File No. 5315/487.
The British Ambassador to the Secretary of State.
Northeast Harbor, Me., September 8, 1909.
Sir: His Majesty’s Government wish me to convey to you their proposed solution of the difficulties that have arisen in regard to [Page 202] negotiations about the international railway loan in China, which are now almost at a deadlock in connection with the appointment of engineers to supervise the construction of different sections.
His Majesty’s Government think that the proper and equitable solution is that each of the three groups originally concerned should make some sacrifice so as to allow the participation of the American group. They understand that the British group is willing to do this and suggest accordingly that the whole Szechuen line from Hankow, with any branch line contemplated, should as nearly as is practicable be equally divided between the four powers as respects the engineers as well as otherwise, and that the agreement with the Chinese Government should be so modified as to permit of the American group signing it. His Majesty’s Government further propose that should the Chinese Government object to the making of any definite arrangement at present for the construction of the Szechuen line beyond the Hupeh section the Chinese Government should undertake as regards the extension beyond Ichang to apply to the four powers for the capital required for that purpose.
Before the advent of the American group it had been agreed that the Hupeh section of the line should fall to the German group, while the extension beyond was to be shared between the British and French groups. While the above proposal will entail the diminution of the German section, it would likewise involve the diminution of the British and French shares of the extension, and it seems to provide, so far as His Majesty’s Government can see, the only fair arrangement possible.
I am desired by His Majesty’s Government, in communicating this suggestion, which they have made at Berlin and at Paris, to express the hope that the United States Government will, if they concur, be prepared to give it their support.
I have, etc.,