4
report of the Allied Commanders was not forwarded to the Chinese Government, and that the stipulation to which you refer is consequently not binding upon them.
All that the Chinese Government appear to have agreed to in this connection As that no Chinese troops should be stationed within 6 miles of the city of Tien-tsio, and that the arrangement made previous to the signature of the Protocol, under whiel the jurisdiction of the Commanders of the posts along the line of communications was to extend to a distance of 2 miles on either side of the railway, should be maintained as long as the line of posts specified in Article 9 of the Protocol continued to be occupied.
As many of the posts mentioned in the foregoing Article have been evacuated, there being no foreign troops at all between this and Tien-tsin, the stipulation would seem to have largely fallen into abeyance, and we could scarcely, I conceive, object to the Chinese taking reasonable measures for safeguarding an important line of com- munications for whose protection we no longer exercise the right conceded by the Protocol.
But it would, I think, be advisable that the Intelligence Department should continue to keep a watch upon these stations, and furnish periodical reports as to any change in the strength and composition of the Chinese troops, which at present appear to be of a poor class.
With regard to paragraph 7 of your despatch, I am strongly of opinion that it is very desirable to retain a small body of British troops at Tongshan. The attitude of the Viceroy towards the Chinese Engineering and Mining Company has lately become far from friendly, and, under instructions from His Majesty's Principal Secretary of State, I recently notified his Excellency that the confiscation of the Company's property could not be allowed.
The fact that we had left a post there while withdrawing from other places would indicate to the Viceroy that we attached especial importance to Tongshan, and if necessary I am prepared to submit this suggestion for the approval of His Majesty's Government by telegraph.
I have, &c. (Signed) J. N. JORDAN.
This Document is the Property of His Britannic Majesty's Government.!
AFFAIRS OF CHINA.
CONFIDENTIAL.
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353
[October 3.38147
SECTIOFRE
1R$ 29 OCT 07.
No. 1.
Sir J. Jordan to Sir Edward Grey.—(Received October 5.)
(No. 396.) Sir,
Peking, August 20, 1907. WITH reference to my despatch No. 353 of the 22nd July, respecting the attitude of the Viceroy of Chihli towards the mining rights of the Chinese Engineering and Mining Company (Limited), I have the honour to inclose copies of recent corre- spondence which has passed between Major Nathan, the representative of the Limited Company, and the Tien-tsin Customs Taotai, Mr. M. T. Liang.
In his letter to Mr. Liang of the 4th July, Major Nathan proposes a scheme for converting the present capital of the Mining Company into a loan made to the Chinese authorities, while the management of the undertaking would be under a Board of Directors to be elected by the shareholders, the Viceroy or his deputy heing, ex officio, a member of the Board and President of the Company. This Board would, nevertheless, have its head-quarters in London, but a local Board could be set up in China to control the local affairs of the Company, under the general control of the London Board. The foreign Manager would have a Chinese colleague appointed by the Viceroy, whose powers would be restricted till the loan was redeemed. The redemption of the loan, Major Nathan suggested, should take place after thirty years, the share capital to receive a bonus of 50 per cent.
Mr. Liang's reply to these proposals, under cover of his letter of the 7th July, is couched in the vaguest terms, but appears to contemplate the conversion of the Company into a Chinese Government undertaking by transforming its shares into the capital of "The Kaiping Mining Bureau," which the Company, i.e., the foreign share- holders, would, nevertheless, continue to hold for thirty years. At the same time, he proposes that the Limited Company should liquidate its obligations to the Chinese Government by issuing to them 400,000 shares of 17. each, a proportion of which would be devoted towards forming a sinking fund for the redemption of the shares held by "the Company" after thirty years.
During this period he proposes that the undertaking should be managed by the Viceroy, as Director-General, with two Chinese Directors and two appointed by "the Company."
As I wished to prevent the Viceroy from trying to bring pressure to bear on the Limited Company by any open act of aggression while the question of an adjustment was under consideration, I sent word to his Excellency on the 1st August that I desired to convey a message to him regarding the Mining Company's case, and that I would send Mr. Mayers, the Acting Chinese Secretary, to Tien-tsin for this purpose. Viceroy replied that as he was on sick leave he could not receive visitors, but would be glad if the message could be delivered to him through the Customs Taotai.
The
I accordingly sent Mr. Mayers to Tien-tsin on the 15th August, when he informed the Customs Taotai on my behalf, that I was prepared to use my best endeavours towards effecting a reasonable and amicable adjustment of the existing difficulties, and was ready to depute Sir Alexander Hosie to meet with the Viceroy's delegate and the Company's representative with the object of arranging a settlement acceptable to both parties. In the meantime, I desired to strongly impress on his Excellency the inadvisability of resorting to any overt net of hostility towards the Limited Company- The establishment of the Lanchow Mining Company under the Viceroy's protection showed an intent to force the hand of the Limited Company, and if this Chinese Company was allowed to start active mining operations on lands over which the Limited Company claimed mining rights, at a time when a settlement was under consideration, such action on the part of the Viceroy would be vigorously opposed by us.
In a letter dated the 16th August, the Customs Taotai stated that he had conveyed my message to the Viceroy, who was quite prepared to accept Sir Alexander Hosie's mediation in the matter.
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