}
This is Hupei's duty, for two reasons
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1. It will supply public development expenses.
The necessary outlay of the Province of Hupei on the important undertakings of military training and education has been very heavy, and resulted in extreme financial The stringency, and future provision for these objects will be increasingly difficult. suggestion for a loan for the construction of the Hupei section of the Szechuan-Hankow line was first mooted by myself when I was in Hupei, and I engaged a large staff of foreign engineering experts and deputed many officers, the expenses of whose three surveys were very heavy. All my worry and labour were simply in the interests of Hupei.
2. It will make for the common good of merchants and people.
Railways in Kiangsu, Chekiang, and Kuangtung have led to wrangling between the upper and lower classes, and their disputes have been carried to most unreasonable limits. At the time when I was in Hupei and making arrangements concerning railway matters, I never invited either the upper or lower classes to take part, so as to centralize control and avoid contentions. Both upper and lower classes in Hupei are law-abiding citizens; yet it would have been unfair to take advantage of their complaisance to lay on them undue burdens. I understand that the Board of Communications intend that, in the future, railways under commercial management in all the provinces will be resumed by the officials; but there is as yet uncertainty as to the date when and the terms on which this will be carried out. Under my scheme the capital of this section of the Szechuau-Hankow Railway, no matter what the present proportion of funds provided by the officials and by the merchants is, either twenty-five or thirty years after the completion of the line, will be held, as in the case of the Tientsin-P'u-K'ou line, by officials and merchants in the perpetual ratio of 50 per cent. each.
The Board of Communications, however, are anxious to get the control of the line into their own hands; I have ventured to object, and the discussion is now going on. For if the control reverts to the Board, the profits of the undertaking are entirely rested in them, and Hupei does not benefit a jot financially. Again, a loan made by the Board and repayable by the Board does no good to the mercantile community of the province. These two are the chief considerations for my objections to management by the Board. I do not say that the management should be left to my control; it should, I maintain, be under the control of the province itself.
Supposing the sanction of the Board can be procured to provincial management by Hupei, that management should be in the hands of Viceroy Chên; it would be impossible for me to undertake it. Even supposing all the officials of Hupei and Szechuan were to request me to undertake the management of the Szechuan section of the Szechuan-Hankow Railway, it would be a great mistake.
Formerly, when I was in office in Hupei, I had long proposed to raise a loan for the construction of the line in that province, and had definitely discussed it with the British Consul-General and informed the Board of Foreign Affairs. The only result was that it was pigeon-holed by the Board, and the matter was shelved for the time being.
I now hear that the Board of Communications say they have received a telegraphic reply from his Excellency Ch'ên to the effect that he wishes the financial management to be left to the Board. His Excellency is constrained to this by absolute lack of I have now funds. Assuredly he is not trying to saddle the Board with the task.
a loan on the arranged satisfactorily with the Wai Wu Pu to sanction such unalterable understanding that it will rest with Hupei Province to make the necessary arrangements.
The railway to be constructed in Hupei on the north side of the River Yang-tsze is to start from Hanyang and proceed by way of Shasi through to Ching Mên; from Ching Mên the line is to split up into two branches, one proceeding west to Ichang, to join the Szechuan-Hankow, and the other going north from Ching Mên through Hsiang-Yang to Kuang-Shui,* to join the Peking-Hankow. The approximate length of the two lines would be 1,600 l, and the estimated cost of construction would average When I was 20,000 taels per h, necessitating an expenditure of about 3,200,000 taels. formerly in Hupei I made proposals to British financiers for a loan of 2,000,0007.,
*In Hupei, close to the frontier of Ilunan, and just south of Sinyang, the proposed terminus of the Pn-Kou-Sinyang Railway, for which the British and Chinese Corporation have a preliminary Agreement.
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which, reckoned at the present sterling rate of exchange, comes to 16,000,000 taels. For raising the balance the rent-rate system, which it is now proposed to introduce in Hunan, should, I suggest, be employed; this would yield 1,000,000 taels per annum, or a total of 5,000,000 taels in five years. All such additional levy should entitle to issue of share certificates representing commercial shares, and any deficit still outstanding could be met by calling for share subscriptions. Should there still be a deficit, it would be quite easy to raise a further loan from British financiers on the security of the earnings of the line itself. The adoption of the above proposals would, by insuring abundance of loan capital, accelerate the completion of the work. After, when the line was finished, the advantages of it would be felt by the Hupei public, the mercantile community would reap the benefit, and it would be a feather in Viceroy Ch'êu's cap. It is, indeed, a perfect scheme.
Since I have been honoured with the Imperial appointment to devise a complete scheme for the three provinces, mature consideration and my familiarity with Hupei's position assure me that only thus can Hupei's people be blessed and her difficulties relieved. I have bestowed special pains in drawing up this detailed Report, and I sincerely and earnestly hope that his Excellency Viceroy Chrên and all the officials in the various departments and bureaux, as well as the leading gentlemen in the Province of Hupei, will thoroughly debate the scheme, and that his Excellency will favour me with the result of their deliberations promptly by telegraph.
If this line is to be subject to the management of the Board of Communications, Hupei will only get the construction of the one money-losing line from Wuchang to Yochou, and the resulting gross injustice to Hupei in the loss of a certain profit and the deprivation of an opportunity for prosperous expansion is diametrically opposed to my own wishes.
The difficulties in connection with the line in the two provinces of Hunan and Kuangtang are endless. The Board has passed them on to me, but my trifling talents are quite unequal to the task, and in the end I fear I shall simply have to request His Majesty to let me resign my commission.
All that should be done at the present time in the matter of the Wuchang-Yochou section of the Canton-Hankow line is to proceed with the work of land purchase; provision of materials, &c., should, I think, be postponed. Big steamers run freely ali the year round between Wnchang and Yochou, and, till the Hunan line is linked up with it, there will be no passengers and goods to carry, and the burden of the loan will have to be met uselessly to say nothing of interest on share capital and running expenses. The better course is to devote all our energies in the first place to arranging for the line north of the Yang-tsze. We must wait till work on the Hanyang-Ichang and Changsha-Yochou lines has taken shape before making arrangements for the Wuchang-Yochou section. The development of through connection on the north and south banks is the only satisfactory solution.
that
These my simple views I hasten to submit for consideration, with the general hope
will thoroughly consider and speedily reply.
you
(Translation.) (Telegraphic.)
Inclosure 3 in No. 1.
The Grand Secretary Chang to the Viceroy Chiến K'uei-lung.
September 25, 1908.
I HAVE received a telegram, dated the 24th September, from the Railway Board. The observations of the leading men of Hupei are most extraordinary, and topsy- The loan turvy notions of their own advantage should not be carried to this extreme. mentioned by the Board of Communications is in any case a foreign loan negotiated by the Board. My own view with regard to this line is that if the funds are to be provided by the Board, the people of Hupei lose the profit on the undertaking; it is for this reason that I have proposed that the province should manage it independently, with the preliminary decision that the shares should in perpetuity be one-half official and one-half merchaut, and I cannot understand the leading men's view that construction, whether by the Board or by Hupei, is alike of no benefit to the leading men and merchants.
The "rent-charge" was brought in to give a preliminary advantage vis-à-vis the Board, with the general idea of pointing out fupei's ability itself to provide fands for
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