This Document is the Property of His Britannic Majesty's Government.
# CHINA RAILWAYS
**CONFIDENTIAL**
[27707]
No. 1.
442
32381
[August 10
08
## SECTION 1.
Sir J. Jordan to Sir Edward Grey.~(Received August 10.)
(No. 281.) Sir,
Peking, June 23, 1908. WITH reference to my despatch No. 270 of the 11th instant, I have the honour to inclose copies of correspondence received from His Majesty's Consul-General at Hankow, which clearly shows that the new Viceroy of Hankow is fully aware of our preferential rights as regards the financing of both the Hankow-Canton and Hankow-Szechuan Railways, and also disposes satisfactorily of the statement made to me by M. Bapst that the interest on the unredeemed gold bonds of the American-China Development Company has not been regularly paid.
I have, &c.
(Signed) J. N. JORDAN.
### Inclosure 1 in No. 1.
R
(No. 34) Sir,
Consul-General Fraser to Sir J. Jordan.
Hankow, June 8, 1908. I HAVE the honour to report that upon receipt of your despatch No. 15 of the 28th May, I forwarded to his Excellency the Viceroy Ch'en copies of the Viceroy Chang's despatch of the 9th September, 1905, conferring on Great Britain preference in case any foreign loan should thereafter be raised by China for the construction of the Hankow-Canton main line or any other railway in Hupei or Hunan, as well as of the correspondence between His Britannic Majesty's Legation and the Wai-wu Pu confirming to Britain and the United States of America the first option of lending money to build the line hence to Szechuan.
As the Agreement under which China bought out the American holders of the Concession for the building of the Hankow-Canton Railway (inclosed in my despatch of the 21st April to the Governor of Hong Kong, of which copy was forwarded in my despatch No. 26 of the 22nd April) contains an explicit undertaking by China to pay interest and principal of the Chinese Government loan bonds issued under the China Development Company's Agreements of 1898 and 1900, the assertion of the Belgian Minister that no interest had since 1905 been paid by China on these bonds appeared so improbable that I added to my note an inquiry whether the stipulation which I quoted had really been ignored, and gave as my reason for asking the question the attempt of Belgium on the strength of this alleged failure to pay interest, as well as of his Excellency Sheng's letter to the Belgian Company of the 26th June, 1898, to deprive Britain of the preferential rights conceded by his Excellency Chang Chih-tung.
On the 6th instant the Wuchang Viceroy sent me the inclosed frank reply, which would seem conclusively to rebut the Belgian contentions, and the gist of which I had the honour to report to you by telegraph so soon as I received it.
I have, &c. (Signed) E. H. FRASER
### Inclosure 2 in No. 1.
Your Excellency,
Consul-General Fraser to Viceroy Ch'en.
Hankow, June 4, 1908. When in 1905 his Excellency the Grand Secretary Chang, at that time Viceroy of the Hukuang Provinces, employed me as intermediary in raising from the Government of Hong Kong a loan to redeem the Hankow-Canton Railway Concession from the American-China Development Company, his Excellency Chang of his own free-will
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