[This Document is the Property of His Britannic Majesty's Government.]
521
[July 29.]
SECTION 2.
CHINA TRADE.
CONFIDENTIAL.
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No. 1.
Sir J. Jordan to Sir Edward Grey.-(Received July 29.)
(No. 275.) Sir,
Peking, June 8, 1907. WITH reference to your despatch No. 42 of the 2nd February, on the subject of the Chinan-fu Settlement Regulations, I have the honour to report that early in March of this year a case arose which put to the test the course of action adopted in regard to these Regulations.
The Asiatic Petroleum Company (Limited), through its agents at Tsingtau, Messrs. Arnhold, Karberg, and Co., a German firm, being desirous of establishing premises for the storage of oil at Chinan-fu, found a suitable site, by the aid of the General Settle- ment Bureau, just beyond the limits of the Settlement. The Bureau drew up an Agreement which was to form part of the lease for this land and which they desired should be countersigned by His Majesty's Consul.
Clause 2 of this Agreement reads: Although the Company's land is situated outside the Settlement boundaries, the Company agrees to pay and abide by all Regu- lations issued by the General Settlement Bureau."
His Majesty's Consul felt that he could not append his signature to such a proviso, in view of his instructions not to recognize the Settlement Regulations, although the Company's agents in this particular case were quite willing to sign the document, Mr. Clennell sought therefore to render the proviso of no effect by adding the words: "Provided that the Company remains under the jurisdiction of the British authorities, and that the Regulations issued by the General Settlement Bureau do not circumscribe the rights enjoyed under Treaty by British merchants at other ports."
The Bureau refused to accept the addition of these words, and on the matter being referred to me by His Majesty's Consul, I replied to him on the 25th March that unless clause 2 was omitted the Agreement could not be countersigned without pledging His Majesty's Government to enforce the Regulations against the Asiatic Petroleum Company, and that the only solution appeared to be for the Company to arrange with the Chinese authorities to accept the conditions in a form binding only on themselves and without the official cognizance of His Majesty's Consu},
Mr. Clennell's reply of the 21st May, copy of which I have the honour to inclose, will show the result to have been that the German agents of the Company chose the line of least resistance, and leased the land in their own names, the Agreement being countersigned for them by the German Consul, whose instructions apparently permit him to recognize the Settlement Regulations.
The Petroleum Company's interests will doubtless not be affected in any way by this procedure, but the principle involved implies, as Mr. Clennell says, that unless the Chinese Government can be induced to modify the Regulations so as to render them acceptable to us, land can only be acquired at Chinan-fu for commercial purposes by foreigners whose Consuls are prepared to guarantee that they will obey the Regulations.. Similar Regulations have now been issued for the port of Nanuing, respecting which I have addressed Prince Ch'ing in a note, copy of which is inclosed in my despatch No. 269. I propose at the same time to press the Wai-wu Pu verbally for the modifications of the Chinan-fu Rules, but the fact of Germany having accepted them militates against the success of such an appeal.
I have, &c.
J. N. JORDAN.
(No. 7.) Sir,
(Signed)
Inclosure 1 in No. 1.
Consul Clennell to Sir J. Jordan.
3
Chinan-fu, May 21, 1907.
YOUR despatch No. 4 of the 25th March, on the subject of the Agreement which the Chinese authorities proposed to attach to the lease of a piece of land required for
the Asiatic Petroleum Company, reached me on the 30th March.
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