CO129-384 - Public Offices - 1911 — Page 140

[This Document is the Property of His Britannic Majesty's Government.} 138

CHINA RAILWAYS.

CONFIDENTIAL.

[25319]

No. 1.

23033

REC Reg£18 JU 1

[June 29.]

SECTION 1.

Sir,

Messrs. Pauling and Co. to Foreign Office.-(Received June 29.)

26, Victoria Street, Westminster, London, June 28, 1911.

I HAVE the honour to acknowledge the receipt of your letter, and, in accordance with your suggestion, Lord ffrench has had an interview with Mr. Addis, of the Hong Kong and Shanghai Bank.

That gentleman, quite naturally, expressed the view that the granting of a contract should not in any way interfere with the Hakuang loan conditions, which must be allowed to run their normal course; but pointed out that it was possible that, if the Chinese granted a contract for some section of the line, they might desire to withhold from the bondholders of the loan some portion of the 5 per cent. commission given in the loan referred to on the purchase of all railway materials.

Lord ffrench informed Mr. Addis, on our behalf, that we were perfectly willing to guarantee, so far as we were concerned, that there should be no interference with the payment of that commission.

Mr. Addis expressed his satisfaction with this arrangement, and stated that, that being so, he had no objection to the Chinese granting us a contract for a section of the line, and added that, in principle, it was in the interests of China herself that railway construction by contract should more frequently take place.

We are therefore cabling to our representative at Peking as per copy, which we enclose for your information, and which has been shown to, and approved by, the Hong Kong and Shanghai Bank and the representative of the American group.

I am instructed to ask whether Secretary Sir Edward Grey will be good enough to inform Sir John Jordan that His Majesty's Government approves of the proposal put forward by Sheng Hsuan Huai, and whether Sir John Jordan will be instructed to render us every assistance that he can in commencing and concluding the necessary negotiations with the president of the Board of Posts and Communications.

I am, &c. (For Pauling and Co., Limited),

J. M. SCOTT, Secretary.

Enclosure in No. 1.

Cable sent to Mr. Gatrel (Peking) by Messrs. Pauling and Co.

FOREIGN OFFICE inform us that president of Board of Posts and Communi- cations has informed Sir John Jordan that he wishes construct by contract portion of Hukuang Railway, and requests Lord ffrench return Peking as soon as possible. You should see President Yu Chuan Pu, and inform him that, if he approves, Pauling and Co. propose sending a first-class engineer to discuss preliminaries ponding Lord ffrench return, which should take place about August. Please informi President Yu Chuan Pu Lord ffrench detained owing to negotiations Chen Ai Railway, and it would be dangerous to the interests of China for him to leave immediately; meantime, suggest President Yu Chnan Pu should give facilities for engineer to examine line, so that negotiations may be concluded on arrival Lord ffrench. You should see Sir John Jordan and show him this cable.

June 28, 1911.

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