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6. The above explanations will show how unfortunate it has been that the arrangement which we had made for the payment of the £400,000 in New York on the 6th of September was not carried through. The £400,000 was already placed in New York when the business fell through; and fortunately on such terms that the remittance could be sold at a profit. If, however, the exchange had gone the other way we should have been placed in such a position towards our agents as could not have failed to act detrimentally upon our powers of doing such business satis- factorily on any future occasion.

33085

No. 134.

I have, &c.,

E E BLAKE

COLONIAL OFFICE to CROWN AGENTS.

(Confidential.)

[Answered by No. 135.]

GENTLEMEN,

Downing Street, September 16, 1905. I AM directed by Mr. Secretary Lyttelton to acknowledge the receipt of your letter of the 14th instant,* with regard to the remittance of money to New York and to Hankow in connection with the loan to the Viceroy of Wuchang.

2. The Hong Kong and Shanghai Bank have not, so far as Mr. Lyttelton is aware, been officially informed of this transaction, but they are probably aware of it. In any case there seems to be no reason why you should not confidentially discuss the question of repayment with Mr. Townsend.

3. As the arrangement will possibly have the result of bringing the Bank remunerative business in connection with the supply of British capital for the con- struction of the railways mentioned in it, it may fairly be expected that the Bank will meet you in a reasonable spirit with regard to the mode of repayment.

177

4. We then passed to a discussion of the terms on which the repayment of the £400,000 should be effected, and Mr. Townsend was at first disposed to make rather much of the expenses which had been, and would be, incurred in the matter. I pointed out, however, that presumably the money had been provided from London and not from China, and that therefore the natural place of repayment would appear to be London, and that as regards expenses and remuneration to the bank, no doubt the branch at Hankow had amply covered itself in its arrangements with the Viceroy. I also suggested that the transaction was of a political nature, which the bank was as much interested as we were in carrying through with as little expense as possible to the Government of Hong Kong, which had behaved in a very spirited way in the matter. To these views Mr. Townsend finally assented, and agreed that he would arrange to place the money, which I settled to pay to the bank on the 6th of October, to the credit of the Shanghai branch without cost to us, leaving the Shanghai branch to arrange with the Hankow branch and with the Viceroy any question of exchange

or expense.

5. I beg to suggest that the arrangements which we have made should be communicated to the Governor of Hong Kong by telegraph, and it might also be well to warn him that German agents are also negotiating with the Viceroy, so that he may secure that the arrangements made with Hong Kong are not complicated by arrangements made with the Germans.

6. I beg also to point out that the arrangements made between the Viceroy and the American Syndicate would appear to be expressed in dollars, whereas all our arrangements are being carried out in sterling, and apparently for somewhat different amounts.

I have, &c.,

33952

No. 135A.

E. E. BLAKE.

PUBLIC RECORD OFFICE

Reference :---

། ། ། ་།

C.O. 882

33952

SIR.

(Confidential.)

No. 135.

I am,

&c.,

C. P. LUCAS.

CROWN AGENTS to COLONIAL OFFICE. (Received September 21, 1905.)

[Answered by No. 135a.]

Whitehall Gardens, London, S.W., September 20, 1905. Hong Kong, £1,100,000 Loan.

I HAVE the honour to acknowledge the receipt of your letter of the 16th of September, confidential,† and to report that in accordance with the suggestion therein made, I have seen Mr. Townsend, of the Hong Kong and Shanghai Bank, and have arranged with him for the payment of £400,000 in connection with the loan made by the Hankow branch of the bank to the Viceroy of Wuchang

2. Mr. Townsend was not aware of the arrangements entered into between the Governor of Hong Kong and the Viceroy, but he had surmised that someone was behind the Viceroy, as the latter would not be in a position to arrange for such an advance without assistance. All Mr. Townsend knew was that he had been asked to make a payment of a specified number of dollars in New York, and that he had done so; and that he had been asked to adjust the payment as with the Shanghai branch of the bank. He had also heard that German agents were seeking concessions of the Viceroy and were offering him loans of money.

3. Upon my explaining the actual arrangements which had been made, Mr. Townsend expressed much pleasure at hearing of them, and considered that a very excellent piece of business had been effected, and he added that it was the only way in which business could be done in China, as the Governments of other countries had adopted the practice.

• No. 1:33.

↑ No. 134.

GENTLEMEN,

COLONIAL OFFICE to CROWN AGENTS.

Downing Street, September 22, 1905. I AM directed by Mr. Secretary Lyttelton to acknowledge the receipt of your Confidential letter of the 20th instant,* and to inform you that a telegram on the lines which you suggested has been sent to the Governor of Hong Kong.

2. Mr. Lyttelton desires me to express his appreciation of the valuable assist- ance which you have given in connection with the loan to the Viceroy of Wuchang.

I am, &c.,

C. P. LUCAS.

33952

(Secret.)

No. 136.

COLONIAL OFFICE to FOREIGN OFFICE.

SIR,

Downing Street, September 22, 1905. WITH reference to the letter from this Department of the 15th instant,t I am directed by Mr. Secretary Lyttelton to forward to you, to be laid before the Marquess of Lansdowne, the enclosed copies of further correspondence with regard to the loan of £1,100,000 to the Viceroy of Wuchang.

33952

(Secret.)

SIR,

No. 137.

I am, &c.,

C. P. LUCAS.

MR. LYTTELTON to GOVERNOR SIR M. NATHAN. [Acknowledged by No. 170.]

Downing Street, September 22, 1905. WITH reference to my cypher telegram of to-day's date,§ of which I enclose

a paraphrase, I have the honour to transmit to you the accompanying copies of

No. 135.

↑ L.F. on 132.

Nos. 133, 134, 135 and 135A. No. LXXXVI in No. 149.

18885

*

9

PUBLIC RECORD OFFICE, LONDON

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