CO882-(6-8) — Page 13

PUBLIC RECORD OFFICE

Reference :-

PILTIC.O. 882

||||||||

6PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO

390

EXTRACT from the "UNIVERsal Gazette" of March, 15, 1906

MEMORIAL by VICEROY of HUKUANG PROVINCES on his action in recovering the CANTON-HANKOW RAILWAY.

After being honoured with Your Majesty's instructions to devise measures as to the Canton-Hankow Railway question, I sent several telegrams to the officials and gentry of Hunan and Kuangtung to concert a method of actually providing funds. Later, I received from the Liang Kuang Viceroy on 16th January, 1905, a telegram stating the discussion of this matter was possible only on the funds to redeem the line being got ready, but the Kuangtung gentry were without cohesion, the advocates of the redemption having no money and the moneyed men not caring so that the

could gentry's resources

not be leant

on, while the official resources being absolutely bankrupt could even less bear such a mighty burden. He added, that as in case the contract was cancelled vast sums would be required at once to be paid over, even if there were any other scheme of finding the money the need was too pressing for them to avail. He suggested the propriety of the three provinces making a joint foreign loan of so many myriads, repayable in equal instalments over a series of years: if loan went through and concession was cancelled, the proceeds would redeem the line; if the concession was not annulled the money could be repaid at once so that the interest wasted would be limited. The Hunan gentry and merchants also telegraphed that they had no scheme for providing vast funds at once. Bethinking me that as the position of the three provinces was identical, there was no help, I then decided on borrowing the money. At the same time I telegraphed my views to the Governor of Hunan to take the opinion of his gentry, and his reply was that after thorough inquiry amongst them, they agreed to my proposal. Exhaustive inquiry proved that the English Consul's offer pro- vided the lowest rate of interest, and the full sun in sterling without discount, only he demanded besides privileges in Kuangtung, a point which I politely put off. This caused the negotiations to be protracted without settlement, until on 31st August, Liang Cheng, Your Minister to America, suddenly telegraphed that the China Development Company's Directors had executed the draft agreement under which the first instalment of 2,900,806 odd gold dollars was payable on 7th Sep- tember, ie., 9th of 3th moon, at New York, and as the date was at hand he must ask the combined provinces quickly to provide that the funds be remitted by tele- graph to America before the 7th September to prevent a catastrophe. I replied, asking him to get an extension of 10 days to enable provision to be made. answer was that he had consulted Foster as to postponement suggested, who replied, that he had, in accordance with my telegraphic statement that we were ready to redeem the concession at figure demanded, apprised Morgan that the execution of the regular agreement on the 6th would depend on the payment of this instalment. Any further change would render recovery impossible, and so he prayed that remit- tance he telegraphed. Now the idea of the Company was that China, being in their opinion very poor, could never within ten days suddenly find the vast sum of several millions. So their head shareholders, after signing the draft agreement, contrived to spin out three months without confirming it, keeping the completion of the matter uncertain so as to prevent arrangements for providing the money or borrowing it. And then seven days before due date, they telegraphed to China to confirm, execute, and pay the money. If money could not be got together, then this agreement was utterly upset, and they could taunt us with having no money and making fools of ourselves. This plot was the most cunning and deadly conceivable.

His

At the time the English Consul had already gone to Lu-shan to avoid the heat. I foresaw that negotiating in straits I should be sure to meet with extreme demands. Besides, the drawing of the agreement itself would need over 20 days, and if the sum payable to the Development Company was too late by a single day, the whole situation would he wrecked. At this moment I was unable to ask for time abroad, and equally unable to apply for aid to other provinces.

Here was a great undertaking, affecting the position of the whole of south China, an important measure ordered by special Resoript, which for two years had been discussed until the whole world knew of it. If simply because of want of funds redemption should prove impossible, and we cast away the draft agreement, not only would the power be lost for ever, but it would make all nations sneer at China's representatives as people who talked without making good, and this would

391

hamper in many ways all our future international dealings. During these seven days I wandered about my abode in absolute despair, and how this business was to be accomplished I dared not surmise.

The above was the sixth of my troubles.

Fortunately, the Hupei Government Bank's credit is good, and is trusted by the foreign banks. I called together the Commissioners and Intendants and held earnest debate. In consideration of the national interests involved, they agreed in taking the responsibility. So I directed the Government Bank to devise means to go surety and apply first to the Hong Kong and Shanghai Bank for a loan of Taels 3,000,000 at interest, the Government Bank itself collecting over 2,000,000, and, so quite beyond my hopes, the telegraphic remittance duly reached America in time. I at once, by telegram to the Grand Council, submitted to Your Majesty the final At the same Redemption Agreement, and obtained sanction to its being executed.

time I had telegraphed to the English Consul to return to Hankow and negotiate the loan agreement. The English Consul, seeing I had managed myself to raise temporary loan to pay the first instalment, and as the redemption of line was a matter of high politics, was also ready to assist in putting through the grand undertaking. Thereupon no further mention was made of the earlier demand, and the Articles of the Agreement were all drawn on lines of the August, 1900, Agree- ment, under which Hupei borrowed Taels 500,000 from the Hong Kong and Shanghai Bank for the provision of military needs for the protection of the Yangtze.. The Agreement has been communicated to the Board of Foreign Affairs. This sort of borrowing certainly does not imply the slightest lending of our railway rights.

The loan being settled, the second instalment was thereunder paid over in full to the Development Company on the due date-10th October.

Thereupon the Company telegraphed to the foreigners at its offices in Shanghai aud Canton to hand over by list to China's deputies the plans and records deposited in Shanghai and Canton, and the railway already built with machinery, cars, houses, and buildings and all appurtenances whatever. I had sent officers for the purpose to both places.

The Agreement, for the sale of the railway, drawn up with the Company states that "The Chinese Government takes possession of all the China Development Com- pany's properties in China, the railway completed, plant, survey maps and plans, special mining privileges, together with all rights and privileges in China, whether set forth or impliedly included." Consideration of the words "special" to "in- cludes," wili indicate how immense was the former great loss of rights which now happily is entirely redeemed, so that hereby complications are for ever cleared up and vast calamity removed. This success is humbly ascribed to the awful virtue of the Court, together with the whole-hearted support of the Council, the auxiliary scheme of the gentry and people of the three provinces, while the Minister, Liang Ch'eng, whose ability and experience are alike excellent, loyally devised for the State and suited his arguments to his opportunities.

Thus was this affair accomplished.

It has now been decided that the funds for constructing the line shall be pro- vided by the combined efforts of the officials and gentry of the three provinces, foreign loans being barred.

money.

But as the funds are to be collected through the gentry and people of each province, each will be concerned with its own finance and railway construction. There will have to be a general uniformity, but identity of system will be impossible. It will be quite dissimilar from the starting of railways elsewhere with borrowed On the principle that enterprises on part of gentry and people are entirely dependent on the aid of the local authorities, I submit to Your Majesty that it seems needful to charge the high provincial authorities concerned to instruct their sub- ordinates, high and low, together with the gentry, scholars, traders, and people in accordance with local conditions, to devise means to provide for undertaking, so that there be no want of co-operation nor the work be protracted.

I have now received from the Minister to America, Liang Ch'eng, by post the Agreement of sale negotiated with the Development Company, and the coupons for interest paid on the outstanding dollar bonds, as well as the inventories of the articles taken over by the deputies at Shanghai and Canton.

I am writing to the Board of Foreign Affairs and Commerce, and, having care- fully drawn up the statement appended, in concert with the Viceroy of Liang Kuang