This Document is the Property of His Britannic Majesty's Government.]
365
AFFAIRS OF CHINA.
CONFIDENTIAL.
[38615]
No. 1.
[November 17.]
SECTION 1.
C. O.
45640
RE:
West 11 DFC 06
Sir J. Jordan to Sir Edward Grey.--(Received November 17.) (No. 390.) Sir,
Peking, September 29, 1906. IN continuation of Mr. Carnegie's despatch No. 370 of the 5th instant, I have the honour to report the further progress which has been made in the negotiations of the Canton-Kowloon Railway Agreement.
At a meeting held on the 27th instant, the Minutes of which I have the honour to inclose, an understanding was arrived at on several points which had previously caused a difference of opinion, and the only outstanding question which practically remains is the issue price of the loan. This is, of course, a vital consideration, and it has, unfortunately, been very unfavourably affected by the recent fall in Chinese securities, for which the Chinese themselves are probably largely responsible. However, it would be to the advantage of the British and Chinese Corporation to meet them in the most liberal spirit, and in a telegram which I sent you to-day I ventured to suggest that advice in this sense might usefully be tendered to the Board of Directors.
Before this last interview took place the Chinese negotiators had contended that the Engineer and Accountant should be exclusively under Chinese control, while Mr. Bland held that they should be responsible to the Corporation for the efficient construction of the railway. A compromise has now been made by which they are to be appointed and removed by the Corporation, in consultation with the Director-General.
Mr. Bland informs me that he is prepared to accept the suggestion made by Kung Taotai with regard to the redemption of the bonds. They will be redeemed by fixed annual payments in accordance with a schedule, and redemption within the first twenty-five years can only be effected by giving six months' notice and paying a premium of 2½ per cent.
The question of the commission on materials is one which has been hotly contested on both sides. The Chinese think it unfair that they should be obliged to pay this levy upon articles of local produce, while the British and Chinese Corporation try to convince them that the remuneration is not merely a commission on the purchase of the materials, but a charge for their services in supervising and constructing the line.
Mr. Tang has now offered to commute the commission for a lump sum of £25,000; Mr. Bland has offered to accept £35,000, and I understand from the latter that the difference is susceptible of adjustment.
The only objection to this arrangement would appear to be that the Corporation, being assured of a fixed sum beforehand, have not the same interest in seeing to the selection of the materials as they would have if they were paid by commission.
I have, &c. (Signed) J. N. JORDAN,
Inclosure in No. 1.
CANTON-KOWLOON RAILWAY.
Minutes of Fourth Meeting held at the Wai-wu Pu on Thursday, September 27, 1906, at 3 P.M.--
(Communicated by Mr. J. O. P. Bland.)
His Excellency Tang Shao-yi;
Present:
Kung Taotai and Mr. Hu, representing the Viceroy of Canton; Messrs. Chu Pao-fay and En, Secretaries to the Wai-wu Pu; and
Mr. J. O. P. Bland, representing the British and Chinese Corporation (Limited).
MR. BLAND stated that, by his instructions received yesterday in a telegram from London, he was directed to state that the money market conditions have become
Page 366
[2226 r-1]
This Document is the Property of His Britannic Majesty's Government.]
365
AFFAIRS OF CHINA.
CONFIDENTIAL.
[38615]
No. 1.
[November 17.]
SECTION 1.
C. O.
45640
RE:
West 11 DFC 06
Sir J. Jordan to Sir Edward Grey.--(Received November 17.) (No. 390.) Sir,
Peking, September 29, 1906. IN continuation of Mr. Carnegie's despatch No. 370 of the 5th instant, I have the honour to report the further progress which has been roade in the negotiations of the Canton-Kowloon Railway Agreement.
At a meeting held on the 27th instant, the Minutes of which I have the honour to inclose, an understanding was arrived at on several points which had previously caused a difference of opinion, and the only outstanding question which practically remains is the issue price of the loan. This is, of course, a vital consideration, and it has, unfortunately, been very unfavourably affected by the recent fall in Chinese securities, for which the Chinese themselves are probably largely responsible. However, it would be to the advantage of the British and Chinese Corporation to meet them in the most liberal spirit, and in a telegram which I sent you to-day I ventured to suggest that advice in this sense might usefully he tendered to the Board of Directors.
Before this last interview took place the Chinese negotiators had contended that the Engineer and Accountant should be exclusively under Chinese control, while Mr. Bland held that they should be responsible to the Corporation for the efficient construction of the railway. A compromise has now been made by which they are to be appointed and removed by the Corporation, in consultation with the Director-General.
Mr. Bland informs me that he is prepared to accept the suggestion made by Kung Taotai with regard to the redemption of the bonds. They will be redeemed by fixed annual payments in accordance with a schedule, and redemption within the first twenty- five years can only be effected by giving six months' notice and paying a premium of 24 per cent.
The question of the commission on materials is one which has been hotly contested on both sides. The Chinese think it unfair that they should be obliged to pay this levy upon articles of local produce, while the British and Chinese Corporation try to convince them that the remuneration is not merely a commission on the purchase of the materials, but a charge for their services in supervising and constructing the line.
Mr. Tang has now offered to commute the commission for a lump sum of 25,0001; Mr. Bland has offered to accept 35,0001, and I understand from the latter that the difference is susceptible of adjustment.
The only objection to this arrangement would appear to be that the Corporation, being assured of a fixed sum beforehand, have not the same interest in seeing to the selection of the materials as they would have if they were paid by commission.
I have, &e. (Signed) J. N. JORDAN,
Inclosure in No. 1.
CANTON-KOWLOON RAILWAY.
Minutes of Fourth Meeting held at the Wai-wu Pu on Thursday, September 27, 1906,
at 3 P.M.--
-(Communicated by Mr. J. O. P. Bland.)
His Excellency Tang Shao-yi;
Present:
Kung Taotai and Mr. Hu, representing the Viceroy of Canton; Messrs. Chu Pao-fay and En, Secretaries to the Wai-wu Pu; and
Mr. J. O. P. Bland, representing the British and Chinese Corporation (Limited).
MR. BLAND stated that, by his instructions received yesterday in a telegram from London, he was directed to state that the money market conditions have become
[2226 r-1]
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