CO129-512-5 Boxer Indemnity Settlement 21-5-1929 - 21-5-1929 — Page 78

75

the completion of the Canton-Hankow Railway is governed by the

Hukuang Jailway Loan Agreement of 1911; and that in making pro-

posals to the Chinese Goverment regarding remission of the In-

demnity they had not been asked to give any undertaking that

they would not repudiate their existing agreements since natural-

ly it had been assumed that they would not do so. Sir M.Lamps on

was further instructed that in the present circumstances it

would be necessary to insist on an assurance that, with regard

to rehabilitation and building of railways out of Indemnity

funds remitted or from loans secured on the said funds, the

terms of existing contracts would be taken into consideration.

As regards the completion of the Canton-Hankow Railway

(there are about 250 miles still uncompleted in the middle of this important trunk line), this is governed by Articles 17 and 18 of the Hukuang Railway Loan Agreement of 1911. The former article provides that there must be a British Engineer- in-Chief, and the latter article concedes to British and German Groups (the German Group has now dropped out) exclusive pur- chasing rights for the whole system the purchasing agents in the British case being the British and Chinese Corporation (a Corporation long and successfully connected with railway building in China and consisting of a partnership between the Hong Kong and Shanghai Bank and Messrs. Jardine, Matheson Company.) If therefore the Chinese Government desire to complete the Canton- Hankow Railway and if they wish to purchase materials abroad they are under an obligation to place such orders through the British and Chinese Corporation, wherever and however the construction of the line may be financed.

&

But, it may be asked, if this obligation exists and if the British and Chinese Corporation can undertake the work, why do the Chinese Government try to evade them and to place the

orders/