CO129-562-20 Whompoa Port- development 19-2-1937 - 4-4-1938 — Page 45

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Encl. No. 3.

In

inevitable on account of the large headways involved.

addition it is extremely doubtful whether the Yuet-Han

Administration would permit their Whampoa traffic to be

controlled by the Canton-Kowloon Administration over the

six kilometres of main line common to both railways.

particularly as they would derive no material advantage

through an increased proportion of receipts. This main line

control is a sine qua non of safe operation "

8.

On the 15th January, 1937, Major Walker visited

Canton and was informed by the Managing Director of the Chinese

Section, Mr. Li Lu-chao, that he himself had actually brought Mr. Street's proposal to the notice of the Chinese Ministry in the course

of a personal visit but that it had been ruled out. He was informed,

however, at the Ministry that "a loop connection was a certainty". It has now been agreed between Major Walker and Mr. Street that when the connection eventuates it should follow generally the plan

which is the third enclosure to this despatch and marked "Scheme

III".

9.

I may conclude by expressing the opinion, which is shared by Major Walker, that our proper policy is to let the matter

of this loop connection take its own course. From the Generalissimo's standpoint it is a strategic necessity, and is therefore certain to eventuate. In the present condition of the

Hankow-Canton Railway there is no through traffic offering, and we can therefore well afford to wait To press the matter now would

merely exacerbate the Cantonese opposition, and so make things more difficult for the Generalissimo and the Chinese Ministry of Railways, and that without reaping any benefit for ourselves.

I have the honour to be,

Sir,

Your most obedient, humble servant,

& Caldecot

Governor, &c.