CO129-328 - Governor Nathan - 1905 [1-6] — Page 714

706

No 128

FO:

TED

.

88

SECRETARY OF STATE to GOVERNOR, Hong Kong.

(June 30, 1905.) Sent 1.15 p.m

Referring to your telegram of June 28th, the Crown Agents can advance the

30.6.0. money if I give an assurance that the sanction of the Legislative Council will be forthcoming later, if required. As the advance would, at any rate at present, be made at bank rate, the Colony would gain the difference between this rate and 4 per cent. It is inadvisable to approach the bank to which you refer if this can be avoided.

You should endeavour, in concert with Sir Ernest Satow, to settle on the con- ditions on which you would lend the money. Such conditions might be the accept- ance of our Canton-Kowloon Agreement, and the issue of an Imperial Chinese decree for the loan, the latter condition being necessary to guard against the possi- bility of default by the Viceroy. An undertaking should also be given by the Viceroy that the redeemed shares will not be sold or pledged to others without your

consent.

Sir Ernest Satow has since suggested that thongh the Viceroy does not want the railway to be mentioned in the agreement, we might demand a written assurance from him and the Canton Viceroy and the Hunan Governor that in the event of foreign capital and foreign engineers being required for railways in the Two Hu, the Two Kwang and the Liang Kiang Provinces, the first option of supplying both or either of them shall be given to Great Britain.

His Majesty's Government concur in this, and we further think that we might endeavour to secure an extensive assurance to cover material for the construction and

equipment of the railway. We leave it, however, to your and Satow's discretion to obtain as much as possible for the interests of British commerce,

Assuming that in your judgment the general opinion of Hong Kong would be in favour of the policy indicated, if later on it becomes necessary to take them into confidence and to pass a Loan Ordinance, I authorise you to make arrangements on the above lines without referring further to me.

Let me know the progress made and the dates and places at which funds will be required, as well as the exact amounts of the various instalments.

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