CO882-6 — Page 620

PUBLIC RECORD OFFICE

זו תור

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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to the Viceroy at Wuchang in connection with the Canton-Hankow Railway, and of negotiations with the Viceroy at Canton for the completion of a Loan Agreement and of a Joint Working Agreement in connection with the proposed Canton-Kowloon Railway,

2. I also enclose a copy of the letter, dated the 11th instant, from Mr. Fraser which covered the scaled copies and translations of the Loan Agreement and of the Viceroy's despatch giving an assurance regarding the Hankow-Canton Railway and other railways in Hupei and Hunan. These are the documents referred to in the Consul-General's telegram of the 9th instant (LXXVIII.), on receipt of which I asked you to inform me that arrangements were being made for remitting on October 6th £400,000 to the Hong Kong and Shanghai Bank at Hankow in repay- ment of the temporary loan from that Corporation to the Viceroy, and £700,000 to the Chinese Minister at New York (LXXIX. and LXXVI.). Your telegram of the 11th instant informed me that these arrangements were being made (LXXXIII.).

3. The translation of the Agreement now sent differs only in a few verbal particulars from the corrected draft enclosed in my secret despatch of the 8th September. The letter of assurance of September 9th differs from the one furnished by the Viceroy on August 8th, of which a translation accompanied my secret despatch of the 26tht of that month by extending the preference promised to British capital, material and engineers in the case of the Canton-Hankow line to other railway construction enterprises in Hupei and Hunan. In other respects it is scarcely as satisfactory, as it makes the borrowing of English capital rather more definitely dependent on the conditions of the loan being as favourable as can be obtained from other countries, and the purchase of material from England conditional on the tenders for its supply not being higher than those from elsewhere. I have no doubt, however, that the Consul-General obtained the best terms he could from the Viceroy.

The tact and perseverance with which he has carried out the important negotia- tions for the Loan Agreement will, no doubt, be brought to the notice of the Secre- tary of State for Foreign Affairs by His Britannic Majesty's Minister at Peking. I should be glad, however, if you could see your way to associate yourself on behalf of this Government with any expression of appreciation that may be conveyed to Mr. Fraser.

4. With regard to the Canton-Kowloon Railway, on receipt of Sir Ernest Satow's telegram of the 11th September (LXXXII), which communicated to me the purport of Prince Ch'ing's reply to his enquiry as to the names of the Chinese official who were to conduct the negotiations for this line, I suggested to His Britannžo Majesty's Consul-General at Canton further arguments with which to combat the obstructiveness of the Viceroy there. In reply Mr. Scott informed me on the 13th instant that he saw "no prospect of the Viceroy modifying his attitude of opposition in respect to the construction of this railway in connection with the Agreement of 1899."

5. On the same date Sir Ernest Satow sent me in a letter, received yesterday, a copy of a despatch which he had addressed on the 11th to the Secretary of State for Foreign Affairs enclosing a copy of his "strongly worded note" to Prince Ch'ing This despatch has doubtless been communicated to you by the Foreign Office. am now waiting to learn from Sir Ernest whether the note above referred to results in the Wai Wu Pu inducing the Viceroy at Canton to adopt a more reasonable attitude.

6. Undoubtedly the negotiations to secure the construction of the Chinese section of the Canton-Kowloon Railway and suitable arrangements for the subsequent joint working of the two sections of the line are made more difficult by the existence of the British and Chinese Corporation's Concession, and it may ultimately be neces- sary to eliminate this factor. This, you will remember, was suggested by Sir Ernest Satow in his demi-official letter to me of the 18th August which formed enclosure 2 to my secret despatch of September 8th. I have, of course, taken no steps here in the direction indicated, but I now suggest to you the advisability of making unofficial enquiries in England as to whether the Corporation would be willing to surrender their concession to China on the following conditions:-

(1.) Out of pocket expenses to be repaid to the Corporation by China.

• No. 144.

↑ No. 138.

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(i.) An agreement to be concluded between the Viceroy of the Two Kwang and the Government of Hong Kong for the completion of the railway by a specified date, and for its subsequent joint working.

7. The only other matter to bring to your notice in connection with the Canton- Kowloon Railway is that when the Estimates for the year 1906 were under discus sion in the Legislative Council yesterday a strong wish was expressed by the unofficial members that the construction of the line within our own territory should not be delayed pending negotiations with China with regard to the construction of the Chinese section. This corresponds with my own view, and I will make proposals for giving effect to it when I transmit to you, as I hope to do shortly, the preliminary survey and estimates prepared by the Chief Surveying Engineer.

8. I take this opportunity of acknowledging the receipt yesterday of your secret despatch of the 17th August transmitting correspondence with regard to the Canton-Hankow Railway negotiations.

I have, &c.,

Enclosure 1 in No. 148.

M. NATHAN.

PARAPHRASES of telegrams between Secretary of State, His Britannic Majesty's Minister, Peking, His Britannic Majesty's Consul-General, Hankow, and Governor, Hong Kong.

LXXVIII.

HIS BRITANNIC MAJESTY'S CONSUL-GENERAL, Hankow, to GOVERNOR, Hong Kong. (Despatched 5.5 p.m., September 9, 1905; received 9.20 p.m., September 9, 1905.)

(No. 7.)

Loan Agreement with the revised Article seven was signed this morning. A sealed copy together with a copy and translations of the Viceroy's despatch giving an assurance regarding the Hankow-Canton Railway and other railways in Hupei and Hunan will be sent to you by post on the 11th of September.

He

The Viceroy promised that in his despatch to the Wai Wu Pu he would speak in the strongest terms of the assistance you have rendered him in this matter. considers that for him to mention the Canton-Kowloon Railway would do harm, but that his appreciation may serve as a ground for pressing the Wai Wu Pu to help your Government as far as possible in the negotiations.

He specially begged me to convey to you and to His Britannic Majesty's Minister his most hearty thanks for your kindness to him and China in procuring the resump- tion for which the final Agreement has been duly signed.

I have repeated this His Britannic Majesty's Minister, Peking.-FRASKR.

(32505/S.)

LXXIX.

GOVERNOR, Hong Kong, to SECRETARY OF STATE.

(Despatched 1 p.m., September 10, 1005.)

The Agreement has been signed. Please inform me that the arrangements requested in my telegram of the 7th of September will now be made.-NATHAN.

LXXX.

GOVERNOR, Hong Kong, to HIS BRITANNIC MAJESTY'S CONSUL-GENERAL, Hankow

(Despatched 1 p.m., September 10, 1905.),

With reference to your telegram No. 7. .I have asked the Secretary of State to make the arrangements indicated in my last telegram to you. I am most grateful

to you for bringing the matter to a successful issue.

I have repeated this telegram to Peking.-NATHAN.

18885

L.F. transmitting copy of No. 122.

2 D1