4
not really object to carry out the terms of his 1905 despatch to me, whatever the nominal purpose of the loan, as he is already engaging British chief and executive engineers, even for the Ilunan section of the southern line, which is to be kept free from foreign money, and he has already said he will apply to us for any further loans.
As regards a loan for Hupei development, Hillier thinks the purposes will have to be specified in the prospectus to the bondholders.
Now the position as I understand it is, Hupei has spent and borrowed locally very large sums for certain public works, and so has not the money needed for other works-mine opening and railway building-which she must do with her own capital. The Government therefore wants to raise a loan to put it in funds, and explains its position as follows:----
The following works have been executed :
(Translation.) Sir,
Inclosure 2 in No. 1.
Chang Chih-tung to Consul-General Fraser.
May 21, 1907. I HAVE given constant thought to the matter of a railway loan, but cannot see my way to memorialize the Throne. I dare not do so, even if the Board of Posts and Communications were in its favour. I must pray you to send an urgent telegram to the agent of the Hong Kong and Shanghae Banking Corporation, Mr. Hillier, to put off his coming for the present; it is very important he should do so. I would also beg you to be good enough to come to my office on the 23rd instant at 10 A.M. to talk the matter over with me. When a scheme has been arrived at I shall then ask Mr. Hillier to come here and discuss details.
(Translation.) (Extract.)
I avail, &c.
(Card of Viceroy Chang.)
Inclosure 3 in No. 1.
Mr. Takahashi to Japanese Minister.
His Imperial Japanese Minister's Consulate, Hankow, May 19, 1907. WHEN the conversation turned on the presence of Messrs. Hillier and Bland at Hankow, Mr. Fraser told me that they have received from their London people a telegram that they were informed by Yokohama Specie Bank, through its London agency, that the negotiations with the Viceroy about the loan was broken off. So these gentlemen came down to see the Viceroy, and had an interview with him yesterday. On hearing this, I said that should Yokohama Specie Bank decide to break off the pending negotiations with the Viceroy about the proposed Hupei industrial loan, I thought Mr. Odagiri shall also be informed thereof before the bank gave its London office notice to such effect, and he would have withdrawn his offer to the Viceroy at This not being the case, and myself not having received any such informations from Tôkiô, neither myself nor Mr. Odagiri dil take any steps of discontinuing the said negotiations. On the contrary, Mr. Odagiri, so far as I know, has been eagerly pursuing the same line as he used to. Now that I hear from you that your bankers have received such informatious and started their movements, we have to report the present circumstances to Tokio and Yokohama, and await instructions as well as informations.
ouce.
Dear Mr. Chan,
Inclosure 4 in No. 1.
Consul-General Fraser to Mr. Chan,
Hankow, May 24, 1907.
AS regards his Excellency the Viceroy's antiniony ore scheme, I am told that there is this practical difficulty, that the ore varies enormously, and unrefined antimony would not be a stable security unless of course the lenders had their own experts at the mines before and during working, which his Excellency would hardly agree to.
Moreover, the antimony market is very uncertain, and Carlowitz and Co., for instance, feed it very cautiously in order to avoid rurning the price down. I have little doubt they or some one else would gladly contract for his Excellency's ore, and so part of the loan charges might be met. To this, so far as I know, we should have no cbjection.
1. Hou Hu embankment
2. Wuchang to Chingkou embankment
3. Wuchang Commercial Settlement site
4. Wuchaug, new roads and streets, as per plan and list
5. Schools, colleges, and other public buildings, as per list
6. Copper and silver mints
7. Factories, as per list
Total expended
Against this expenditure can be set :
1. Government laud inside Hou Hu embankment,
*::::::
mou, worth at
present taels per mou, and sure to rise in value, especially if land be raised; total value estimated
2. Reassessment of such land meanwhile will bring in annually a net revenue
of taels, which will increase with future assessment
3. Wachang Commercial Settlement, including site of railway station,
wharves, &c., worth even now taels per mou; total
When railway is made and Settlement opened, land sales and
rents will come to large sums.
4. Municipal rates in Wuchang, annually
5. Copper and silver mints, annual profits
years at
6. Cotton factories, let for
Other factories [?]
taels a-year
Ilanyang Ironworks, bound to pay 1 tael per ton of pig iron, at least
400 raels a-day, within a short time, say annually
and
Cost.
Taels.
Taels.
120,000
For developing Wuchang Settlement, reclaiming Hou Hu land, upkeep of embankments, opening of antimony mines at
, [?] coal mines at iron mines at
, copper mines at
, as well as Government enterprises in the province, the Viceroy wants to borrow 1,000,000l. at 5 per cent. for [15] years, during the first [5] years of which interest only shall be paid, the principal to be repaid in [10] equal yearly instalments, and Hupei to have the right on giving [5] months' written notice at any time after the completion of [10] years to pay off all or any part of the principal outstanding.
3
(The figures within brackets are merely my suggestion.) The loan is sanctioned by Imperial Decree of
1907; is guaranteed by the seal of the Shan Hou Chu. Instalments of principal and interest will come from the incomes mentioned above, the sale of mineral ores, and, if necessary,
the general provincial revenues, especially earmarked being the special taxes on sugar, tobacco, and samshu, the collection of which in case of default will be supervised by an agent of the lenders; these bring in taels per annum.
In order to secure proper development of mines, upkeep of embankments, and execution of other public works, his Excellency the Viceroy will engage one of the lenders' nationality to supervise under his Excellency each branch of such works, whether mining engineering, civil engineering, or other sorts.
If you can fill in the blanks in the above satisfactorily I think such a prospectus would go through without trouble. The Hanyang works royalty especially should soon come to a good sum, which it can well afford to pay.
I apologize for giving you so lengthy a document, but you translate better and quicker than I can.
Will you please tell his Excellency the Viceroy that I am instructed to say to the Japanese Consul that the Chinese Government recognizes as binding upon it both his Excellency's despatch to me of the 9th September, 1905, which applies to all Hukuang railways as well as the Hankow-Canton line, and also the earlier unconditional under- taking of the Wai-wu Pu to apply to us in case China's own capital proves insufficient
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