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of Joint Management, but submitted no counter-proposals which
could in any sense be regarded as a serious scheme for working
the two sections. In October last I visited Peking myself
and had two very long conversations with His Excellency Liang
Shi-yi, Director General of Railways. I found him radically
opposed to anything in the nature of Joint Management, and
though (as it appeared to me) he was unable to reply to my
arguments, I learnt more clearly than before the nature of his
objections. Ilia counter proposals amounted practically to
independent working with arrangements for through booking and
hire of stock, and he voluntarily and without any suggestion
on my part suggested that in calculating the rates to be charged
by each section under that scheme, it would be clearly admis-
sible for the Hongkong section to impose a higher rate than
the Chinese section because of the much more difficult and
costly nature of the construction of our section. On my re-
turn to Hongkong I found that the Director General of the Chi-
nese Section who had been nominated as the Negotiator for a
Working Agreement by the Chinese Government had resigned, in
consequence of the fact (which he freely admits) that he con-
sidered our proposals reasonable and proper and did not share
the view of his own Government.
was nominated as his successor.
After some delay Mr. Chao
Being very desirous of meeting the wishes of the
Chinese Government in every way, I directed Messrs. Clementi and Lindsey (who represented this Government) to postpone the question of Joint Management and proceeded to a discussion
the question of rates, mutual provision of Rolling Stock and
suth other/matters which demand solution before the line opens in other ma August.
of
5. Generally speaking the arguments which I have ad- vanced as the basis of a Working Agreement are as follows:- That the line is one entity and should be regarded as a business proposition, in which it is to the interest of both parties to
realise
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