PUBLIC RECORD OFFICE
Reference :-
EPIC.O. 882
H
6 PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
I replied as follows:-
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"Your telegram of August 21st. Private letter from me, dated August 18th, is on its way to you. On its receipt you should see Viceroy again and urge on him the considerations contained in it. The Chinese Govern- ment is, of course, bound by the preliminary Agreement signed by Sheng, duly authorised, and the consent of his predecessor was not necessary. I do not wish to antagonise the Viceroy. We must try to persuade him to recognise the justice of our view and the binding force of the preliminary Agreement."
I do not propose officially to take any notice of the Viceroy's telegram, but I shall take an early opportunity of mentioning it as indicating a wrong judgment on these things.
In a few days I shall probably be able to address the Chinese Government officially, asking for the appointment of a negotiator.
In the Canton Consular archives there exists a paper which demonstrates that the present Viceroy's predecessor was cognisant of the arrangement for a preliminary Agreement. I have instructed Scott to show this to the Viceroy and to send you a copy. I wrote to you on August 18th explaining my view of the situation.
L.
GOVERNOR, Hong Kong, to HIS BRITANNIC MAJESTY'S MINISTER, Peking. (August 25, 1905.)
In view of the present hostile attitude of the Chinese in the matter of railway construction by foreigners, and in view of the probability of Japanese influence, which is undoubtedly considerable, extending in South China, whether we like it or not, I suggest, for consideration, whether Japanese co-operation might not be obtained for our railway policy in Kwang Tung if we shared equally with them the Hankow-Canton redemption loan and all concomitant advantages in Hupei, This is merely a suggestion Hunan, and Kwang Tung to be derived from it. prompted by my desire for the early completion of the Canton-Kowloon Railway Agreements. Of course, if we could get Japanese pressure exerted on our behalf on Chinese Authorities without such definite arrangement as I have indicated it would be better.
Enclosure 2 in No. 138.
DRAFT AGREEMENT FOR THE LOAN BY THE GOVERNMENT OF HONG KONG TO THE VICEROY AT WUCHANG OF £1,100,000.
This Agreement is made between His Excellency Chang, Junior Guardian of the Heir Apparent, Viceroy of the Hu-Kuang Provinces of China, acting under his Viceregal powers and with the Imperial Sanction for himself and his successors in office of the one part and the Government of Hong Kong of the other part.
Whereas the Viceroy is charged with the settlement of all questions concerning the Hankow-Canton Railway and for this purpose is in need of funds to buy back the concession for the said railway granted to an American Syndicate: and whereas the Viceroy has officially applied to the Government of His Britannic Majesty for financial assistance with a view to the due performance of the said charge laid upon His Excellency and whereas the Government of Hong Kong has agreed at the instance of the Government of His Britannic Majesty to afford His Excellency the Viceroy the assistance applied for it is now agreed as follows :—
1. The Government of Hong Kong agrees to lend to the Viceroy the sum of one million one hundred thousand pounds sterling payable as set forth in Clause 7 below.
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2. The term of the Loan shall be ten years calculated from the 27th day of November, 1905, and repayment of principal shall be made by ten equal instalments of £110,000 each commencing on the 27th day of November, 1906, provided that at any time after the payment of the fifth annual instalment the Viceroy shall be at liberty on giving six calendar months' notice beforehand to pay off the whole amount of the Principal then outstanding with interest up to the date of such paying off only and thereupon this Agreement shall cease and determine.
3. Interest on the Loan shall be paid at the rate of 44 per cent, calculated half-yearly on the amount of Principal from time to time outstanding.
4. All payments of interest and repayments of principal shall be made in accordance with the amounts and dates of the schedule attached to this Agreement to the Treasurer of Hong Kong at Hong Kong in sterling sight drafts or such equivalent of the same as the Government of Hong Kong may on each occasion agree to accept in lieu thereof.
5. This Loan shall be secured by a first mortgage on the opium revenues of the three Provinces of Hupei, Hunan, and Kwang Tung and shall as regards security for principal and interest rank before any Loan hereafter raised on the security of those revenues and the priority of this Loan shall be expressly stated in any Agree- ment for such subsequent loan secured wholly or in part on the said opium revenues. In case of need it shall be open to the Viceroy to supplement the above opium revenues by other revenues of his Provinces for the service of the present Loan: but in case of default with regard to payment of interest or repayment of principal of the present Loan the Viceroy may be called upon by His Britannic Majesty's Govern- ment to appropriate and place under administration of Imperial Maritime Customs further approved revenues as its security.
6. This Loan shall be further secured by deposit with His Britannic Majesty's Consul-General at Hankow of sterling Likin yearly bonds equal in value altogether to the total amount of the Loan, Principal and Interest, sealed by the Viceroy of the Hukuang Provinces and countersigned by the Foreign Commissioner of Customs at Hankow. In the event of the money to meet a payment of Interest or instalment of Principal not being handed to the Hong Kong Treasurer at Hong Kong on due date these Ļikin Bonds shall become available for the payment of Likin in the Hukuang Provinces: and the Provincial Authorities shall be instructed accordingly. 7. The proceeds of this Loan shall be paid by the Government of Hong Kong to the order of the Viceroy at New York in two instalments, namely, the equivalent of two million gold dollars on 29th September, 1905, and the balance of the £1,100,000, less interest on the first instalment at 4 per cent. from 29th September to 26th November, 1905, inclusive,, on the 27th November, 1905; and the Hong Kong Govern- ment may require from the Viceroy through His Britannic Majesty's Consul-General at Hankow such evidence as he may deem satisfactory of the due employment of the funds for the object stated, namely, the repurchase of the Hankow-Canton Rail- way concession.
8. On the execution of this Agreement the Viceroy shall obtain an Imperial Decree approving and sanctioning this Loan, which Decree shall be communicated to His Britannic Majesty's Minister at Peking officially before any of the proceeds of this Loan become payable.
9. The Viceroy guarantees that the Viceroy of the Liang Kuang consents to the pledging of the opium revenues of Kwang Tung and to the terms of this Agree- ment so far as they affect that Province.
10. This Agreement is executed in quadruplicate in English and Chinese, one copy to be retained by the Viceroy, one copy by the Government of Hong Kong, one copy by His Britannic Majesty's Minister at Peking, and one copy by His Britanni Majesty's Consul-General at Hankow. In the event of any doubt arising as to the interpretation of the contract the English text shall rule.
Signed at Wuchang by the contracting parties this moon of the year of the reign Kuang Hsu, being the day of
Western Calendar.
His Britannic Majesty's Consul-General, Hankow, for the Government of Hong Kong.
day of the
Viceroy.
1905.