226
a Colonial Loan otherwise than by the issue of Inscribed Stock. But it has been pointed out to me that the circumstances of the present loan, so far as they relate to the advance made to the Viceroy at Wuchang, are altogether exceptional. The loan is to be repaid in ten years at the outside, and possibly after five years; and it may prove advantageous to issue this loan in the form of debentures repayable by ten annual drawings proportionate to the instalments due from the Viceroy.
It has, therefore, been suggested that the most convenient course will be to amend the Ordinance of 1893 by providing in general terms that, notwithstanding the provisions of Section 3, it shall be lawful for the Governor to raise money by debentures or partly by debentures and partly by Inscribed Stock on conditions as to the repayment of the debentures as the Crown Agents, with the approval of the Governor, may prescribe. A saving clause should be added providing that nothing shall affect the rights acquired, or liabilities incurred, under the provisions of the principal Ordinance, and it should be made clear that the Amending Ordinance will apply to the loan just authorised.
You should report to me by telegraph as soon as this Ordinance has been passed, as it is important that the Crown Agents should be in a position to raise the loan at the beginning of the new year, and you should take the earliest opportunity of informing me as to the amounts and dates of your probable requirements in respect of such part of the loan as is not required on account of the advance to the Viceroy.
I have, &c.,
37732
ALFRED LYTTELTON.
237
ment of Hong Kong to the Viceroy at Wuchang, I am directed by Mr. Secretary Lyttelton to transmit to you, for your information, a copy of the Agreement as signed by the Viceroy and by the Consul-General at Hankow on behalf of the Colonial Government.
I am, &c.,
38126
GENTLEMEN,
No. 160.
H. BERTRAM COX.
COLONIAL OFFICE to CROWN AGENTS. [Answered by No. 188.]
I AM directed by Mr. Secretary Lyttelton to acknowledge the receipt of your
Downing Street, November 3, 1905. letter of the 28th ultimo† respecting the mode of raising the Hong Kong loan of £2,000,000.
In deference to your representations Mr. Lyttelton has addressed to the Governor of the Colony the despatch of which a copy is enclosed for your information. The instructions contained therein will meet the points raised by you with regard to this particular loan; but I am to observe that the Secretary of State, before he authorises the abandonment of all the advantages of borrowing by stock, which is a trustee security on which the stamp duty can be compounded, will require very cogent reasons for reverting to the antiquated system of borrowing by debentures subject to annual drawings.
PUBLIC RECORD OFFICE
Reference :-
PILLIC.O. 882
6
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
COPYRIGHT PHOTOGRAPH-NOT TO
No. 158.
COLONIAL OFFICE to FOREIGN OFFICE. [Copy to Governor, November 3, 1905, Secret. L.F.]
[Answered by No. 165,]
(Confidential.)
SIR,
Downing Street, November 3, 1905. WITH reference to previous correspondence respecting the loan by the Govern- ment of Hong Kong to the Viceroy at Wuchang, and the proposed (anton-Kowloon Railway, I am directed by Mr. Secretary Lyttelton to transmit to you, to be laid before the Marquess of Lansdowne, copies of two further despatches* (with their enclosures in original) from the Governor of the Colony on the subject.
Mr. Lyttelton would invite Lord Lansdowne's attention to the observations contained in paragraph 3 of the despatch of the 22nd September, in which he fully concurs, with regard to the assistance rendered by Mr. Fraser in the loan negotiations.
Lord Lansdowne will observe that, in paragraph 6 of the same despatch, Sir M. Nathan suggests the advisability of approaching the British and Chinese Corpora- tion with a view to their surrendering their Concession for the Canton-Kowloon Railway. Mr. Lyttelton has, however, no reason to suppose that the Corporation would favourably entertain the idea, at any rate in present circumstances, and he would, therefore, propose to take no action in the matter pending further informa- tion as to the results of Sir E. Satow's represcutations to the Chinese Government.
It is requested that the enclosures to Sir M. Nathan's despatches may eventually be returned to this Department.
37732
No. 159.
I am. &c..
H. BERTRAM COX.
COLONIAL OFFICE to CROWN AGENTS.
(Confidential.)
GENTLEMEN,
Downing Street, November 3, 1905. WITH reference to previous correspondence respecting the loan by the Govern-
+ No. 148.
Nos. 148 and 149.
39287
(Secret.)
No. 161.
I am, &c.,
H. BERTRAM COX.
GOVERNOR SIR M. NATHAN to MR. LYTTELTON. (Received November 4, 1905.)
SIR,
Government House, Hong Kong, October 6, 1905. In continuation of my secret despatch of the 23rd September, 1905,§ I have the honour to enclose, for your information and record, a paraphrase of further telegraphic correspondence with yourself, His Britannic Majesty's Minister at Peking, and His Britannic Majesty's Consul-General, and Vice-Consul, at Hankow, on the subject of the loan by Hong Kong from to-day's date of £1,100,000 to the Viceroy at Wuchang for the redemption of the Canton-Hankow Railway.
2. The correspondence now forwarded deals with (1) in telegrams (XCII and XCIII) the form of receipt for £700,000 of that loan to be given by the Chinese Minister at New York, (2) in telegrams (CI, CII, CIII, CVI, and CVII) with an alteration in the proposed allotment of the sum of £1,100,000 between that Minister and the Hong Kong and Shanghai Banking Corporation, and (3) in the remaining telegrams with a proposal of the Viceroy's that the amount of the loan should be increased by £250,000.
3. With regard to (1) it seemed to me sufficient if the receipt furnished by the Chinese Minister at New York definitely connected the payment to him with the agreement under which it was made.
4. With regard to (2) it was so obviously undesirable to alter the payments provided for in the agreement without good reason assigned for such alteration, that I did not think it worth while troubling you with a communication in the matter.
5. The reason for (3) appears to have been misconceived by Mr. Savage, the Vice-Consul at Hankow, who has apparently been acting for the Consul-General in Mr. Fraser's absence down the river. The proposed further loan of £250,000 or £200,000 (it is not clear from Mr. Savage's telegram of 3rd October (XCV) which is the correct amount) would seem to be required, not to buy out outstanding Belgian shareholders, as stated in that telegram, and repeated in mine to you of the following
18883
Sub-enclosure 1 to Enclosure 2 in No. 148.
† No. 151. * No. 157.
No. 149.
2 FI
22K