CO882-6 — Page 685

PUBLIC RECORD OFFICE

Reference :-

C.O. 882

6

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH—NOT TO

330

Sir E. Satow states that he was informed by the Wai-wu-pu on December 12th last, that the Canton Viceroy, in compliance with their request, had promised to delegate an official to negotiate with the Representative of the Corporations. Two officials were appointed for that purpose, but as Sir E. Satow afterwards learnt from telegrams from Canton and Honk Kong, they merely said that the Viceroy wished to pay the expenses of the survey and to cancel the preliminary agreement.

Sir E. Satow thereupon wrote, on December 27th, to the Wai-wu-pu, and requested that orders might be sent to the Viceroy to give such positive instructions to his delegates as would ensure the conduct of negotiations in accordance with the accepted rules of international business.

Later on Sir E. Satow learnt that the instructions sent by the Wai-wu-pu were not sufficiently explicit, and on the 12th of January addressed to them a strong note asking that the Viceroy should be definitively instructed to discuss the contents of the proposed final and working Agreement, copies and translations of which had already been communicated to Tang Shao Yi.

Subsequently, the Governor of Hong Kong informed His Majesty's Minister, on January 24th, that the Viceroy had stated that if he found the text of the Northern Railways Loan Agreement of 1898, of which he asked for a copy, satis- factory, he would commence negotiations on the basis of that Agreement.

Sir E. Satow suggested to Sir M. Nathan, in reply, that it would be better to stand out for negotiations on the basis of the draft Agreements, as to give the text of the Northern Railways Loan Agreement would be equivalent to conceding the point that it should form the basis of the negotiations. Sir Ernest added, as a further suggestion, that the British_negotiator might examine, without exhibiting any eagerness to accept, the proposal to negotiate on the basis of that latter Agree- ment if such a proposal were brought forward by the Viceroy's delegates in the course of the discussion.

On January 26th the Governor stated that he had asked His Majesty's Consul- General at Canton to inform the Viceroy that if he had any object beyond causing delay, he could obtain copies of the Northern Railways Agreement from his own Government, but that it had no bearing on the Preliminary Agreement of 1899 with regard to the Canton-Kowloon line.

Sir E. Satow concludes by saying that the Chinese New Year holidays have prevented him from pressing the matter, and that he is waiting for the text of the Viceroy's request for a copy of the Northern Railways Loan Agreement before again addressing the Wai-wn-pu.

The Chairman,

British and Chinese Corporation, Limited,

3, Lombard Street, E.C.

Enclosure 2 in No. 217.

AFFAIRS IN CHINA, No. 7129/1898. NORTHERN RAILWAY LOAN AgreemENT.

No. 105.

I am &c..

F. A. CAMPBELL.

HONG KONG AND SHANGHAE BANKING CORPORATION, to FOREIGN OFFICE.

(Received November 24.)

31, Lombard Street, London, November 23, 1898.

SIR,

IN September last I had the honour to inform you that, in order to enable the bank to raise the funds required for the extension of the Peking and Shan-hai-Kuan Railway to Newchwang, it would be necessary to have some assurance from Her Majesty's Government that our contract would be upheld. In reply, you were so good as to inform me that Her Majesty's Government would be prepared to state that they made a note of the contract as a binding agreement upon the Chinese Government. At that time, I was not without hope that a communication in those terms would be sufficient.

Since then, however, so much has happened in China that capitalists naturally hesitate to invest money in that country without some assurance that their security will not be interfered with. I am, therefore, reluctantly compelled to ask Her

331

Majesty's Government to go the length of giving an assurance that our contract will be upheld, otherwise it will not be possible to carry out the transaction.

I have the honour to inclose a report upon railways forming our security, from which you will notice the proposed advance is amply covered, and consequently such an assurance as I am asking for is not likely to carry with it any pecuniary obligation.

I further enclose a copy of our Agreement with the Chinese Railway Adminis- tration, under which the Chinese Government guarantee the loan.

I further have the honour to send you a chart showing the railway lines already constructed and hypothecated to the bank, and also the proposed extensions.

I need not point out how important it is that the railway entering into China from Manchuria should be under British control, and that the important trade of Newchwang shall not be diverted to Port Arthur or Talienwan.

AGREEMENT.

I have, &c.,

EWEN CAMERON.

This Agreement is made between His Excellency Hu, Governor of Peking, as Administrator-General of the Railways of North China within and without Shan-hai-Kuan, acting under the authority of the Imperial Chinese Govern- ment, hereinafter called the "Administrator-General," of the one part, and the Hong Kong and Shanghae Banking Corporation, for themselves and on behalf of the British firm of Jardine, Matheson, and Co., representing as joint agents the British and Chinese Corporation (Limited), hereinafter called the "Corporation," of the other part:

Whereas, on the 7th day of June, 1898, being the 19th day of the 4th month of the 24th year of the Emperor Kuang-Hsü, a preliminary Agreement was signed at Peking between the Administrator-General and the Hong Kong and Shanghae Banking Corporation, representing a British Syndicate, for a sterling loan for the equivalent of about 16,000,000 taels for the construction of a railway line from Chung-hou-so to Hsin-ming-t'ing and a branch line to Ying-tsu, and for the redemp- tion of existing loans made to the Tien-tsin-Shan-hai-Kuan and Tien-tsin- Lucouchiao Railway lines; and

Whereas in terms of the preliminary Agreement a period of three months from its date was allowed to the Syndicate to accept or decline its conditions; and

Whereas the Hong Kong and Shanghae Banking Corporation, before the expiration of the period named, duly notified the Administrator-General that it is prepared, with certain modifications, to arrange the issue of the loan upon the conditions named in the preliminary Agreement:

It is now agreed as follows:-

1. The Corporation agrees to issue on behalf of the Administrator-General a sterling loan for the amount of £2,300,000, the proceeds of which are to be applied in the order following:-

(1.) To the redemption forthwith or at maturity of the loans and advances specified in the statement attached to this Agreement which have been made by foreign banks to the Tien-tsin-Shan-hai-Kuan and the Tien-tsin-Lucouchiao Rail- way lines. The Administrator-General hereby certifies that the total amount of the liabilities due by the lines named does not exceed the sum of 3,000,000 taels.

(2.) To the carrying out within a period of three years from the date of this Agreement of certain improvements and additions to rolling-stock on the existing lines between Peking and Shan-hai-Kuan, recommended by the European Chief Engineer, and estimated by him to cost about 1,500,000 taels.

(3.) To the construction of a railway line from Chung-hou-so to Hsin-ming- t'ing, and one from a point on that line near Shih-san-chan to Ying-tzu, and of a branch line from Nu-erh-ho to the collieries of Nanp'iao.

เ

The Administrator-General engages that the construction of the new lines here specified shall be completed within a period of three years from the date of this Agreement.

2. In the event of the proceeds of this loan being insufficient for the completion of the new lines here specified, the Administrator-General will provide or will arrange with the Imperial Government of China to provide funds from other sources sufficient to complete their construction,

18885

ITI