[This Document is the Property of His Britannic Majesty's Government.]
AFFAIRS OF CHINA.
CONFIDENTIAL.
40
C O.
[September 12.137616
15 00: 08
SECTION 1
Rec
[31718]
No. 1.
Sir,
Mr. W. Pritchard-Morgan to Sir Edward Grey.(Received September 12.)
1. Queen Victoria Street, London, September 10, 1908.
I HAVE the honour to respectfully lay before the Secretary of State for Foreign Affairs certain facts with regard to the Chinese Mining and Engineering Company, some of which there is reason to believe have not been disclosed to the Foreign Office.
The original negotiations consisted of an offer by Mr. Moreing to supply £100,000 extra working capital for the Kaiping collieries. Mr. Cartwright, a former Commissioner of Customs, being in the employment of Mr. Moreing and a personal friend of Mr. Detring, another Commissioner of Customs in Tien-tsin, met together in that town, and through their instrumentality Mr. Moreing was allowed to examine the mines. Mr. Detring was a Director of the Mines and a personal friend and the confidential adviser of his Excellency Chang Yen Mao, who was Director-General of the mines, which mines were the property of the Chinese Government, and Chang Yen Mao, having every confidence in his judgment, signed certain documents. The result was the borrowing of capital on debentures and the formation of a Company with a nominal capital of £1,000,000. The Chinese shareholders in the mine were given 375,000 shares, and the promoters of the Company allotted themselves 625,000 shares for effecting the mortgage. These 625,000 shares have been sold, and the majority of them are probably held by innocent holders who have paid full value for them.
On the 6th October, 1898, the Chinese Government addressed a most important note to all the Legations in Peking, stating that they would not be responsible for any contracts entered into with foreigners respecting loans on mines or mining transactions privately made, even though they may be officially signed and sealed, unless the whole of the terms were mutually agreed upon between the Tsung-li Yamên and the Minister representing the foreigner entering into the contract.
(N.B. In November 1898 the preliminary Szechuan contract was entered into with Mr. Pritchard-Morgan, and the whole of the negotiations with regard to the ratification by the Throne of the final contract were carried through by the British Legation in Peking in accordance with that note.)
In November 1898 Mr. Moreing entered into his preliminary contract with regard to the Kaiping collieries, subsequently transferred to the Chinese Mining and Engineering Company. The British Legation was not in any way informed of these preliminary negotiations, nor had they anything whatever to do with the matter, nor was the Chinese Government in any way cognizant of it. On the 30th July, 1900, Mr. Hoover, on behalf of Mr. Moreing, entered into an agreement with Mr. Detring respecting these collieries, which were then being worked by Chang Yen Mao. The Kaiping colliery is situated 150 miles from a Treaty port. The contract was never ratified by the Throne. Peking was under siege at this time. The contract was not made known either to the British Legation or to the Chinese authorities, and it was in violation of the note of the Chinese Government, and in violation of the well-known restriction imposed by our Treaty with China. It was never ratified by the Throne and consequently not binding upon anybody.
On the 19th February, 1901, another contract was entered into purporting to be a transfer of property known to be worth some millions of money. When the facts became known to the Chinese authorities, Chang Yen Mao was informed that he had no right whatever to have parted even with the area comprised in the Agreement of the 30th July, 1900, much less the larger area and other property, including the port of Chingwantow, and he thereupon came to England and commenced a lawsuit against the Chinese Mining and Engineering Company. The principal question before the Court was whether the Memorandum signed by Mr. Hoover that Chang Yen Mao should continue to be the Administrator of the mines was binding or not.
In delivering judgment, Mr. Justice Joyce held that Chang Yen Mao was to continue in his position as Director-General. Mr. Justice Joyce also held that the second deed of the 19th February, 1901...
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