CO129-477 - Public Offices - 1922 — Page 308

In any further communication

on this subject, please quote

No.

FOREIGN OFFICE.

30%

the Directorate and the Governor undertake on behalf of their respective Governments that no line competing with either the British or Chinese section shall be built to the detriment of either section and that no branch line or extension shall be built which could divert traffic, to the detriment of either section without the consent of both Governments,

Article 38.

When the Chinese Government constructs

a line from Canton to Hankow and connects it by a loop line with the Railway in accordance with its declared intention, rules for the interchange of traffic and rolling stock and for through bookings and through rates shall be settled by the Administrations of the British and Chinese sections of the Canton-Koloon Railway with the Administration of the Canton-Hankow Railway and the British section of the former railway shall be a party to any agreement made for through traffic from the latter railway to the port of Hongkong and vice versa.

4.

+

It seems obvious that the development of Canton as a port would divert traffic from the Canton-Kowloon, Railway to a certain though possibly limited extent, but it would probably be difficult to claim that Article 15 of the Loan Agreement of 1907 prevents the development of the port of Canton itself by me and of terminal and harbour improvements including railway side-tracks etc.

5.

The nature, if not the existence, of the unsigned agreement of 1911 is probably unknown to Sir C. Addis and Mr. Lamont and it may be the "Treaty" referred to by the

latter....

address,

but to

not to any person by name,

"The Under-Becretary of State,"

Foreign Office,

London, S.W.1.

latter in his letter,

6.

Lord Balfour proposes, subject to the concurrence of

Mr. Churchill, to cause a reply to be returned to Sir C. Addis

that apart from Article 15 of the Canton-Kowloon Railway Loan

Agreement of 1907 His Lordship is not aware of any Treaty

provisions on this point, that the construction of a loop line

between the Canton-Hankow and Canton-Kowloon Railways has been

under discussion for many years but that no agreement has ever

been signed, and that he is unable to express any opinion as

to whether the development of the port of Canton would divert

traffic from the Canton-Kowloon Railway, but that whether it

would do so or not Mr. Lamont may be assured that there is no

intention so far as His Majesty's Government are concerned

to do anything to obstruct the natural economic development of the port.

7.

Sir C. Addis is anxious to reply to Mr. Lamont as soon as possible as he is leaving town in a few days, and I am accordingly to request the favour of an early reply.

I am,

Sir,

Your obedient servant,

1. Wellesley