[This Document is the Property of His Britannic Majesty's Government.] 345
AFFAIRS OF CHINA.
CONFIDENTIAL.
0
[January 16.] 5712
SECTION 3.
[1678]
No. 1.
(No. 472.) Sir,
Sir J. Jordan to Sir Edward Grey.--(Received January 16, 1911.)
Peking, December 29, 1910. IN continuation of my despatch No. 438 of the 6th instant on the subject of the Peking-Hankow Railway redemption loan, I have the honour to transmit berewith the translation of the reply which I have received from the Wai-wn Pu to my note of the 3rd December.
The gist of this communication lies in the last paragraph, in which it is stated that the Imperial sanction accorded to the memorial of the Board of Posts and Communications is on record, and "constitutes a guarantee of the responsibility for repayment." A further statement is made that " persons holding these bonds, no matter what their nationality, are all on a footing in all respects identical with that of Chinese subjects in regard to the rights to which they are entitled." This, then, is the official and considered reply of the Chinese Government to the clear questions put to them by His Majesty's Legation, namely (1) whether the loan was a direct obligation of the Chinese Government to the foreign bondholders, and (2) whether the payment of the principal and interest of the loan was guaranteed in sterling by the Imperial Government. As you will see from the accompanying copy, I have replied to the Wai-wu Pu, but merely in order to correct a misapprehension of a statement made by me verbally on the subject of the intervention of the Chinese Minister in Londou in this matter, and it must, I think, be taken that the Chinese Government have now said their last word. In view of all the circumstances in which this loan has been issued, and which are well known to you, Sir, I feel it my duty to state my opinion that the attitude of the Imperial Government is not satisfactory. In his letter of the 8th November, which was published in the "Times," his Excellency Tang Shao-yi, President of the Board of Posts and Communications, replying to a letter written by "Ex-Consul" on the 17th October, also published in the "Times," stated that the bonds were the direct obligation of the Imperial Chinese Government, and further that the said Government had undertaken to pay principal and interest in sterling. Taking into account the procedure regarding the issue of Chinese Government loans laid down by the Board of Foreign Affairs in December 1891, and again in May 1908, and followed hitherto in practice, it must be admitted that there is a wide distinction between his Excellency Tang Shao-yi's statement, on the one hand, and the Chinese Minister's statement to Messrs. Dunn, Fischer, and Co., dated the 31st August and reproduced in the prospectus, on the other. Lord Li Ching-fong stated that the Board of Posts and Communications of the Imperial Chinese Government had undertaken the repayment of the capital and the payment of interest. The Wai-wu Pu's statement to me is in virtually the same terms. But, if the obligations and responsibility of the central Government are so clearly established as a perusal of his Excellency Tang Shao-yi's letter would seem to imply, I can offer no explanation as to why the Wai-wu Pu, after more than one enquiry from His Majesty's Legation, have not satisfied me in language equally unmistakable. Moreover, the observation of the Board of Posts and Communications, quoted and endorsed by the Wai-wu Pu in the enclosed note, to the effect that the present loan is widely different from an ordinary loan under an agreement drawn up with a foreign country is indisputable but not reassuring.
His Majesty's Government may perhaps deem it advisable to publish the correspondence, in order that the bondholders may judge for themselves the position in which they stand.
I have, &c.
J. N. JORDAN,
[1850 q-3]