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LE CANTON-HAN-KAU RAILWAY.
(FROM OUR SHANGHAI CORRESPONDENT.)
In order to understand the actual position of affairs in regard to the southern section of the great trunk line which is to connect Peking with Canton, and to appreciate the international importance of its unsettled questions, it is necessary to go back to the earlier history of this railway, in order to throw light on some of the factors determining its inception. The story is a long one, complicated by intrigue from the outset, typical enough of the methods and results of commercial diplomacy in the Far East and illustrative of the helpless ignorance of Chinese officialdom. The earlier history of this railway and the details of the silent struggle for its possession maintained since 1898 are known in their entirety to few. They are recorded, no doubt, after the Chinese manner, in the archives of Sheng Ta-jên, Director-General of Chinese railways; but there are blanks in these archives, lacunæ significant of Chinese methods which can only be completely filled by knowledge of many widely-separated interests, individuals, and intrigues working secretly in Washington, New York, Brussels, Peking, and Shanghai. To tell the whole story là requires a volume. Complete information on certain points of detail is not to be obtained without assistance from Sheng Ta-jên and the representatives of King Leopold in New York; nevertheless, such a résumé of the situation as can be given in this article may be useful.
Let us begin at the beginning. When, at the close of 1896, the construction of the northern line from Peking to Han-kau was successfully urged upon the Throne by Chang Chih-tung and Sheng Hsüan-huai, the original intention of the Tsung-li-Yamên was to build it with Chinese capital. It was admitted, however, in a joint memorial by the two officials above-mentioned in December, 1897, that the Imperial Treasury had been unable to find the funds required, and the following passage from the memorial in question explains the steps suggested and subsequently carried out.
Your memorialist Sheng had the intention of employing American capital for the construction of the Lu-kou-chiao-Han-kau line, but afterwards when the American Washburn came to China, his conditions were too hard to be accepted, and consequently negotiations were broken off. Your servant was thus constrained to negotiate with Belgium. By electing thus our privileges would not be lost, nor would ill consequences follow. But Belgium is a small country, and her strength is inconsiderable, and often she has pointed out that she is hardly a sufficient guarantee for the loan.
The question is not yet decided, but we have hopes that subsequently some compromise terms may be adopted at last, though the question is extremely difficult. If another scheme must be adopted for raising funds for the southern line, there are grave objections to entrusting either England, France, or Germany to undertake the work, and your memorialists suggest that Wu Ting-fang, the Minister at Washington, should be communicated with. He is a Cantonese, and will not fail to do his best to find a scheme.
A preliminary contract for the Han-kau-Peking line was made with the Belgian syndicate in 1898, subsequently modified, and finally ratified in August, 1898. The details of that final agreement, rightly regarded by the British Government as a breach of faith by China, have been published. The undertaking, loudly proclaimed at the outset as a purely Belgian affair, was recognized, when too late, as a political intrigue wherein the influence of Russia had been powerfully exerted with the active co-operation of Li Hung-chang. Though Sheng was fully aware of the facts—it is certain he has not infrequently denied it—there can be no doubt that Chang Chih-tung was bitterly disillusioned at the result of negotiations with Belgium, "the small country whose strength is inconsiderable."
Chang's negotiations with the Belgian syndicate at Shanghai were concluded under instructions from Peking by the signature of the Peking-Han-kau contract in June, 1898. The contract, however, required ratification by the Tsung-li-Yamên; and in May the British Government, warned by the Peking Correspondent of The Times, had instructed Sir Claude MacDonald to oppose it on the ground that it was an offset to press for the concession of the proposed Shan-hai-Canton line to England. On June 9 Lord Salisbury telegraphed to the Minister as follows:
With reference to your telegram of May 28, her Majesty's Government entertained objections to the Han-kau-Peking line when they originally heard of its being granted to a Russo-Belgian syndicate; when there is likelihood of the Russo-Chinese Bank, which is tantamount to Russia's Government, financing the southern section of that railway, that objection is greatly increased. A concession of this nature is no longer a commercial enterprise, and becomes a political movement against British interests in the region of the Yang-tze.
You should inform the Tsung-li-yamên that her Majesty's Government cannot possibly continue to co-operate in a friendly manner in matters of interest to China if, while preferential advantages are conceded to Russia in Manchuria and to Germany in Shan-tung, these or other foreign Powers should also be offered special openings or privileges in the region of the Yang-tze.
These words were written at a time when the Yang-tsze Valley was understood to mean something more for Englishmen than a geographical expression and an empty boast. They did not, however, prevent the Tsung-li-Yamên from ratifying the contract which two months later was rushed through, as the British Minister reported, by the influence of Li Hung-chang, combined with strong pressure on the part of the representatives of Russia, France, and Belgium.
In March, 1899, the prospectus of the loan for the Peking-Han-kau Railway was issued in Brussels, from which document Chang Chih-tung and other patriotic Chinese learned, first, that three-fifths of the money raised for this purely Belgian commercial undertaking was French; second, that the "Société Belge pour l'Étude de Chemins de Fer en Chine" was half French; and, third, that the "Société Belge" in question claimed that "in the event of the contract with the American syndicate not being finally arranged, they have a preferential right to the Han-kan-Canton line."
Before the ratification of the Peking-Han-kau agreement, and in pursuance of the views contained in the memorial of 1897 above quoted, a preliminary contract had been made and signed at Washington between the Chinese Minister and an American syndicate (April 14, 1898) for a loan of $4,000,000 to construct the southern line (Han-kau-Canton). The Belgians had endeavoured to obtain this concession, and there had been a faint-hearted attempt to secure it by the British Legation; Chang Chih-tung had, however, finally determined that in America alone could capital be found unconnected with political and territorial ambitions. His experience in the Peking-Han-kau concession, for which he has never ceased to denounce his colleague Li Hung-chang, produced its direct result in the supplementary agreement (July, 1900) for the southern railway. Therein, to prevent against further dangers from the Continental Powers, he caused the following clause to be introduced:—
The object of making this supplemental agreement of equal force with the original agreement is to permit of the benefits being transmittible by the American company to their successors or assigns, but the Americans cannot transfer the rights of these agreements to other nations or people of other nationality. It is further agreed that without the express consent in writing of the director-general and the American company no other rival railway detrimental to the business of the same is to be permitted, and no parallel roads to the Canton-Han-kan line are to be allowed to the injury of the latter's interest within the area served by the Canton-Han-kan line or branch lines.
The intentions of this clause are clear, and as a precaution it was well meant. It has, however, been violated, and the rights and interests of the undertaking have now become practically vested in the Belgians, or in those behind the Belgians. It resembles in fact the Belgian administration of the Persian Customs, with equally obvious political methods and objects.
The organizers of the original American syndicate, formed in 1895 to exploit "grants and concessions in China," laid stress on the political advantages enjoyed there by Americans. Among the subscribers and holders of the 55 original shares (£1,000 each) were several prominent financiers and capitalists of the United States, and the first president of the company, Senator Brice, was undeniably sincere in his desire to direct American capital and activity towards China. It was certainly because of confidence in the expressed intentions of America to help China in her progress, and with a view to avoid any further complications with the European Powers, that the syndicate received the energetic support of Chang Chih-tung.
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