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السليسا

PUBLIC RECORD OFFICE

Reference :-

C.O. 882

9

PUBLIC RECORD OFFICE, LONDON

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

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of State, transmits herewith copy of the under-mentioned paper relative to the Canton-Kowloon Railway.

Foreign Office,

October 7, 1905.

Name and Dabe.

Bir E. Satow, 234, Peking, July la

DESCRIPTION OF ENCLOSURE.

Subject.

Mr. Campbell's interview with Sheng Kung-pao.

Enclosure in No. 143.

Sir E. SATOW to the MARQUEss of LansdoWNE.

(No. 254. Confidential.) MY LORD,

Peking, July 18, 1905. WITH reference to my despatch, Very Confidential, No. 193, of June 8th, and to my telegram, No. 114, of June 13th, I have the honour to state that after the signing of the Peking Syndicate Agreements, as reported in my despatch, No. 251, of July 15th. I did not consider it expedient, though privately informed that Sheng kung pao had in a large measure reassured his position, to approach the Wai Wu Pu again on the subject of the Canton-Kowloon Railway until I had some clearer indica- tions of the course which the negotiations in regard to the Hankow-Canton Railway Loan (which will be reported in a separate despatch) were likely to take.

On July 12th I instructed Mr. Campbell to see Na tajen with the object of ascertaining the attitude of Sheng and of the Viceroy of Canton towards the contents of my summary of the draft agreements (enclosure in my despatch, No. 146, of April 29th). Na tajen had heard nothing from Sheng, but said that the Wai Wu Pu had received a telegram from the Viceroy of Canton to the effect that the local notables wished to build the Canton section themselves. On Mr. Campbell reminding him that there was a preliminary agreement, he merely said, in private explanation, that the local notables nowadays were everywhere wanting to build railways them- selves. In answer to questions he made it clear that Sheng was fully empowered and was the person I ought to deal with in this matter.

It was evident that nothing was to be gained by endeavouring to keep it in the hands of the Wai Wu Pu, and the loan negotiations at Hankow having reached a stage when direct communication with Sheng promised to be a help rather than a hindrance, I instructed Mr. Campbell to call on him, leave with him copies of the Canton-Kowloon Railway Draft Agreements, and mention that Mr. C. H. Ross was in Peking and ready to discuss the first of these agreements on behalf of the British and Chinese Corporation.

In an interview on the morning of July 14th Mr. Campbell fulfilled these instructions. Although Sheng kung pao had not been told beforehand of the object of this visit he had apparently been warned by Na tajen, and as soon as the conversa- tion began he produced from a letter case before him copies of the Chinese text of the Preliminary Agreement of March 28th, 1899, and of my summary of the draft agreement. He first drew Mr. Campbell's attention to what he called the discrepancy between the Preliminary Agreement of 1899 and the draft agreements now proposed. Article I of the former contemplated the construction and working of the whole distance from Canton to Kowloon as one railway by the British and Chinese Corpora- tion under conditions to be concluded with the Chinese Government. The latter divided the line into two distinct portions, one of which was to be built by the Hong Kong Government and the other by the British and Chinese Corporation. That meant that England would have everything to say about the Hong Kong end and have a considerable voice in the Chinese end, while China would have no voice what- ever in the Hong Kong part of the line.

Mr. Campbell took him through the Chinese text of Article I of the Preliminary Agreement and pointed out that it did not bear out his interpretation, and that it contained nothing at variance with the two draft agreements, the object of which, in any case, was to bring the whole line from Canton to Kowloon under one adminis- tration. The Hong Kong Government proposed to build their section themselves with their own money, and as it passed through their own territory they naturally

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had all the say in regard to it: the Chinese portion was to be built by the British and Chinese Corporation with money borrowed from that Corporation.

Sheng kung pao did not appear to wish to listen to much refutation of his arguments, but went on to complain of the way in which he had been treated by the British and Chinese Corporation in the matter of the Shanghai-Nanking Railway Agreement, which was the model of the Corporation's draft agreement in the present case. He had negotiated that agreement with Mr. Brenan, an old friend, who had gone to England after the signature, leaving details unsettled. There was delay over these, and finally because he was asked by me through Sir Pelham Warren (an old friend) to let the details stand over and allow the issue of the loan for market reasons, he had agreed and the loan was issued. That was a long time since, and two important details which should have been settled months ago in accordance with the terms of the Loan Agreement were still unsettled. One was the regulation for the guidance of the Board of Commissioners, and the other the contract of the Engineer-in-Chief. As to the first, after long discussion, regulations had been agreed upon which Mr. Henry Keswick, in Shanghai, said had to go home for approval to the head office in London. To hasten this approval Sheng kung-pao wrote a letter at the time, seven or eight months ago, to Mr. W. Keswick (also an old friend), and had received a satisfactory reply, yet nothing was done. It was the same sort of delay in regard to the contract of the Engineer-in-Chief, Mr. Collinson : he liked Mr. Collinson and had nothing to say against him except that he had been performing his duties without a contract, and that was contrary to the intention of the Loan Agreement.

His Excellency had just received a letter from Li Ching-fang (Lord Li), who is in charge of the railway administration at Shanghai during his absence in Peking, warning him that if these matters were not promptly settled the affairs of the Shanghai-Nanking Railway would become as disordered" as those of the Canton- Hankow Railway.

"

After Mr. Campbell promised to report these two complaints to me, Sheng kung- pao indicated that he had not yet made up his mind to undertake the negotiations in regard to the Canton-Kowloon Railway. To this Mr. Campbell rejoined that the Wai Wu Pu had mentioned him as the proper negotiator. His Excellency explained that he had kept silent when my summary was sent to him, and had kept silent again when the Wai Wu Pu sent him later the telegram from the Viceroy of Canton, mentioned in the second paragraph of this despatch. When asked his reasons for this silence he told Mr. Campbell, for my private information, that he intended to endeavour to transfer the burden of the negotiations to the Board of Commerce. At the time of the Preliminary Agreement there was no Board of Commerce, and all commercial negotiations with Foreign Powers were thrust upon him. Now there was such a Board he thought it should undertake these negotiations. However, he could not say for certain whether he would undertake them, or the Board of Commerce, or the Viceroy of Canton. If he undertook them he should require from the Viceroy of Canton the assistance of a delegate. In the meantime he would examine the contents of the draft agreements.

There was one point, however, on which he could say something definite at once, and that was the proposed sum of £2,000,000 for the railway loan. That amount was out of the question and would have to be reduced. He had been taken severely to task by the Board of Commerce over the amount of the Shanghai-Nanking Railway Loan, 34 millions, of which only 2 millions were to be spent on railway construction. On the same basis of reckoning the 101 miles of the Chinese section of the Canton- Kowloon line should cost about £600,000. In any case a loan of £2,000,000 was manifestly excessive.

Mr. Campbell thought that £2,000,000 would be found to be an outside figure, but said that whatever sum was fixed on would, of course, be based on professional estimates, which could scarcely be brought so low as His Excellency suggested. The Hong Kong Government's preliminary estimate for their 24 miles of line was £450,000, and this estimate, which was not made by the engineers of the British and Chinese Corporation, was considered below rather than above the probable cost.

I do not think any good purpose would be served by my urging the Chinese Government to declare officially who is to negotiate the Final Contract for this rail- way until I hear what the Viceroy of Canton thinks of the drafts, which I have requested Sir Matthew Nathan to communicate to him confidentially through His Majesty's Consul-General.

1888.3

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