252
4
rules of the Syndicate, it is to be feared that disturbances may occur and frauds be perpetrated. The Syndicate shall in such cases apply to the Governor to prevent such abuses.
49. Whenever mining concerns actually working wish to change their rules, or to increase their share capital, they must report the circumstances to the Syndicate. The Syndicate will then send an inspector to make investigations, and in case of non-compliance with the Regulations of the Syndicate or of disturbances and fraud, the Syndicate shall, if necessary, petition the Governor to put a stop to their operations.
50. The above Regulations apply to mines actually in operation. Such mines as have not yet been started, or that have ceased work, or that may be started hereafter, must be carried on as per Sections V and VII.
Section VII.
51. Merchants or gentry of our own or other provinces wishing to lease any particular mining property from the Syndicate with a view to mining in accordance with the Syndicate's Regulations, must enter into an agreement with the Syndicate, and have the Company registered as a branch of the Syndicate.
52. The name of such Company to be registered in accordance with Section 1, 4.
53. The rent charged by the Syndicate to such a Company to be estimated according to the output.
54. In such cases the Syndicate may depute a person to manage the branch Company, and he is to have control over the output, and to enforce discipline, &c. The costs to be borne by the branch Company.
55-57. Methods for the financing of branch Companies. Any admission of a foreigner to the finances to invalidate the Agreement.
year.
Section VIII.
58-59. The year to be divided into two halves, and accounts to be audited every
60. The Syndicate and its branches to pay to the Government the royalties provided for by the Regulations.
61-62. Distribution of profits, &c.
63. The above Regulations may be altered, in case they prove unsatisfactory, by a general meeting of shareholders.
(Translation.) Sir,
Inclosure 8 in No. 1.
The Governor of Hunan to Acting Consul-General Playfair.
I HAVE the honour to acknowledge receipt of your despatch of the 4th February
February 14, 1904. to the following effect:-
"I heard a short time ago that the Hunan Board of Mines had issued new mining Regulations by which foreigners were to be excluded from mining enterprises in that province. This caused me much surprise, as it is in direct opposition to Article IX of the new British Commercial Treaty, and Article VIII of the new American Treaty. But, as I have not received any communication from your Excellency on this subject, I am in doubt as to the genuineness of this report. I beg, therefore, to request your Excellency to supply me with information on this point."
1 have the honour to state in reply that the Hunan Board of Mines has not issued any new Regulations; but the General Mining Syndicate of Hunan, a Company formed with a capital subscribed by merchants, obtained a Concession to work all the mines in the province and started operations some years ago. They changed their Regulations this year and issued them afresh.
5
On hearing of this, I instructed the Bureau of Foreign Affairs and the Board of Mines to call upon the said merchants to report on this subject. It is stated in this
Report that there is nothing in the new Regulations that is contrary to the Articles afore-mentioned of the British and American Treaties. Moreover, no new Regulations have, as yet, been issued by the Wai-wu Pu.
I have, &c.
(Seal.)
Inclosure 4 in No. 1.
+
Acting Consul-General Playfair to Governor of Hunan.
(Translation.) Your Excellency,
February 27, 1904. I HAVE the honour to acknowledge the receipt of your despatch of the 14th instant.
[Quoted.]
I beg to point out the following clause in paragraph 10 of the Regulations of the Hunan General Mining Syndicate: "Any natives of any province in China may hold shares in the concern, but no foreigner may exercise any control over its management." In paragraph 57 I note the following: "All the capital for the branch Companies must be Chinese, no foreign capital being admitted; nor may any Chinese represent foreign capital. Any contravention of this rule nullifies the Agreement."
I have the honour to inform your Excellency that the enforcing of these Regulations will be contrary to the new British Commercial Treaty. The Regulations are undated, and there is nothing to indicate whether they are new or old. It is impossible for me to agree to them.
The Wai-wu Pu, you say, has never issued new mining Regulations; therefore these Rules emanating from the Hunan General Mining Syndicate are so much waste paper.
I have, &c.
Your Highness,
(Signed)
G. M. H. PLAYFAIR.
Inclosure 5 in No. 1.
Sir E. Satow to Prince Ch'ing.
Peking, March 14, 1904. I HAVE received from the Acting Consul-General at Hankow a copy of certain Regulations governing mining operations in the Province of Hunan, the effect of which is to establish a General Mining Syndicate with a monopoly of all the mines in the province.
By the 10th Article of these Regulations no foreigners are allowed to become shareholders in the Syndicate; by Article 25 transfer of shares to foreigners is prohibited; and by Article 57 the admission of foreign capital into one of the branch Companies of the Syndicate invalidates the Agreement with such branch.
It is clear from these provisions that the object of the Regulations is to prevent the introduction of foreign capital for the development of mines in Hunan. Now, by Article IX of the Commercial Treaty of the 5th September, 1902, the Chinese Government recognized the desirability of attracting foreign as well as Chinese capital to embark in mining enterprises, and engaged to recast the present mining Rules in such a way as to offer no impediment to the attraction of foreign capital.
If Regulations excluding foreign capital can be adopted for Hunan, they can equally be put in force for all the other provinces, but it would evidently be a breach of faith on the part of the Chinese Government to promise to frame Rules offering no impediment to the introduction of foreign capital, and then to sanction Regulations which directly prohibit its employment.
I trust, therefore, that the Governor of Hunan will be informed that these Regulations must be cancelled.
0
I avail, &c. (Signed)
ERNEST SATOW.
252
4
rules of the Syndicate, it is to be feared that disturbances may occur and frauds be perpetrated. The Syndicate shall in such cases apply to the Governor to prevent such. abuses.
49. Whenever mining concerns actually working wish to change their rules, or to increase their share capital, they must report the circumstances to the Syndicate. The Syndicate will then send an inspector to make investigations, and in case of non- compliance with the Regulations of the Syndicate or of disturbances and fraud, the Syndicate shall, if necessary, petition the Governor to put a stop to their operations.
50. The above Regulations apply to mines actually in operation. Such mines as have not yet been started, or that have ceased work, or that may be started hereafter, must be carried on as per Sections V and VII.
Section VII.
51. Merchants or gentry of our own or other provinces wishing to lease any particular mining property from the Syndicate with a view to mining in accordance with the Syndicate's Regulations, must enter into an agreement with the Syndicate, and have the Company registered as a branch of the Syndicate.
52. The name of such Company to be registered in accordance with Section 1, 4.
53. The rent charged by the Syndicate to such a Company to be estimated according to the output.
54. In such cases the Syndicate may depute a person to manage the branch Company, and he is to have control over the output, and to enforce discipline, &c, The costs to be borne by the branch Company.
55-57. Methods for the financing of branch Companies. Any admission of a foreigner to the finances to invalidate the Agreement.
year.
Section VIII.
58-59. The year to be divided into two halves, and accounts to be audited every
60. The Syndicate and its branches to pay to the Government the royalties provided for by the Regulations.
61-62. Distribution of profits, &c.
63. The above Regulations may be altered, in case they prove unsatisfactory, by a general meeting of shareholders.
(Translation.) Sir,
Inclosure 8 in No. 1.
The Governor of Hunan to Acting Consul-General Playfair.
I HAVE the honour to acknowledge receipt of your despatch of the 4th February
February 14, 1904. to the following effect:-
"I heard a short time ago that the Hunan Board of Mines had issued new mining Regulations by which foreigners were to be excluded from mining enterprises in that province. This caused me much surprise, as it is in direct opposition to Article IX of the new British Commercial Treaty, and Article VIII of the new American Treaty. But, as I have not received any communication from your Excellency on this subject. I am in doubt as to the genuineness of this report. I beg, therefore, to request your Excellency to supply me with information on this point."
1 bave the honour to state in reply that the Human Board of Mines has not issued any new Regulations; but the General Mining Syndicate of Hunan, a Company formed with a capital subscribed by merchants, obtained a Concession to work all the mines in the province and started operations some years ago. They changed their Regulations this year and issued them afresh.
On hearing of this, I instructed the Bureau of Foreign Affairs and the Board of Mines to call upon the said merchants to report on this subject. It is stated in this
5
Report that there is nothing in the new Regulations that is contrary to the Articles afore-mentioned of the British and American Treaties. Moreover, no new Regulations have, as yet, been issued by the Wai-wu Pu.
I have, &c.
(Seal.)
Inclosure 4 in No. 1.
+
Acting Consul-General Playfair to Governor of Hunan.
(Translation.) Your Excellency,
February 27, 1904. I HAVE the honour to acknowledge the receipt of your despatch of the 14th instant.
[Quoted.]
I beg to point out the following clause in paragraph 10 of the Regulations of the Hunan General Mining Syndicate: "Any natives of any province in China may hold shares in the concern, but no foreigner may exercise any control over its management." In paragraph 57 I note the following: "All the capital for the branch Companies must be Chinese, no foreign capital being admitted; nor may any Chinese represent foreign capital. Any contravention of this rule nullifies the Agreement."
I have the honour to inform your Excellency that the enforcing of these Regula- tions will be contrary to the new British Commercial Treaty. The Regulations are undated, and there is nothing to indicate whether they are new or old. It is impossible for me to agree to them.
The Wai-wu Pu, you say, has never issued new mining Regulations; therefore these Rules emanating from the Hunan General Mining Syndicate are so much waste paper.
I have, &c.
Your Highness,
(Signed)
G. M. H. PLAYFAIR.
Inclosure 5 in No. 1.
Sir E. Sulow to Prince Ch'ing.
Peking, March 14, 1904. I HAVE received from the Acting Consul-General at Hankow a copy of certain Regulations governing mining operations in the Province of Hunan, the effect of which is to establish a General Mining Syndicate with a monopoly of all the mines in the province.
By the 10th Article of these Regulations no foreigners are allowed to become shareholders in the Syndicate; by Article 25 transfer of shares to foreigners is pro- hibited; and by Article 57 the admission of foreign capital into one of the branch Companies of the Syndicate invalidates the Agreement with such branch.
It is clear from these provisions that the object of the Regulations is to prevent the introduction of foreign capital for the development of mines in Hunan. Now, by Article IX of the Commercial Treaty of the 5th September, 1902, the Chinese Government recognized the desirability of attracting foreign as well as Chinese capital to embark in mining enterprises, and engaged to recast the present mining Bules in such a way as to offer no impediment to the attraction of foreign capital.
If Regulations excluding foreign capital can be adopted for Hunan, they can equally be put in force for all the other provinces, but it would evidently be a breach of faith on the part of the Chinese Government to promise to frame Rules offering no impediment to the introduction of foreign capital, and then to sanction Regula- tions which directly prohibit its employment.
I trust, therefore, that the Governor of Hunan will be informed that these Regulations must be cancelled.
0
I avail, &c. (Signed)
ERNEST SATOW.
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