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Hangchow-Ningpo Railway remained unanswered, and that the repeated promises of the Wai-wu Pu and the Board of Communications, that the terins of the loan agreement would be carried out, had not been fulfilled.
The loan agreement was signed on the 6th March, 1908 (4th of 2nd month of the 34th year of Kuang Isü) by the Wai-wu Pu and the Yu Chuan Pu, acting under the authority of an Imperial decree. It provided that the loan funds should be applied to the construction of a line from Shanghai to Hangchow and Ningpo, and that the construction and control of the railway should be entirely vested in the Imperial Chinese Government.
But on the same day as this agreement was made under Imperial sanction the Wai-wu Pu and the Yu Chuan Pu secretly memorialised that the railway should be under private management, and this having been sanctioned, the Yu Chuan Pu on the 15th April, 1908, entered into an arrangement with the provincial companies of Kiangsu and Chekiang, whereby the constraction and control of the line were entirely handed over to those commercial companies; and although the Yu Chuan Pu has made a pretence, by nominating a managing director and engaging a British chief engineer, to follow the terms of article 17 of the loan agreement, neither of these two officers has been concerned in any way with the affairs of the line, which has been constructed as far as Hangchow, and controlled exclusively by the provincial railway companies.
The breach of faith on the part of the Yu Chuan Pu in making the secret arrangement with the provincial companies above alluded to was so flagrant an act of perfidy, that little doubt was entertained at the time but that the Chinese Government would dissociate itself therefrom and proceed honourably and without pressure to carry Time out the loan agreement. Repeated assurances were indeed given in this sense. after time the Wai-wn Pu has declared that the terms of the loan agreement must positively be observed,
Three years have now elapsed, and these assurances have proved as untrue as the action of the Yu Chuan Pu. Throughout these three years no serious effort has been made by the Chinese Government to deal with the question. For the past fifteen months, it is true, there have been vague proposals. First it was suggested by the Yu Chuan Pu to transfer the loan funds for the construction of another line. No sooner was this considered than it was alleged by the Yu Chuan Pu that they had hopes of regaining control over the Kiangsu section. Three months elapsed, and no progress whatever was made in that direction. Then the Yu Chuan Pu suggested using the loan funds to buy up the shares of the provincial companies. Again, nothing came of the proposal. Mr. Max Müller, at this juncture, seeing that the Yu Chuan Pu had no serious intention of taking any action, once more prossed the Wai-wu Pu to memorialise for a special decree rectifying the mistakes of the past and commanding compliance with the loan agreement. He was requested to wait a few days till the new acting president of the Yu Chuan Yu, his Excellency Tang Shao-yi, assumed office, and he consented to do so. Tang Ta-jen was unfortunately prevented by illness from transacting business, but it was understood that his desire also was to utilise the loan funds for another line, in spite of the well-known fact that the provincial companies have no capital to complete the railway, and that they are working the section already constructed at a loss. But at the same time as the Yu Chuan Pu in Peking suggests transferring the loan funds to build the Kaifeng-Haichou line, the provincial company is issuing at Shanghai an appeal for foreign capital to construct this identical line, as well as others in the north of Kiangsu.
The quarrel between the Central Government and the provinces on the question of railway control has been an unedifying spectacle, to which a termination should be put. It has involved China, in the case of the Shanghai-Hangchow-Ningpo Railway, in bringing into contempt her own Imperial decrees. Certain engagements having been made in 1899 with British capitalists under Imperial decree, the subsequent establishment under decree in 1905 of two commercial railway companies with sole rights over the whole of the two provinces concerned constituted an infringement of the previous engagements. After years of pressure the Wai-wu Pu and Yu Chuan Pa at length concluded the loan agreement, but again practised a deception in making simultaneously the arrangement with the provincial companies. This was the second breach of faith.
It appears almost, now that the Yu Chuan Pu suggests transferring the loan funds for the Kaifeng-Hsuchou-Haichou Railway, while the provincial company is trying to raise funds for the same purpose, as if a third deception was contemplated.
However this may be, matters have now been brought to a clear issue by the action of the Kiangsu Company in dismissing the English engineer and in resolving to apply
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the loan funds to the payment of the company's debts. The telegram addressed by the company to the Yu Chuan Pu notifying these decisions has been published in the native press, and both the British and Chinese Governments have thus been exposed to ridicule.
The 6th March will be the third anniversary of the signature of this loan agreement, and the patience of both the British Government and the British and Chinese Corporation is exhausted.
As I informed the Wai-wu Pu at my interview of the 28th February, I am determined that this question shall now be decided once for all, and that the Chinese Government shall no longer be permitted to set aside its solemn engagements with the easy unconcern which it has shown in the past. It is due to myself as representative of a great and friendly Power to demand suitable satisfaction for the almost derisive treatment which I have received from the Chinese Government in this matter. As the only means, therefore, of repairing the wrongs which have been done, and of settling a question which has embittered good relations for the last three years, I must call upon your Highness to memorialise the Throne without delay, and request the issue of a special decree which shall restore the control of the railway to the Chinese Government, and shall ensure the full and strict enforcement of the loan agreement of the 6th March, 1908.
[ avail, &c.
Enclosure 2 in No. 1.
J. N. JORDAN
President and Vice-Presidents of Board of Communications to Mr. Mayers.
(Translation.) Sir,
March 4, 1911. THIS board now intends to proceed with the extension of railway enterprise, and it is essential that all railway loan questions which remain outstanding should be speedily settled. Now the question of the Shanghai-Hangchow-Ningpo Railway loan, which has long been a subject of dispute, still remains undetermined, thus constituting a serious impediment to railway development; and whereas this board just now finds itself in need of funds for a line from Kai-feng-fu to Hsüchow-fu, which it is authorised by the Throne to construct, we propose that the loan for the Shanghai-Hangchow- Ningpo Railway shall be transferred entirely for application to the needs of that line, and that any extra funds that may be required for this purpose shall be borrowed from your corporation.
We request you to favour us with an early reply as to whether this proposal can be accepted or not. Should you be able to accept it, we intend further to ask you to engage an engineer on our behalf to find by survey a harbour on the sea-coast for the line.
We have, &c.
Sirs,
Enclosure 3 in No. 1.
Mr. Mayers to President and Vice-Presidents of Board of Communications.
March 11, 1911. I HAVE the honour to acknowledge the receipt of your Excellencies' letter of the 4th instant, proposing that the loan for the Shanghai-Hangchow-Ningpo Railway shall be transferred entirely for application to the needs of a line from Kaifeng to Hsüchow, and that any extra funds that may be required for this purpose shall be borrowed from the British and Chinese Corporation (Limited).
Your Excellencies also expressed the intention, if the corporation should find themselves able to accept this proposal, to call upon them to engage an engineer on behalf of the Board of Communications to find by survey a harbour on the sea-coast for this line.
I duly communicated this proposal to my directors by telegraph, and an now authorised to inform your Excellencies that, subject to the authorisation of the proper
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