CO129-338 - Public Offices & Others - 1906 — Page 95

[This Document is the Property of His Britannic Majesty's Government.]

AFFAIRS OF CHINA.

CONFIDENTIAL.

[30282]

No. 1.

91

C O [September 6.11

SECTION 2.

VA NOV OR

Mr. Carnegie to Sir Edward Grey.-(Received September 6.)

(No. 165.) (Telegraphic.) P.

Peking, September 6, 1906. PLEASE refer to my telegram No. 162 of yesterday's date respecting the Canton-Kowloon Railway negotiations. From minutes of three meetings held on the 23rd August, 29th August and 3rd September respectively, which Bland gave me this morning, it appears that there are two important points of difference, viz.: (1) the price of the loan issue; (2) the commission of 5 per cent. received by the Corporation on material bought. In respect of (1), his Excellency Tong Shoa Yi suggests that there should be a fixed price of 961, or a price of 4 points below the issue price. But 5 points below issue price is what Bland wants. As regards (2), his Excellency is willing to offer 5 per cent. Commission, but only on British materials purchased, on the understanding that preference shall, after tender, be given at equal prices to British goods. Bland, however, asks that on all material purchased outside of China the Corporation shall receive 5 per cent.

I have urged Bland to persevere in his negotiations, but I hear from him that he has telegraphed to the Corporation, no doubt with the intention that His Majesty's Legation should be asked to intervene. In my opinion the points of difference are not so important as they appear to Bland, and, from my knowledge of T'ong, I consider that matters would not be expedited by our interfering at this stage with a view of obtaining a better issue price or more commission on material. The Corporation should, I think, be asked to send instructions to Bland to patiently insist on his points. In negotiating with Chinese he should not expect to bring a matter of this kind to a successful issue in a fortnight.

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