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(No. 44. Confidential.)
Sir,
Inclosure 1 in No. 1.
Consul-General Fraser to Sir J. Jordan.
Hankow, May 17, 1907. I HAVE the honour to report that a few days ago a Commandant (reserve) Baesens of the Belgian army, called at this office with a request to have four Chinese documents translated into English and also to execute before me an Agreement between the Belgian beneficiary under the three contracts with the Kansub authorities, M. Splingaerd, interpreter to the Belgian Legation at Peking, and himself, as repre- sentative of a financial group.
Translations of the three contracts are inclosed; the fourth M. Splingaerd stipu- lated should be kept secret.
Under the Agreement, which is for five years and renewable, M. Baesens is to find the necessary funds, estimated at about 1,000,000 fr. at 941 net and 5 per cent, a-year, and to form a Syndicate for this purpose, as well as to insure the duc execution of the engagements entered into by M. Splingaerd. In return he is to be sole agent for the present and any future Concessions in Shensi and Kansuh granted to M. Splingaerd, including the boring of oil wells and refining of kerosene proposed by the Viceroy Shêng to that gentleman. M. Splingaerd is out on leave, and will act as Lanchou agent of the Syndicate, of which M. Baesens will be the Director in China.
I inquired of M. Baesens, who gave as his reference the Chartered Bank of India, Australia, and China, why he brought Belgian business to the British Consulate.
He replied that his Syndicate's capital would mostly come from British capitalists, and that his own country was not powerful enough to give effective support in case of opposition, which, however, he did not anticipate. Moreover, the Belgian authorities would insist on M. Splingaerd giving the agency to the Banque Sino-Belge instead of to his Syndicate. He was proceeding to Peking shortly and would personally explain to you the position, but meanwhile he wished to ratify his Agreement with M. Splingaerd, and to obtain certified translatious which could be shown to financiers in London. He had been adviser to Yuan Shih-k'ai for two years until Russian influence caused his recall to Belgium. After retiring from the army he came back to China, where Jung-Lu had promised him a post as adviser, only to find the Boxer trouble in full violence, and so he had turned bis attention to mercantile business.
Mr. Combe translated the Chinese documents, of which M. Splingaerd keeps possession, and, after revision, I certified the correctness of his versions. I also witnessed the signatures to the Agreement of the two parties, who deposited one copy here.
In the "Han Pao" of yesterday I saw the inclosed garbled account of the grant of these Concessions and showed it to MM. Splingaerd and Baesens, who were aware of the students' opposition and did not fear any result from it,
My Japanese colleague called to-day inquiring about M. Baesens who was, he suspected, trying to arrange to supply funds for redemption of the Ching-Han Railway bonds this autumn.
I have, &c.
(Signed)
Inclosure 2 in No. 1.
E. H. FRASER.
Agreements made between the High Authorities of the Province of Kansu und M. Splingaerd.
(1.)
THE Treasurer, the Judge, the Taotai, and the Chief Bureau of Agriculture, Works, Commerce, and Mines of Kansuh have now received instructions from Viceroy Sheng of Shensi and Kansuh permitting them to make an Agreement with M. Splingaerd, the Belgian Secretary of Legation, for the purchase of a set of machinery for gold- washing and for additional purchases of many appliances required for weaving woollen cloth. The matter has been mutually discussed and this preliminary draft Agreement
drawn up embodying the following rules, specifying the machinery, its cost, and the method of conducting the schemes :----
Article 1. The gold-washing machinery will include a complete set of appliances for blasting, shaft-sinking, extracting the ore, crushing the stone, washing, refining and separating the gold, together with furnaces and boilers; nothing must be wanting. The actual cost of the necessary materials, freight, insurance, and customs dues from Belgium to Lanchou is reckoned at a total of 40,000 Lauchon taels.
Art. 2. For the woollen factory, one complete set of up-to-date steam boilers; hot- water and heating boilers; driving engines, one set; wool-sorting machinery, two sets; machines for spinning thread, two sets; for winding thread, three sets; the necessary thread-twisting, wool-cutting, cloth-pressing, and pumping machines, each one set; with such leather belting and other fittings as are required at the works, and in addition packing, insurance, carriage, customs dues, and other expenses from Belgium to Lanchou, will actually cost 80,000 Lanchou taels. M. Splingaerd will make a separate list, for purposes of record, of the various miscellaneous articles required for use in the factory.
Art. 3. In regard to the gold-washing machinery, M. Splingaerd guarantees its daily capacity to be 50,000 catties of ore, producing 20 Chinese ounces of gold. The cloth-weaving machinery is of three kinds, according to fineness, and M. Splingaerd guarantees its daily capacity to produce 500 Chinese feet of cloth 7 feet in breadth, also that the cloth may be dyed of any colour. For the cloth-weaving machinery a daily consumption of coal will be allowed at the rate of 2 tons, or in Chinese measure, 3,200 catties.
Art. 4. The woollen factory will employ four foreigners-one cloth-weaver, one thread-spinner, one dyer, and one mechanical engineer. The salary of each will be 300 taels monthly. Two foreigners may be used for the gold-washing machinery, a mining engineer and an engineer-artificer, each drawing a salary of 300 taels monthly. All these will be engaged through the medium of M. Splingaerd in accordance with the Regulations which have hitherto governed the engagement of foreigners. But as regards employment of persons, the Director of the Bureau will have the controlling voice in deciding. The nationality of the men engaged is immaterial: the important point is ability to set up the machines, weave cloth, and work the gold. No outsider may interfere.
Art. 5. The foreign artisans engaged must not neglect their work; if there is any neglect of work fines by the day will be deducted from their salary, and other more satisfactory workmen will be engaged in order that business may not be neglected.
Art. 6. According to the new Regulations, whenever an Agreement is drawn up the Throne should be memorialized, and the Board written to; only after Imperial sanction is obtained can the matter be definitely settled. This Agreement for those two classes of machinery has been mutually discussed, and is signed as a preliminary draft Agreement. His Excellency Viceroy Shông will be requested to memorialize and write for permission, and when that is obtained this draft Agreement will become an actual guarantee; if sanction is refused, it will be dropped and become waste paper.
When
Art. 7. The full price of the two kinds of machinery is to be 120,000 taels. the Throne's sanction has been obtained M. Splingaerd will receive 20,000 taels as first instalment. When the machinery is shipped from Belgium he will receive a second instalment of 20,000 taels. Three months after all the machinery has arrived in Kansuh and been set up complete, if the various kinds of cloth, coarse and fine, daily woven are really 500 Chinese feet, and if the daily amount of ore worked is really 50,000 catties, and produces 20 Chinese ounces of gold, M. Splingaerd will then further receive 80,000 taels as third instalment. If, however, the machinery is not fit for the purposes, or is not in accordance with the standard fixed by the Agreement, it will all be returned to M. Splingaerd to take back. The Kausuh Bureau will not pay a cash for it. The two previous instalments paid to M. Splingaerd, amounting to 40,000 taels, must also be refunded, and the Chief Bureau of Agriculture, Works, Commerce, and Mines of Kansuh will drop the business. But if payment of the third instalment has been authorized, there can be no withdrawal whatever,
Art. 8. The woollen factory is the property of Kansub, the gold works are a source of profit to Kansub, and the machinery is bought on account of the public of Kansub. M. Splingaerd acts merely as middleman to buy these two kinds of machinery, having knowledge of cloth-weaving and gold-washing. With all other matters he has no concern. The question of staff is to be dealt with from time to time by the Director of the Chief Bureau of Agriculture, Works, Commerce, and Mines of Kansuh.
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