This Document is the Property of His Britannic Majesty's Governmərt
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[Septem9.]
REG 8 OCT 07 SECTION 2.
2
departure. He regrets, therefore, that he cannot express concurrence in the terms of the proposed reply to M. Cambon. But he recognizes that the responsibility for any communication to the French Government must rest with the Secretary of State for Foreign Affairs, and he does not think that he can usefully pursue the matter further.
I am, &c.
(Signed)
CHINA RAILWAYS.
CONFIDENTIAL.
[30117]
H. W. JUST.
(No. 360.) Sir,
No. 1.-
Sir J. Jordan to Sir Edward Grey-(Received September 9.)
Peling, July 24, 1907. THE negotiations between his Excellency Liang Tun Yen and Mr. Cordes: respecting the Tien-tsin-Chinkiang Railway, the inception of which I had the honour to report in my despatch No. 264 of the 30th May, continued for nearly a month without producing any tangible result, Mr. Cordes, however, derived the impression from this exchange of views that a practical arrangement was an eventual possibility, and he deprecated further action on the part of my German colleague and myself until he had exhausted every effort to come to an understanding. Towards the end of June he proceeded, by the advice of Mr. Liang, to consult the Viceroy at Wuchang, and while there he had two interviews with his Excellency on the subject, notes of which I have the honour to transmit to you herewith. The Viceroy embodied under fifteen heads the points which appeared to him to be essential for the conclusion of a satisfactory Agreement. Apart from financial considerations, the principal of these stipulations were that the loan was not to exceed 5,000,0004, that the whole line was to be completed in three years, that the line was not to be pledged as security for the loan, and that the engineers were to be selected by, and to be under the control of, the Chinese authorities.
Mr. Cordes returned to Peking early in this month, and on the 12th instant had a The further interview with Mr. Liang, an account of which is likewise inclosed. conversation at this meeting related chiefly to the question of the security which was to be substituted for a mortgage of the line. Mr. Liang held that as the obligation was an Imperial one the security should partake of the same character, and suggested the Imperial Customs receipts--a suggestion which seems to be impracticable, having regard to the liabilities which already attach to the customs revenue.
The outcome of the negotiations between Mr. Liang and Mr. Cordes was the preparation of the accompanying draft Agreement, which is merely a rough outline of the terms that are considered likely to prove acceptable to the Viceroys Yuan and Chang.
It is of course understood that the Preliminary Agreement holds good until the Syndicates formally accept the substitution of this or some other arrangement. The fundamental feature of the present proposal (Article 9) relates to the security for the payment of the principal and interest of the loan, and this is a point which is receiving the careful attention of Messrs. Hillier and Cordes. The conclusions at which they have arrived are clearly stated in the extract from a private letter from Mr. Cordes of which a copy is inclosed, and appear to me to be necessitated by the circumstances and calculated to smooth the future course of railway negotiations. The words "with the Powers concerned" should, I think, be omitted, as it is scarcely fitting that private agents should enter into arrangements intended to bind their Governments, but Mr. Hillier's view that the good faith of the Chinese Government is the ultimate guarantee for such obligations is undoubtedly correct, although there may perhaps be difficulty in inducing the financial markets of London and Berlin to accept it."
Inclosure 1 in No. 1.
I have, &c. (Signed) J. N. JORDAN.
Notes on Mr. Cordes' Conferences with Chang Chih-tung at the Viceregal Yamên in Wuchang on July 1 and 2, 1907.
(Translation.)
Tien-tsin-Chinkiang Railway.
THE Viceroy expressed pleasure at the opportunity of a personal consultation, as Liang's telegram had not been very clear to him. His Excellency showed great
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