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auditor to examine the accounts and see that the money has been properly expended. It is obvious that if the auditor had visited Nanking at intervals, I could without committing a technical breach of my Agreement have called attention to irregularities without appearing to act in antagonism to the Managing Director, to whom I am bound by the Loan Agreement to be respectful.
This support was denied me by the Syndicate, and although every person connected with the railway was in favour of having the accounts audited at Nanking where the accounts are, the Syndicato have appointed an auditor resident in Tien-tsin, and himself an employé of the Chinese Government. The result is that no accounts have ever reached the auditor, and in the natural order of things they cannot reach him in time for the audit to be of the slightest help to me.
My German confrère in the north has the German Syndicate beside him, and an auditor on the spot. He can check any abuse without having to appear in the matter
himself,
He has further, I believe, only one Syndicate to deal with, who have opened an office in Europe for the conduct of railway affairs. In Mr. Bland's absence I was left with no support. I actually represented the state of affairs to Messrs. Jardine, Matheson, and Co. unofficially, and I was told that they were merchants, and that it was not to their interest to embroil themselves with the Chinese.
Now these very people accuse me of not keeping in touch with them.
I have great difficulty in understanding who are the agents of the Loan Syndicate. The British and Chinese Corporation, Messrs. Jardine, Matheson, and Co., and the Hong Kong and Shanghat Bank are apparently all agents, and unfortunately they are not in agreement on many points.
I was found fault with the other day for not engaging my engineers through the London agents of the Syndicate.
I asked who they were, and whether they bad any facilities for finding such men, or any organization competent to go through numbers of applications and make selections.
The question could not be answered.
Messrs. Jardine, Matheson, and Co. complain of orders for material not being given to them as agents. I told them that I had recommended the placing of indents with them, and that the Managing Director had refused to follow that course. The Managing Director had the right under the Loan Agreement to go to any agents he liked, and it was impossible for me to force him in any way. Yet Jardine, Matheson, and Co. decided that the blame was mine.
I cannot help contrasting the assistance given by the German Syndicate to their Engineer-in-chief with the support that has been given to me. Agreement with the Tien-tsin-Pukow Railway is witnessed by the representative of Even my own the German Syndicate.
Yours truly,
My dear Tuckey,
(Signed)
Inclosure 3 in No. 1.
Mr. Bland to Mr. Tuckey,
T. W. T. TUCKEY.
Chinese Central Railways (Lómited), Peking, January 18, 1909.
I HAVE had an interview with his Excellency Lu flai-huan, for the particular purpose of informing him of the probability that funds will not be forthcoming for the southern section if we have any further breach of the Loan Agreement in the matter of the Managing Director's requisitions on the bank.
Jardine's tell me that they have sent you the bank's statement of these requisitions, showing that Loh drew some 962,000 taels between July and October, of which, I understand, he did not expend anything on materials before the end of the year. I have also pointed out that by the Loan Agreement funds are to be drawn to "suit the progress of construction," and that nothing can justify the Managing Director in taking them before actually needed to meet accounts due to deposit in Chinese banks.
The Director-General (or rather Secretary Woo) defended this practice on the ground that they get more interest in native banks, which is to the benefit of the railway. I said that this argument was inadmissible. Next I pointed out that if the
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Honk Kong and Shanghae Bank's rate of interest is, in their opinion, unduly low, it is for them to represent the matter to the Chinese Central Railways, who would inquire (into the facts, and use their influence with the bank to get a better rate, if the rate allowed is lower than the ordinary market interest on current accounts. But the fact that they are dissatisfied with the bank does not justify them in breaking the Agreement with regard to requisitions, and we are going to insist therefore on fuller details and a better system in future. It would be as well for you to warn Loh Taotai, as I have warned the Head Office, for it will be a losing of "face" if he applies for funds and they are refused.
I was surprised to find that the Director-General denies that he has agreed to have the accounts audited up here. He says that, personally, he has no objection to so doing, but that he is perforce influenced by the objections which Loh Taotai and you have expressed to the proposal. He has requested, he says, that you and he shall come to a definite opinion and recommend a course of action in re. I told him that he had officially agreed to the appointment of Henderson, and that under the circumstances I could not, as representing the Chinese Central Railways, agree to removing the audit down south. That the alleged inconvenience of having to inquire from here to Pukow would be far less than having to refer to Pukow from here. For instance, I have asked for the monthly statements of materials which, by the Agreement, ought to be rendered regularly to the Chinese Central Railways through the auditor. If the accounts were here and audited, as they should be, I could get the auditor's statement as to the accuracy of the document without delay.
As it is, I have to await the result of Chinese (ie, interminable) correspondence on the subject. Anyhow, you know my views on this subject. I am prepared to give you all the support you may want, to be your mouthpiece at the Legation, and to do everything to make your work a success.
But, on my side, I expect your support in the matter of the accounts. It involves, I know, making out the accounts in duplicate, but that is done in every Government office all over the world, and the Customs system is there, handy for you to follow and most effective. With Henderson and myself in touch here, and you to keep me posted whenever you think the interests of the line require it, we can handle the thing with some prospect of success. With some Shangbae auditor who knows nothing of railway work going once a-month to Pukow, and making a formal certificate that he has seen the books and compared them with the vouchers--well, I wash my hands of any further concern in the business, beyond protecting, so far as I may be able, the interests of the Chinese Central Railways.
I expect that Sun Pao-chi will take over charge after the New Year; there may then be a change in methods. Hope to hear from you soon, and trust you will be able to back me effectively about the accounts,
Yours truly, (Signed)
My dear Bland,
Inclosure 4 in No. 1.
Mr. Tuckey to Mr. Bland.
J. O. P. BLAND.
Tien-tsin-Pukow Railway, Southern Section, Chief Engineer's Office, Nanking, January 27, 1909. I AM in receipt of yours of the 18th instant. I note your remarks ahout the withdrawal of the funds from the Hong Kong and Shanghae Bank.
Be the audit: I wrote you stating that the Director-General preferred the audit to be made at Nanking, as I had myself advised when in Peking last May. After the Director-General left, Mr. Loh told me that he understood that the Director-General had changed his mind, and intended to agree to the audit being made in Peking. I advised you of this fact, but I have never disguised my own opinion that the decision to have the accounts audited in Peking was a mistake of the first magnitude, and deprived me of all effective support, such as is freely given to my confrère, Herr Dorpmüller, by the German Syndicate.
I have not reopened the subject with the Managing Director, but when I was accused a few days ago by Messrs. Jardine, Matheson, and Co. of failing to keep in touch with the Corporation, I was obliged to state that, in my opinion, it was the Corporation who had failed to keep in touch with me. They had the opportunity of sending an employé of their own to Nanking to examine the accounts, and through
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