CO129-326 - Foreign Office - 1904 — Page 709

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It remains to be seen whether the Chinese Government will accept this counter- proposal; but a refusal of conditions which constitute the minimum of what the Powers are justly entitled to claim in return for the surrender of their rights under the Protocol of 1901, would doubtless be regarded as a proof that their offer to undertake the con- servancy work at their own cost, provided the control were left in their hands, was not made in good faith.

As I have been informed by his Excellency Natung, to whom I gave an outline of my note a few days ago, that it would be referred to the Shanghae Tuotai for his opinion, I am sending a copy of this despatch and the inclosed note to Sir Pelham Warren for his confidential information.

The new Agreement would, of course, require to be signed by the Representatives of the Powers who were parties to the original Protocol, and by no others.

I have, &c.

(Signed)

Inclosure 1 in No. 1.

Mr. Conger to Prince Ch'ing.

ERNEST SATOW,

Legation of the United States of America, Peking, August 11, 1904.

Your Imperial Highness,

IN reply to your Highness' note of the 5th instant stating that the Chinese Government would give as a guaranty for the faithful carrying out of the Whangpoo Conservancy scheme certain opium revenues, I have the honour to say that I at once telegraphed the substance of your Highness' note to my Government, and have received a reply to the effect that, while it is not willing to deny the sufficiency of the revenue proposed as a guaranty, yet it thinks that, in view of the enormity of the enterprise, the great cost of organizing the work, and of the necessary plant and long continuance "of the work, that some kind of satisfactory kind of bond measure should be arranged.

At any rate, before my Government can consider any abrogation of the provisions of the Final Protocol, a full programme of the plans for work and maintenance must be submitted. If, then, China is really is really desirous of promptly taking up this work and hastening it to a conclusion, I suggest that she forthwith present to the Representatives of the Powers a full and detailed plan, which secured by the revenues mentioned and supported by some kind of bond measure, will insure the speedy and satisfactory carrying out the important work and its permanent maintenance in good condition.

If this should be done at once, my Government will not oppose it, and I shall be glad personally to do whatever I properly may for its furtherance.

It should be clearly understood, however, that whereas the United States is willing to waive temporarily its right to insist on China complying with the terms agreed to by her in Article VI of the Final Protocol concerning the improvement of the course of the Whangpoo River, it will do so only so long as the Chinese Government promptly and satisfactorily discharges the new obligations which it now wishes to assume. Should it become evident at a later date that the conservancy work is not being done promptly, or that a disposition is evidenced not to carry out the work to the satisfaction of all interests concerned, the United States will insist upon full and strict compliance with the terins of the original Agreement.

I avail, &c.

(Signed)

E. H. CONGER.

Note. The revenues are those arising from opium in Szechuan and Kiangsu, estimated to amount to 600,000 taels.

Inclosure 2 in No. 1.

Sir E. Satow to Prince Ch'ing.

Your Highness,

Peking, September 16, 1904. IN my note of the 22nd June last relative to the new proposals of the Chinese Government for carrying out the Whangpoo River Conservancy works, I informed your Highness that I would transmit to my Government a copy of your Highness' note of the 9th June, and I have now been authorized to reply to those proposals as follows:--

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As I had the honour to point out in my previous reply, the whole of the Customs revenue is pledged for the payment of foreign loans and for the indemnity due to the Powers for the next thirty or forty years, and His Majesty's Government are unable to assent to any portion of the Customs revenue being diverted to any other purpose than those stipu- lated in Article VI of the Protocol of 1901, but I hope that your Highness will be able to inform me that other revenues are available for the works which the Chinese Government have declared their willingness to undertake.

Your Highness will no doubt understand that His Majesty's Government can only entertain the present proposals, which it is desired to substitute for the formal stipulation contained in Article X1 (6) and Annex 17 of the Protocol, if they are recorded in docu- mentary Agreement of equal diplomatic force. Such an Agreement, I conceive, would begin by stating the desire of the Chinese Government to substitute for the Conservancy Board created by those stipulations, wherein also the powers, composition, duty and revenues of the Board were defined, other stipulations, by which they would undertake to carry out all the necessary works and bear the entire cost, and the acceptance by the representatives of that proposal in principle on certain conditions.

The conditions on which my Government would authorize me to agree with the Chinese Government are the following: They include those contained in your Highness' note of the 9th June last, with others which seem necessary in order to secure the punctual execution and efficient maintenance of the works :---

1. The works in connection with the improvement and maintenance of the water approaches to Shanghac, consisting of the Whangpoo River and the inner and outer bars at Woosung, will be placed under the management of the Shanghae Taotai and the Commissioner of Customs at that port, the control of the river police and sanitary and other matters remaining in the same hands as before the signature of the Protocol of the 7th September, 1901.

2. Within three months from the signature of the Agreement the Chinese Govern- ment will select an engineer well versed in river conservancy, and will submit his name for the consideration of the Representatives of the Signatory Powers, and on his approval by a majority of them will appoint him to frame a scheme and carry out the necessary works.

In case of the post becoming vacant at any time during the execution of the works his successor will be selected, approved, and appointed in the same manner.

3. For all contracts for carrying out the works and providing the necessary materials and machinery public tenders will be invited, and the most advantageous will be accepted.

4. Every quarter an account of the moneys expended on the works will be made up and submitted to the Consuls of the Signatory Powers for their inspection.

5. The authorization of the Taotai and the Commissioner of Customs shall be necessary before any new bunds are built, jetties constructed, or pontoons or hulks are placed in the river.

6. The Taotai and the Commissioner of Customs to be empowered to expropriate existing moorings, aud to establish a system of public moorings in the river.

7. No dredging to be carried out in the river except with the authorization and under the control of the Taotai and the Commissioner of Customs.

8. The Taoral and the Commissioner of Customs to be empowered to acquire by purchase the lands necessary for carrying out the works of conservancy and improvement of the water approaches to Shanghae as defined in paragraph 1, and to dispose of them. If, for this purpose, it shall be deemed necessary to expropriate land outside the foreign Settlements, the rules laid down in Article 6 (a) of "The Land Regulations for the Foreign Settlements at Shanghae north of the Yangking-pang" to be followed. The price to be fixed by a Committee, consisting of (1) a person chosen by the Consular authority of the Power to whose jurisdiction the owner is subject; (2) one chosen by the Taotai and the Commissioner of Customs; (3) one chosen by the Senior Consul.

9. Riparian owners to have the refusal of all land made in front of their properties by the reclamation carried out for the improvement of the water approaches in question. The purchase price of these lands to be fixed after consideration of all the circumstances by a Committee composed in the same manner as provided in paragraph 8.

10. The Chinese Government to bear the whole cost of the necessary works. 11. The Chinese Government to deliver within three months from the date of the Agreement to the doyen of the Diplomatic Body twenty bonds for 460,000 Haik wan taels secured upon the revenues assigned as security for the expenditure, maturing at the end of each successive year during twenty years from the date of signature of the Agreement. At the end of each year if the Consular Representatives of the Signatory Powers report to the Senior Diplomatic Representative of such Powers that the works are being carried