We have the honour to state, in reply, that the Mining Regulations, as drawn up by the Viceroy of the Hukuang Provinces, Chang Chih-tung, were laid before the Throne, and by Imperial Rescript referred for consideration to this Board and Board of Commerce.
It is now, of course, undesirable to put a complete stop to their so doing. But the treaties which have been concluded in the past constantly contain provisions which judicially affect the interests of Chinese subjects, or encroach on the sovereignty of China. The Regulations in question are extremely complicated, and we have laid our views thereon before the Throne. When this has been done we will send in a copy of the Regulations for your perusal.
Inclosure 3 in No. 1.
We avail, &c.
Letters to the following intent :-
China agrees to invite foreign as well as Chinese capital to embark in mining enterprises, and will permit foreigners of all nationalities to develop mining property, provided they comply with the regulations drawn up by China relating to mining affairs; but these regulations must not place (foreign) mining capitalists at a greater advantage than they would be under generally accepted foreign regulations. Accordingly, it is only obligatory that the regulations which are to be decided on, whether in relation to new or old enterprises, shall secure foreign capitalists from being placed at any disadvantage.
Memorial of the Hukuang Viceroy, Chang Chih-tung, submitting the Mining Regulations to the Throne,
("Universal Gazette," January 28, 1906.)
On the other hand, steps must be taken to secure the interests of Chinese subjects, the sovereignty of China, and the local administration, and to draft the regulations in the best manner so as to remedy the mistakes that have been made. Too much complaisance must not be shown to the desires of others, so as to result in the abandonment of China's inexhaustible resources.
A respectful Memorial, in pursuance of Imperial Decree, submitting for consideration of your Majesties a copy of the proposed Mining Regulations for China.
What China is rich in is her mineral resources; what she lacks is capital.
In August 1902 the following Imperial Decree was received :-
"Mining affairs are one of the important questions which are now awaiting the attention of the Government. We have recently received a telegraphic Memorandum from Liu Kun-yi and Chang Chih-tung reporting that they are making selection from the mining regulations of foreign countries, and with the most careful deliberation deciding on satisfactory regulations. Their purpose is very proper, and therefore we do not let the two Viceroys make careful selection from the conditions under which mining affairs are managed in foreign countries, jointly decide on satisfactory regulations, submit them to us for the issue of a Decree. It is our earnest desire that, with a view to safeguarding rights and manifesting the importance of mining affairs, no irregularities will mar the general observance of these regulations. Respect this."
Irrespectively whether the land is private or public property, or whether the capitalists are Chinese or foreigners, the land-owner contributes the mining land as his share of the partnership, and the promoter his capital as his share. In mines coming under Class (A), which includes all abundant and important mineral deposits, the land-owner and capitalist take an equal number of shares in the partnership, and deducting the working expenses, which are taken by the capitalist himself, the profits are divided equally between the partners.
Liu Kun-yi afterwards died of illness. Your servant thereupon proceeded to select and depute a number of Chinese and foreign officials, and caused copies of Mining Regulations of Great Britain, the United States, Germany, France, Belgium, and Spain to be purchased and translations carefully made. These were forwarded in the winter of 1903-1904 to the Board of Foreign Affairs, by whom they were handed to the Vice-President, Wu Ting-fang. He took them into consideration and coupled with some students who had completed a course of education in Japan, to carefully revise them with the aid of selections from the Mining Regulations of Japan.
I then again reviewed them myself: for it was essential, in order to prevent irregularities and safeguard rights, that every one of these regulations was the least unsuited to the conditions existing in China should be thoroughly digested and deliberated before being decided on. The Mining Regulations for China are humbly presented herewith in two volumes - one containing the Principal Regulations in seventy-four clauses, the other the Supplementary Regulations in seventy-... clauses.
The partnership of the owner of the mines with the foreign capitalist, in which the land-owner and the foreign capitalist each enjoy a share in the profits, is a most simple and equitable arrangement; the foreign capitalist, of course, suffers no loss, because the land takes no share in partnership nor in the profits until all the working expenses are deducted and there remains a net profit over.
I consider that the Mining Regulations for China now being decided on, which clearly grant foreigners permission to open mines in the interior, are in every way more lenient than the generally accepted regulations of foreign countries, and, moreover, the rules regarding the extent of mining areas, the ground rents, and levies on output are altogether more moderate.
It is evident that China attaches importance to her sovereignty and not to gain so as to make foreigners willing to act in accordance with her methods and to observe her laws. Moreover, in all cases, both the State and people enjoy the profits: in first-class mines the State and people take equal shares in the net profits; in second-class mines the profits are all given to the people.
It is a general practice in foreign countries in dealing with land to make a distinction between the surface and the subsoil; the powers of private owners of land are restricted to the surface. The subsoil is wholly the property of the State; therefore, though mining property is developed on private lines by natives of the country, yet the authority to sanction or disallow such enterprises rests wholly with the State.
In regard to metallic ores, beds containing precious stones and deposits of valuable and important mineral deposits, the rule that official authorization must be obtained is even more strict. As for mines being worked by foreigners, that is absolutely forbidden; and if foreigners embark capital in Mining Companies, the direction of such concerns rests in the native shareholders, who must be in the majority. Japanese law on this subject is even more strict, for by their regulations foreigners are not permitted to invest in mining concerns.
Page 345
...
Page 346
is not present in the original text, hence not included.