CO882-(6-8) — Page 72

PUBLIC RECORD OFFICE

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Reference:

C.O. 882

6 PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH-NOT TO

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In conclusion, and referring especially to the negotiations now proceeding for the Tientsin-Yangtse Railway, His Excellency observed that the Chinese Govern- ment was convinced that railway construction by Boards of Commissioners was not advisable, that experience had shown it to be fraught with serious difficulties, and that any negotiations, to be successful, must abandon this system. The Govern- ment would rather pay compensation to cancel the preliminary agreement than conclude it with this condition attached.

The meeting then adjourned.

October 23, 1906.

CANTON-KOWLOON RAILWAY.

J. O. P. BLAND.

MINUTES OF MEETING (the 8th) held at the Wai Wu Pu on Thursday, 25th October, at 2.30 p.m. PRESENT:

His Excellency Tang Shao-Yi;

Kung Taotai and Mr. Hu, representing the Viceroy of Canton; Mr. En, Secretary to the Wai Wu Pu; and

Mr. J. O. P. Bland, representing the British and Chinese Corporation,

Limited.

With reference to the question of sterling exchange Mr. Bland stated that he had not yet received a reply from the Chief Manager of the Hong Kong and Shanghai Bank to whom he had referred the matter. He had, however, seen the Manager in Tientsin, who had expressed the opinion that, as the arrangement provided for in the present contract, and all others now in force, had worked without disadvantage to the Chinese Government in the case of the Northern Railway, and as the new condition now proposed would certainly create unfair and artificial com- petition by the Bank's rivals, the Bank was justified in refusing to accede to it.

Later in the course of the meeting the Chief Manager's reply was received stating that the Bank could not accept the proposed change in the contract, but was willing to concede an option available at any time within six months previous to each date of payment. After considerable discussion, His Excellency Tang Shao-Yi stated that, if the Bank would agree that the local currency sufficient to meet payments might be made to the Bank at the option of the Viceroy, either at Hong Kong or Canton, the clause would be allowed to stand otherwise unamended. He explained that as the receipts of the railway had to be paid to the Bank, it was reasonable and necessary that the latter should have an agent at the place where the railway's head office was situated-Canton-and that this agent should be in a position to transact ordinary banking business. The Chinese Government wished to avoid having to forward the railway receipts at its own risk to the Bank at Hong Kong

Mr. Bland undertook to telegraph again in the matter.

Referring to Article 9, Mr. Blând stated that his instructions, and adherence to the basis of negotiations provided in the Northern Railway Agreement, made it necessary to stipulate that, if loans were hereafter required for branch lines, they would be financed by the Corporation--a definite understanding on the point was essential because the possibility of raising funds in other quarters for, and on the security of, branch lines would certainly prejudice the railway as a security, neces- sitating complicated accounts and separate administration. His Excellency Tang Shao-Yi declined to accept the clause as drafted. After full discussion of the point it was agreed that, in the event of branch lines being constructed, the Corporation would be given the first option of tendering for any loan required.

At the request of Küng Taotai and to meet the objections of His Excellency the Viceroy of Canton, an amendment was made in Article 12, having reference to the Corporation's remuneration as trustees, whereby the necessity and justice of this new condition is stated and explained,

Kung Taotai suggested that the remuneration in question should commence only upon completion of the line, but His Excellency Tang Shao-Yi concurred in the view that it was properly due upon the issue of the loan.

In regard to the price of the loan, Mr. Bland read a telegram received yesterday from his Board to the effect that, in consequence of the unsettled state of the

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market, it would be necessary to stipulate that the price of the loan should be governed by the quotations for other Chinese securities at the time of its issue: the present price of the Northern Railway Loan, deducting interest, being now only £98 10s., and other bonds having similarly fallen. Under these circumstances, His Excellency Tang Shao-Yi suggested the advisability of postponing the con- clusion of the agreement, but after full explanation and discussion of the situation it was decided to be generally advisable to come to a decision which, in the event of the market conditions remaining unfavourable at the date of signature of the agreement, would enable the Chinese Government thereafter to exercise its option and discretion for issuing the same within a reasonable period, allowing the Cor- poration a fixed commission of six points on the flotation. Article was accordingly redrafted in this sense, it being understood that the Corporation would, if necessary, make advances under the terms of the agreement to defray cost of survey, &c., pending issue of the loan.

His Excellency T'ang Shao-Yi raised the question as to the date of payment to the Corporation of its commuted commission under Article 9, expressing the opinion that it was not reasonable to claim payment until services have been actually rendered; after discussion it was agreed that half the amount is to be paid when half the work, estimated by mileage, has been done, and the other half upon com- pletion of the railway.

The terms of the Agreement, with the one exception above noted, being thus determined, it was decided that the representatives of the Viceroy of Canton would go over the entire agreement with Mr. Bland and check the same carefully prior to revision of the final official translation.

After arranging for a meeting on Thursday next, the 1st November, at 2.30 p.m., the meeting adjourned.

J. O. P. BLAND.

October 27, 1906.

CANTON-KOWLOON RAILWAY.

MINUTES OF MEETING (the 9th) held at the Wai Wu Pu on Wednesday, October 31st, at 3.30 p.m. PRESENT:

His Excellency Tang Shao-Yi;

Kung Taotai and Mr. Hu, representing the Viceroy of Canton;

Mr. En, Secretary to the Wai Wu Pu; and

Mr. J. O. P. Bland, representing the British and Chinese Corporation,

Limited.

With reference to the minutes of last meeting, it was recorded that the Hong Kong and Shanghai Bank had agreed to the option, exercisable by the Viceroy, of making payments of interests and capital to the Bank, either at Canton or Hong Kong.

It was also noted that the Canton Viceroy's deputies had carefully checked with Mr. Bland the English and Chinese text of the agreement.

Kung Taotai stated that a telegram had since been received from the Viceroy taking exception to several clauses of the agreement. Mr. Bland pointed out that His Excellency had formally agreed to accept the result of negotiations by the Wai Wu Pu and that no finality of agreement could be obtained if the agreement were subject to objections raised without knowledge of these negotiations. His Excellency Tang Shao-Yi observed that the Viceroy's views expressed local opinion, which it was necessary to conciliate, so as to prevent hostile criticism of the agree- ment and opposition to the Edict.

The Viceroy's objections were then discussed seriatim, and certain verbal amendments agreed to under Articles 1, 4, 6, and 15, the object of these amendments being the clearer assertion of the authority and dignity of the Chinese Government. It was stated that certain other proposals by the Viceroy were impracticable and would be met by explaining to him the facts in each case.

His Excellency Tang Shao-Yi objected to the inclusion in the preamble of any reference to the preliminary agreements as calculated to create an erroneous impres- sion on Chinese public opinion—he also desired that, instead of making the Viceroy