PUBLIC RECORD OFFICE
Reference :-
TTIC.O. 882
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
6 PUBLIC RECORD OFFICE, LONDON
08
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7. All rolling stock, plant, machinery and materials and goods acquired by or on behalf of the Railway Company, shall be free of all import duties, &c.
8. During construction the Government to pay half-yearly to the Company a sum equal to 3 per cent. per annum on the full nominal amount of the Railway Company's issued Capital in Shares, Debentures and other Securities, and after the Railway has been completed and opened for traffic, the Government to guarantee to pay to the Railway Company half-yearly such sum as may be required to make up the net revenue to a sum equal to 3 per cent. per annum on the full nominal amount of the Company's issued Capital in Shares, Debentures, or other Securities, and the Railway Company shall undertake and agree to pay to the Government the net earn- ings during construction and afterwards an annual sum equal to one moiety of the Railway Company's surplus net profits derived from working the Railway in each year all expenses and outgoings of all kinds having been paid, including the Railway Company's administration expenses, and after payment of all interest on Mortgages, Debentures, or other borrowed money, all dividends on Preference Shares and Stock, and of annual cumulative dividends of
per cent. on the paid-up ordinary capital of the Railway Company for the time being issued and entitled to dividend.
9. The Government shall have the right at any time after a period of from the date hereof to purchase and take over the Railway with the rolling stock, plant, stores and materials and everything connected therewith including the Tele- graph and all current contracts and engagements of the Railway Company indemni- fying the Railway Company against all liabilities upon giving twelve calendar months' previous notice in writing to the Railway Company in London of its intention so
to do.
years
10. The price to be paid by the Government to the Railway Company for such purchase of the Railway, its property, effects and telegraph shall be a sum in cash sterling equal to the amount of the Railway Company's issued capital, debentures and other securities plus the amount of any reserve funds accumulated out of the profits of working the Railway or otherwise on the date of the expiration of such 12 months' notice, first giving credit to the Government for their proportion on that date of the balance of any reserve funds which shall have been created out of the Govern- ment's portion of the profits of working the Railway. As a further consideration for such purchase the Government shall also pay to the Railway Company a sum equal in amount to
times the whole average annual net profits of working the Railway for the three years actually preceding the completion of such purchase, provided always that such last mentioned sum shall not in any event be more than per cent. of the total amount of the Railway Company's issued capital, debentures and other securities. Such cash payments to carry interest against the Government at the rate of 7 per cent. per annum from the date on which the purchase shall take effect, and upon payment thereof in full the Railway Company shall be bound to give up possession of the purchased property to the Government,
5732
(Confidential.)
No. 14.
COLONIAL OFFICE to FOREIGN OFFICE.
SIR,
Downing Street, April 22, 1904. I AM directed by Mr. Secretary Lyttelton to acknowledge the receipt of your letter of the 16th of February, and with regard to its first two paragraphs dealing with the Hankow-Canton railway, to transmit, for such action as may appear fit to the Marquess of Lansdowne, copies of further despatches and of a telegramt from the Officer Administering the Government of Hong Kong, showing the progress that is being made in the transfer of this undertaking from American management to Belgian direction in Russian and French interests.
The corre- spondence also suggests the necessity of steps being taken to stop this transfer which, apart from being antagonistic to British interests in Southern China, is apparently not looked upon with favour by the Chinese Government, from fear that it may result in weakening Chinese sovereignty in the control of the railway.
2. I am also to enclose a copy of a confidential despatoht from the Acting
* No. 12.
• No. 6.
↑ Noe. 7, 8, 11, and 9.
19
Governor as to a possible concession for the construction of a railway from Chin Kiang, on the Yangtze, to the Hong Kong frontier.
3. With regard to the remaining paragraphs of your letter dealing with the construction of a railway between Hong Kong and Canton, I am to request you to inform Lord Lansdowne that proposals recently received from the British and Chinese Corporation are now under consideration, and Mr. Lyttelton will com- municate further with his lordship on this subject.
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SIR,
(Confidential.)
No. 15.
I am, &c.,
C. P. LUCAS.
ACTING GOVERNOR MAY to MR. LYTTELTON. (Received April 25, 1904.)
Government House, Hong Kong, March 23, 1904. REFERRING to my previous despatches on the subject of the Canton-Hankow Railway, I have the honour to transmit, for your information, the enclosed news- paper report of a speech made by Mr. Gershom Stewart, Member of the Legislative Council, at the recent annual meeting of the local branch of the China Association.
2. Mr. Stewart has been resident in the Colony for over 20 years, and is one of the ablest men here, and a very shrewd and successful man of business. keenly interested in the development and progress of the Colony, but has no pecuniary interest in the proposed line of railway. His remarks are, therefore, valuable as showing the opinion of an unbiassed mind, which looks only to the interest of the Colony in this matter.
He is
3. You will observe that Mr. Stewart shares my opinion that it would he a sound transaction for this Colony to guarantee a moderate interest on the cost of construction of the line, and that he emphasises the crucial point in the question when he says that the linking of this port with Canton would render impossible the development of any port on the banks of the Canton River as a rival to Hong Kong.
4. I submit that till Hong Kong is protected, by the construction of the railway, from such competition, her commercial supremacy will remain in danger.
I have, &c.,
F. H. MAY, Officer Administering the Government.
Enclosure in No. 15.
EXTRACT FROM THE "HONG KONG DAILY PRESS," dated 18th March, 1904. HON. GERSHOM STEWART: Mr. Chairman and gentlemen. -I have very much pleasure in seconding the adoption of the report and accounts. The report came into my hands about two days ago, and when Mr. Wilcox asked me to second the motion for its adoption I hardly thought I would have time to know very much about what the Association has been doing. However, I am glad to say that when I opened the report and began to read it, the subject-matter of which it treated was of such interest that I read it right through without once putting it down. I congratulate the committee on the useful work they have done, especially since the latter half of 1903, when they have actively tackled several very important subjects. The three which occur to me as the most interesting are the occupation of Newchwang by the Russians in violation of all pledges and treaties, the construction of the railway between here and Canton, and the opening of Watchow. With regard to the first, I feel that protests such as ours will carry considerable weight with our Home Government, especially at a moment such as the present. It seems to me that, although our country has taken no active steps to vindicate its treaty rights openly, protests such as that which has been sent forward by this committee will strengthen them in their determination to support to the utmost of their ability what our allies are endeavouring now by all the efforts in their power to secure-free and open rights in Manchuria to all traders. (Applause) With regard to the construction of the railway, I do not know enough about it to express an opinion about the deviation of route which the committee's letter of the 12th December recommends. But I am heartily gial to see that the committee have addressed them- selves to the British and Chinese Corporation apon the subject of this long hung-up concession. of opinion that failing every other means of making that railway it would be a sound thing for this Colony to guarantee a moderate interest on the cost of construction. In any case the amount the Colony would be liable for would not be very great, and if the railway prospered the guarantee of a certain interest might never be called up; and I consider that even in the event of a small lebit in the first year or two the prospects of a fair revenue from that railway are extremely good-(applause)- because the Canton delta is, as we all know, both fertile and populous. In regard to the opening of
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