7/986/46.
No.68.
CONFIDENTIAL.
Ansil (4)
GOVERNMENT HOUSE,
HUNG KONG,
6* April 1948.
3
77
Sir,
I have the honour to report for your information and covering approval, the arrangements which have been made to settle a number of outstanding differences which arose with the Canton-Hankow Railway authorities as
a consequence of the enemy occupation. The Chinese Section of the railway between Kowloon and Canton is, as you are aware, now under the administration of the Canton-Hankow Railway.
2.
On the reoccupation of the Colony, it was found that the rolling stock belonging to the British Section of the Kowloon-Canton Railway had been seriously depleted and efforts were made to ascertain whether any of the missing coaches, wagons and locomotives were to be found on the Chinese Section of the Canton-Kowloon Railway or on the Canton-Hankow line. Some difficulty was experienced in pursuing these enquiries but ultimately the Chinese authorities agreed to an investigation of all rolling stock on their lines by a joint committee representing both sides. This committee duly made its investigations and reported that on the Chinese lines between the Kowloon frontier and Hankow were
29 coaches. 65 wagons.
2 locomotives.
all of British ownership.
3.
When the findings of the committee were made known to the Chinese authorities, they at once disavowed their representative, who, they stated, had not been appointed by their Managing Director but by one of his subordinates acting without authority.
4. The Chinese authorities were nevertheless pressed again and again to return this rolling stock or alternatively to recognize British ownership and pay hire charges for its
use.
Representations were also made to the Chinese Government through His Majesty's Ambassador in Nanking without avail. The attitude adopted by the Chinese railway authorities was that they could do nothing without the consent of the Ministry of Communications, and the Ministry refused to move in the matter.
5. The suspicion then grew that the Chinese authorities, who had insufficient rolling stock of their own to maintain traffic on their lines, intended to delay action as long as possible so as to maintain their services until new coaches and wagons could be obtained from abroad.
It was decided that a strong line must be taken if the negotiations were not to share the fate of so many similar discussions with China.
RECEIVED 17 APR 1948
THE RIGHT HONOURABLE
ARTHUR CREECH JONES, M.P.
/ 6.
AC.
C. O. REGY
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