kong to the mainland, (b) charge the Eastern Extension

royalty on messages for their line.

14.

proposals.

a rent plus

There seem to be difficulties as regards both

If the Government builds the line it will be competing with the Tassarn Extension Company and profits may not be

Cn. Si I. hueandi dufalch) much. If it tries, under the bill enclosed to make the Company pay a rent for its lines and a royalty, the Company[ue] that under old arreements with the Government they have a right to work their line in perpetuity, and they could not accept any limitation of years in the

X

licence under the bill. But that point could be easily

might

arranged, and spersonally I think that less friction might result if the Eastern Extension Company took over the

lines.

15. The point is not one of immediate importance, what des appear Aben

but I think it is of great importance that Chinese

Government

(1390). Wt.20,024-26. 6000. 11/08. A.&E.W. (15,613).

18,912-27. 8000. 30/09.