File No. 5315/334–335.
The Minister for Foreign
Affairs to Ambassador Reid.
Foreign Office,
London, June 23,
1909.
Your Excellency: I have the honor to
acknowledge the receipt of your note of the 12th instant on the
subject of the proposed participation of American financiers in the
Hankow-Szechuen Railway loan.
I entirely agree with all that your excellency says as regards the
danger that would arise in China from the pursuit of conflicting
interests and the consequent disagreements among western
nations.
As I had the honor to explain verbally to your excellency, I also
concur entirely in your view that, as a doctrine of international
law, one of two joint concessionaires has no power to fix the term
when the right of the other to its share in a concession should
lapse through nonuser. I suggest, however, to your excellency that
in certain matters of business that do not admit of indefinite delay
circumstances arise which justify, and indeed compel, one party to a
bargain to assume that the other party no longer desires to adhere
to the arrangement if the latter party, after reasonable notice,
gives no indication of its wishes. In the present case several
years’ notice was given, and it was not until the negotiations
between China and the European groups concerned had been proceeding
quite openly for many months and had, subject to imperial sanction,
reached a successful issue that any claim to participation was put
forward on behalf of American financiers.
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The agreement which has been reached between British, French, and
German financial groups and the Chinese Government is to the
following effect:
A loan of £5,500,000 is to be raised by the three groups in equal
shares for the construction of railways in Hupeh and Hunan.
The portion of the Hankow-Canton Railway which lay in these Provinces
is to be constructed by a British chief engineer.
About 500 miles of the Hankow-Szechuen Railway, including branches,
all in Hupeh, is to be constructed by a German chief engineer, and
the remainder of the lines in Hupeh by a French engineer.
It is further agreed between the three groups that endeavors should
be made to secure an extension of the line to Ch’eng-tu, the capital
of Szechuen, to be constructed partly by a French and partly by a
British chief engineer in such a manner that of the whole line from
Hankow to Ch’eng-tu about a third each should be intrusted to
German, French, and Bhitish chief engineers.
I venture again to express the hope that the American group will
place no difficulties in the way of securing imperial sanction for
the agreement which has been reached.
As regards, however, the participation of American capital in
financial loans in China, I have the honor to suggest that the
American group should place themselves in communication with the
British, French, and German syndicates concerned.
His Majesty’s Government entirely approve and welcome in principle
the participation of American capital in Chinese railway loans, and
they hope that an arrangement may yet be arrived at for an equal
participation between the American and other foreign banks in the
loan in question, leaving undisturbed the agreement concluded by the
British, French, and German groups.
I have, etc.,
