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becoming a purely Government concern it would be most inadvisable for this Government to allow a portion of the system to traverse a British Colony and a Chinese official to be stationed in Hong Kong to control and supervise them. Even under the former conditions this Government has on more than one occasion had cause to take notice of the tendency on the part of the person in charge to interfere in matters outside his duties as Telegraph Supervisor.
Although the Telegraph Company claimed the land upon which their office is located before the Land Court, and their claim was allowed, no permission has ever been granted to the Company to erect and maintain its telegraph poles on Crown land, and this Government would be within its rights in summarily ordering the removal of the poles. With a view, however, to preserving our friendly relations, and to avoiding the appearance of arbitrary action, I have the honour to request that your Lordship will move the Secretary of State for Foreign Affairs to request His Majesty's Minister at Peking to take such diplomatic action as he may deem to be advisable with a view to removing the terminal office of the Chinese Telegraphs to the frontier. I shall then be glad to discuss any arrangements which the Chinese Government may desire to put forward for the working of the section in this Colony, whether by this Government or by the Eastern Extension Telegraph Company or otherwise.
6. I am transmitting a copy of this despatch, and of Sir M. Nathan's despatch of the 10th October, 1904, to His Majesty's Minister at Peking.
(Confidential.) Sir,
I have, &c.
(Signed)
Inclosure 2 in No. 1.
F. D. LUGARD,
Acting Consul-General Fox to Governor Sir F. Lugard.
Canton, August 18, 1908. IN reply to your Excellency's despatch of the 13th instant on the subject of the redemption by the Chinese Government of the shares in the Chinese Telegraph Company, I have the honour to inform your Excellency, on the authority of the Superintendent of Telegraphs at Canton, that the Board of Communication in Peking have been instructed to take over the administration of telegraphs throughout the Chinese Empire. With this end in view the Board have for some months past been in negotiation with the shareholders in the present Company for the purchase of their shares, but as the Board is only offering 170 dollars a share for shares which are said to be worth between 280 dollars and 300 dollars, a majority of shareholders have so far refused to part with their shares. As the Government seem determined to acquire these shares by compulsory purchase, the shareholders will no doubt be forced to give way sooner or later, and, as an inducement to surrender their shares without further delay, have, I understand, been notified that the offer of 170 dollars per share will only remain open for another two months, when it will be reduced to 150 dollars, and later on to 100 dollars only.
The Central Government's action in this matter, which is, I am informed, deeply resented by a large number of shareholders in Shanghae and Canton, is to a certain extent justified by the fact that the Chinese Telegraph Company has never been a bona fide commercial undertaking, but has always been, both as regards finances and administration, under Government control.
I have, &c.
Sir,
(Signed)
Inclosure 3 in No. 1.
Governor Sir M. Nathan to Mr. Lyttelton.
HARRY F. FOX.
Government House, Hong Kong, October 10, 1904.
I HAVE the honour to bring the following circumstances to your notice:
2. Previous to the leasing of the new territories to Great Britain there existed a house on the border between this Colony and Chinese territory at Kowloon in which the wires from Canton of what was then known as the Chinese Government Telegraph Administration met and were connected with those of the Eastern Extension Telegraph Company from Hong Kong.
3. Upon the incorporation of the new territories in the Colony of Hong Kong in 1899, the question of the maintenance in British territory of the length of telegraph line from the new frontier to the old boundary was raised, and Sir Henry Blake suggested that the local Manager of the Eastern Extension Telegraph Company should approach the Director-General of the Imperial Chinese Telegraphs with a view to the Eastern Extension Telegraph Company acquiring the length of line in question.
4. This was done, and in June 1899 the Manager wrote to the effect that Shông Taotai, Director-General of the Imperial Chinese Telegraph Administration, had replied that in the first place the line in question belonged to private individuals, and secondly that his Administration had received no instructions from the Chinese Government to terminate the line at the new frontier.
5. The matter was then allowed to drop till last year, when Sir Henry Blake directed that the Chinese authorities should be addressed on the subject of the removal to the frontier of the terminal station of the Chinese telegraph line. A letter was accordingly written to His Majesty's Consul-General at Shanghae, who was asked to notify the Director-General of the Imperial Chinese Telegraph Administration that the removal should be effected within a period of six months.
6. In reply to a communication from Sir Pelham Warren in that sense, the Director-General of Telegraphs wrote a letter (see Inclosure 4) in which he claimed that the telegraph station, being situated in the new territories, and not in Hong Kong, was in the same category as the telegraph lines in Shanghae, Wei-hai Wei, and other places, and explained that, although the Chinese telegraphs are controlled by officials, the Chinese Government permits private individuals to hold shares in the undertaking, and that therefore the lines are the property of private individuals. The Director-General begged that the telegraph house and lines might therefore be allowed to remain in the leased territory.
7. In answer to this communication a letter (see Inclosure 5) was addressed to the Consul-General at Shanghae, in which it was pointed out that the new territories are in every respect British territory, and the request for removal of the house and lines was repeated.
In due course a reply was received from the Director-General (see Inclosure 6), in which the contention that the telegraph lines and poles are private property was repeated. The Director-General added that he had called a meeting of shareholders, and that they had expressed the opinion that compliance with the request of the Hong Kong Government was impossible.
8. To this communication the Hong Kong Government replied (see Inclosure 7) that as the entire control of the Chinese telegraphs had been recently taken over by the Chinese Government it could not regard the Administration as a purely commercial enterprise. It was also pointed out that the name (printed in large roman type on the envelope supplied by the Administration) by which the Administration is known, viz., the Imperial Chinese Telegraph Administration, supported that view.
9. To this letter two Directors of the Chinese Telegraph Administration replied through His Majesty's Consul-General at Shanghae (see Inclosure 8), pointing out that in the Chinese name of the Administration the word "Imperial" did not appear, and reiterating that since the capital of the Administration was subscribed and still held by private individuals the Administration must be regarded as a private commercial undertaking, although the Administration had been handed over to the Chinese Government by Edict in 1902 and Chinese officials had been appointed "to supervise, watch over, and support its interests." The letter concluded with a request that the removal of the lines might be delayed pending arrangement of the matter.
10. It is, I believe, the fact that the shares in the Administration or Company are held by private individuals. It is also beyond doubt that the control is in the hands of Chinese officials. The Director-General is an official of high rank, and the Superintendent in this Colony holds the official rank of an Expectant Taotai or Intendant of Circuit. This gentleman has been questioned by the Registrar-General, and he admits that the management of the Administration is vested in the Chinese Government. He claimed the site of the telegraph station at Sham-shui-po before the Land Court on behalf of the Imperial Chinese Telegraph Administration, and the Land Court has allowed the claim.