CO882-6 — Page 595

PUBLIC RECORD OFFICE

Reference :--

TC.O. 882

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PUBLIC RECORD OFFICE, LONDON

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COPYRIGHT PHOTOGRAPH-NOT TO

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XII.

HIS BRITANNIC MAJESTY'S MINISTER, Peking, to GOVERNOR, Hong Kong.

(Dated July 10, 1905.)

My previous telegram of to-day. Following received from Consul, Hankow :- Hong Kong loan. Have seen Viceroy, who has received a telegram stating that the agreement with Morgan cannot be signed till August. Consequently he would prefer money in two instalments, namely, two million dollars gold at beginning of ninth Chinese moon and remainder at beginning of eleventh moon.

Can the money be made payable to his order in New York? The Viceroy telegraphed yesterday to the Viceroy at Canton with regard to the guarantee proposed in Condition 4. He knows nothing of the railway agreements referred to, but if informed of the points on which opinions differ he offers to do his best to reconcile the views of Hong Kong, Viceroy Canton, and Sheng. He also asks whether you will send him the text, and whether the Viceroy at Canton has got copies. As he is in charge of the redemption concession he will guarantee in Condition 5 for all three provinces, and is telegraphing to the Canton Viceroy for his assent to this. He wants to make it clear that half the engineers will be Japanese and half British. Viceroy added that for construction of the railway Sheng would require £3,000,000, in instalments of €500,000 or £1,000,000, and he would like to borrow the money from British financiers. He would get Imperial sanction for it at the same time as for the Hong Kong loan, if you could tell him whether this loan could be negotiated, and at what rate of interest.

Secret.-The Japanese Consul offered better terms than anyone else; he might offer and will probably bid for the new loan."

I have replied: "Your telegram, No. 33. Paragraph 1. I am enquiring about second instalment, and whether payment can be made at New York. Canton- Kowloon agreements must be paid [? signed] before newly-proposed date of first instalment.

"Paragraph 2. Though I furnished Chinese Foreign Office with a summary showing proposals, on the 26th of April, discussion has not yet begun, so no difference of opinion has shown itself. Text of agreements can be furnished. Canton Viceroy has not yet got copies.

"Paragraph 3. Condition 5 refers to H. and L. provinces. By 'three' pro- vinces I conclude you mean Kwang Tung, Hunan and Hupei.

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Paragraph 4. I am making enquiries."

I think, unless you see any objection. I propose to agree to the final suggestions

in paragraph one.

Private. Can you suggest anything regarding fourth paragraph. It is important to keep the loans entirely British, and this is made difficult by the con- nection of the Hong Kong and Shanghai Bank with German finance.

XIII.

GOVERNOR, Hong Kong, to His BRITANNIC MAJESTY'S MINISTER, Peking. (Dated July 11, 1905.)

Your telegrams of yesterday and to-day. Following numbers refer to conditions in my telegram of 1st July:-

4. I agree to payments at New York and to dates and amounts proposed by Wuchang Viceroy, provided Canton-Kowloon Railway Agreements are concluded before payment of first instalment. Also to assurances in writing from Viceroy Canton being given separately to loan agreement, but before that agreement is signed. Shall I send draft of agreements in English to Consul at Canton, to be communicated confidentially to the Viceroy there?

5. I agree to assurance in writing with regard to capital and engineers for railways in Hu Kwang and Liang Kwang Provinces being given separately to loan agreement, but before that agreement is signed, and also to equal employment of Japanese and British engineers.

With regard to the loan of £3,000,000, Government of Hong Kong cannot do this as well as loan of £1,100,000, and, except the Hong Kong and Shanghai Bank,

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which for reasons you give I cannot approach, there are no financiers here that I can consult. It ought not to be difficult to borrow the money at 4 per cent. from financiers in England, and should you agree I will communicate the information have given me to the Secretary of State for the Colonies, and ask him to assist in the matter.

you

Attached to 28691/S.

(Secret.)

No. 125.

FOREIGN OFFICE to COLONIAL OFFICE.

The Under-Secretary of State for Foreign Affairs presents his compliments to the Under-Secretary of State for the Colonies, and, by direction of the Secretary of State, transmits herewith copy of the under-mentioned paper relative to the Hankow- Canton Railway.

Foreign Office,

August 17, 1905.

REFERENCE TO PREVIOUS LETTER. Colonial Office of August 1.*

DESCRIPTION OF ENCLOSURE.

Name and Date.

Sir C. Phipps, No. 95, Brussels, August 11, 1905

Subject

Conditions for purchase of concession to be

decided on August 29,

Enclosure in No. 125.

Sir C. Pairs to the Marquess of LanSDOWNE.

(No. 95. Very confidential.) MY LORD,

Brussels, August 11, 1905. WITH reference to your Lordship's despatch, No. 65, very secret, of the 2nd instant (which reached me on the 9th) relative to the proposed purchase of the Hankow-Canton Railway Concession, I have every reason to believe the information supplied in my despatch, No. 86, confidential, of the 29th ultimo, to be correct, namely, that the bargain (referred to in Sir E. Satow's telegram, No. 110) is so far complete that the conditions offered by the Viceroy of Wuchang are to purchase the £20 shares at £120 each, all expenditure already incurred being also refunded. yield a sum of £288,000 for the 2,400 shares held by the King of the Belgians or his syndicate, and £360,000 to the 3,000 shares of Mr. Pierpont Morgan and the American holders.

This would

The question would, however (according to my informant) be only definitely decided at the extraordinary meeting of the "America China" Company to be con- voked at New York on the 29th of August. The King of the Belgians is stated to have unwillingly agreed to this transaction.

The Marquess of Lansdowne, K.G.,

&c., &c.,

&c.

I have, &c.,

CONSTANTINE PHIPPS.

• L.F. transmitting copy of No. XXXI. in No. 130.

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