[This Document is the Property of His Britannic Majesty's Government)
Inclosure 6 in No. 1,
Agreement for the Establishment of Smelting Works in Shansi and for Joint Working of
Shansi Iron Mines.
1. WHEREAS the Shansi Bureau of Trade, having been granted the sole right to work iron and coal in Yu Hsien, Ping-ting Chow, Luan, Tsechow, and Pingyang Fu, entered into an Agreement with the Peking Syndicate in the 24th year of Kwangsu (1898) whereby the Syndicate was requested to work the aforesaid mines for a term of sixty years, now it is further agreed as follows:-
China being desirous to join in the working of iron in the above-mentioned places, namely, Yu Hsien, Ping-ting Chow, &c., and of coal and coke required for smelting purposes, the Peking Syndicate consents to such participation to an extent of one-half share. The joint working to be for a term of sixty years, and the term to run from the date of the issue of the (Governor's) permit to work. During the continuance of the term, the Chinese and English Managers shall be of equal number and have equal powers. In apportioning the capital in the joint working, the Syndicate may bring into account, as part of their capital, all preliminary expenses which can be shown by vouchers to have been expended actually for affairs in relation to iron mines. All details of such joint working will be settled by a separate Agreement. As regards the above-mentioned coal-mining areas, if, when the time comes, co-operation is desired, the matter may be discussed between the Shansi Bureau of Trade and the Syndicate.
2. The Chinese Government will provide funds for the erection of smelting works in Shansi, where the ores of the co-operation may be smelted into pig-iron in order to facilitate its conveyance by railway. These smelting works shall be established either near the place where the iron is produced, or near the railway at some convenient place to be mutually agreed upon. The latest and most approved foreign type of smelting plant will be selected. If when the time comes the Syndicate can supply plans and estimates, they may be handed in to the Chinese Director- General of Works, who will select the most suitable pattern with a view to economy and rapidity of working. If the industry is flourishing, and an extension of works would be profitable, the Chinese Government should be consulted as to the best mode of effecting such extension with a view to the mutual benefit of the mines and works.
3. The charges for smelting are to be reasonable, and will be mutually decided upon hereafter. Coal and coke actually required for smelting will be supplied from the mines mentioned in clause 1, if so desired, on special terms at a somewhat less price than is charged to the public, and the Syndicate will give the preference to the works in regard to such supply. After the works have been established, the Chinese Government shall always maintain them in good order; and the Syndicate shall, not without the consent of the Chinese Government, send its ores for smelting to any other places or otherwise dispose of them. Conversely, there shall be no delay on the part of the smelting works in smelting the Syndicate's ores handed over for that purpose.
4. The smelting works, and all extensions thereof, shall be the property of the Chinese Government. The Director-General of the works shall appoint a suitable expert as Smelting Master. If at the time there is no properly qualified Chinese, an Englishman will be appointed. The agreement with such smelting-master will be signed by the Director-General.
Except as modified by the foregoing four rules, and by the detailed Agreement to be hereafter drawn up, all the clauses in the original Agreement hold good.
These Regulations are drawn up in English and Chinese, and are signed in duplicate, one copy of each to be held by the respective parties as evidence.
(Signed at Peking the 3rd July, 1905.)
(Signed)
(Seal of his Excellency Shêng Hsuan Huai.)
G. JAMIESON, Agent - General, Peking
Syndicate (Limited).
AFFAIRS OF CHINA.
CONFIDENTIAL.
(21623]
No. 1.
Sir Edward Grey to Sir J. Jordan.
27192 !
534
(July 30 JUL 07
SECTION 1.
(No. 80.) (Telegraphic.) P.
Foreign Office, July 5, 1907. CHINESE Engineering and Mining Company. Your telegram No. 127 of the 29th instant.
Our Court of Appeal after full investigation held that transfer was valid, but maintained that the provisions of the Memorandum must be observed, and that an inquiry should be held to decide what damages, if any, in respect of their non- fulfilment were due to the Chinese Company; we cannot go behind this judgment. Offer of the Company to arrange the appointment of an Assessor has so far, understand, been declined by the Chinese. I agree with Sir E. Satow (vide his letter to which you refer), under these circumstances, that we should strenuously resist any attempt on the part of the Viceroy to dispossess the Company of their property, unless it be in accordance with a judgment of a British Court in China.
The Company's case is doubtless somewhat weakened, on the other hand, by the fact that the transfer was never confirmed by Imperial Decree, though it appears to me that their assumption in the negotiations that an official of Chang's position was authorized to conclude an arrangement was justified. Any reasonable compromise to which the Viceroy will assent might therefore, I think, be accepted; it should, however, be made clear to him that we cannot allow the property of the Company to be confiscated. You might urge him, in the first instance, to consent to the nomination of Assessors as the judgment of the Court of Appeal directs.
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