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of foreign capital in this railway, and it was conceived and carried out entirely without aid from the West. To a considerable extent the line is the outcome of large-hearted patriotism on the part of the chief promoter, his Excellency Chang Yung, a Straits Settlements Chinese millionaire, who, after protracted negotiations with the Peking Government attended with great difficulties, succeeded in obtaining the Concession. The whole length of the line, about 30 miles, has been built by a firm of Japanese contractors at a cost of upwards of 3,000,000 dollars. The work of construction has occupied two years and a half, which is not rapid, considering that the whole of the distance is through flat, low-lying, and populous country where labour can be had in abundance. As the country through which the line passes is most fertile and densely populated, and the people are constantly coming and going between the villages and the Treaty port of Swatow, the enterprise is expected to pay handsomely in the near future, especially as the rates charged are most reasonable-1 dol. 25 c. for first class, and 50 c. for second class. The locomotives (50 tons each) and the rails are American manufactures, but the passenger cars and the hard-wood sleepers were imported from Japan.
The above line was completed about two months ago, and its opening attracted a great deal of attention in South China, Chinese officials from all parts of the Kuang Provinces being present to show their pride and satisfaction over the completion of such an important undertaking entirely with Chinese capital and Chinese labour, excepting a few Japanese.
A short line of railway intended to connect the district capital of Hsin-ning with the terminus of the Fatshan-Samshui branch line at Samshui, on the West River, is making rapid progress in construction. Already it has been completed to a place 16 miles from Hsin-ning city, and when entirely finished will make its terminus at a point opposite to Samshui, on the West River. Here a new mart is to be started, to be called Hsin-fou, or "New Town." The capital for building this line was subscribed by Chinese in America and Australia, and the whole work of construction is being carried out by them, some of whom have returned to China for the purpose. It will be interesting to missionaries and others who are interested in the religious welfare of the Chinese that among these Chinese railway capitalists there are quite a number who are earnest Christians, and therefore, when they drew up their plans for starting the "New Town," which is to be the terminus of their railway, they reserved a special plot of ground near the centre, where a large church and a school are to be built for the use of the Christian portion of the community. The streets are to be laid out similar to those in the cities and towns of the United States.
Inclosure 2 in No. 1.
Extract from the "South China Daily Journal" of January 30, 1907.
RAILWAY ENTERPRISE IN SOUTH CHINA,
TURNING to the remote south-western corner of Kuangtung, we find that the Chinese there are not asleep as to the importance of railway enterprise. The gentry and people of Lienchow, the chief city in the Pak-hoi district, is realizing the importance and necessity of making railway connections with other portions of the province and with the adjoining provinces. They are planning to make Lieachow the centre of an extensive network of railways in western Kuangtung, connected with projected lines in Kuangsi, which later on might be extended to Kueichow and Yunnan and possibly even Szechuen, with branch lines reaching out to the neighbouring mining and agricultural districts. The first line to be built is one connecting Lienchow with its port Pak-hoi, a distance of some 16 miles, and the cost is to be raised through the issue of shares at 5 dollars. As this line by itself is not expected to prove profitable commercially, it will be at once extended to Lingshan, and two other extensions will be made from Lienchow to Pok Pak and Kamchow. It is intended to employ Japanese engineers for these projected railways, as they are cheaper, and Chinese engineers are not available at present.
While the people of Kuantung are thus active in prosecuting railway enterprise, its neighbouring province, Fukien, has not been idle. His Excellency Chen Pao-sen, Director-General of Railways in the Province of Fukien, has met with remarkable success in raising capital from his fellow-provincials in Singapore and other places. He has just
wired to the Yuchuanpu (Ministry of Posts and Communications) at Peking stating that the Chinese residing in the Straits Settlements and Java have subscribed to shares amounting to 7,000,000 taels, and that the building of railways in Fukien Province will be commenced forthwith. His Excellency has been making a tour among his com- Catriots and fellow-provincials in Malaya since the summer of last year, with the result he has just announced to the Yuchuanpu. He first went to Singapore, for the purpose of arousing the interest of Chinese there in railway enterprise in Fukien Province. Having obtained subscriptions to the amount of nearly a million there, he next went to Penang. From Penang he went to Rangoon, and thence returned to Singapore, where be collected further subscriptions to his railway shares. From Singapore he went over to Java, and, having terminated his perambulating mission at this place, he returned to China vià Singapore.
It is the intention of the Directors of the Fukien Railway Company to form a Joint Stock Company, with the object of linking up their railway system with those already constructed or projected in the Provinces of Kuantung, Anhui, and Chekiang. This Company will not be controlled by the Government, but by a Board of Directors. The first lines so be constructed at first are between three districts-Cheangehou, Chuan- chou, and Hochou.
Inclosure 3 in No. 1.
Memorandum respecting the Hankou-Canton Railway.
A GREAT deal of friction was reported in June 1906 to exist at Canton between the To the merchants and the Viceroy over the control of the Yueh-Han Railway. Viceroy's demand for money for the railway the merchants' guilds replied with a demand for popular control of the line. The Viceroy's opposition to this led to stormy meetings, where the merchants denounced him and his officials. However, subscriptions from Cantonese in China and abroad poured into the fund started by the guilds, and by the end of June 1906 some 2,600,000 taels had been guaranteed. The Viceroy was then reported to have agreed to the control of the Railway by the merchants, and also to the Directors they appointed.
On the 19th January, 1907, His Majesty's Consul-General at Canton reported that After the affairs of the Railway Company were in a more unsatisfactory state than ever, the friction between the Viceroy and the merchants over the control of the affairs of the Company, matters were ostensibly patched up and a directorate appointed nominally by the shareholders as a body, but in reality by the nine charitable institutions of the provincial capital and the seventy-two guilds with which they are intimately connected, The number of directors was thirteen, and these elected a President. The arrival of the new Viceroy was the signal for an inquiry into the affairs and accounts of the Railway Company. Rumour had it that the total of 6,000,000 dollars subscribed in Canton had been employed as follows:----
3,000,000 dollars for the redemption of the Concession to the American China Development Company;
1,000,000 dollars invested in local banks and pawnshops;
2,000,000 dollars loaned to various shops, the property of intimate friends of the directors of the charitable institutions, many of whom were said to be on the verge of failure, rendering it problematic whether the funds thus invested could in many cases be recovered.
It should be added that the Hong Kong shareholders, representing 2,000,000 dollars, had refused to remit this sum to Canton, their required guarantee that it should be invested in local foreign banks not being obtainable.
The new Viceroy, having decided that the affairs of the Company needed scrutiny, and that the amount of work involved necessitated a special office, instituted a Govern- ment Railway Bureau, and the directorate was called upon to submit to an investigation of their accounts. This led to spirited protests and lively meetings. The directorate professed itself outraged at the idea of any interference on the part of the shareholders- as a body, as represented by the four members of the Committee of Investigation, two of whom were Hong Kong merchants, and they took up the stand that, as the Hong
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