THE CHINESE RAILWAY PUZZLE.
The history of railway concessions in China is an extremely interesting record of ambitious enterprise on the part of certain European Powers, and of almost inexplicable supineness and apathy so far as England is concerned. The special project to which our cables refer to-day has already had a varied history, and there is no doubt that it vitally concerns the future of British prospects in China, and more especially in the Yangtse Valley. To understand the situation, it must be remembered that this HankowCanton line is merely to be the continuation of the railway which has been projected from Peking to Hankow. The combined lines would thus pass through the heart of China, linking the northern and southern provinces and opening up the immensely fertile and populous Yangtse Valley to foreign trade. The northern half of this scheme the famous Lu-Han concession, covering the route from Peking to Hankow, was first submitted to British and then to French capitalists, without result. The concession was then secured by a Belgian syndicate, which, as subsequent events proved, was merely acting as the agent for the Russo-Chinese Bank; and until the Boxer rising of 1900-1, it seemed that this valuable line was destined to fall into Russian hands. But after 1901 it became increasingly evident that China was not inclined to accept the obligations which she had been coerced into acknowledging before, and the final collapse of Russia's power and prestige in the Japanese War left the Peking-Hankow line once more without capital or promoters to carry it through.
After the war was over, a determined attempt was made by Germany through her financial institutions in the East to get hold of this Lu-Han concession. But so far as can be gathered at present, whatever rights and privileges have been granted by China since the war on this rpute have been secured by American and British capitalists. However, the Peking-Hankow line is only one half of the great central railway, and south of the Yang-tee the Germans appear to have been more successful. The concession covering the Hankow-Canton route was originally granted to an American syndicate co-operating with Chinese financiers; but in the general reconstruction that followed the rebellion and the war, these rights seem to have lapsed. A few months ago it was rumoured that German capitalists were working to revive this concession, and England, acting in conjunction with the United States, extracted a promise from (Jhina that any concession granted by the Chinese Government should be dealt with under the agreement of 1905, that is, England should be allowed a pre-emptive right over it. At the same time it was specified that if the Chinese Government undertook the construction of the PekingHankow line itself it should use only British material and should build the railway under British supervision. But from the developments chronicled during the last few weeks in our cables, it would appear that Germany has been working actively to undermine British influence, and to secure for herself the privileges already promised to England in connection with the opening of the Yangtse Valley. However, England is evidently alive to her danger; for we can hardly regard as " unofficial " or " uninspired " the refusal of the British and French banks in conjunction to have anything to do with Germany's attempt to raise capital to construct these lines. But the question is a most serious one for England, for the control of the Yangtse Valley and the trade of Central China are at stake, and a false step may mean their irrevocable loss.
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