[This Document is the Property of His Britannic Majesty's Government.]
[B]
36747
AFFAIRS OF CHINA.
[November 12.]
RECP
C
CONFIDENTIAL.
REGS 1 FC IC
SECTION 2.
[41245]
Sir,
No. 1.
Hong Kong and Shanghai Banking Corporation to Foreign Office.——— (Received November 12.)
31, Lombard Street, London, November 11, 1910. I HAVE the honour to inform you that representatives of the British, French, German, and American groups met in London on the 10th instant and signed the inter-bank and inter-group agreements, draft copies of which have already been submitted to you.
I enclose twelve copies of the inter-bank and inter-group agreements, as finally agreed to, together with twelve copies of the official minutes of the meetings held in London on the 8th, 9th, and 10th November, duly attested by the signatures of all the delegates who attended.'
Both agreements follow the lines of the former Anglo-German-French inter-bank and inter-group agreements of the 6th July, 1909, but changes and modifications have been introduced in order to permit of the inclusion of the American group.
Clauses 6 and 5 of the inter-bank and inter-group agreements respectively have now been altered in such a way that, while the independence of the groups as regards the conduct of separate negotiations is retained, the mutual consent of the other parties to the agreement is now made a condition precedent to the right of any one party to sign the agreement alone. In effect, the decision as to whether joint signature is impracticable or not will in future be by common consent instead of being vested in any single one of the groups.
In clause 8 of the inter-bank agreement, in lieu of loan internationalisation, which the French Government refused to allow, the American group is granted the option of issuing its portion of any loan either in New York or Europe, but, in the latter case, only through the channel of the three other parties to the agreement. Should this option not be exercised, the American group, by the words "in its and their markets," which have now been inserted, will then be limited to New York for the issue of the American portion of any loan.
The Chinchow-Aigun Railway loan of 40,000,000 dollars, and the projected American loan for currency reform in China of 50,000,000 dollars, although "included in the general agreements, are subject to certain reservations, which will be found in the official minutes of the proceedings. I enclose two memoranda on the subject of these loans, prepared by Mr. W. D. Straight, the American delegate, by whom they were negotiated with the Chinese Government,
The Chinchow-Aigun loan has been concluded on terms which do not fall within the conditions of clause 10 of the inter-group agreement. It is clear that the American group can only offer what it has been able to obtain, and it does not seem unreasonable, therefore, that, if the offer they make of participation to the other three groups should not be accepted, all parties should then be free to act as they think fit with regard to this particular business.
A difficulty having arisen as to the admission of the other three groups as principals in the American loan of 50,000,000 dollars, the American group, with the promised assistance of the United States Government, engages to use their best endeavours to obtain joint signature of the agreement. If these endeavours fail, and if for this or any other reason the British, German, and French groups refuse to accept participation, the American group may then issue the loan in Europe through their own channels. In that event, any one of the other parties shall have the right to withdraw from the Quadruple Agreement of the 10th November, 1910, and then the
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