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to build the Ch'uan-Han line. His Excellency's despatch gives us first option only, the 1903 undertaking (communicated to his Excellency on the 12th September, 1905) goes farther.
I am to add that His Britannic Majesty's Government will insist on both these promises being adhered to fully in case of funds other than Chinese being raised directly or indirectly, overtly or covertly, for the building of the Hankow-Canton, Hankow-Szechuen, or any other line in Hupei or Hunan.
I am, &c.
(Signed)
P.S.-I am still waiting for Ross's money.
E. H. FRASER.
(Mr. Hayashi) had wired to Mr. Midzuno requesting him to assure the Viceroy that it was the intention of the Japanese to conform strictly to the British Agreement within the limits it covered.
E. G. HILLIER.
Peking, May 24, 1907.
(Signed)
Inclosure 6 in No. 1.
Inclosure 5 in No. 1.
Memorandum of interview between Mr. Hillier and Mr. Hayashi, dated May 24, 1907.
I ASKED his Excellency if he was in a position to give me precise information with regard to the position of his people in the Hankow negotiations. At present it appeared so confused that I found my own position in the matter very difficult.
His Excellency said that he was very glad I had come to see him, and to have the opportunity of explaining to me what had passed. He described to me how the Viceroy had sent for Mr. Odagiri some two months ago, and discussed with him proposals for a loan of 2,000,000l. to 3,000,0007,, nominally for industrial purposes, but the Viceroy appeared to have made no secret of the fact that it was intended to apply the funds to railway construction. The security offered was, amongst other things, the "Shan Hou Chu" (?), and there was to be no Imperial guarantee. Mr. Odagiri asked if the Viceroy would have any objection. to his inviting the co-operation of British capitalists, which Mr. Hayashi pointed out to me was a proof of Mr. Odagiri's entirely honourable intentions towards the latter. The Viceroy raised no objection, and proposals for the loan were accordingly laid by the Specie Bank in London before the Hong Kong and Shanghae Bank and Parr's Bank. At that time Mr. Odagiri was entirely unaware of any existing understanding between the Viceroy and the British Government with regard to railways in his province, nor was he aware of the telegram communicated to the Hong Kong and Shanghae Bank by the Specie Bank in London aunouncing their withdrawal from the negotiations. (This is not strictly in accordance with what Mr. Odagiri said to me, which was that the Specie Bank had withdrawn without consulting him, that he had wired to them protesting that their withdrawal was now cancelled, and that he would continue to negotiate with the Viceroy.)
Mr. Hayashi had now, he said, received from Sir John Jordan the text of the understanding between Great Britain and China, and he had wired to Mr. Odagiri "suggesting" that Mr. Odagiri should for the future act in accordance with these undertakings. I asked Mr. Hayashi if he could see his way to request Mr. Odagiri to inform the Viceroy definitely of his withdrawal. Mr. Hayashi did not give me a very direct answer to this, but his language seemed to imply that, since the invitation to negotiate had come from the Viceroy, this might be rather difficult. He touched on the subject of participation, which he thought very desirable. As regards the French, he said Mr. Takahashi had, when in Europe, been approached by the French Minister of Finance with a proposal that the Japanese should co-operate with their people in railway matters in China; and he, Mr. flayashi, had received instructions from Tôkið to support this combination. I said I was unaware of the arrangement with the French, but as regards the British, in view of the friendly relations existing between the Specie Bank and ourselves, I had no doubt that the banks would be prepared to consider the application for participation to any reasonable extent, but this was naturally a point which would have to be settled between the banks at home, with which Mr. Hayashi' concurred. I pointed out at the same time that, until the Viceroy was satisfied that the Japanese had definitely withdrawn, there was little chance of our making headway with the negotiations, or of being in a position to offer participation to anybody. The' present complications had evidently made the Viceroy timid, and it might take some little time and patience to reassure him.
Mr. Hayashi informed me towards the end of our interview that Mr. Odagiri was leaving Hankow, and would pay his farewell visit to the Viceroy to-morrow. He
Your Excellency,
Mr. Takahashi to M. Caillaux.
November 22, 1906. IN consequence of the conversation I had with your Excellency on the 16th instant, I cabled to Tokio on the same day your Excellency's observations in regard to the Railway Concessions in Southern China, which your Excellency desired to be communicated to the Japanese Government through my channel. I have just received a reply from the Government saying that the Imperial Japanese Government has instructed Mr. Hayashi, Japanese Minister in Peking, to confer with the French and English Ministers there, and to give due support with reference to the measures to be taken toward the Chinese Government, although the subject of participation by Japanese bankers in the matter is not yet decided upon.
It is my pleasant duty and a source of great satisfaction to me to communicate the above to your Excellency.
(Signed)
KOUKIYO TAKAHASHI,
Special Financial Commissioner of the Imperial
Japanese Government.
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