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und Sohn, the German manufacturers, are a firm of high standing, and that it is improbable that they could afford to build an engine to the specification given for the sum named.
In the tenders for engines for the Chekiang Bureau, to which reference is made below, it is also noticeable that Messrs. Carlowitz and Co.'s tenders are very much lower than those of other German firms, the difference in one case amounting to over 1,3007.
There is some ground therefore for the suspicions entertained by local British firms of the bona fides of the tenders accepted by the Kiangsu Bureau: either Messrs. Carlowitz and Co. had already secured an order for the Henschel locomotive before the tenders were opened, and so were able to quote a dummy price, or if the price is genuine it is for an engine (possibly American or second-hand) not up to the specification.
On the 3rd June the "North China Daily News" published a leader on the subject adverting to a telegram sent previously to the "Times" by their Shanghae correspondent, and this produced a reply from the secretary of the Kiangsu Bureau, which was published in the "North China Daily News" of the 11th instant. enclose copies of these documents herewith.*
I
I have been unable to verify the statement in the "North China Daily News" leader that the stipulation as to German manufacture was known as early as February last, and in my opinion the evidence is insufficient to support it. The further state- ment that the specification and design of the German model were distributed in April is based on a misunderstanding of the bureau's circular letter of the 5th April, which promised these documents when printed"; as a matter of fact they were not distributed until the 14th May.
Many of the firms interested sent their shroffs or compradores on various occa- sions to the bureau in search of information, and it is possible that further details were obtained in this way by different firms at different dates, but the official distribution of information by the bureau itself took place on the dates given by me above,
In order to ascertain if possible the view of the bureau officials on the incident as a whole I instructed Mr. Barton to call on them, and on the 18th instant he had an interview with Mr. Wang Ching-mu, the chairman of directors.
Mr. Wang stated that the original intention of the bureau, as evidenced by their first circular letter of February was not to specify any country of origin for the loco- motive required. In view of repeated representations, however, by the foreign firms interested in the tender that the information given by the bureau was too vague, the bureau's Chinese engineer was directed to select from among the numerous plans accompanying the offers of material made by foreign firms from time to time since the construction of the line commenced two years ago a design for an engine suitable to the line's requirements. The Chinese engineer (Mr. Foord was not consulted) selected the design and specification of a German engine by Henschel und Sohn, and these were printed and circulated to the foreign firms in due course.
Mr. Wang expressed himself unable to appreciate the difficulty that would be experienced by a British firm in tendering for an engine of German design, but he admitted that the time given for tenders for British manufacture, namely, from the 18th to the 31st May, as compared with the 5th April to the 31st May, given for tenders for German manufacture was too short.
He denied absolutely that the engine would be bought out of loan funds, and added that it was not even certain that it would be used on this line at all, as the bureau was also constructing another line between Chinkiangpu and Hsüchow-fu.
On the general question of the conflict between the loan agreement provisions and those of the Kiangsu and Chekiang Bureaux' agreement with the Board of Communications, which latter agreement was sanctioned on the same date (6th March, 1908) as the former, Mr. Wang was naturally very guarded. He declined to admit that there was a direct conflict between the two on the subject of the purchase of materials, and said that the result of the commutation of their commission by the British and Chinese Corporation was to give the bureau an entirely free hand in the If there were any stipulation in article 18 of the loan agreement which still gave British goods a preference (and he steadily refused even to refer to his Chinese version of the agreement on this point), the bureau held that article 13 of their own
matter.
* Not printed.
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agreement with the Board of Communications, which gave them an unfettered choice, must prevail.
Any discrepancy between the two agreements was a matter between the British Government and the Wai-wu Pu and he could not discuss it, adding bitterly and with emphasis that it must be well known that the loan agreement was only a means devised by the Wai-wu Pu to get out of their own difficulties with the British Govern- ment, and inferring that if it produced fresh difficulties for them (the Wai-wu Pu) it was not fair to visit this upon the bureaux.
Asked further whether the letter written by the secretary of the bureau on the 10th June to the "North China Daily News" (see Inclosure No. 10*) was a correct exposition of the bureau's views, he replied that it was and supplied Mr. Barton with a copy of it in the original Chinese, which I enclose.*
They did not go so far as to say that the loan agreement was of no effect at all— otherwise they would not employ a British engineer-but they would accept no interpretation of it that was not in accordance with their own agreement with the Board.
We of The bureau's position was put very tersely by Mr. Wang when he said, the bureau never speak of the loan, but only of the deposit," and it will be noticed that these terms are scrupulously employed in their letter of the 10th June.
In conclusion, Mr. Wang pointed out that as the bureau had already purchased British materials, e.g., bridge girders and cement, so they would continue to do in the future should the occasion arise; there was no intention to deliberately discriminate against British goods.
In connection with the Kiangsu Bureau's action in this matter the following incident which occurred in relation to a call for tenders for locomotives by the Chekiang Bureau is of interest.
It appears that the British firm of Brighten, Malcolm, and Co. (Limited), which started business in Shanghac last year, having ascertained that a Chinese named 2. D. King (Chin Shao-tang) had influence with the Chekiang Bureau, made him a partner in the hope of getting business from the bureau.
This Z. D. King took a prominent part in the agitation against the loan agreement with the British and Chinese corporation two years ago and is a brother of the Mr. King (Chin Kung-po) who as assistant magistrate at the mixed court was conspicuous in the fracas of the 8th December, 1905.
On the 3rd March last Messrs. Brighten, Malcolm, and Co. approached the local representative of several British engineering firms with an enquiry for twenty- one locomotives which the Chekiang Bureau proposed to purchase, they having obtained advance information of the call for tenders which was not made public until the Sth April. The original date for opening the tenders, viz., the 25th May, was postponed to the 17th June, on which day they were opened by Mr. Z. D. King (himself a tenderer) in the presence of the directors.
In the discussion which ensued it is reported that one of the directors stated that in view of the fact that there had been trouble over the purchase of German engines by the Kiangsu Bureau, it would be better not to purchase any from that country on this occasion. Chu Pao-san (the chairman of the Piece Goods Guild and one of the most prominent of the settlement Chinese), however, retorted that as Messrs. Jardine, Matheson, and Co. had been responsible for the press agitation over the Kiangsu Bureau's action he would recommend that no British engines should be accepted.
The chairman of directors, Tang Shou-chih, suggested that no tenders at all should be accepted except one for a small American tank engine by Messrs. Mitsui and Co. for appearance's sake. To this Z. D. King replied that this tender was not in accordance with the specification, and if accepted there would be trouble with the British engineer Mr. Foord.
Finally it was decided to reject all the tenders and purchase nothing.. Another report had it that the bureau had never seriously intended to purchase, and had merely called for tenders to impress the public with their business-like energy and financial prosperity.
It is a significant fact that Messrs. Brighten, Malcolm, and Co.'s tenders were considerably higher than those of Messrs. Jardine, Matheson, and Co. for precisely the same engines based on precisely the same quotation made to both firms * Not printed.
469