File No. 5315/252–256.
[Inclosure.]
Sir Edward Grey
to Ambassador Reid.
Foreign Office,
London, June 8,
1909.
My Dear Ambassador: I send you the
memorandum which I had intended to give to you to-day. I should have
explained in giving it that nothing was further from our intention
than to prejudice any rights or obligations which exist between the
United States and the Chinese Government, but as far as the British
financiers are concerned it is clear that they were entitled to act
independently, and indeed could not be expected, after what had
passed, to do otherwise.
Yours, etc.,
[Inclosure.]
Memorandum from the British Foreign
Office.
Whilst agreeing with the statement of the arrangements entered into
in 1903 by the Chinese Government for the construction of the
proposed Hankow-Szechuen
[Page 150]
Railway line, as set forth in the first two paragraphs of Mr.
White-law Reid’s note of the 3d instant, it appears to His Majesty’s
Government that the subsequent features of the case have escaped the
attention of the United States Government. The point of view of His
Majesty’s Government will perhaps be best elucidated by a brief
recapitulation of these events as they are recorded in the archives
of the foreign office.
In July, 1905 the question of raising a loan for the purpose of
building this line arose, and His Majesty’s ambassador at Washington
was instructed to inquire whether American capitalists still desired
to participate and to request that if American capital were
forthcoming, the American group might be put in communication with
the Chinese Central Railways (Ltd.) in London. Sir M. Durand was
informed in reply that, notwithstanding the publicity given to the
matter, no intimation had been received at the State Department as
to any intention on the part of American capitalists to take the
matter up.
In the meantime an agreement regarding railway construction in China
was being discussed between certain British and French financial
groups, and Sir M. Durand was instructed, by a telegram dated
October 16, 1905, to inform the United States Government verbally
that, as the conclusion of this agreement admitted no further delay,
the British and French groups had decided to proceed in the matter
of on the assumption that American capitalists did not desire to
participate in the loan. On October 26 of that year His Majesty’s
ambassador reported by telegraph that he had made a verbal
communication to Mr. Root in accordance with his instructions, No
objections were raised at Washington to the course proposed, and on
December 7, 1905, a copy of the Anglo-French agreement was
communicated privately to Mr. Carter, of the United States embassy
in London, at his request, under cover of a letter stating that, as
the offer of a share of the loan to be reserved for American capital
had not been taken up, that offer must be regarded as having lapsed.
No reply appears to have been returned to this letter.
The negotiations entered upon in 1905 turned out to be of a
complicated nature and have occupied the attention of the legations
and the financial groups concerned almost continuously since that
date. It is only in the last few weeks that a settlement has
appeared in sight, as the result of much labor and considerable
expense. The fact that these negotiations were proceeding has been a
matter of common knowledge, and at no period since their inception
has any intimation of a desire of American financiers to take part
in them.
In these circumstances the United States Government will readily
understand that His Majesty’s Government would scarcely feel
justified in interfering with the arrangements concluded, after such
protracted and arduous negotiations and under their auspices, by the
British financial group interested in the matter.
Foreign Office,
June 7, 1909.
