[This Document is the Property of His Britannic Majesty's Government.] 516
C.O.
CHINA RAILWAYS.
CONFIDENTIAL.
7798
[January 20.]
BECO SECTION 4 MAR 09
[2587]
(No. 2.) Sir,
No. 1.
Sir J. Jordan to Sir Edward Grey.-(Received January 20.)
Peking, January 1, 1909. I HAVE the honour to transmit to you herewith copy of a letter from Mr. Bland, agent of the British and Chinese Corporation, in which he furnishes an account of his first interview with his Excellency Chang Chih-tung on the question of a loan for the Hankow-Canton Railway.
The Grand Secretary proposes to raise a loan of 3,000,0001. for constructing the section of the line which will run for over 400 miles through the provinces of Hupei and Hunan, and he opens the negotiations by naively asking for the same terms as those which were conceded in the recent Agreement for the redemption of the Luhan Railway. The accompanying despatch from His Majesty's Consul-General at Hankow, which gives some insight into the Grand Secretary's attitude towards the whole question, shows that the Tien-tsin--Pukow terms are more likely to form the limit of his ambition, and if China, with a decrease last year of over a million sterling in ber customs revenue and her present hand-to-mouth financial arrangements, succeeds in building another trunk line on such easy terms she may consider herself especially fortunate.
The fact that negotiations were in prospect has attracted here the usual number of would-be competitors, the most prominent of whom are Mr. Odagiri, representing Japanese, and M. Jadot, acting in Belgian interests, and the Grand Secretary will naturally turn the competition to advantage in extracting the best terms he can out of Mr. Bland.
Mr. Odagiri seems to be the only one who has any locus standi, and his claims, as stated in Mr. Bland's letter to me, appear to be of an extravagant nature.
In my reply to Mr. Bland's letter, copy of which is likewise inclosed, I have told him that, in my opinion, the Agreement of 1905 gives no specific advantages to Japanese manufacturers or contractors, and that the most they can claim is to bave half the engineers. I have suggested that if Mr. Odagiri raises the question of Japanese rights he should be referred to his Legation, which can obtain an interpretation of them from us.
Since Mr. Bland's Memorandum was written the Hupei division of the Szechuan Railway has also been taken out of the hands of the provincial authorities and intrusted to Chang Chib-tung by a Decree, copy of which I have the honour to inclose.
I have, &c. (Signed) J. N. JORDAN.
Inclosure 1 in No. 1.
Dear Sir John,
Mr. Bland to Sir J. Jordan.
Peking, December 26, 1908. I INCLOSE copy of the Memorandum I have made recording the results of my interview with Chang Chih-tung. I have sent a copy to Fraser.
Odagiri was with Chang yesterday. I learn that he expects that the Japanese will come in under any loan that may be made by British finance, that is to say, that half of the engineers and work of construction will be Japanese. If this should prove to be the case, there must arise serious difficulties, for the railway is by agreement (approved by the Foreign Office) an Anglo-French concern, and even if the British were to agree that British capital should be placed at China's disposal for the specific advantage of Japanese manufacturers and contractors, the French Government would certainly refuse to be bound by any such condition. Nor could we expect any contractor to agree to have Japanese engineers and construction work imposed upon him as a matter of right, though no doubt something might be arranged to meet this condition if unavoidably necessary?
[2104 u-2
-2]
B
British