CO882-6 — Page 692

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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asked by the Viceroy, although probably he already had them, with a view, under the guise of a friendly intention to negotiate, to cause further delay and weary me out. In these circumstances I have written to-day to the Consul General sending the English, and promising the Chinese, text of the Northern Railways Loan Agree- ment without committing myself to an acceptance of it as a basis for negotiation, and strongly hinting, for the benefit of the Viceroy, my suspicion of the real intent of his request.

3. Copies of the letters referred to in the preceding paragraph, and of the three telegrams that have passed since my last despatch are enclosed for completeness of record and for convenience of reference. I also send a copy of the Northern Railways Loan Agreement of 1898 referred to above. This Agreement is printed in "Rockhill's Treaties," and also on page 29 of China Blue Book, No. 2, of 1899.

SIR,

Enclosure 1 in No. 223.

I have, &c.,

M. NATHAN,

Governor.

The British-Chinese Corporation, Limited, Hong Kong,

Canton-Kowloon Railway.

January 12, 1906.

We are informed by the Governor of Hong Kong that the British Minister is of opinion that we should persist in negotiating at Canton, and not treat the despatch to you of 20th December as the Viceroy's last word on the subject.

Views such as these expressed by the Minister lead us to believe that Sir Ernest Satow thinks we should apply to the Viceroy of Canton for another interview with his Deputies, but unless in the interval which has elapsed since our meeting on the 19th ultimo orders have been received from Peking which the Viceroy dare not dis- regard, we entertain but little hope that a further meeting with these Deputies (even if accorded) would have any satisfactory result. At the same time, as we desire to act entirely in accordance with what we believe to be Sir Ernest Satow's advice in this matter, we shall feel obliged if you will be kind enough to notify the Viceroy that the Corporation's representative is ready to again meet his Deputies, if he will appoint a time and date, with the object of discussing terms and details of proposed Loan Agreement.

The result of your application for this interview please communicate to our Canton Agent, who will pass it on to us by telegraph.

We have, &c.,

The BRITISH AND CHINESE CORPORATION, LIMITED.

JARDINE, Matheson, and ComPANY, Agents

James Scott, Esq., I.S.O.,

His Britannic Majesty's Consul-General,

Canton.

SIR.

Enclosure 2 in No. 223.

British and Chinese Corporation, Limited, Hong Kong,

Canton-Kowloon Railway.

January 12, 1906.

WE beg to thank you for your letter with two enclosures of yesterday's date, also for the information which you were good enough to verbally communicate to us to the effect that the British Minister is of opinion the British and Chinese Corpora- tion should persist in negotiating at Canton, and not treat the Viceroy's despatch of December 20th as his last word on the subject.

Views such as these expressed by the British Minister lead us to believe that Sir Ernest Satow thinks we should apply to the Viceroy at Canton for another interview with his Deputies, and we have accordingly addressed the Consul-General as per copy enclosed, requesting him to endeavour to arrange for another meeting,

• Enclosure 2 in No. 217.

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though from the attitude assumed by Viceroy Shum in regard to this particular con- cession, and of the Chinese Government to the construction of railways by foreign capital in general, we fear that no good purpose can be served by local negotiations until some definite understanding is arrived at between His Majesty's Government and the Chinese on the whole question.

In the Viceroy's despatch to the Consul-General of 30th December, a copy of which you were kind enough to send to us, there are several points which we think it would be a mistake to allow to pass unnoticed, and though loth to trouble Your Excellency in the matter, we think, as the despatch in question was intended for communication to Your Excellency only, it would be well if the inaccuracies therein, referred to below, were brought to the Viceroy's notice by Your Excellency's special request.

LE

In paragraph 2 of this despatch, the Viceroy states that the Preliminary Agree- ment is only a "Draft Agreement," and has nothing in common with a " Final Agree- ment." We believe the actual Chinese characters employed by Sheng to represent Preliminary Agreement" in the Chinese text, are capable of being translated as "Rough Agreement," but whether the Agreement is called "Preliminary," "Rough," or "Draft" it was nevertheless sanctioned by the Tsung-li Yamen and the Emperor of China, and was signed, sealed and delivered by Sheng and the Agents of the Corporation in March, 1899, and it is, therefore, a solemn and binding document which cannot be disregarded in the manner desired by the Viceroy of Canton. Moreover, as provided by Clause 206, this Preliminary Agreement, when the terms of the Final Agreement of the Shanghai-Nanking Railway were agreed to, and con- firmed by Imperial Edict of 9th June, 1903, this Preliminary Agreement thereupon assumed the status of a Final Agreement," the terms of the Shanghai-Nanking Railway, mutatis mutandis, being applicable thereto. This is a point the Viceroy persistently and conveniently ignores.

Paragraph 3. The English text and the Chinese text of Clause 5 of the Prelimi- nary Agreement vary to some extent, the former reads:-"This Preliminary Agree- ment is signed by the Director-General of the Imperial Chinese Railway Administra- tion, who will, in case there should arise local difficulties, consult with the Viceroy of Canton to make the necessary arrangements, the said Viceroy_will in conjunction with the Director-General memorialize the Throne before the Final Agreement is signed," while the latter translates: "The foregoing Rough Agreement shall, in the first instance, be signed by the Director-General, and then the Viceroy and Governor will be consulted, and in case there should be local objections, it shall be forthwith amended. Anyhow, when the time comes for settling the Original Agreement a joint memorial shall be presented forthwith."

We are not sure which version the Viceroy accepts as a standard-he sometimes quotes from one and sometimes from the other, but assuming that he takes the Chinese text as a basis we would remark that " to amend" the details of an agreement cannot by the widest stretch of imagination be taken to imply "absolute cancella- tion" of such agreement.

Pargraph 4. The evil results anticipated by the Viceroy can only result, if fanned and stirred up by himself and his officials. This is the opinion not only of foreigners, long resident in China, but also of practically every Chinese of high and low degree with whom we have conversed on the subject.

Paragraph 5. The Viceroy's reference to profits of private firms would, strange as it may appear, seem to point to his not being aware that the actual holders of this concession are the British and Chinese Corporation, a company established in England whose shares, though mostly held by important London financiers, may nevertheless be (and are) owned by Chinese and British subjects alike, and it might, perhaps, be well to disabuse his mind of the idea he evidently holds that the firm of Jardine, Matheson, and Company and the Hong Kong and Shanghai Banking Corporation control the business of that Corporation. They are merely Agents acting under instructions.

We have, &c.,

The BRITISH AND CHINESE CORPORATION, LIMITED. JARDINE, MATHESON, AND COMPANY, Agenta,

His Excellency Sir Matthew Nathan, K.C.M.G.,

Government House, Hong Kong.