786
loan facilitated. At this juncture occurred the removal of H.E. Chao Erh-hsun from the Wuchang Viceroyalty and at an interview on 11th March H.E. stated that H.E. Chang Chih-tung desired to postpone negotiations until the new Viceroy, Sheng Kuei-lung, had taken over charge.
Subsequently, however (28 March), it was intimated to the Chinese Government by the Belgian Minister that so long as the outstanding bonds of the American China Development Company, held by Belgians, remained unredeemed, it was not open to H.E. Chang to negotiate for a British loan for the construction of the Hankow Canton railway; moreover, that in view of the letter given to the Société d'Etudes by H.E. Sheng on 26th July 1898 relative to an alleged preferential right to the Hankow Canton Railway, the Chinese Government were debarred from entering upon negotiations with British capitalists. This protest would appear to have caused H.E. Sheng to reconsider his intention to raise a foreign loan.
Referring to the Belgian protest it is to be observed that the alleged preferential right given by H.E. Sheng in the letter referred to, was specifically stated to be effective only (1) in case the American China Development Company's provisional contract "should not become a definitive one" — which it did — and (2) that in the agreement made between H.E. Chang and the American China Development Company on 26th August 1905 for repurchase of the Syndicate's construction rights, it is clearly stated that, notwithstanding the fact that bonds for $2,222,000 (gold) had been already issued by the syndicate and were then outstanding, the Chinese Government should re-enter absolutely upon all its rights and privileges in connection with this railway, admitting only a liability to pay the interest and principal of the said bonds whenever due. The American China Development Company's rights and powers were therefore definitely restored to China.