2
prospecting and working cal in certain districts of the province by a joint Sino-British company. Copies of this correspondence are enclosed, and it is not without interest to compare the recent American attitude towards this enterprise with that reported in Sir John Jordan's telegram No. 848 of the 8th October, 1918, at which time the American Legation were quite prepared to admit the impropriety of American interests securing a mining monopoly in provinces contiguous to the British colony of Hong Kong. When informing His Majesty's consul-general at Cauton in a despatch dated the 20th November (copy enclosed) of the action taken at Peking, Mr. Clive instructed Mr. Goffe to continue to use his influence with the new Canton Government in favour of recognition of the agreement, and on the 23rd December Mr. Goffe reported that the latter's attitude was not unsatisfactory. They had raised objections on minor points and required time to consider how far the monopoly charge (which was being exploited by American-owned papers) might afford ground for protest by other Powers.
On the 4th January Mr. Goffe reported that the Canton authorities were loth to recognise the agreement, fearing that it would constitute a precedent for recognition of other agreements entered into by their predecessors of which there were several in existence, and that they suggested drawing up a fresh agreement. Mr. Goffe objected to this, but having offered to consider modification of the original agreement, the Chinese defined their objections as follows:—
1. The area covered by the agreement was too large.
2. The railway clause (15) was too vague.
3. By-products were not mentioned in the agreement,
4. The period of the agreement (90 years) was too long.
As the modifications seemed reasonable, I informed Mr. Goffe that the syndicate would be well advised to endeavour to come to terms with the new Government thereon, provided that any addition to the agreement embodying such modifications were made in the name of the present prvioncial authorities, and that all reference to the independent "Military Government," as such, were avoided.
In the meantime the Wai-chiao Pu had replied on the 20th December, refusing Mr. Clive's request for ratification of the agreement on the ground that it had been concluded without the consent of the Central Government, and quoting the view of the Ministry of Commerce that the number of districts covered came near to constituting a monopoly. I enclose a translation of this reply which, as I pointed out to Dr. Yen at an interview on the 29th December, merely begged the question, for if we had intended to dispense with the Central Government's sanction we should not have applied for it as we had done in Mr. Clive's note of the 30th October, and such an inconsequent refusal of our request was but a poor return for our recognition of the Central Government's authority over a so-called independent province, besides being in direct conflict with the President's recent assurance to me of his Excellency's desire to support any offer of British co-operation in the development of Chinese resources,
Dr. Yen admitted the force of my arguments, and on my adding that there should be no difficulty in adjusting the question of area, he agreed to reconsider the matter in consultation with the Ministry of Commerce. He also vouchsafed the information that the French Legation had protested against the agreement under article 5 of the French Treaty of 1895; he gave, however, no indication that he was prepared to admit the validity of the French contention, which I submit can hardly be maintained, in view of the fact that the subsequent exchange of notes of the 12tli June, 1897 (see Rockhill's Treaties, p. 25), cancelled the definite priority conceded to the French under that
article.
I saw the Minister for Foreign Affairs again on the 19th January, when be informed me that no fresh difficulties would be raised by Peking to ratification, provided that the syndicate could come to terms with the present provincial authorities at Canton as to modifications in the agreement, and that means could be found to satisfy the Central Government that the modified agreement had, in fact, been approved by the province.
This information was communicated to His Majesty's consul-general at Canton for transmission to the syndicate, who had already informed me confidentially that they would be willing by supplementary agreement to reduce the number of districts mentioned in the original agreement to five or six, provided a clean title were secured by them and the demarcation period were extended to date from the signature of the supplementary agreement, they were also willing to reduce the term of the agreement
3
from ninety to seventy-five years and to relinquish other minor rights, provided the cash deposit payable under article 4 were proportionately reduced.
The material for a compromise appeared, therefore, to be ready to hand, but as local political conditions showed signs of increased instability with a prospect of a return to power of the Kwangsi Party, or of the association of certain Hong Kong Chinese with General Chen Ching-ming's provincial Government, either of which prospects might have been favourable to the syndicate, the latter decided not to push the negotiations for modification of their agreement pending developments.
It was at this period that Mr. Stevens, the representative of the American group in the consortium," visited Canton and concocted his memoranda of the 10th and 25th February (see your Excellency's despatch No. 472 of the 13th May), alleging that the Cassel agreement was the outcome of a deep-laid plot on the part of His Majesty's Government to secure control of Southern China to the detriment of American commerce and of the "cruelly exploited" Chinese.
Although Mr. Stevens doubtless imbibed most of his ideas from the local American missionary and educational circles who are extremely friendly with Sun Yat Sen and the Chinese Radical leaders, and have long carried on a campaign of hostile insinuation against us in Canton, as reported in the enclosed despatch from Mr. Jamieson (who had now replaced Mr. Goffe as consul-general at Cauton) of the 22nd February, there would seem to be little room for doubt that he did not conceal them from the Chinese with whom he came in contact. However this may be, when, subsequent to the assumption of the Presidency of the republic by Sun Yat Sen in April and to the launching of the attack by Canton on Kuangsi, negotiations were once more in train between the syndicate and the Canton Government, the latter's tone had undergone a change, and any recognition or modification of the original agreement was absolutely declined, though willingness was expressed to enter into a fresh agreement. Sun Yat Sen, angered by our attitude towards his Government generally, was also reported to be considering giving the coal-mining rights in the Canton province to the Japanese in return for their support.
In view of our previous refusal to consent to any cancellation of the original agree ment, His Majesty's consul-general applied to me for instructions, and in reply I informed Mr. Jamieson on the 13th June that, provided he was satisfied that the syndicate could secure permission to commence work more easily by accepting the Chinese offer to negotiate a fresh agreement, I saw no objection to this course, subject to any agreement being worded as made with the provincial authorities of Canton and not with the Military Government. I added that I was not prepared to purchase any agreement at the cost of recognising the Government of" President" Sun Yat Sen, but that, short of this, His Majesty's consul-general should do all in his power to assist the syndicate to secure permission to commence operations on reasonable terms,
These views were duly conveyed to the syndicate, and the latest information in my possession with regard to the present state of their negotiations is contained in the enclosed despatch from Mr. Jamieson dated the 25th ultimo,
With regard to the prominence which, as stated in your Lordship's telegram No. 245 of the 29th ultimo, has been given in certain sections of the English press to the falsehoods fathered by Mr. Stevens ou the subject of the Cassel agreement, I have little to add to the information contained in my telegrams No. 234 of the 14th June and No. 297 of the 31st ultimo.
Extracts from the utterances of the "Daily Herald" and the "Manchester Guardian" have already been reproduced in the local press, and I tear that the only conclusion to be drawn is that Mr. Stevens's action forms part of a deliberate policy of anti-British propaganda aimed at depressing the balance of commercial oppertunity in this country in favour of America by misrepresenting us as unscrupulous adventurers only fit to be hated, and as co-defendants with the Japanese before the bar of inter- national opinion. It is interesting to note, however, that this policy is apparently not supported by American interests possessing a stake in, and experience of, this country, such as the Standard Oil Company, whose representative is quoted in the last enclosure to this despatch as having told his Chinese enquirers that China had always had a square deal from the British,
(Copy to Hong Kong; copy to Canton.)
I have, &c.
B. ALSTON.
766