i
PUBLIC RECORD OFFICE
Reference :-
C.O. 882
6 PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
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occupy four years against two years for the Chinese section, it follows that for two years after completion the Chinese section will have to rely entirely upon its own traffic to pay the interest on the bonds, failing which the Chinese Government will have to provide it; the only alternative being to increase the loan to a safe figure (of which the whole need not be issued) or to 'take power in the Agreement to issue supplemental pari passu bonds in the event of the principal loan being insufficient.
The engineer's estimate for the construction and equipment of 24 miles in British territory, exclusive of land, is £488,317.
20756
FOREIGN OFFICE to COLONIAL OFFICE.
(Confidential.)
No. 94.
(Received June 16, 1905.)
[Answered by No. 105.]
SIR,
Foreign Office, June 15, 1905. I AM directed by the Marquess of Lansdowne to transmit to you, herewith, for the consideration of the Secretary of State for the Colonies, copy of a telegram from His Majesty's Minister at Pekin forwarding an application, which has reached him, through His Majesty's Consul-General at Hankow, from the Viceroy at Wuchang for a loan to enable him to buy up the American shares in the Hankow-Canton Rail- way, and thereby secure control over the Company by which the line will be built.
It will be observed that Mr. Fraser calls attention to the competition of the Germans and Japanese, who are said to be offering very advantageous terms, whilst the composition of the Board of the Hong Kong and Shanghai Bank, and its rela- tions with the Deutsch Asiatische Bank make it awkward for the Viceroy to approach it in the matter. Sir E. Satow adds that the only other British bank in the Far East is the Chartered Bank of India, Australia, and China, which hitherto has done but little Government loan business, and in these circumstances he suggests that this country should advance the money.
As Mr. Lyttelton is aware there is no prospect of such a proposal being favour- ably entertained by the Lords Commissioners of the Treasury, but before informing Sir E. Satow to this effect Lord Lansdowne would be glad to know if, in Mr. Lyttel ton's opinion, it would be worth while to ascertain whether the Government of Hong Kong would entertain the idea of assisting the Viceroy.
The importance attached by the Colony to the exercise by this country of control over the Hankow-Canton Railway was shown in the despatches from the Officer Administering the Government of that Colony which were forwarded in your letters of February 4th and April 22nd, 1904.*
Enclosure in No. 94.
I am, &c.,
F. A. CAMPBELL..
Sir E. SATOW, Peking, to the MARQUESS OF LANSDOWNE. (Sent 5.25 p.m., received 6.45 p.m., June 7, 1905.) TELEGRAM.
(Decypher.)
No. 110. Following telegram received from His Majesty's Consul-General at Hankow:-
“Very confidential.-Viceroy of Wuchang wants loan under Imperial sanction 5,000,000' taels for 20 years secured on Opium Revenue of Hupei and Hunan, which is left to him under the new arrangements. He wishes object kept very secret; it is to pay for Mr. Pierpoint Morgan's block of shares in the Hankow-Canton Railway, bargain for which is practi- cally completed. Possession of these will give control over Company.
* Nos. 4 and 14.
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"Japanese and Germans are bidding for this loan, which will in
all probability, fix allotment later
large railway loan with its concomitant advantages. Their proposals are very tempting so that Viceroy, although he wants to borrow from us, would not be justified in accepting worse conditions than those Board of Revenue recently obtained. Composition of Board of Hong Kong and Shanghai Bank and its relations with German Bank make it awkward to approach. Viceroy desires your advice, and is ready to discuss details personally, if you give him encouraging reply. He has the prospectus of the last loan issued by Hong Kong and Shanghai Bank, and will probably no longer object to demand for bonds signed by the Chinese Minister at London."
The other British Bank in China is the Chartered Bank of India, Australia, and China. It is a sound establishment, but hitherto has done but little government loan business. I suggest that it would be worth the while of Great Britain to advance this money to the Viceroy.
19701
No. 95.
COLONIAL OFFICE to THE BRITISH AND CHINESE CORPORATION, LIMITED. [Answered by No. 97.]
SIR,
(Confidential.)
Downing Street, June 15, 1905. WITH reference to previous correspondence respecting the proposed Hong Kong-Kowloon Railway, I am directed by Mr. Secretary Lyttelton to inform you that in a letter of the 17th April from Mr. C. H. Ross to Sir E. Satow-a copy of which has been communicated to this Department by the Foreign Office the fol- lowing passage occurs:-
"With regard to Section 16" [of the Working Agreement] "this is a clause on which I anticipate much discussion. Our own experience, however, in dealing with Chinese officials is to ask for more than we expect to get, so as to leave a margin for concessions later on, and possibly the Colonial Office in passing this clause held somewhat similar views."
2. You are aware that the terms of the section referred to were settled after prolonged discussion and full communication to the Directors of the British and Chinese Corporation of the views held by the Secretary of State on the point. It also appears from a despatch from the Governor of Hong Kong* that he intimated to Mr. A. J. Barry in January last that he would not recommend any other mode of sharing the profits, and that Mr. Barry undertook to inform the Directors accordingly. Moreover, it will be within your recollection that shortly before Mr. Ross's departure you called at the Colonial Office, accompanied by that gentleman, when the matter was touched upon. It was then pointed out that it was necessary to the success of the negotiations that Mr. Ross should loyally endeavour to obtain the consent of the Chinese Government to this particular stipulation no less than to the others embodied in the draft agreement, and the most satisfactory assurances were given in this respect by you and Mr. Ross.
3. In these circumstances it is with surprise and regret that Mr. Lyttelton has observed that Mr. Ross, in his communication to Sir E. Satow, should throw doubt on the attitude of the Secretary of State in the matter. If the negotiations should hereafter break down on this point it may be necessary for him to reconsider the whole position.
• No. 60.
I am, &c.,
C. P. LUCAS.