1
[This Document is the Property of His Britannic Majesty's Government.
C.O.
14492
651
CHINA RAILWAYS,
CONFIDENTIAL.
[8873]
March 18.
SECTION 1.24 APR 07
[AMENDED COPY.]
No. 1.
Papers communicated by the British and Chinese Corporation, March 18.)
(1.)
Gentlemen,
Mr. Bland to the British and Chinese Corporation.
Peking, December 18, 1906. ON the 11th instant 1 met M. Casenave, as previously agreed, at Hankow, with the intention of arranging with him for au interview with the Viceroy Chang Chih-tung, to discuss the financing of the Hankow-Canton Railway and other matters. Upon my arrival I learned that the Belgian Minister had seen the Viceroy a few days before and had proposed a loan for the same purpose, but had been informed that in the event of foreign capital being required the Viceroy was pledged to apply to British financiers. I also learned that M. Casenave had applied, by telegram from Peking, for an interview with the Viceroy, through the French Consul-General (M. de la Batie) who, in forwarding the application, had erroneously represented M. Casenave as acting for the Banque de l'Indo-Chine. The Consul's letter added that I would accompany M. Casenave at this interview. Under these circumstances it was inevitable that the Viceroy, pledged to deal only with British capitalists, should decline to discuss matters with the representative of the French bank. After ascertaining the position of affairs and consulting His Majesty's Consul-General (Mr. P. Fraser), I wrote to the Viceroy asking for an interview (which was granted) and, with M. Casenave's approval, drew up a Memorandum explaining that both he and myself represented in this instance the British and Chinese Corporation, which desired to renew its negotiations for the financing and construction of the Hankow-Canton Railway. I said that the French Consul's letter had been written under a misapprehension, and explained the Corporation's relations with the French banks interested in the promotion of this and other enterprises for which the British and Chinese Corporation would be directly responsible. This Memorandum was banded to the Viceroy by Mr. Fraser at our interview. (M. Casenave was precluded by illness from attending this meeting.)
The Board will no doubt recognize that the Viceroy, had he been so disposed, might have availed himself of the error committed by the French Consul to refuse to discuss matters with the Corporation. The opportunity appears to me, therefore, one which we should use, on grounds of general expediency and policy, to suggest to the French group the advisability of eliminating for the future from business in which the British executive control is recognized all intervention by French officials. I have personally represented to M. Casenave the desirability of his suppressing in these aegotiations his semi-official status, and appearing simply as the joint, representative of a British Corporation with which French interests are identified, and I have laid stress on the fact that the less official intervention--whether British or French-is brought to bear on our business with the Chinese, the better our prospects of success.
In these opinions M. Casenave concurs, and it therefore only remains for me to suggest that the Board should convey a similar intimation to the French group without referring particularly to the present contretemps or raising questions of a contentious nature, so that for the future it may be understood that our negotiations shall in no case form the subject of representations from French officials. From the nature of the agreement between the Corporation and the French group it must be evident that, in the event of diplomatic intervention being necessary, it should come from the British and not from the French Representatives; and, in view of the special conditions attaching to the Hankow-Canton Railway, recognition of this condition is essential.
At the interview with the Viceroy on the 12th instant, whereat Mr. Fraser was present, I informed his Excellency of the intimation which had been verbally made
[2421 s-1]