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colleague, with the approval of his Government, has been supporting those interests.'
The India Office, however, adhered to their view, March 5, 1889, and on the 16th March we telegraphed to Sir J. Walsham explaining why they did so.
Sir J. Walsham, No. 27, Telegraphic,
Sir J. Walsham, in reply, telegraphed a summary of the modifications desired by Russia, and stated that his attitude in supporting them was in the interest of the Companies. October 10, 1889.
But before the receipt of this telegram Sir J. Pender, October 4, 1889, wrote enumerating certain modifications which the Company were prepared to agree to, and which would, he thought, satisfy both Russia and India.
The India Office gave a general assent to these proposals, and Sir J. Walsham was instructed to give them a general support at their approaching discussion at Chefoo. India Office, October 19, 1889. To Sir J. Walsham, No. 32, Telegraphic, October 20, 1889.
On the 29th October, however, Sir J. Pender informed us that they were not put forward at the Chefoo Conference. The Russians decided that the negotiators were to confine themselves to making the arrangements necessary for the out-payments in Europe being defrayed by China out of her proportion of the tariff; that Article 13 of the original Agreement was to be left as amended by Russia; and that Article 9 was not to be discussed for the present.
An agreement was arrived at on this basis, subject to the approval of the British and Russian Ministers, the Viceroy Li, the Tsung-li Yamên, and the two Companies.
The following is a copy of the original Agreement, in which the proposed amendments are printed in italics :-
"An Agreement entered into the 10th day of August, 1887, between the Imperial Chinese Telegraph Company (hereinafter called the 'Administration') of the one part, and the Great Northern Telegraph Company of Copenhagen, and the Eastern Extension, Australasia, and China Telegraph Company (Limited) (hereinafter called the 'Companies') of the other part.
"Whereas the Administration intend to connect the Chinese telegraph system with the telegraph lines of adjacent countries in telegraphic communication with Europe; and
"Whereas the Companies have already established such connections by means of their direct cable routes vià Russia and via India; and
"Whereas, by the basis of Agreement signed on the 7th July, 1887, at Chefoo, the Administration and the 'Companies, in order to avoid competition and establish friendly co-operation, have agreed upon certain principles to effect this end; and
"Whereas it has been agreed that the said basis of agreement shall be annulled, and shall be superseded by these presents; and
"Whereas it has been proposed that the Administration and the Companies shall enter into the Agreement hereinafter contained, and it is intended that such Agreement shall be construed with reference to and so as to effectuate the aforesaid objects of the Administration and the Companies.
"Now it is hereby agreed as follows:
"Article 1. All the traffic exchanged between any part of China (excepting the three ports, Shanghae, Foochow, and Amoy) on the one side, and Europe (Russia excepted) and countries beyond Europe on the other side, and vice versa, transmitted by the land lines of the Administration, whether via the land frontiers or via the cables of the Companies, shall belong to the Administration.
"For the traffic named in this Article the Administration shall fix a terminal rate of 5 fr. 50 c. per word, which shall belong to the Administration.
"Art. 2. The Administration shall fix a terminal rate of 5 fr. 50 c. per word for all traffic exchanged by the land lines of the Administration via the land frontiers between Hong Kong, Amoy, Foochow, and Shanghae on the one side, and Europe (Russia excepted) and countries beyond Europe on the other side, which shall belong to the Companies, subject to the payment of percentage named in Article 4.
"Art. 3. The Companies shall fix their proportion of the tariff on traffic exchanged between Hong Kong, Amoy, Foochow, and Shanghae on the one side, and Europe (Russia excepted) and countries beyond Europe on the other side, and vice versa, by their direct cable routes vià Russia (Siberia) and viâ India at 5 fr. 50 c. per word, which shall belong to the Companies, subject to the payment of percentage named in Article 4.
"Art. 4. The proceeds of all traffic exchanged, whether by the cables of the Companies, or by the land lines of the Administration, between Hong Kong, Amoy, Foochow, and Shanghae on the one side, and Europe (Russia excepted) and countries beyond Europe on the other side, and vice versa, shall belong to the Companies, who shall pay to the Administration 10 per cent. of their proportion of the tariff on traffic exchanged between Shanghae, Foochow, and Amoy, on the one side, and Europe (Russia excepted) and countries beyond Europe on the other side, and vice versa.
"Art. 5. If the traffic described in Article 1 be transmitted via the Companies' cables, the Companies shall not charge for such transmission, provided that the land lines of the Administration be not interrupted for more than sixty days during any one foreign calendar year, but out of the Administration's proportion mentioned in the preceding
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