This Document is the Property of His Britannic Majesty's Government.]
CHINESE LOANS AND CONCESSIONS.
CONFIDENTIAL.
[October 1.]
SECTION 1.
157
ļ
[186071]
No. 1.
Memorandum communicated to French Ambassador, October 1, 1917.
THE memorandum communicated by the French Ambassador on the 20th September concerning the post of Deputy Associate Chief Inspector of the Chinese Salt Gabelle has been carefully considered by His Majesty's Government, who desire to offer the following observations:—
It will be within the recollection of the French Government that the post of Deputy Associate Chief Inspector was created in 1913 as the outcome of protracted negotiations between the representives at Peking of the five Powers interested in the Reorganisation Loan Agreement with the sole object of obtaining the German Govern- ment's acquiescence in the appointment of a British subject as Associate Chief Inspector of the Salt Administration, and of a Russian and a Frenchman to the posts of advisers in the Audit and Accounts Department.
The appointment of Deputy Associate Chief Inspector was secured definitely for a German subject by a contract concluded between the Chinese Government and the German Minister, and His Majesty's Chargé d'Affaires at Peking was perfectly correct in pointing out to his French colleague that this particular appointment does not form part of the stipulations of the Reorganisation Loan Agreement in regard to the establish- ment of a Salt Administration. The agreement, in fact, contains no mention of such a post. On the other hand, the terms of the contract concluded between Herr vou Haxthausen and the Chinese Government show that the appointment was made subject to special conditions which were not made applicable to the contract of the British Associate Chief Inspector, or to those of the French and Russian advisers, inasmuch as article 13 of Herr von Strauch's contract of engagement states: "If for any reason the Adviser and Deputy Chief Inspector vacates lits appointment before the expiration of the three years' term of his engagement, the Government shall appoint another official of the same nationality, and under the same conditions.” With the declaration of war against Germany the liability of the Chinese Government under the terms of this article ceased to exist. The German official having been ipso facto eliminated, His Majesty's Government are of opinion that the Chinese Government are under no obligation to replace him by one of another nationality, nor does it appear to them to be in the power of the Legations of Peking to show that the maintenance of the post is in any sense a necessity in order to secure the fulfilment of the provisions of the Loan Agreement.
It would appear that the Chinese Government, availing themselves of the termination of Herr von Strauch's contract, have decided to abolish the post of Deputy Associate Chief Inspector entirely, and that Sir R. Lane has concurred in this decision.
His Majesty's Government trust that the French Government will share their view that the eminent services which Str R. Dane has rendered in his capacity of Associate Chief Inspector, his brilliant success in the administration of the Gabelle, and the unique knowledge which he has acquired during his four years' tenure of office of the capacities and qualifications of his subordinates, as well as of the requirements of the service, justify them in attaching the greatest possible weight to any opinion which he may express in regard to the abolition of such a post as that under discussion, or the appoint- ment of a successor. Indeed, His Majesty's Government feel that, in a matter of this kind, directly affecting the internal organisation of the Chinese Salt Administration they must be guided entirely by his opinion. In these circumstances His Majesty's Govern- ment regret that they cannot see their way to instructing Mr. Alston to support the candidature of M. Lauru for the post of Deputy Associate Chief Inspector, and they venture to express the earnest hope that the French Government will not press the point.
Foreign Office, October 1, 1917.
[2788 a-1]