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PUBLIC RECORD OFFICE

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TILLC.O. 882

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PUBLIC RECORD OFFICE, LONDON

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

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of loans by Hong Kong to the Viceroy at Wuchang in connection with the redemption of the Canton-Hankow Railway, I have the honour to enclose, for your information and record, a paraphrase of further telegraphic correspondence with yourself, His Majesty's Minister at Peking and His Majesty's Consul-General at Hankow.

2. Mr. Fraser's telegram of October 21st (CXXIV.) and yours of the 26th (CXXVII.) refer to the British and Chinese Corporation raising the additional amount required by the Viceroy for the redemption of bonds. From the latter tele- gram I assume that this is now being arranged in connection with the Corporation's loan for the Hupeh section of the Szechuan Railway and for the Hankow-Canton Railway and that no further action in the matter is required on my part.

3. The remaining telegrams deal with the Belgian claim, supported_by_the French Minister, for a preferential right as regards the Canton-Hankow Railway now that the American concession has been cancelled. This claim is not apparently put forward on the grounds of bonds remaining outstanding as previously stated in Mr. Fraser's telegram of the 12th October (CXI.) and it is difficult to see on what it is based, as according to the letter from Sheng, dated the 26th June, 1898, referred to in Sir Ernest Satow's telegram of the 27th October (CXXVIII.), as published on page 246 of Rockhill's "Treaties and Conventions with or concerning China and Corea," whatever the Belgian preferential right may have been, it lapsed when the agreement with the American Syndicate became definite on July 13th, 1900; it did not again come into effect on the redemption of the loan contracted under that agree- ment. Sheng's action in the matter was further formally repudiated by the Tsung- li-Yamên in their letter to Mr. Bax-Ironsides, which appears on page 243 of Rock- hill's book.

4. These points are being pressed by Sir Ernest Satow, who will not allow Sheng's unauthorised undertaking to be used to take away from the concomitant advan- tages conceded in connection with the loan by the Hong Kong Government. In this matter also no action appeared to be called for from me.

5. I enclose, for convenience of reference, transcripts of three letters extracted from Rockhill's book above referred to, of which a copy has been lent to me by His Britannic Majesty's Consul-General at Canton. I shall be obliged by your kindly sending me a copy of this work for my future use.

Enclosure 1 in No. 180.

I have, &c.,

M. NATHAN,

Governor.

PARAPHRASE of Telegraphic Correspondence between the Secretary of State, His Britannic Majesty's Minister, Peking, His Britannic Majesty's Consul-General, Hankow, and Governor, Hong Kong.

CXXIV.

HIB BRITANNIC MAJESTY'S CONSUL-GENERAL, Hankow, to GoVERNOR, Hong Kong. (Despatched 1.5 p.m., October 21, 1905; received 2.53 p.m., October 21, 1905.)

(No. 15.)

Your telegram of yesterday. The Viceroy would not accept a five per cent. loan, as that is the interest payable on the bonds.

The guarantee was only to enable the bank concerned to make use of the sum lent as a covering for its note of issue; this was done, I believe, in the case of the Hong Kong and Shanghai Bank loan to the Viceroy in 1900.

He would, of course, prefer that it was from your Government.

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

FRASER

CXXV.

His BRITANNIC MAJESTY'S MINISTER, Peking, to GOVERNOR, Hong Kong. (Despatched 4.45 p.m., October 25, 1905; received 6.58 p.m., October 25, 1905.)

(No. 19.)

I have sent the following to the Foreign Office:-

"Telegram, No. 190.

Canton-Hankow Railway. In answer to a question, the

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French Minister informs me that he has supported the Belgian Minister in claiming priority of rights to the concession in virtue of a written undertaking given by Sheng at the time when he negotiated the agree- ment with the American Concessionaires. By this undertaking the Belgian Company built the Luhan line and were to have the reversion if the Americans failed to construct.

In consequence the Viceroy, Chang Chih Tung has been forbidden by the Chinese Government to borrow from anyone for the construction of the Canton-Hankow Railway."-SATOW.

CXXVI.

HIS BRITANNIC MAJESTY'S MINISTER, Peking, to GOVERNOR, Hong Kong. (Despatched 12.30 p.m., October 26, 1905; received 5.21 p.m., October 26, 1905.)

The Foreign Office have misunderstood the last sentence of my telegram repeated to you as No. 19. It should read: "Viceroy has been forbidden to borrow."-SATOW.

(37374.)

CXXVII.

SECRETARY OF STATE to GOVERNOR, Hong Kong.

(Despatched 4.55 p.m., October 28, 1905; received 5.55 a.m., October 27, 1905.)

Your telegram of the 20th of October. The Corporation have instructed agents

in Shanghai to negotiate for loan of £2,500,000 to include £450,000.-LYTTELTON.

CXXVIII.

HIS BRITANNIC MAJESTY'S MINISTER, Peking, to GOVERNOR, Hong Kong. (Despatched 11.50 a.m., October 27, 1905; received 2.4 p.m., October 27, 1905.)

(No. 20.)

Hankow-Canton Railway. My telegram, No. 19. I have received the following from Consul-General, Hankow:-

On the 9th of October the Viceroy's Secretary mentioned this matter. He said that the undertaking was given on page 246, Rookhills, &c., and that the Chinese Government and the Viceroy at Wuchang had replied or would reply to the Belgians and French that even if this undertaking, which was made without the authority of the Tsung-li-Yamen and to whom it was not communicated, bound China to give a concession for the construction of the railway, the obligation ceased on the execution of the American agreement of July 13th, 1900."

I have sent the following reply:-

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"I suppose the Viceroy is aware of the denial in writing on page 248, Rockhills. I am unwilling to embarrass the Viceroy, but you should make him clearly understand that if Sheng's unauthorised undertaking is used to bar us from the advantages conceded in connection with your loan agreement I shall strongly object.”

I have repeated this to the Foreign Office.-SATOW.

CXXIX.

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

(Despatched 10.45 a.m., October 28, 1905.)

I do not understand the reference to pages, Rockhills, in your telegram, No. 20. Will you kindly explain --NATHAN.