CO129-382 - Public Offices - 1911 — Page 195

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

CHINA RAILWAYS.

CONFIDENTIAL.

193

CO

1168

[December 24.]

LO

SECTION 1.

REG 13 JAN 11

No. 1.

[46448]

Mr. Max Müller to Sir Edward Grey.-(Received December 24.)

(No. 393. Confidential.)

Sir,

Peking, November 1, 1910. MR. HILLIER, the manager of the Hong Kong and Shanghai Bank, has recently brought to my notice a proposal made to him on behalf of the Viceroy of Kansu for a loan for the construction of railways in Shensi, Kansu, and the New Dominion. The amount of the loan contemplated so far exceeds any of the schemes mentioned in my despatch No. 386 of the 28th ultimo, and the proposal in itself is so novel and remark- able that I think it worth while writing to you fully on the subject, even if the scheme should not materialise for some years to come.

Mr. Hillier informs me that a representative of the Viceroy of Kansu has approached him in regard to negotiating a loan with the Hong Kong and Shanghai Bank for the construction of a railway from Pao-t'ou in inner Mongolia, about 10 miles west of Sui-yuan, the projected terminus of the Peking-Kalgan extension, westwards to Urumchi, in the New Dominion, a distance of about 2,000 miles, and of a branch line from Pao-t'ou south-westwards via Ning-hsia to Lanchow, a distance of about 700 miles. I would say that the distances mentioned are those given me by Mr. Hillier, though they do not appear to be borne out by a cursory examination of the map. The line would eventually connect with the Peking-Kalgan extension at Sui-yuan. The country is said to be easy level grass country, offering few engineering difficulties, and there are said to be prospects of a lucrative trade in minerals, timber, cattle, hides, and grain. A conservative estimate of the cost of the 2,700 miles at a low figure of 5,5001. per mile would amount to roughly 15,000,000, the security offered by the Viceroy being a mortgage of the lines and the Imperial guarantee.

The scheme is at present in a most preliminary stage, and the next step is for the Viceroy to memorialise the Throne for permission to negotiate with the Hong Kong and Shanghai Bank on the above basis, but of course it is too early to say whether the line is likely to materialise.

For months past, and especially since the signing of the Russo-Japanese Agree- ment, the Chinese press has been full of threatened aggression of Russia in Mongolia, and schemes have been discussed for the colonisation of the New Dominion and for the strengthening of these outlying parts of the Empire by military and other measures, and it appears to me that in proposing this vast railway scheme the Viceroy has been largely influenced by the idea that he will thus be checking Russian political designs in Mongolia.

I have, &c.

W. G. MAX MÜLLER.

[1835 aa-1]