CO129-451 - Public Offices - 1918 — Page 218

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

CHINESE LOANS AND CONCESSIONS.

(237891]

(No. 6.)

CONFIDENTIAL.

No. 1,

Mr. Balfour to Sir J. Jordan.

[January 9.]

SECTION 1.

Sir,

Foreign Office, January 9, 1918. I HAVE received your despatch No. 326 of 16th October, on the subject of the ukuang 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 therė 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 hould be held to discuss the question. Copy of a letter and its enclosure which I have

ceived 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 lligerent to liquidate German interests in the Han-I section of the line, and that such quilation, 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 pannot be run independently of each other, and the best interests of the railway demand tha a definite arrangement acceptable both to the groups and to the Chinese

overnment 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 ndeavour to come to some mutual agreement in regard to the proper division of the Tine. 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

rangement 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.

N

[2764 i—1]

• Not printed.

A. J. BALFOUR.

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