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Sir E. Satow has been informed by telegram that the Viceroy still refuses to discuss the draft Agreements, and he therefore again requests that the Chinese Government issue definite instructions to the Viceroy of Canton in the sense desired.

Sir E. Satow also requests Prince Ching to favour him with a written reply to his note of January 12th for the information of His Majesty's Government.

(4)

Telegram from the WAI Wu Pu to the VICEROY OF CANTON. (Chinese text communicated privately to Sir E. Satow by Prince Ch'ing on February 23rd, 1906.)

(Translation.)

In an interview the British Minister has pressed for the conclusion of the Final Agreement for the Canton-Kowloon Railway. As regards this line the records show that in 1898 a request by letter was received by the Tsung-li Yamen from the British Minister, Sir Claude Macdonald, and that this was communicated to His Excellency Sheng, who concluded a preliminary agreement in five clauses with Messrs. Jardine, Matheson, and Company, and reported that he had done so. In our view the negotiations should be continued. Clause 2 states clearly that what- ever can be adopted in pursuance of Clause 1 of the Preliminary Agreement shall be "subject to the terms and conditions hereafter agreed to in the Final Agreement for the Shanghai-Nanking Railway when concluded and ratified." That is to say, although the Final Agreement is to follow the Shanghai-Nanking model, yet, the Shanghai-Nanking Railway being long and the cost great, the Canton-Kowloon Rail- way being short, and the cost small, the conditions are different. Clause 2 must be considered, and the pros and cons carefully weighed and closely discussed in accordance with the original understanding. We hope you will appoint an official to arrange the matter satisfactorily with the British and Chinese Corporation, and that you will inform us by telegraph of the state of the negotiations from time to time.

[See also Enclosure 2 in No. 238.]

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interview with the Viceroy. He took a favourable view of the chances of negotia- tions if the Corporation were prepared to make some concessions, and if the matter was proceeded with at once. He thought that the Viceroy would be glad to follow Chinese custom in facilitating the last business with which the retiring Consul- General was entrusted. He also thought that a question of personal relations would make matters proceed more smoothly if Mr. Ross rather than Mr. Bland was working with Mr. Scott.

4. After hearing and considering these views, I sent Your Lordship my telegram of the 26th (XXIV).* I am now inclined to think that telegram was a mistake, especially in view of it having failed in its effect, as I learnt definitely from Sir Ernest Satow's telegram of the 29th (XXV). From Messrs. Jardine, Matheson's manager here I had also learnt that though the Corporation had approved, on the 27th, of Mr. Ross taking up negotiations in Canton, this approval was withdrawn on the following day, and the Corporation directed that unless I requested the contrary, negotiations were to be suspended until the arrival at Hong Kong of Mr. Bland.

5. I asked that negotiations should not be suspended until the result of Mr. Ross's first interview with the Viceroy's deputies was reported. The instruc- tions I had given Mr. Ross were to put forward the Loan Agreement (print of 16/2/06, which had been sent me by the Corporation to substitute for the print of 9/2/05) as the only basis on which he was authorised to negotiate, and to hear what the deputies had to say.

6. I annex notes of meeting held by Mr. Ross with the Viceroy's deputies on the 28th and 29th March, to which are attached the Viceroy's proposals put forward at the latter meeting.

7. On April 1st Mr. J. O. P. Bland arrived in Hong Kong, and I had an interview with him early on the following day. I enclose a note, not of course intended for communication to the Corporation, on that interview. Mr. Bland further expressed a wish to see the Viceroy himself, and I wrote to Mr. Scott to endeavour to arrange this. Mr. Bland left for Canton on the 3rd instant, after writing me a letter, of which a copy is annexed, which shows a distinctly uncom- promising attitude on the part of the Corporation.

I have, &c.,

M. NATHAN,

Governor.

UBLIC RECORD OFFICE

Reference :-

C.O. 882

6PUBLIC RECORD OFFICE, LONDON

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

16015

(Secret.)

MY LORD,

No. 246.

GOVERNOR SIR M. NATHAN to THE EARL OF ELGIN.

(Received May 5, 1906.)

[Copy to Foreign Office, May 23, 1906. L.F.]

Government House, Hong Kong, April 6, 1906,

IN continuation of my secret despatch of the 23rd March,* on the subject of negotiations for the completion of a loan agreement and of a joint working agree- ment in connection with the proposed Canton-Kowloon Railway, I have the honour to enclose, for information and record, a paraphrase of further telegraphic commu- nications with Your Lordship, His Majesty's Minister at Peking, and His Majesty's Consul-General at Canton.

2. On receipt of Mr. Scott's telegram of the 24th of March XXIII), which was in reply to mine of the previous day, of which a paraphrase was covered by my last despatch, I requested that Mr. C. H. Ross should proceed as soon as possible to Canton to meet the Viceroy's deputies.

3. On the same day I had a long conversation on the subject of the railway with Dr. G. E. Morrison, correspondent of the London "Times," who had just returned from Canton, where he had an interview with the Viceroy. Previous to his going to Canton I had discussed the same subject with him, as, having regard to his very considerable influence, it seemed to me advisable that he should know how matters stood. I annex a copy of a note furnished me by Dr. Morrison of his

No. 241.

Enclosure 1 in No. 246.

Paraphrase of telegraphic correspondence.

XXIII.

HIS BRITANNIC MAJESTY'S CONSUL-GENERAL, Canton, to GOVERNOR, Hong Kong. (Despatched 3.50 p.m., March 24, 1906. Received 4.20 p.m., March 24, 1906.)

The negotiations can begin whenever the representative of the Corporation arrives in Canton.

XXIV.*

XXV.

SCOTT.

From His BRITANNIC MAJESTY'S MINISTER, Peking, to GOVERNOR, Hong Kong. (Despatched 2 p.m., March 29, 1906. Received 3.3 p.m., March 29, 1906.) Canton-Kowloon Railway.

The Foreign Office informs me that the British and Chinese Corporation have instructed Mr. Bland to proceed to Hong Kong as their special representative to communicate with you before proceeding to Canton.

I have repeated this telegram to Canton.

• No. 230.

SATOW.