2
covered by the shares subscribed and this year's land assessment shares. The company's total annual funds include over 200,000 taels from rice funds and 300,000 taels odd from various salt funds, while the land assessment shares are estimated only at 700,000 taels. Thus, with good seasons, we have 1,300,000 taels a-year. Deducting the service of the British resumption loan and the Belgian gold bonds, this leaves 700,000 taels or so for all purposes.
Although the total cost of Hunan section be 20 millions, yet, however fast it is built, this will be spread over several years, and the yearly cost will not be over 3 millions, towards which we have 700,000 taels in sight. Even if the balance of 2 millions odd is raised by loan, there is no need to borrow 20 millions from other nations, and so cause all sorts of difficulties. In any case, under such a contract as the Tien-tsin-P'u-K'ou lines, the bonds are issued at three dates, and not all at once, so why breed actual trouble for an unreal amount? Every one in Hunan perceives his personal danger in alien loans, and is constantly busy over raising the necessary share capital, and once the first section is in actual working next spring there is certain to be a brisk demand for shares.
We pray your board to maintain supervision over the company, so as to safeguard our respective powers and confirm the confidence of the shareholders, while preserving the due control of the board and the local and high provincial authorities. All Hunan is of one mind, never to be shaken, and the writers cannot evade any part of their responsibility to lay the matter before you.
We hope you will communicate our urgent desires to the Grand Council, the Wai-wu Pu, and the Board of Finance, and will favour us with a reply.
[This Document is the Property of His Britannic Majesty's Government.]
[B]
CHINA RAILWAYS.
CONFIDENTIAL.
[41850]
| 39215
[November 15.]
R2 DEC 09
SECTION 2.
No. 1.
Sir J. Jordan to Sir Edward Grey.-(Received November 15.)
(No. 385.) Sir,
Peking, October 23, 1909. I HAD hoped that the appointment of a successor to Mr. Kinder as engineer-in- chief of the northern railways would be arranged by Mr. Hillier in a manner to satisfy the provisions of the loan agreement of 1898 and the protocol of 1902, but the attitude recently taken up by the director-general, Liang Shih-yi, has brought the negotiations to a deadlock, and necessitates a report of the circumstances to yourself.
Before and after the receipt of your telegram No. 97 of the 22nd May last two or three attempts were made in interviews with the new president, Hsu Shih-ch'ang, to bring the Board of Communications to see the necessity of doing justice to the claims of Mr. Cox, but it soon became plain to me that the Chinese would rathor engage a new engineer-in-chief from England than appoint him to succeed Mr. Kinder, and after a consultation with Mr. Cox and the British and Chinese Corporation's representative it was decided to act upon the suggestion mentioned in the last paragraph of my telegram No. 83 of the 3rd May. Messrs. Jardine, Matheson, and Co. had previously informed me that as opposition to Mr. Bellingham was, according to their information, unlikely to succeed, they preferred to support his nomination at once rather than risk antagonising both Mr. Bellingham and the Chinese to no purpose.
I then arranged verbally with Hsu that Mr. Cox should receive a substantial addition to his pay, 2501. a-year, raising it to 1,4501, and was assured that he would be the senior engineer in charge of the permanent way and railway works, and perform practically the same duties as those discharged of late years by Mr. Kinder, who had taken little interest in the traffic department. However, as soon as the corporation signified their acceptance of Mr. Bellingham, a proposal was set on foot by the board to separate the post of engineer-in-chief under the 1898 agreement from that of general manager under the 1902 protocol, and to appoint the present traffic manager, Mr. Foley, as general manager on an equality with Mr. Bellingham. The objections to this arrangement are stated in the enclosed letter of the 17th July from Mr. Hillier to Liang Shih-yi, and apart from them it is pretty well agreed that Mr. Foley, who is partly responsible for the Chinese opposition to Mr. Cox, is scarcely a suitable person for the higher position. The board's proposal was no sooner dropped than another difficulty was created in connection with Mr. Bellingham's agreement of service. In August Mr. Bellingham sent Mr. Hillier for approval a draft of the agreement which he proposed to sign, and this was returned to him with the necessary alterations and additions, yet on the 19th August he signed with Liang Shib-yi a document which is very different, and in some respects objectionable. I enclose, for your information, copies of both these papers. Mr. Bellingham having informed Mr. Hillier that he had signed subject to ratification by the British Minister, I have declined to recognise the agreement, the terms of which appear to me to be drawn up with the object of curtailing, as far as possible, the powers and duties given to the engineer-in-chief under the loan agreement and the protocol. That this is so is evident from a controversy which sprang up almost immediately between Liang and Mr. Bellingham, in which the former argued that the agreement of the 19th August did not place Mr. Bellingham at the head of all the working departments. Mr. Hillier consequently addressed a letter to Liang on the subject on the 7th September, a copy of which is enclosed, stating our objections, and to this an unsatisfactory and discourteous reply, also enclosed, was returned on the 9th October after much pressure.
The position now is that Mr. Bellingham has an agreement which Mr. Hillier and I object to, and because we object to it he does not take up the appointment, the duties of which are in a
At the same time manner performed by Mr. Cox.
210
SC
June
[2486 p-2]
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