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that if, for instance, half the material could be supplied from Hanyang or Tongshan, the Corporation would still be entitled to remuneration for its services and responsibilty in the construction of the line. He suggested that, on this basis, the minimum commutation would be £35,000, which is less than 2 per cent. on the loan. While considering the system adopted in the Shanghai-Nanking Railway more generally acceptable, the Corporation might be willing to accept such an arrange- ment with a view to concluding this vexed question.
His Excellency Tang Shao Yi observed that, in the event of the Corporation offering acceptable terms as regards the price of the loan, the amount of the commis- sion commutation might be increased.
At this point the meeting adjourned.
September 28, 1906.
44367
(Secret.)
MY LORD,
No. 316.
J. O. P. BLAND.
GOVERNOR SIR M. NATHAN to THE EARL OF ELGIN. (Received December 1, 1906.)
Government House, Hong Kong, October 31, 1906. REFERRING to my secret despatch of the 22nd August, 1906,* on the subject of the engagement of foreign engineers to superintend the construction of the Canton-Hankow Railway, I have the honour to enclose, for your Lordship's informa- tion, copies of correspondence which has taken place in this matter during the current month between His Majesty's Consul-General at Canton and myself.
SIR,
Enclosure 1 in No. 316.
I have, &c.,
M. NATHAN,
Governor.
Government House, October 12, 1906.
I HAVE the honour to enclose extracts from issues of the "Hong Kong Tele- graph" newspaper of the 9th and 11th instant dealing with the proposed engage- ment of an American engineer to be deputy engineer-in-charge of the construction of the Canton-Hankow Railway, and to request you to be good enough to ascertain for me if the statements therein are correct.
&c.,
R. W. Mansfield, Esq., C.M.G.,
&c.,
&c.
I have, &c.,
M. NATHAN,
Governor.
"HONG KONG TELEGRAPH," October 9, 1906.
THE YUET-HAN RAILWAY. (From a Correspondent.)
Canton, October 9. Some of the directors of the Yuet-han Railway Company, Limited, at Canton, thinking that the superintendence of the work of construction of the line is too respon- sible and important to be entrusted solely to Mr. Kong, the chief engineer of the line, are intending to engage the services of the former constructor, an American, Smith by name, to be the assistant, or deputy, engineer-in-charge, and with this object in view, have already wired to America, offering him the position, and asking him to come out as soon as possible. Whether he will accept the offer is, of course, not yet known, and remains to be seen.
* No. 292,
485
"HONG KONG TELEGRAPH," October 11, 1906.
CANTON-HANKOW RAILWAY.
FOREIGN ASSISTANT ENGINEER.
AMERICAN CONSTRUCTOR'S TERMS. (From Our Own Correspondent.)
Canton, October 10.
The Yuet-han Railway Company received a reply to the telegram which they despatched to the American engineer, named Smith, asking him on what terms he is willing to give his services to the Company, as assistant chief engineer. He replies that he is willing to come to Canton, on the understanding that he be employed by the Company for at least five years at the salary of $25,000 gold per annum, which equals $50,000 per annum local currency. The President, Mr. Chang To Chai, will consult with Mr. Kwong, the chief engineer, on the matter.
(No. 150.)
YOUR EXCELLENCY,
Enclosure 2 in No. 316.
His Britannic Majesty's Consulate-General,
Canton, October 18, 1906.
In reply to your letter of the 12th instant enclosing cuttings from the "Hong Kong Telegraph," I have the honour to forward a memorandum of a conversation between my Vice-Consul and Mr. Kwong on the subject of the engagement of an American engineer.
I propose shortly to obtain an interview myself with Mr. Kwong, and, in the meantime, I shall be glad to learn, as far as possible, your views on the subject. There can, it appears, be no question that Kwong is to remain, in appearance at all events, chief engineer of the line, and he has probably realised that foreign assist- ance is indispensable. I am not in a position to name a thoroughly competent rail- way engineer, who would consent to take a nominally subordinate position at such a salary as the Chinese would offer. The position would not be a pleasant one. It would mean practically all the work and responsibility and little or none of the credit, though I should think that Kwong, who speaks English and has worked for a long time under Kinder, would not be hard to get on with.
Awaiting your reply,
His Excellency
Sir Matthew Nathan, K.C.M.G.,
&o.. &c., &c.
I have, &c.,
R. W. MANSFIELD,
Consul-General.
MEMORANDUM of a Conversation between Mr. Kwong, Chief Engineer of the Yuet- Han Railway, and Mr. H. E. Sly, Vice-Consul at Canton, on behalf of His Majesty's Consul-General. Subject: The Report published in the "Hong Kong Telegraph" of the 9th and 10th instant with reference to the alleged engagement of Mr. Smith, an American, as Assistant Chief Engineer.
Mr. Kwong admitted that Mr. Smith had been approached with the object as reported, but did not think that he would come. On reference to the representa- tions made last month to the Viceroy at the request of His Excellency the Governor of Hong Kong, when it was reported that a Belgian engineer was to be employed, Mr. Kwong stated that, as chief engineer, he was at liberty to engage as assistant engineers the nationals of any Power. What he wanted was the best man.
He wished to know whether it was claimed that all foreign engineers engaged should be British, and could His Majesty's Consul-General produce any agreement. Also would there be any objection to the employment of Japanese? He would require in all five to six foreign engineers, three of whom were needed at once.
Could the Consul-General recommend any British experts to fill these posts? The undertaking was in the hands of a Chinese Company, and, as such, differed
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from an Imperial line. Tenders would be offered in the open market for the supply of materials, rolling stock, &c., required.
SIR,
Enclosure 3 in No. 316.
Government House, October 22, 1906.
I HAVE the honour to acknowledge the receipt of your letter, No. 150, dated the 18th instant, forwarding a memorandum of a conversation between your Vice- Consul and Mr. Kwong, chief engineer of the Canton-Hankow Railway, on the sub- ject of the engagement of engineers for the construction of that line.
2. You are aware, as is doubtless Mr. Kwong, of the circumstances in which I feel that the Government of Hong Kong is entitled to have some voice in this matter. More than a year ago and during the first year that I administered this Government I was approached with the suggestion that it might render valuable service to that of China by enabling it to redeem the Canton-Hankow Railway, which had passed into foreign hands, in which it was considered against the interests of China that it should remain. I listened to this suggestion, anxious as I then was to do a service to China and strengthen the friendly bonds that united this Colony to that country. As a result the railway in question was redeemed by means of a loan from this Government granted on terms more favourable than those of any previous transaction of this nature. The pecuniary advantage which was antici- pated would accrue to Hong Kong, and which is accruing is very small and would certainly in itself have been no inducement to the Colony to undertake the business. Viceroy Chang Chih Tung, however, who negotiated the loan, recognised the favour- able nature of the terms under which it was made and gave an assurance that the first application for any further loan required for purposes of construction should be made to England, and, if England lent the money, half the engineers should be British. In so far as no application has been made to England for funds the con- dition as to half the engineers being British has not come into force. So long as only Chinese money is used and only Chinese engineers are employed on the Canton- Hankow Railway I have nothing to say beyond to express a hope that the under- taking may be early and successfully carried out, but I think that if, after the action of the Hong Kong Government in enabling the railway to be constructed as a Chinese undertaking, the attempt is made to get other foreign, rather than British engineers for it, I am justified as looking on the Chinese as ungrateful and to treat their action in this matter as needlessly unfriendly.
3. I observe that Mr. Kwong draws a distinction between the railway now that it is in the hands of a Chinese Company and what it would have been as an Imperial line. It seems to me that as the existence of the Chinese Company has only become possible through the action of the Hong Kong Government in lending the money required for the redemption of the railway, the ingratitude to which I have referred would only be more marked if the Company gives a preference to other foreign over British engineers,
4. I do not believe that I should have much difficulty in finding a competent deputy chief engineer and suitable executive and assistant engineers if I am asked to help in this matter. A salary of $1,250 per mensem for the deputy chief engineer would seem to me a reasonable though by no means an excessive one, while an executive engineer might be obtained for $750 and an assistant for $500 per mensem.
5. As regards the senior foreign engineer, it might facilitate matters if he were given the appointment of chief engineer with charge of, and responsibility for, all engineering details Mr. Kwong himself taking the superior title of general superin- tendent, but I leave it to you whether or not to make this suggestion.*
R. W. Mansfield, Esq., C.M.G., &c., &c., &c.
SIR,
Enclosure 4 in No. 316.
I have, &c.,
M. NATHAN,
Governor.
Government House, October 25, 1906. REFERRING to my letter of the 22nd October on the subject of the engage- ment of engineers for the construction of the Canton-Hankow Railway, I have the
487
honour to enclose copies of telegrams which have passed between Mr. Hunter, the chief manager of the Hong-Kong and Shanghai Bank here, and the manager of the Bank at Bangkok, with regard to a Mr. Smyth, who has been employed on the Royal Railways of Siam, and is very strongly recommended to me by Mr. Hunter, being selected for the appointment of deputy chief engineer to the railway in question.
2. As I have no personal knowledge of Mr. Smyth or his qualifications it will be necessary for me to await the receipt of his testimonials, now 'on their way, before I shall be in a position to make a definite recommendation with regard to him. In the meantime, I have thought it well to inform you of the availability, at three or four weeks' notice, of this gentleman in case Mr. Kwong shows anxiety for an early settlement. Mr. Hunter, whose position would preclude him from making a recommendation that might not turn out satisfactorily, writes to me that he is "confident that the Chinese could not do better."
3. You will observe that the salary suggested to Mr. Smyth was $1,000 per mensen, whereas that mentioned in paragraph 3 of my letter to you of the 22nd instant is $1,250 per mensem. When putting the larger amount before you I antici- pated that a request would be made for house allowance and the additional $250 per mensem was intended to provide for this.
4. You will no doubt let me know, as soon as possible, whether, providing Mr. Smyth's testimonials are satisfactory to me, I may cause a definite offer to be made to him.
R. W. Mansfield, Esq., C.M.G., &c., &c., &c.
I have, &c.,
M. NATHAN,
Governor.
CHIEF MANAGER, Hong Kong and Shanghai Bank, Hong Kong, to MANAGER,
Bangkok. (October 21, 1906.)
Governor of Hong Kong has asked me as to deputy chief engineer Canton- Hankow Railway to work under Chinese chief engineer, whose control it is believed would be nominal. Railway being constructed by Chinese Company. Re foregoing, enquire Smyth would be disposed to consider appointment. Salary, $1,000 per mensem. If so, how soon after appointment could he be in Canton? (Governor would require references to some consulting or chief engineer as to qualification.)
MANAGER, Hong Kong and Shanghai Bank, Bangkok, to Chief Manager, Hong Kong.
Smyth willing to accept with contract three or five years, adequate house allow- ance in addition to salary. Testimonial follows by next mail. He could start three
to four weeks after appointment.
(No. 158.)
Enclosure 5 in No. 316.
His Britannic Majesty's Consulate-General, YOUR EXCELLENCY,
Canton, October 26, 1906. REFERRING to your letters of the 22nd and 25th instant relative to the appoint- ment of an assistant engineer for the Canton-Hankow Railway, I have the honour to state that I have just had a long conversation with Mr. Kwong Suen, now chief engineer of the projected line. I began by pointing out to him that, though we did not assume any right to dictate what foreigners should or should not be appointed to assist in the construction of the railway, it would, after the special assistance given by the Government of Hong Kong to enable China to redeem the concession, be considered, both by us and by other nationalities, as an intended slight if, at any rate, the head of any foreign staff engaged were other than an Englishman. That