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PUBLIC RECORD

OFFICE

Reference :-

PLEC.O. 882

6

PUBLIC RECORD OFFICE. LONDON

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

244

The Viceroy trusts, therefore, that your Government will consent to again assist him, and he recognises the magnitude of his obligations to you. I have repeated this telegram to His Britannic Majesty's Minister at Peking.

(36516)

CXII.

GOVERNOR, Hong Kong, to SECRETARY OF STATE.

(Despatched 3.25 p.m., October 13, 1905.)

•

Referring to your telegram of 11th October. Railways Loan Ordinance to raise sum of £2,000,000 to defray the cost of the railway from Kowloon and for other railway purposes was passed this afternoon, and authorizes the Governor to borrow, as occasion requires, sums not exceeding £2,000,000 in all by the sale of Inscribed Stock under the provisions of the General Loan Ordinance of 1893. I informed the members that the amount was to cover loan to the Wuchang Viceroy as well as the cost of the Hong Kong section of the Canton-Kowloon line, and of possible other contingencies, and I promised them that they should be informed when any loan was actually raised. I presume that the Crown Agents will continue to lend the money at bank rate until the conditions are favourable for raising loan. Should they not be able to do this, I suggest applying to the Hong Kong and Shanghai Banking Corporation to allow an overdraft for the amount on the same

terms.

(36517)

CXIII.

GOVERNOR, Hong Kong, to SECRETARY of State.

(Despatched 5.25 p.m., October 13, 1905.)

My telegram re discrepancy of the 4th of October.

The Viceroy has now asked for a further loan of £450,000 on identical terms so as to enable him to redeem the Canton-Hankow Railway bonds at a premium of two-and-a-half per cent.. as prescribed by the American Agreement, and says that the Belgian Minister, supported by the French, makes these being unpaid a pretext for claiming rights to take up the lapsed concession.

The Viceroy has been negotiating with the British and Chinese Corporation for this further loan, but their terms are too high.

If you can induce the Corporation to lower their terms so that they will be more advantageous than those which the Viceroy can get from any foreign source, this would be the best arrangement. Otherwise I propose, if Sir Ernest Satow advises it, to make a supplementary loan, but I do not want to do this if it can be avoided.

CXIV.

GOVERNOR, Hong Kong, to HIS BRITANNIC MAJESTY'S CONSUL-GENERAL, Hankow. (Despatched 4.15 p.m., October 13, 1905.)

Your telegram No. 11. I have asked the Secretary of State for the Colonies to induce the British and Chinese Corporation to lower their terms for loan to the Viceroy, as this would be preferable to a further loan from the Hong Kong Govern-

ment.

Private. If the terms of the Corporation are kept so high that in order to extinguish all the remaining foreign interests in the railway, and the Viceroy's only alternative is to borrow from a foreign source or from us, I shall, provided His Britannic Majesty's Minister at Peking advises it, and the Secretary of State for the Colonies approves of it, consider a further loan on identical terms to the last, but I do not want to do this if it can be avoided.

I have repeated this to His Britannic Majesty's Minister at Peking.

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CXV.

GOVERNOR, Hong Kong, to HIS BRITANNIC MAJESTY'S MINISTER, Peking. (Despatched 4.30 p.m., October 13, 1905.)

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

(Telegram No. CXIV. repeated.)

CXVI.

HIS BRITANNIC MAJESTY'S MINISTER, Peking, to GOVERNOR, Hong Kong. (Despatched 4.30 p.m., October 15, 1905: Received 5.55 p.m., October 15, 1905.)

(No. 18.)

Following sent to Consul-General, Hankow, No. 64:--

Your telegram, No. 65, and Governor, Hong Kong's telegram to you of

October 13th, Private. I am willing to advise a further loan if neces sary, as suggested by the Governor of Hong Kong, but the financial vagueness of the Viceroy is disturbing, and, under the circumstances, it would seem to me to be desirable that, before making the loan, something more than the verbal statement of the Viceroy should be adduced to show that this additional sum of £450,000 really does extinguish all the foreign interests in the Canton-Hankow Railway.

Could not

you get the Viceroy to show you the text of the Agree- ment with Morgan?

CXVII.

HIS BRITANNIC MAJESTY'S CONSUL-GENERAL, Hankow, to GOVERNOR, Hong Kong. (Despatched 7.50 p.m., October 16, 1905; Received 8.45 a.m., October 17, 1905.).

I have sent the following to His Britannic Majesty's Minister, Peking

4

'Your telegram, No. 64. I telegraphed asking to see the Agreement in question directly a further loan was suggested, but the Viceroy's Secretary informed me, on the 9th of October, that it had not been received, and, he doubted if it mentioned these bonds at all.

'Shall I again apply to Viceroy?"

CXVIII.

HIS BRITANNIC MAJESTY'S CONSUL-GENERAL, Hankow, to GOVERNOR, Hong Kong. (Despatched 7.50 p.m., October 16, 1905; Received 8.53 a.m., October 17, 1905.)

I have sent the following to His Britannic Majesty's Minister, Peking:-

41111

44

Ross has telegraphed, at my suggestion, to his Corporation asking them if they would make the loan on the British or Hong Kong Government guarantee if, on his part, the Viceroy would accept the loan proposals of the Central Railways, Limited, and also undertake to borrow from the British Chinese Corporation on not inferior conditions, from their point of view, whenever China decides to raise a loan or loans for the Canton-Hankow Railway construction."

(Secret.)

SIR.

No. 170.

GOVERNOR SIR M. NATHAN to MR. LYTTELTON. (Received November 18, 1905.)

Government House, Hong Kong, October 20, 1905. IN continuation of my secret despatch of the 18th October,* on the subject of loans by Hong Kong to the Viceroy at Wuchang in connection with the redemp- tion of the Canton-Hankow Railway, I have the honour to enclose a paraphrase of

• No. 169.