CO129-345 - Public Offices & Foreign Office - 1907 — Page 284

This Document is the Property of His Britannic Majesty's Government.]

CHINA RAILWAYS.

CONFIDENTIAL.

[31715]

No. 1.

[September 23.)

SECTION 1.

(No. 370.) Sir,

Sir J. Jordan to Sir Edward Grey.-(Received September 23.)

Peking, August 7, 1907. WITH reference to my despatch No. 251 of the 29th May respecting the proposal of the Wai-wu Pu to intrust the question of the Soochow-Ningpo Railway to Mr. Wang Ta Hsieh on his return from London, I have the honour to report that Wang Ta-jên called upon me on the 27th July and discussed the proposals which his Government had to make regarding this line.

His Excellency at first sought to lead me into making some proposal, and expatiated upon the dilatoriness of the British and Chinese Corporation and their neglect of Sheng Kung-Pao's warning to their representative, in 1904, that this Concession would be cancelled unless undertaken within six months.

I refused, however, to be drawn into this ancient bistory, which had been threshed out repeatedly by my predecessor and myself at the Wai-wu Pu. I said that we adhered to the Preliminary Agreement, and only desired to hear from the Chinese Government how they proposed to give effect to it.

After some further circumlocution his Excellency said that their view was to negotiate with the Corporation for a loan on the basis of the Tien-tsin-Yang-tsze Railway negotiations now proceeding.

I pointed out that such a solution would involve the abandonment by the Corpora- tion of many of the advantages which the Preliminary Agreement had secured for them. and that it would be a question for them to decide, through their representative, Mr. Hillier, with whom I hoped his Excellency would discuss this proposal at an early date.

A meeting with Mr. Hillier was thereupon arranged for the 29th July, after I had ascertained that his Excellency was authorized by Prince Ching to take up active negotiations. I also impressed upon him that if he failed to come to an agreement with the Corporation we reverted to the Preliminary Agreement, and that it was important that these negotiations should overtake the start which had been made by Liang Ta-jên and Herr Cordes in the Tien-tsin-Yang-tsze negotiations.

At the meeting between Wang Ta-jên and Mr. Hillier on the 29th July much the same ground was covered. Mr. Hillier could do no more than promise to telegraph the proposal home to the Corporation, and to bring their answer to Wang Ta-jên on the 1st August.

At the second meeting Wang Ta-jên handed to Mr. Hillier a Memorandum con- taining three alternative proposals, viz. :~~

1. That the Corporation should be indemnified for all their out-of-pocket expenses incurred in connection with this line, its survey, &c.

2. That the Corporation should find the capital for constructing the line from Hangehow to Ningpo, while the construction of the section from Hangchow to Soochow would remain in native hands, it being understood that the control of the whole line would be purely Chinese.

3. That the Corporation should furnish a loan for the construction of the whole line by China herself, the loan being secured by Chinese Government revenues other than those of the railway, but repayable out of the surplus earnings of the line.

At the close of this Memorandum a note was added to the effect that, whichever of these alternatives was chosen, it must be borne in mind that nothing could be done to injure the existing powers of the provincial gentry, under Imperial Decree, to construct this railway themselves.

This was equivalent to saying that the Corporation must consider their Preliminary Agreement of 1898 as cancelled; and in fact Wang Ta-jên said as much in the course of conversation to Mr. Hillier.

The latter could only reply that his instructions were of course to negotiate on the basis of the Preliminary Agreement, but that he would consider the proposals

now made.

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