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[This Document is the Property of His Britannic Majesty's Government.]
CHINA RAILWAYS.
CONFIDENTIAL.
[42351]
No. 1.
[December 28.]
SECTION 2.
(No. 529.) Sir,
Sir J. Jordan to Sir Edward Grey.--(Received December 28.)
Peking, November 12, 1907. WHEN I wrote my despatch No. 513 of the 30th October, on the subject of the Hangchow -Soochow-Ningpo Railway, the negotiations were proceeding on the basis of the Decree of the 20th October, and two points in particular were occupying the attention of Liang Ta-jên and Mr. Bland.
The first of these was the amount of commutation to be paid to the Corporation in lieu of profit certificates. Mr. Bland claimed payment at the rate of 5 per cent. on the amount of the loan, while Liang Ta-jén pressed him to accept 4 per cent., which was the figure agreed upon in the case of the Tien-tsin-Yang-tsze Railway.
Mr. Bland showed in favour of his claim that the sum named for the loan (1,500,000%) did not represent more than 60 per cent, of the probable cost of the line, and as it had been decided that no commutation was payable in respect of supplementary loans, it was not just to bind him down in this calculation by the precedent of the Tien-tsin-Yang-tsze Railway. Further, the original right of participation in the profits of the latter line, under the Preliminary Agreement, extended only over thirty years, while in the case of the Hangchow Railway it was for fifty years.
These arguments had little effect on Liang Ta-jên, who came to seek my mediation on the 2nd November. I was somewhat disinclined to become involved in a purely financial question of this nature, but Mr. Bland's contentions seemed to justify an attempt at persuading Liang Ta-jên to meet his wishes.
The result was that I induced Liang Ta-jên to agree to 44 per cent., which gives the Corporation 67,5007., instead of 75,0001, as claimed.
The other point, raised by Liang Ta-jén, was in regard to the only other outstanding Railway Concession dating from 1898-9-the P'uk'ou-Sinyang line. The Chinese Government desired to come to an understanding with the Chinese Central Railways (Limited) that the Agreement for this line should be based upon those now under negotiation. On the 1st November Mr. Bland learnt from bis Directors that they would agree to such an understanding, provided that commutation of profits was paid.
Matters stood in this position, and it was arranged that the draft of the Hangchow Agreement should be initialled by both parties on the 5th November, a copy of the document based, mutatis mutandis, on the Tien-tsin-Yang-tsze draft having been sent to Liang Ta-jen on the previous day.
While Mr. Bland was occupied with Liang Ta-jên at the Wai-wn Pu on the after- noon of the 5th November, and was, as I hoped, initialling his draft Agreement, I was received in another part of the building by Yuan Shib-k'ai.
As soon as I alluded to the railway negotiations, and expressed the hope that final signature would follow quickly upon the initialling of the draft, his Excellency said that the Tien-tsin-Yang-tsze Agreement must first be definitely decided upon by himself and Chang Chih-tung, and that when this was done the Hangchow Agreement could be discussed. This reply led me to think at first that perhaps his Excellency was speaking in ignorance of the progress made during the last few days, and that Liang Ta-jên had not kept him informed of his intention to initial the draft that day. But as the con- versation developed, I judged, from his Excellency's nervousness of manner, that another hitch had occurred.
In reply to my insistence upon the signature of this Agreement simultaneously with or before the signature of the Tien-tsin-Yang-tsze contract, his Excellency said that Prince Ching could not see his way to do this, and with much reluctance he explained that the opposition of the Chekiang gentry was still the deterrent factor, and that it bad been exhibited in the desecration by a mob of Wang Ta-hsieh's ancestral graves.
Being unable to extract from his Excellency any further assurance than that efforts were being made to arrange matters amicably with the obstructionists, I returned home to find Mr. Bland, who informed me that Liang Ta-jên had refused to initial the draft, had repudiated the idea that he had ever arranged definitely to do so on that day, and
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