CO129-344 - Public Offices & Foreign Office - 1907 — Page 299

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

CHINA RAILWAYS.

CONFIDENTIAL.

[17860]

No. 1.

238

[June 1.]

SECTION 1.

Telegram from Shanghae to the British and Chinese Corporation, dated May 30, 1907.-

(Communicated by Mr. Addis, June 1.)

WE have received a telegram from E. G. Hillier :-

"Japanese satisfactorily assure me that they will respect British Agreement, and they have notified the Viceroy of Hankow of their withdrawal. The Viceroy of Hankow states he cannot negotiate now openly for Railway Loan owing to opposition gentry, but proposes loan 1,000,000. 5 per cent., to be redeemable in fifteen years, commencing sixth year Imperial sanction; security, specific provincial revenue, reported yearly value 3,000,000 taels; object, nominally industrial development, but actually railway, which forms legitimate part of the above.

"Idea is that, commencement having been made, native capital may be attracted sufficient to disarm opposition and facilitate foreign borrowing later. The Viceroy of Hankow is anxious to allow Japanese take up contracts for works, total value not exceeding 4,000,000 taels against advances Yokohama Specie Bank, secured by second mortgage our security. The Viceroy of Hankow repeats he adheres to railway engagements, British effecting purchase materials. Employment railway engineers on railway specified, and if preceding general terms acceptable I (Hillier) am asked enter into negotiations with [sic]. With reference to foregoing, my opinion is it would be very desirable to meet wishes of Viceroy of Hankow so far as may be practicable in order to preserve footing, and since it is necessary to act in conjunction with French, I recommend you to authorize me (Hillier) enter into negotiations with [sic] on behalf of British-French group. But I think Japanese share represented by contracts as proposed too large. I would suggest limited to 1,000,000 taels, not to be paid for from the British-French loan. The British Consul-General at Hankow considers security satisfactory. I would stipulate for Imperial guarantee. I would suggest price 93 or 94.

"If approved of it is my intention to leave next Wednesday for Hankow. The British Minister requests communicate foregoing to the Foreign Office without delay."

[2525 α-1]