CO882-(6-8) — Page 28

PUBLIC RECORD OFFICE

Reference :-

TILLC.O. 882

9

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH-NOT TO

420

In November last year the memorialist was honoured with this preliminary message: "The question of the Canton-Hankow Railway is serious; now that the Development Company is considering the cancellation of the concession we must arrange for its being taken over. Chang Chih-tung will thoroughly consider and devise suitable steps.

The expressions" arrange for its being taken over" and "devise suitable steps showed that the whole of the railway matters from beginning to end were included in the charge committed by Their Majesties. In his humble judgment how dare he disobey the Order thoroughly to arrange? But the censor looks on this as monopolising. Had he only cancelled the concession and not arranged redemption funds and the result been either repudiation as funds were wanting or the agree- ment, in fact not cancelled nor land bought by us which had mostly been bought up by the foreign company, the critics would then have accused him of failure to arrange for the future by his shuffling and neglect.

As to issuing an official stamp to the Hunan gentry; in March the Hunan gentry jointly represented to the former Hunan Governor, Tuan-fang, and memorialist that whether the railway could be recovered or not it was absolutely necessary first to provide funds to buy the railway track so as to safeguard territorial rights, and so they suggested the issue of a stamp. For in fear lest this line should not be got back they were forced to adopt this scheme of financing land purchase. This was a desperate expedient forced on the gentry. As they proposed to set up a bureau which must have heads, he inquired by telegraph who it was proposed to recommend: and Governor Tuan-fang presently replied that the gentry suggested (names given) two ex-metropolitan officials as directors, two expectant taotais as managers, a scholar as associate manager, and six men of official status as con- sultant gentry, for whom letters of appointment were asked. So memorialist, in consultation with Governor, acted as desired.

These official stamps were called for by the gentry a dozen times by letter and telegram and in person, but were not issued till May. He finds that since last year the Hunan gentry in all their telegrams and deputations in regard to the railway question have insisted on the control resting with his office. He retorted that he must act in concert with the Hunan Governor, but it took argument and explanation to get his view adopted.

That there are many resident gentry in Ilunan is a fact that can be proved. To provide funds to buy land as some slight means of resistance in case the cancellation of the concession proved impossible is a step proper for the local authorities to be concerned in. Memorialist unworthily filled the post of Viceroy to Two Hu, which includes superintendence of Hunan, even had he no charge to cancel the concession, he surely could not refuse to take an interest in matters affecting the territory of the Two Hu. The letters of appointment and despatches are in names of both Viceroy and Governor, from what point of view can they be called "monopolising"! The gentry concerned are of established local repute and put forward by the general body; they were earnest in fulfilment of the duties they came forward to undertake, nor did they draw any pay. Where did the "ingratiating" come in? The Com- pany's office was set up in Hunan, its personnel chosen there, its rules proposed there; how could there be said to be an absence of actual control? At the time the redemption of the line was uncertain, how could one at once scheme to build it with borrowed money? To borrow or not was left to the public feeling of the three provinces; how could it shut people's mouths? Moreover, in case Hunan could provide funds, there would be no need of borrowing. How could calling on the gentry to provide funds be twisted into an underlying purpose to borrow? This sort of profound writing and turns of expression is indeed beyond the power of thought to explain!

4.

The original memorial also states:-

•

'The Wai Wu Pu telegraphed to the Hukuang Viceroy its refusal of foreign loans. He, however, said the Hunan gentry also advocated building the line on borrowed money. Now, if the Hunan gentry really held this view, why, to begin with, did they strongly urge the cancelling of the concession? Even if there were unworthy Hunan gentry, they were probably only roving members holding Hupei offices who wanted to meet the Viceroy's wishes as a means of reaping profit, and had no regard for the ruin of the general interest, while the Viceroy rashly took the lies of his subordinates for gospel."

421

The total length of the Canton Hankow line is 2,000 and several hundred li, of which less than 300 are in Hupei. Over 1,200 are in Hunan; besides above Hengchou there is much hill track. The average cost per li being estimated for whole at Tls. 15,000, the Hunan section will require over Tls. 18,000,000. To this must be added Hunan's three-sevenths of the interest and amortization charges on the resumption loan, and the outstanding gold bonds, that is five or six million taels, without reckoning interest on the shares raised locally. The grand total will thus be 20 odd millions of taels. Of late years the state of every province is one of anxiety for the people's straits and the exhaustion of wealth. That such vast sums for railway work, even if sought to be raised over a series of years, can be managed, one dare not assert, so the date of completion of the whole line is really likely to be indefinitely postponed. Supposing money be borrowed for building it, the whole line could be definitely finished within five years. The sooner the work is done the sooner there will be a traffic profit, and after it pays by raising half in shares and charging half to traffic profits, the loan could be paid off in a period of ten years.

As to method of raising loan, it might be by annual instalments gradually arranged for without making one State the sole creditor, and only paying interest without bidding lenders undertake the work or giving separate advantages, nor need the line be given as pledge. By such an arrangement a foreign loan would entail no malpractices.

When the representatives of the whole gentry of Hunan, the taotais Chang Tsu-t'ung and Hsi Hui-hsing, came to Hupei, the memorialist considered this point with them, and they both absolutely approved this view. After thorough considera- tion and careful calculation, he was convinced that a foreign loan for building the line, provided the powers given were strictly limited, was by no means necessarily objectionable. For it is very probable that the provision of funds would not be easy nor the funds provided abundant, while want of funds means delay in work, and that postponement of profit, and absence of profit means serious embarrassment. So, after getting the resumption loan, I wrote to the English Consul arranging this one move as a reserve in case of need.

Later on, as the Wai Wu Pu telegraphed an apprehension of its breeding complications, he, on 25th October, telegraphed back to the Board saying he would strongly urge the three provinces' gentry and people themselves to provide funds, and on 27th, in his telegraphic reply to that Board and his telegram to Chang Po-hsi, President of Board of Revenue, said: "For the Hankow-Canton Railway it is decided to provide tunds for our own working and not to raise foreign loan." Thus the question of a construction loan has long ago been dropped. censor, in an utter ignorance of current affairs as deep as of local matters, suddenly on 24th November, a month after date, makes the abandoned idea of a construction loan a ground for blame, and also imputes blame for the redemption loan under- taking.

The

This is really extraordinary; but he goes on to slander the Hunan officers holding posts in Hupei for taking opportunity to grasp gain and destroying the public interests. He ignores the fact that as the redemption loan fund passed through the hands of the Envoy to America there was no gain for Hupei officers or Hunan gentry to get. The Hunan gentleman, ex-Civil Board official Yeh Te-hui, after the loan question was dropped, came to Hupei, and being apprehensive lest the difficulty of finding money should delay the work, lamented the mistaken policy of abandoning the loan. The Board Secretary in question was certainly no Hupei roving subordinate. If the recovery of the railway is called the ruin of public interests one wonders what step would be thought a safeguarding of those interests.

5. The original memorial states:-

"The said Viceroy's further agreement for English loan purports to be with the Hong Kong Government; but it is reported that there is a supple- mentary compact indirectly promising privileges, and that he took on himself to give the English Consul a despatch to the effect that should China need further loans England should come first, if machinery and materials were bought abroad English manufacturers must first be applied to. It is also reported that the said Viceroy has promised that the engineers for building the line shall be partly English partly Japanese, which gives others a loophole."

In a loan agreement who is the lender is proved by seeing who provides the