[This Document is the Property of His Britannic Majesty's Government.]
AFFAIRS OF CHINA.
CONFIDENTIAL.
[21026]
No. 1.
27192
532 1
[June 25:20 || 07
SECTION 1.
}
Sir,
Peking Syndicate to Foreign Office.-(Received June 25.)
110, Cannon Street, London, June 24, 1907. I AM instructed by my Directors to forward, for the information of Secretary Sir Edward Grey, copy of a letter recently received from the Syndicate's Agent- General in China, inclosing a communication from Sir John Jordan, with copies of two letters addressed to him by the Wai-wu Pu, both dated the 9th May.
In regard to the former of these two letters which has reference to the claim for compensation for non-issue of the coal permit, my Directors would only remark that its tone appears to indicate that the attitude of the Chinese Government towards the Syndicate is becoming more and more antagonistic.
Hitherto, there has been some show at least of a desire to recognize the rights of the Syndicate, and assurances have again and again been given to Mr. Brown that instructions had been sent, or were being sent, directing the Governor of Shansi to issue the permit applied for. Similar assurances, it is understood, have been made to His Majesty's Legation. Now the Central Government appears to have adopted the views of the provincial authorities, and the action of the latter in refusing the permit is indorsed and confirmed, while at the same time all responsibility for compensation is denied.
"It is, however, more particularly in respect to the second of the two letters that I am now to address you. This letter has reference to the Syndicate's application to proceed with the Agreement for the joint working of iron mines, called for short, the Smelting Agreement. The history of this Agreement may be briefly stated. In 1905, when the Agreement for the purchase of the Tao-ching Railway was being negotiated by Mr. Jamieson, he was strongly pressed to concede to China a half share in the working of iron in Shansi, which, by the Concession, was solely vested in the Peking Syndicate so far as the areas specifically named were concerned. No question whatever was then raised as to the fact that the Syndicate had in truth the sole right even as against the Chinese Government itself, otherwise, of course, there would have been no need to ask the Syndicate to concede anything. The cession, however, was asked for and granted as collateral to the Railway Agreement. It was embodied in a separate document, of which I have the honour to inclose a copy for reference. Both Agreements were submitted to the Throne in a Memorial by Sheng Kung Pao, then Director-General of Railways, and both were ratified by Imperial Decree in the usual form, The Smelting Agreement is therefore a validly subsisting Agreement of the highest authority.
It is this Agreement which the Syndicate now wishes to proceed with. The Syndicate's Agent-General having failed to get any reply to his own application, requested the assistance of Sir John Jordan, and the reply of the Chinese Govern- ment is contained in the second letter referred to. It simply says China at present has no intention of establishing smelting works in Shansi, and therefore there is no need to discuss the details of the joint working.
My Directors feel that the position taken up by the Wai-wu Pu is one that cannot be allowed to pass unchallenged. The Agreement was entered into at the request of the Chinese themselves, in substitution for that part of the original Concession which gave the Syndicate the sole right, and they cannot indefinitely delay the work simply by saying they are not prepared to do their part. If they regret the bargain, the Syndicate is prepared to waive it and go on with the original Agreement, or in the alternative if the difficulty is want of funds the Syndicate would be willing on terms to lend them the amount necessary for erection of smelting works. But in one form or other my Directors must press that the work be proceeded with without delay.
As the refusal of the Chinese Government is qualified by the words "at present," my Directors propose to instruct Mr. Brown, in the first place, to press for the fixing of an early date within which the Smelting Agreement, as it now stands, is to be
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