CO882-6 — Page 621

PUBLIC RECORD OFFICE

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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LXXXI.

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

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

I have sent the following to His Britannic Majesty's Consul-General at Hankow to-day-

"Referring 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."

I assume that you will now deal with the questions of British finance and other assistance on the Hankow-Canton and Hupeh-Szechuan Railway construction, and also that you are taking all possible steps to hasten the negotiations regarding the Canton-Kowloon Railway.-Nathan.

LXXXII.

HIS BRITANNIC MAJESTY'S MINISTER, Peking, to GOVERNOR, Hong Kong. (Despatched 8 p.m., September 11, 1905; received 10.26 p.m., September 11, 1905.)

(No. 15.)

Last paragraph of my telegram No. 10. Foreign Board replied on September 3rd in writing, first that the Preliminary Agreement was for a railway from Canton to British Kowloon, hence my proposals of April 26th are not in accordance therewith; secondly, the Viceroy reports that the capitalists and notables of the province propose to raise funds and build the railway themselves, and the Consul-General has been informed of this.

It is not, therefore, necessary for the British and Chinese Corporation to raise a loan on behalf of China for this purpose, and the Wai Wu Pu do not consider it necessary to appoint anyone to negotiate with the Corporation; the construction of the railway will be in the hands of the Viceroy at Canton.

I am forwarding a strongly worded note asking whether the Chinese Government seriously intend to repudiate the solemn Agreement entered into in 1899, and at the same time pointing out that it is for a line from Canton to the leased territory; and that the British and Chinese Corporation could not contract to build a railway for China over British territory. I finish by urging that instructions may be sent to the Viceroy to negotiate with the Agent of the Corporation. As he is the chief obstruction I consider that this is better than obtaining the nomination of another official who would agree to nothing without his consent.

Separate. The Chinese text has the words "British leased territory, Kowloon and the English text "British Kowloon" only. British and Chinese Corporation were ignorant of the Convention of the 8th of June, 1898, but Sheng evidently was

not.

Copies have gone to you by post.-SATOW.

(32505/S.)

LXXXIII.

SECRETARY OF STATE to GOVERNOR, Hong Kong.

(Despatched 2.15 p.m., September 11, 1905; received 1.25 a.m., September 12, 1905.)

Referring to your cypher telegram of 10th September, arrangements are being

made. LYTTELTON.

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LXXXIV.

GOVERNOR, Hong Kong, to HIS BRITANNIC MAJESTY'S CONSUL-GENERAL, Hankow. (Despatched 11 a.m., September 12, 1905.)

My telegram, September 10th. The Secretary of State has telegraphed to me that arrangements are being made.

Repeated to His Britannic Majesty's Minister at Peking.-NATHAN.

LXXXV.

GOVERNOR, Hong Kong, to His BRITANNIC MAJESTY'S MINISTER, Peking. (Despatched 11 a.m., September 12, 1905.)

I have sent the following to His Britannic Majesty's Consul-General, Hankow, this morning:-

(Telegram No. LXXXIV. repeated.)—NATHAN.

(Confidential.) YOUR EXCELLENCY,

Enclosure 2 in No. 148.

British Consulate-General, Hankow, September 12, 1905. I HAVE the honour to confirm my telegram of yesterday, No. 7, reporting the execution by the Viceroy, Chang, and myself at Wuchang, on the 9th instant, of the enclosed Agreement by which the Government of Hong Kong lends to the three provinces of Hupei, Hunan and Kuangtung the sum of one million one hundred thousand pounds sterling for the purpose of buying back from the American-China Development Company the Concession for the construction of the Canton-Hankow Railway granted in 1808.

The Viceroy informed my Vice-Consul and myself that the first instalment of the purchase money (dollars 2,090,806, gold) has been duly paid by the Chinese Minister and the final resumption contract executed so that the danger to which His Majesty's Minister had first called his attention of the Canton-Hankow line falling into the same hands as control the Pei-Han Railway has ceased.

The Viceroy begged me specially, when telegraphing and reporting, to convey to Your Excellency and to His Majesty's Minister at Peking his intense appreciation of the manner in which you had come to the aid of China and himself. He would not fail to lay stress on Hong Kong's assistance, and the extreme fairness of the terms of the loan when sending the text of the Agreement to the Wai Wu Pu; and he felt confident that this would facilitate any negotiations with China in which the Colony may be engaged far better than if he actually advocated meeting your wishes as to the Canton-Kowloon Railway.

When I asked to see the assurance as to our having first option of providing capital, material and half the engineers of the Canton-Hankow line as of any rail- ways requiring foreign aid built in Hupei and Hunan, His Excellency bade his Secretary draft a letter, which, as I hinted that His Excellency might not be at Wuchang indefinitely, he altered to a formal despatch, copy and translation of which I have the honour to enclose.

The negotiations for the present loan were, so far as I can learn, unknown outside until a week ago, though circumstances compelled us to employ the consulate writer to copy my note to the Viceroy of 25th August.

I proposed to treat the enclosed despatch as confidential.

The Agent of the Hong Kong and Shanghai Bank is anxious to take a copy

of the Loan Agreement, but I have not felt justified in permitting this.

His Excellency

Major Sir Matthew Nathan, K.C.M.G., Governor of Hong Kong.

I have, &c.,

E. H. FRASER,

Consul-General.

This Agreement is made between His Excellency, Chang, Junior Guardian of the Heir Apparent, Viceroy of the Hu Kuang Provinces of China of the one part and the Government of Hong Kong of the other part.

The Viceroy has been imperially appointed to devise means for the resumption of the Canton-Hankow Railway and the present Loan has been referred to the Throne

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