RAILWAYS IN CHINA.

Timaru Herald, Volume XIIC, Issue 13904, 15 May 1909, Page 3

RAILWAYS IN CHINA.

CONTRACT SYSTEM. (Home paper.) Much intorbst lias been attracted by the news lrom Pckin giving particulars* of the manner in wincn bntish capital has been wasted in China in connection with railway connection, but an even more, interesting piece oi iulormation regarding Chinese railway aiiairs has been received stating that tne Chinese have arranged tor a railway loan with German inlanders. Having, regard to the manner in winch capital has been squandered in connection w i ti) one line, it would not seem very probable that British financiers would be

anxious to find more capital, but the political points in connection with the matter are very curious, and it certainly appears for the moment as if Germany has got ahead of Britain. The lure in question is the CantonHankow, which is a very important trunk line, and for some time past negotiations have been in progress between British financiers and the Chinese lor raising a loan for its construction.

The position which has arisen with regard to this Canton-Hankow" line is rather curious, for in the first place negotiations were conducted with the Chinese authorities under the stipulation of contract conditions. At a later date these conditions,were sligiin.v modified, and arrangements were entered into with German, French, and Belgian financiers whereby they suould, also take an interest in the loan, but events suddenly developed in an altogether new direction, and it Avon Id now appear that has got tnere first and has undertaken to supply the money, and a preliminary agreement has been signed. The Anglo-Uerman Agreement of 1898 would appear to preclude Germany from any participation in the construction or in the management of this railway, and although no details of the China-German agreement are as yet forthcoming it is judged, according to the political aspect of the situation, that Germany is doing nothing more than conducting the operation as a financial affair, and will accordingly take no part iii the actual construction of the line. The matter is engaging the earnest attention of the Foreign Office at the present time and a greatdeal of correspondence is going on between the various parties interested, the. Foreign Office, and Germany. The opinion held by the British (interests is that China has not the power to make a loan of this character with Germany, for it is maintained tlfat, in an undertaking given by China, in 190-5, it was .set forth that England should have preferential rights with regard to the raising of monev for the construction of the Can-ton-Hankow line, and that in the event of other countries being desirous of granting a loan, England should have the opportunity of, if needs bo, revising its terms and meeting any other questions which might arise with regard to the matter.

This is the position of the tangle as it exists at present, and it seems highly likely that it will take a good deal of diplomacy to unravel- it, particularly with such a slow-moving people as the Chinese. It •is higlilv desirable that England should maintain its position in the development of China, but it is absolutely essential that in tliis development the .financial arrange.-* ents should be such as to guarantee "as falas possible prosperity-in the future and absolute security for those who become interested in Chinese affairs. To obtain this,, whatever is done in the shape of railway construction must be done to some considerable extent under British' management and guidance. Having regard to all the. officials \a the way, it might be reasonably asked why British financiers are at all anxious to lend money in China for railway construction, but they arc given to looking well ahead, and . British financiers are naturally jealous of Germany obtaining a hold where they consider, having regard to previous arrangements, they have a nrior claim; and where they believe that railway construction will be carried out on much belter lines under the contract system than under a purely finaucial arrangement by which China simnly takes the money and does what it like* with it. As to the payability of the railways when properly constructed, there seems to bo no question.