[This Document is the Property of His Britannic Majesty's Government.]
253
AFFAIRS OF CHINA.
CONFIDENTIAL.
[35561]
No. 1.
[October 22.]
SECTION
C O 129537
Ru: 27 OCT
(No. 370.) Sir,
Mr. Carnegie to Sir Edward Grey.-(Received October 22.)
Peking, September 5, 1906.
WITH reference to my despatch No. 335, Confidential, of the 8th ultimo, I have the honour to inform you that the negotiations in regard to the Canton-Kowloon Railway were commenced on the 23rd ultimo between Mr. J. O. P. Bland, the representative of the British and Chinese Corporation, and the following Chinese officials: the Grand Secretary, Na-t'ung, and his Excellency Tang Shao-yi, representing the Wai-wu Pu and Kung Taotai, with Mr. Hu, representing the Viceroy of Canton.
Further meetings took place on the 29th ultimo and the 3rd instant, and Mr. Bland has furnished me with Minutes of all these sittings, of which I have the honour to inclose copies for your information.
Mr. Bland came to see me this morning, said matters had come to a deadlock (a favourite expression of his) over the two questions of the issue price of the loan and the commission to the Corporation on material purchased, and appeared to think that Legation intervention was necessary.
From the Minutes it seems that Mr. Tang Shao-yi, who is the spokesman of the Chinese negotiators, proposes a fixed price of 961 for every 100l. issued, or over 4 points below the actual issue price; Mr. Bland refuses a fixed price, and requires over 5 points below issue price. As regards commission, Mr. Tang offers 5 per cent. on purchases of British materials only, with the understanding that British goods, after tender, shall have preference at equal prices; Mr. Bland wants 5 per cent. on all materials purchased outside of China. Those two points of difference, however important to the financial interests of the Corporation, did not appear to me to be so vital to British interests as Mr. Bland evidently thought them, and from my knowledge of Mr. Tang and his strong objection to Legation intervention in questions of bargaining I felt certain that representations from me at this early stage of the negotiations, in order to obtain a better issue price or more commission, would not expedite matters, and might only increase his obstinacy.
I did not share Mr. Bland's hopeless view of the negotiations. I encouraged him to persevere, to insist patiently, and not to recoil from repeating the same arguments over and over again. As I had the honour to mention in my telegram No. 165 of to-day to you, he cannot hope to conclude a matter of this kind with Chinese negotiators in a fortnight.
I have, &c.
(Signed) LANCELOT D. CARNEGIE.
Inclosure 1 in No. 1.
CANTON KOWLOON RAILWAY.
Minutes of First Meeting held at the Wai-wu Pu on Thursday, August 23, 1906, at 3 P.M.
Present:
Their Excellencies Na-t'ung and Tang Shao-yi, representing the Wai-wu Pu; Kung Taotai and Mr. Hu, representing his Excellency the Viceroy of Canton; Messrs. Chu Pao-fay and En Hou, Secretaries to the Wai-wu Pu; and
Mr. J. O. P. Bland, representing the British and Chinese Corporation (Limited).
IT was agreed that the negotiations should be conducted in Chinese. Mr. Bland requested that it be noted that the Corporation, recognizing the special nature of the case, due to the railway being partly in Chinese and partly in British territory, was
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