the railway being much higher than those paid by water-borne traffic. On the 26th December I received the Yu Chuan Pu's reply, intimating the establishment of the new Railway Department of that Board and the appointment of his Excellency Liang, who was empowered to deal with all questions arising out of the Shanghae-Nanking Railway's administration. Since that date I have had two interviews with his Excellency on the subject of li-kin. He states that the question is receiving his most serious attention, and that it is being actively discussed with the provincial authorities concerned, but that no definite arrangements are likely to be made until after introduction of the proposed new system of administration (i.e., delegation of the Board of Commissioners' powers to a Chinese Managing Director). He appears to recognize the serious responsibility which attaches to the Central Government in respect of this railway's finances, as well as its self-evident interest in its prosperity; nevertheless no steps have been taken to remedy a condition of affairs which shows absence of initiative and disregard of formal engagements on the part of the Chinese Government. As one-fifth of the profits of the line are the property of the profit-certificate holders, acquiescence by the Corporation in the present state of affairs would be a breach of trust; but so long as the Chinese Government (to whom the remainder of profits will accrue) does not see fit to apply the remedial measures, the Corporation's intervention and protests produce no appreciable result; so far as those remedial measures are concerned, the appointment of his Excellency Liang to be Director-General has effected no change in the situation.
I append copy of a letter from the Corporation's Joint Agents at Shanghae, dated the 21st instant, the substance of which has been communicated to his Excellency Liang Shih-yi. The urgency of the question has been repeatedly impressed upon the Yu Chuan Pu during the past year, but that Board, as at present constituted, is notoriously inefficient.
Peking, January 29, 1908.
(Signed)
J. O. P. BLAND.
[This Document is the Property of His Britannic Majesty's Government]
CHINA RAILWAYS.
[February 28.]
163
C.0.
10573
SECTION 25 MAR 08)
CONFIDENTIAL.
[6874]
No. 1.
Sir J. Jordan to Sir Edward Grey.(Received February 28.)
(No. 58.) Sir,
Peking, February 3, 1908. I described in my despatch No. 33 of the 21st January the position then reached in the Hangchow-Soochow-Ningpo Railway question.
Mr. Bland held a meeting with the three officials deputed to bring these negotiations to a conclusion on the 24th January, when suggestions were made to him materially modifying the terms granted by China in the Tien-tsin-Puk'ou Agreement.
These modifications involved the financing of a loan by the Corporation to the Board of Communications under Imperial guarantee, and with no provincial revenue as collateral security. In place of provincial revenues the surplus earnings of other Government railways were offered as security. The Engineer-in-chief was to be entitled simply "Engineer," and he was to be appointed irrespective of the Corporation's approval. The line of railway was to be changed so as to run from Shanghae to Hangchow.
Mr. Bland gave them no encouragement in thinking that such radical changes could be effected, yet at the ensuing meeting on the 28th January, they went further and wanted to eliminate the clause regarding the Auditor, contending that, as the railway was to be purely Chinese, the accounts would be kept in the Chinese language.
Mr. Bland informed them that he saw no prospect of arriving at a settlement along these lines, but agreed to receive from them a written draft embodying their proposals.
These proved so divergent from the terms of the Tien-tsin P'uk'ou Agreement that Mr. Bland, with my approval, has informed the Wai-wu Pu in the letter copy of which is inclosed that no such modifications can be accepted.
The New Year holidays are now stopping all but urgent business, so no development can be anticipated for some days. The interval will doubtless not be wasted by the provincial leaders in trying to revive public feeling against the loan.
As regards the attempted boycott at Shanghae, I received on the 23rd January from His Majesty's Consul-General a despatch, copy of which is inclosed, describing
But indications are not wanting in the native press that the spirit of opposition is not extinguished, as will be seen from the extracts included in the monthly summary.
I have, &c.
(Signed) J. N. JORDAN.
Inclosure in No. 1.
Mr. Bland to Wai-wu Pu.
My dear Mr. En.
Peking, February 1, 1908. I received yesterday evening from the Wai-wu Pu a draft of the proposed Loan Agreement for the Soochow-Hangchow-Ningpo Railway, and have carefully examined the same.
Will you be so good as to inform their Excellencies that the conditions proposed in this draft are incompatible with the issue of the loan and contrary to the assurances given by the Chinese Government in regard to this Agreement. I regret, therefore, that I am precluded from referring them to the Corporation's Directors. No such modification of the text of the Tien-tsin-Yang-tsze Railway Loan Agreement was suggested or discussed at my recent informal interviews with the Wai-wu Pu.
I am informing His Majesty's Minister accordingly.
Believe me, &c.
(Signed)
J. O. P. BLAND.
* Not printed.
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