CO129-451 - Public Offices - 1918 — Page 216

(This

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

CHINESE LOANS AND CONCESSIONS,

(237891)

CONFIDENTIAL.

[January 9.]

co.

SECTION 1.

No. 1.

Mr. Balfour to Sir J. Jordan.

(No. 6.) Sir,

Foreign Office, January 9, 1918. I HAVE received your despatch No. 326 of 16th October, on the subject of the Hukuang railways and the elimination of German participation in the construction of the line.

A suggestion has now come from the French to the British group that there should be a re-division of the railway between the French, British, and American groups and that, subject to a previous reference to their respective Governments, a meeting should be held to discuss the question. Copy of a letter and its enclosure which I have received from Sir C. Addis on the subject is enclosed herewith for your information.*

I am advised that as a matter of broad legal principle China is entitled as a belligerent to liquidate German interests in the Han-I section of the line, and that such liquidation, if carried out with all due care and skill for the interests of the private parties concerned, does not entail the confiscation of enemy private property. It should be borne clearly in mind, however, that it is China, and not the groups, which is entitled to insist on the elimination of German interests and to make whatever arrangements she may think best to effect this object. At the same time I am of opinion that the groups can fairly claim the right to be consulted. The different sections of the line cannot be run independently of each other, and the best interests of the railway demand that a definite arrangement acceptable both to the groups and to the Chinese Government should be come to with as little delay as possible,

I am therefore of opinion that the best course is for you to consult with your French and American colleagues and with the agents of the three groups and to endeavour to come to some mutual agreement in regard to the proper division of the line. You could then take concerted action with your French and American colleagues with a view to obtaining the approval of the Chinese Government to whatever arrangement you may have agreed to.

I therefore authorise you to act accordingly, and I have to request you to report to me in due course the result of your negotiations.

I am, &c.

A. J. BALFOUR.

• Not printed.

[2764 i-1}

213