[This Document is the Property of His Britannic Majesty's Government) 446
C. O.
6761
CHINA RAILWAYS.
CONFIDENTIAL.
[January 23.]
RECE
REG. 25 E 09
SECTION 3.
[3055]
No 1.
Mr. Hillier to Mr. Addis.--(Communicated by Mr. Adilis, January 23, 1909.)
(Private.)
My dear Addis,
I HAVE nothing from you to acknowledge.
Copies of recent telegrams between us are inclosed.
Peking, December 31, 1908.
Loon to Viceroy of Manchuria.-The Acting Governor of Mukden, Mr. M. T. Liang, wrote to me on the 16th instant pressing me for a reply with regard to this business, and adding that, if we were not prepared to take it up, they would have to consider other arrangements. I passed this on to you through head office, asking for a further expression of your views in the light of my more recent advices. Your reply merely confirmed your previous opinion, and you asked whether I had communicated the same to the Chinese Government, and what were their own views on the subject of provincial loans, Whatever may have been the views of the Chinese Government with regard to provincial loans, it has been difficult for me to consult them in the present instance without appearing to go over Mr. Liang's head, and thereby risking my relations with him. On receipt of your telegram, however, I called privately on Liang Tun-yen, Vice-President of the Wai-wu Pu, and explained to him the difficult position in which we were placed by Mr. M. T. Liang's pressure on the one hand, and our concern for the credit of the Chinese Government on the other. He quite grasped the point, and promised to speak to Yuan Shih-k'ai. The reply of the latter was that the Government was already alive to the necessity of putting a stop to promiscuous borrowing, and of controlling all such operations through one official channel; they were especially dissatisfied with the recent conduct of the Yu-chuan Pu in hawking about a loan for 100 lacs of dollars, which no one would look at. A Memorial had therefore been prepared by the Board of Finance, and was to be presented to the Throne in a few days, arging that all future loans, whether for account of the Peking Boards and Departments of State, or of the provinces, should be negotiated and concluded with the Board of Finance alone. It is an admirable Regulation if they will stick to it; at any rate, it furnished me with the material for a reply to Mr. M. T. Liang, and I inclose copy of my letter to him herewith,"
Apart from this, however, there are growing indications that the Government is being forced irresistibly towards the path of financial reform. The Prince Regent, Yuan Shih-kai, and the best men in the Government realize that this must come, and, what is still more hopeful, that effective and real reform cannot be carried out without the assistance of expert foreign advisers. Liang Tun-yen spoke to me on the subject with great frankness and common sense, and what he says may fairly be taken as representing the growing opinion in higher official circles.
Railway Negotiations.-Mr. Bland reopened the Hankow-Canton Railway negotia- tions with the Grand Secretary, Chang Chih-tung, this week by a four hours' sitting. They do not appear to have got beyond generalities, and, of course, a good deal of nonsense was talked by his Excellency Chang. The subject of negotiation was the Hupei-Human section of about 400 miles. Chang wants 3,000,000.; he wants it on the same or better conditions than the recent loan to the Yu-chuan Pu, and he wants to deal with the British alone. At the same time, which is not very consistent, he All these nations threatens competition from the Belgians, Japanese and Germans.
have in fact colourable claims to an interest in the undertaking, and we may look forward to long and complicated negotiations before the business is completed. A hopeful sign, on the other hand, is the fact that Chang is prepared to consider the principle of construction by contract; if he can be persuaded to adopt this system and place the construction of the line in the bands of a reputable firm of British railway contractors, the agreement will be immensely simplified. Within the last few days an Edict has appeared giving Chang Chih-tung supreme control of the financing and construction of the Hankow-Szechuan as well as of the Hankow-Canton line, so we
[2104 -3]
* Not printed.