[This Document is the Property of His Britannic Majesty's Government. 571
CHINA RAILWAYS.
CONFIDENTIAL.
[11403]
(No. 85.) Sir,
No. 1.
[April 4.]
0. SECTION 1
160
REC (REG: 28 trn 10
Mr. Mur Müller to Sir Edward Grey.-(Received April 4.)
Peking, March 19, 1910. WITH reference to my despatch No. 6 of the 5th January last, I have the honour to summarise certain information respecting the affairs of the Ch'uan Han Railway Company contained in two lengthy despatches from His Majesty's consul-general at Ch'engtu.
Shares in the company are mainly of two classes, kou-ku, or shares voluntarily purchased, and tsu-ku, sharos given in exchange for a forced levy, payable in the form of an increase to his land tax by every land owner. This levy is to cease as soon as it amounts to 40 per cent. of the estimated capital of 50,000,000 taels (about 6,500,000Z.), so that the mainstay of the company is to be the voluntary shares.
The first meeting of the shareholders of the company, which is a native association formed to build the Szechuan portion of the Hankow-Szechuan Railway, and which, as already reported, has begun to construct the line from Ichang, was held at Ch'engtu in November last, and was attended by 657 shareholders and by the Governor-General of the province. No report of the proceedings has been published, but there seems to have been considerable friction, owing in great measure to the unequal distribution of voting power, and dissatisfaction was freely expressed with the manner in which accounts had been cast and with the general conduct of the company's business.
The meeting, His Majesty's consul-general learns from various sources, decided among other things that superfluous employés should be dismissed, the rate of salaries cut down, and subscriptions invited from the Chinese residents in the Straits Settlements. The balance in hand is stated to amount to 10,421,958 taels (about 1,300,000Z.), and the necessity for economy and retrenchment on the item of staff and salaries was rendered evident by the accounts presented to the meeting, which showed that 249 employés were in the pay of the company at a yearly cost of over 8,5001. a- year. The section now being built from Ichang to Ilsiang-chi, which is only 90 miles in length, is estimated to cost 10,000,000 taels, and the most rigid economy will have to be practised if the work is to be brought to a conclusion without an appeal to foreign assistance.
As the result of the dissatisfaction expressed at the meeting the management have promised a fresh audit of accounts. They have also given an undertaking, in a circular letter to the shareholders, to dismiss superfluous employés, and state that the "airs of a Yamen" will no longer be adopted, and that "red tape" is to be a thing of the past. A scheme, they say, is being prepared to attract further capital, but this last proposal does not foreshadow any application to foreign capitalists, but is merely an appeal to the shareholders to induce other Chinese to buy the company's scrip.
Unless, however, unexpected sources of revenue become accessible to them, it is highly improbable that any native organisation in Szechuan will be able to build the line without the assistance of a foreign loan. When half the line is built and all their funds are exhausted, their pride may bend and a loan be sought. But at present the people of Szechuan have no intention of seeking foreign advice or foreign money, and their immediate concern would appear to be to find out what has become of the sum which Mr. Wilkinson puts as high as 5,000,000 taels, which has been spent without any result to show for its expenditure.
I have, &c.
W. G. MAX MÜLLER.
[2706 d-1]