[This Document is the Property of His Britannic Majesty's Government.]
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# AFFAIRS OF CHINA.
**CONFIDENTIAL.**
[33681]
(No. 351.) Sir,
No. 1.
.40914
[October 6.]
RECE SECTION 6 NOV 06
Mr. Carnegie to Sir Edward Grey.-(Received October 6.)
Peking, August 21, 1906.
WITH reference to your despatch No. 193 of the 13th June and earlier correspondence, I have the honour to inclose copies of letters relating to the affairs of the Peking Syndicate in Shansi.
On the 12th January, 1906, Mr. George Brown, who had taken the place of Mr. G. Jamieson as Agent-General of the Syndicate, addressed a letter to Sir E. Satow, inclosing extracts from the native press, which tended to show that the antagonism to the Syndicate's operations was encouraged, if not actually fomented, by the provincial authorities of Shansi. Mr. Tong Shao-yi having previously told Sir Ernest that he had arranged an interview with Mr. Brown at the Wai-wu Pu to discuss the Syndicate's affairs, it was suggested to Mr. Brown, in a letter of the 16th January, that the Legation would be in a better position to decide on further action after this interview had taken place.
In a letter of the 5th February Mr. Brown reported the result of this interview, at which he submitted to Mr. Tong and other Representatives of the Wai-wu Pu and of the Shansi Notables, a clear statement of the Syndicate's position, and of the arguments against the proceedings of the Shansi authorities (Inclosure 1). This statement was discussed inconclusively, and Mr. Tong ended the sitting by saying that the Chinese Representatives wished to "consult again amongst themselves."
Shortly afterwards a new Governor was appointed to Shansi, and early in March he called on Sir E. Satow in Peking. He expressed an earnest desire to work in harmony with the Peking Syndicate and to observe Agreements; made a special point of the necessity of personal conferences with the Syndicate's representative; and asked Sir Ernest to give them letters to him. Sir Ernest thought the opportunity a good one for establishing good relations with the Shansi Government, and recommended Mr. Brown to see his Excellency in Peking without delay. This was done, and though little was accomplished beyond establishing amicable personal relations, his Excellency concurred with Mr. Brown in thinking it advisable that he should come to an understanding with the Wai-wu Pu on main principles before visiting Tai-yuan Fu.
Before renewing the discussion with the Wai-wu Pu, Mr. Brown felt it necessary to communicate with his Board in London, and the delay from March to July has been partly a matter of choice on his side, and partly due to the procrastination of the Wai-wu Pu. On the 27th July and the 9th August he had two conferences at the Wai-wu Pu with Mr. Tong and others, the details of which are reported in his letters of the 2nd and 13th August (the latter received to-day), copies of which are inclosed for your information.
The discussion has now, I think, been brought to a definite issue with much ability and patience by Mr. Brown, and if the permit which the Wai-wu Pu have promised to obtain from the Governor of Shansi is refused, or not issued within a reasonable time, or if it is saddled with conditions of an unreasonable character, the question of claim for compensation will, it seems to me, require immediate consideration. In my view the Syndicate will be justified in claiming compensation, but I am not at present in possession of sufficient information to judge whether the Directors' proposal of 200l. a-day is a reasonable amount. It does not appear to me judicious to make the necessary inquiries of the Syndicate at this stage, and I should consider that this point, as well as the date from which the claim for damages should commence, could very well remain in abeyance until the negotiations here have unmistakably failed and it is definitely settled that compensation should be demanded.
A further despatch will be addressed to you as soon as I hear again from Mr. Brown.
I have, &c. (Signed) LANCELOT D. CARNEGIE.
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