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This Document is the Property of His Britannic Majesty's Government.]
AFFAIRS OF CHINA.
CONFIDENTIAL.
No. 1.
24
[June 7.]
SECTION 2.
Sir E. Salow to the Marquess of Lansdowne.—(Received June 7.)
(No. 110.) (Telegraphic.) P.
Peking, June 7, 1905. HIS Majesty's Consul-General at Hankow has telegraphed to me as follows :----
"(Very Confidential.)
"A loan of 5,000,000 tuels for twenty years is desired by the Wuchang Viceroy. The Hupoi and Hunan opium revenue, which, under the new arrangements, is left to him, would serve as the security for this loan, which will be sanctioned by the Throne. Its object, which his Excellency desires kept very secret, is to buy up Mr. Pierpoint Morgan's Hankow-Canton Railway block of shares, possession of which would mean control of the Company. Arrangements for the purchase of these shares are virtually completed.
"It is highly probable that the subsequent large loan for railway purposes, with its many concomitant advantages, will be allotted in accordance with this loan, for which Japanese and Germans are competing, both of them making very tempting
offers.
"It is not easy to approach the Hong Kong and Shanghae Bank on the subject, owing to the composition of its Board and its relation to the German Bank.
"The Viceroy, anxious though he is to borrow from Great Britain, considers that he would not be justified in accepting terms inferior to those recently obtained by the Board of Revenue.
"His Excellency would welcome advice from you, and, if your reply gives him encouragement, he is prepared to enter into a personal discussion of the details. The prospectus of the last loan issued by the Hong Kong and Shanghae Bank is in his hands, and he would probably no longer object to the demand for bonds signed in London by the Chinese Minister."
The Chartered Bank of India, Australia, and China, the other British banking establishment in China, has not done rauch business in the way of Government loans hitherto; but it is a sound institution.
The loan of this sum to the Viceroy would, in my opinion, be quite worth the while of Great Britain.
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