This Document is the Property of His Britannic Majesty's Government.]
CHINA RAILWAYS.
CONFIDENTIAL.
[41489]
No. 1.
[November 28.]
SECTION 3.
C.0
47047
¡REC"
Reef 23 DEC 08
Sir J. Jordan to Sir Edward Grey.-(Received November 28.)
(No. 445. Confidential.) Sir,
Peking, October 11, 1905, ON the 1st instant, Mr. Hillier arranged with the Board of Communications for a suitable addition to the joint letter, in order to fulfil the conditions mentioned in the postscript to my despatch No. 439 of the 1st instant, and a draft Agreement was initialled by the Board and the two banks on the 3rd instant. After it was definitely settled that a Decree should be issued and signature take place on the 8th instant, M. Casenave was warned from Paris that the political situation in the Balkans might cause some delay on his part, and when transmitting this warning to Mr. Liang Shih-yi, who was much disturbed by it, he managed to obtain a promise that the Chinese Government would take steps to make it known authoritatively to the existing bondholders through the European press that the proceeds of the new loan would be used to retire their bonds. However, his authorization to sign arrived in time, and the Agreement, copy of which is inclosed, was signed at the Board of Communications on the fixed date. I had the honour to inform you of this by my telegram No. 160 of the 8th instant. Last evening I was notified officially of the Decree authorizing this transaction in a note, translation of which is inclosed herewith.*
With reference to the concluding paragraph of my despatch No. 420 of the 16th ultimo, I have the honour to inclose copies of correspondence communicated to me confidentially by Mr. Hillier,* which would seem to throw some light on the circumstances connected with the change of terms proposed by the Banque de l'Indo-Chine in their telegram of the 8th ultimo.
I have, &c.
(Signed)
J. N. JORDAN,
(Translation.)
Inclosure in No. 1.
Loan Agreement, dated October 8, 1908.
THIS Agreement is made between the Board of Posts and Communications, Peking, acting for and on behalf of the Imperial Government of China, under the authority of an Imperial Edict, dated the 11th day of the 9th month of the 34th year of the Emperor Kuang-Hsü (being the 8th day of October, 1908), hereinafter called the Board, on the one part, and the Hong Kong and Shanghae Banking Corporation and the Banque de l'Indo-Chine, hereinafter called the contracting banks, of the other part.
1. The Imperial Chinese Government hereby authorizes the contracting banks, either by themselves or associated with others, to issue an Imperial Chinese Government gold loan, in one issue, of the amount of 5,000,000l.
Of the proceeds of this loan the Imperial Chinese Government will employ 80 per cent. in Europe to complete the redemption of certain railway loans; the balance of the proceeds, namely, 20 per cent., will be employed by the Board of Posts and Communications in productive works of public utility coming within the department and functions of that Board.
2. The term of the loan shall be thirty years, and the principal shall be repaid to the bondholders in twenty equal annual instalments of 250,000l. commencing with the eleventh year; but the Imperial Chinese Government, on giving a previous notice of six months to the contracting banks, shall have the right to redeem the whole loan, up to or increase the regular redemption by extra drawings, after the fifteenth year and the twenty-third year, inclusive, by the payment of a premium of 2½ per cent. upon the
* Not printed.
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