No. 3.

Sir F. Satow to the Marquess of Lansdowne.--(Received November 11.)

(No. 371.) My Lord,

WITH reference to your Lordship's despatch No. 174 of the 25th July (received on the 11th instant), respecting French action with regard to a Concession for the establishment of waterworks for supplying water to Canton, I have the honour to report that, with a view to ascertaining the correctness of the statements reported in Sir Henry Blake's despatch to Mr. Chamberlain of the 7th June, I wrote to Mr. George Jamieson, representative of the Peking Syndicate in China, asking for a report on the connection of his Syndicate with the proposed Concession.

Peking, September 26, 1901.

I have now received a reply from Mr. Jamieson, and inclose a copy herewith. A copy of this despatch and its inclosure will be sent to Sir Henry Blake.

I have, &c.

(Signed) ERNEST SATOW.

Inclosure in No. 3.

Mr. G. Jamieson to Sir E. Satow.

Peking Syndicate, Shanghae, September 18, 1901.

Sir,

I HAVE the honour to acknowledge receipt of your letter of the 12th instant, inquiring whether I had any information regarding an alleged statement on the part of the French Consul at Canton that only French capital could be employed in the construction of waterworks in that city. So far as my information goes, I am unable to confirm the report which has reached you. I am in correspondence with Messrs. Shewan, Tomes, and Co., of Hong Kong, of which firm Mr. Feng Wa Chun is Compradore, in regard to a Concession for waterworks, but so far they have made no complaint of such interference. At the same time I cannot help thinking that there is some sinister influence at work which, at all events, has the effect of preventing the Concession going into English hands.

Perhaps I may be excused if I state briefly the history and present position of the case so far as my Company is concerned. In June or July of last year the Yang-tsze Valley Company of London, of which I am a Director, was offered, through Shewan, Tomes, and Co., a Concession for waterworks in Canton, which, it was stated, the Viceroy was willing to grant in the name of their Compradore, Mr. Fung Wa Chun, and the offer was accepted, subject to certain conditions which I was requested to look into. In February of this year I went to Canton, taking Mr. Fung with me. I found he had been working through a friend of his named Li, a Secretary in the Treasurer's Yamen, who seemed a very proper person to be a negotiator in the matter. Mr. Li came and met Fung and myself in Shameen, and, together, we discussed and settled the terms of a

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