(This Document is the Property of His Britannic Majesty's Government.?
AFFAIRS OF CHINA.
CONFIDENTIAL.
[35293]
No. 1.
404
[October 25.]
SECTION 1.
Sir,
Peking Syndicate to Foreign Office.-(Received October 25.)
110, Cannon Street, London, October 24, 1907. I AM instructed by my Directors to acknowledge receipt of your letter of the 15th instant, stating that a despatch had been received from His Majesty's Minister in Peking, in which he expresses the opinion that, in order to reach a satisfactory solution of the present difficulties, two things are essential: (1) that the Syndicate should have an agent in Peking, whose sole duty it should be to keep the matter constantly before the attention of the Chinese authorities; (2) that the Syndicate must be prepared to modify the view it holds of the rights granted under the Agreement of 1898, and negotiate for a practical Working Agreement.
In reply I am to say that, as regards the first point, my Directors have already given instructions in the sense suggested by Sir John Jordan, viz., that Mr. Brown, the Syndicate's agent in China, should devote himself exclusively to the Shansi business until that question has been satisfactorily disposed of. They will, however, again cable to him to see that the Minister's wishes are complied with.
In regard to the second and more important requisite for a settlement, viz., that the Syndicate should modify the view it holds of the rights granted under the Concession, this proposition comes as a surprise to my Directors. They were unaware that the view they hold and have always held differs in any respect from the view entertained by His Majesty's Government. The wording of Article 1 of the Agreement of 1898 is so clear that, to their minds, there can be no possible doubt as to the meaning of the grant, viz., the sole or exclusive right to work minerals within certain specified areas for a term of sixty years. They are aware that attempts have recently been made to show that the Chinese text differs from the English text on the pint of sole right, but, in reply to this, it will be sufficient to quote from a letter addressed by Sir Ernest Satow to Mr. George Jamieson on the 4th September, 1905, in which his Excellency, the former Minister at Peking, says :--
"It appears clear from both the English and Chinese texts that the Syndicate possesses the sole right to mine within the districts specified."
But, while unable to alter their views as to the rights granted under the Concession, my Directors recognize that practical difficulties have arisen which may prove insurmountable at least for a long period, and that it is in the interest of the Syndicate that a settlement of some sort should be arrived at without delay. Two methods of settlement have presented themselves, either of which would be satisfactory to the Syndicate. The first is a co-operation between the Syndicate and the Shansi Bureau of Mines, whereby both would be jointly interested in the successful working of minerals and causes of friction removed. This offer was made as far back as July 1905, and was embodied in the Smelting Agreement signed by Mr. Jamieson on the 3rd of that month. So far neither the Central Government nor the provincial authorities have shown the least desire to take advantage of this offer, their attitude having been one of simple obstruction. The other alternative is for the Chinese Government to buy back the Concession at a price to be arranged; and if it is true, as appears probable, that the opposition to the Syndicate is a fixed determination on the part of the people of the province, or some considerable section of them, to keep the minerals for their own working, this seems the obvious course to take. My Directors, if approached, are prepared to name a price for the whole of their rights in Shansi, but they do not consider it their province to take the first step in the matter.
There is a third alternative which, though not so satisfactory, would be accepted by the Syndicate if nothing better can be arranged, and that is to permit native mining anywhere outside of certain selected areas of moderate extent but sufficient for the sixty years' working, coupled with safeguards against preferential treatment of native mines in matters of taxation, railway rates, &c.--in short, to put the Syndicate and native mines on equal terms. The details of such a possible compromise have been in the hands of Mr. Brown for some little time. They include, I am to add, compensation for
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