74
41.250 £300
£10,630
opprox
£10.500
3
(a) British claims for hire, demurrage and
detention charges in respect of all rolling stock to be waived up to and including the 29th. February, 1948. Normal charges to be resumed thereafter.
(b) The Chinese to receive an agreed sum of $170,077 in respect of repairs which they carried out on the coaches returned.
(c) The Chinese to purchase the six coaches
retained by them for the total of $168,000.
13. The question of the locomotive was left over pending an examination of its condition which has now been made. It is not worth the expense of ferrying across the Pearl River for transport back to Kowloon and has been offered for sale to the Chinese for $20,000. Its scrap value is estimated at about $4,800, and if it is not possible to obtain the full price of $20,000 it will be sold at the best price the Chinese can be induced to pay.
14. The terms of the settlement seem to be somewhat favourable to the Chinese in view of the attitude they have displayed throughout these long drawn out negotiations. Nevertheless I consider that the agreement should be honoured. The difficulty of obtaining any kind of settlement for such claims as these against China does not need to be stressed, and I feel that it is at least satisfactory that the greater part of the property of the British Section of the railway should have been recovered and that, if the sale of the locomotive goes through, there will be a small net balance due from the Chinese in addition. I consider that a more favourable settlement could only have been achieved by resort to drastic measures such as resulted in the return of the coaches, but it is very probable that the taking of such a step a second time would prejudice irreparably the harmonious relations between the two sections of the railway. I therefore request your covering approval for the settlement and for the consequential adjustments to the Railway accounts.
15. The course of the negotiations which led up to this settlement has been hampered throughout by differences with the Chinese railway authorities over the division of the terminal through traffic earnings. The basic rate for the calculation of passenger fares and freight rates between Kowloon and Canton is reckoned in Hong Kong currency and terminal through traffic receipts are divided in the proportions of 20 to the British Section and 80% to the Chinese.
16. The basic rate being in Hong Kong currency, and through fares being collected at Kowloon in Hong Kong dollars, no difficulty arises regarding payment to the Chinese of their share of earnings collected by the British Section, payment being made in Hong Kong dollars to their account with the Hong Kong and Shanghai Bank. Fares paid in Canton must however be collected in Chinese National currency, and it is apparent that if the British Section is to obtain its correct share of the receipts based on the basic rate, it would be necessary for the Chinese either to increase the fares almost hourly to keep pace with the fall of the Chinese National dollar, or to take a heavy loss at each fortnightly settlement with the British Section.
/ 17.
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