[This Document is the Property of His Britannic Majesty's Goverment o
CHINA RAILWAYS.
CONFIDENTIAL.
[3513]
No. 1.
[January 31-Jo
206
4196
Rege IT FEB 10
SECTION 2.
Sir J. Jordan to Sir Edward Grey. (Received January 31.)
(No. 19.) Sir,
Peking, January 12, 1910, THE promised communication from the Wai-wu Pu, which was mentioned in my despatch No. 455 of the 7th December, on the subject of the Shanghae-Ningpo Railway, reached me on the 16th December, and merely stated in a few sentences that the Board of Communications had come to an understanding with President Tang in personal interviews; that the affairs of the railway would be managed without friction in the future; and that the engineer-in-chief was generally performing the duties prescribed by the loan agreement.
I had just received the enclosed letter of the 15th December from the agent of the British and Chinese Corporation, and on the strength of the information therein given I was able to point out to the Wai-wu l'u, in a note of the 21st December, copy of which is enclosed, that the conditions were going from bad to worse, and that the irregular practice of drawing loan funds from the Hong Kong and Shanghae Bank and employing them regardless of the provisions of the loan agreement was still continuing. I asked that these facts might be brought to the notice of the Board of Communications, and that the promises given to me both by the Wai-wu Pu and the board should be fulfilled as quickly as possible.
A few days afterwards Mr. Liang Shih-yi, a councillor of the Board of Communi- He said that he was cations and director-general of the railway, called to see me. endeavouring to place matters on a satisfactory footing, and had asked Mr. Foord, the As for the loan funds, he admitted engineer-in-chief, to come to Peking to assist him. payments amounting to 800,000 taels to the bureaux of Kiangsu aud Chekiang, and gave me an assurance that no more money would be drawn until the situation was cleared up.
I was, however, informed by Mr. Hillier on the 26th December that the sums drawn up to date totalled to 2,130,000 taels, and I at once wrote to Mr. Liang for an explanation of the discrepancy. He sent his chief secretary to explain that his statement to me was that 800,000 taels were handed over to the bureaux, and in auswer to a question the secretary said that the Board of Communications had the rest of the money. On the 28th December Mr. Hillier informed me that further sums had heen requisitioned, making the total 2,760,000 taels, and I thereupon addressed to Mr. Liang another letter, copy of which is enclosed, enquiring where the sum of 1,960,000 taels, which represented the difference between what was issued to the bureaux and the requisitions of the Board of Communications, was then deposited.
Mr. Liang made no reply to me directly, but he arranged an interview with Mr. Hillier on the 8th instant, at which he admitted that the funds were deposited in the Chiao-t'ung Bank, known as the bank of the Board of Communications. He said that a railway had been built from Shanghae to Hangchow and was in working order, and it only remained to bring that line up to standard and construct the 110 miles He from Hangchow to Ningpo to complete the work required by the loan agreement. expressed himself as very anxious to put an end to the present situation, and enquired whether the British and Chinese Corporation would be prepared, if requested by the Chinese Government, to agree to making the old agreement apply to a new railway from K'ai-feng to Hsü-chou, about 200 miles in length, the security and other terms remaining in force, and the funds already drawn to be replaced. If this alternative were practicable, he thought that he would be in a position to bring more effective pressure to bear upon the provincial bureaux, whose obstruction had not relaxed.
Mr. Liang's proposals were communicated by Mr. Hillier to his principals by telegraph on the 10th January, and in my telegram No. 8 of the same date to you I strongly recommended that it should be entertained favourably.
As the director-general has given both Mr. Hillier and myself explicit assurances that no more loan funds will be drawn until some solution of the question is found, the point raised in your despatch No. 355 of the 27th November last would seem to be settled for the moment.
I have, &c.
J. N. JORDAN.
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