[This Document is the Property of His Britannic Majesty's Government.]
AFFAIRS OF CHINA.
CONFIDENTIAL,
75
[December 19-1-
SECTION 3.
2753
[42534]
Sir,
No. 1.
Chinese Central Railways, Limited, to Foreign Office.--(Received December 19.)
110, Cannon Street, London, December 18, 1906.
AM instructed to inclose, for your information, copy of the Memorandum of the Conference between members of my Board and of the Deutsch-Asiatische Bank recently held in Berlin, re Tien-tsin-Yang-tsze Railway, by which you will please observe that, having regard to the altered conditions in China since the Preliminary Agreement was signed in the year 1899, certain material alterations in the draft. Final Agreement have been mutually agreed to, the particulars of which are fully set out in the Memorandum of the Conference, and bave been cabled to our respective agents in China,
I am to add that you will kindly note that my Board and the Directors of the Deutsch-Asiatische Bank are agreed on all points referred to.
I bave, &c.
(Signed)
THOMAS GILBERT,
Secretary.
¿
Inclosure in No. 1.
Memorandum respecting Tien-tsin-Yang-tsze Railway.
MEMORANDUM of a Conference held at the Disconto Gesellschaft, Berlin, on the 1st December, 1906, between the German and English groups of the Chinese Central Railways, Limited. The former were represented by Directors of the-
Deutsche Bank, Deutsch-Asiatische Bank, Disconto Gesellschaft, Dresdner Bank, Bleichroders, Mendelssohn, &c.
The British representatives were Messrs. Carl Meyer and C. S. Addis.
Dr. Knappe (Chairman of the Deutsch-Asiatische Bank) occupied the chair, and, after welcoming the English Delegates, invited from them a statement of their views on the present position of the Tien-tsin-Yang-tsze negotiations.
It was pointed out by the representatives of the British group that the object of their visit was to advocate a change of policy, which they believed to be inevitable in face of the changes which had taken place since the Preliminary Agreement was signed some seven years ago. During that time there had sprung into existence a political party in China, known as the "Young China" party, whose avowed object was the exclusion of foreign control and the maintenance of the sovereign rights of China. The party was supported by a powerful native press, and were able to make their influence felt in a way which made it very difficult for the Chinese Government, however willing they might be to do so, to carry out the provisions of the original contract, in so far as this involved interference with any national undertaking. On the other hand, it would be admitted that a significant change external to China had taken place in the national credit. It was not too much to say that an Imperial loan could now be issued, either on the German or English markets, on the security of the Chinese Government's guarantee alone.
If these two facts--viz., the growth of a new political party in China and a new estimate of the credit of the Chinese Government abroad-be admitted, then we must expect the Chinese to follow them up to their logical conclusion, and we should be prepared to meet them.
We should be prepared, for instance, to admit that the railway is a Chinese undertaking with which, so long as the interest and sinking fund of the loan are duly met, we have no desire to interfere, and that the hypothecation of the line would only take effect in case of default.
[2263 -3]