CO129-350 - Public Offices - 1908 — Page 404

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Apart from sinking additional shafts at Lin-hsi, which is 50 & distant from Tongshan, permission was obtained to buy land and sink shafts at Wui-shui Chuang, Pai-tao Tzu, and other places in the Lanchow district which were found to be connected by the same seam of coal at Tongshan. The object was to provide a supply in case the output of the Tongshan and other mines should not be sufficient. Furthermore, I received instruc- tions through the Tsung-li Yamên that the Imperial sanction had been given to the voluntary opening by China of Chinwangtao as a commercial port. Land, on which the various wharves, yards, and godowns required to be constructed by the Company, has been bought ready for use, These facts are also on record; but the cost of buying the land just referred to is very great, and the reserve fund which the Company has accu- mulated during the successive years has been used to pay for the wharves, machinery, &c., and there is no balance left. At this critical period the national treasury is short of money, and, furthermore, it is not a fitting time to request a loan from the Government. I have frequently reflected on this, as all these points are essential and must not be neglected. The only way is either to seck foreign loans, or invite additional capital in a sufficient amount to help to carry on the business. While I was thinking how to carry out this, it happened that in the 5th moon of last year bad characters raised a disturbance, and the allied troops came to Tien-tsin and forcibly seized the wharves, yards, and godowns at Tongku and Tien-tsin, and also took the Company's steamers at Tien-tsin. The reason was that the Kaiping mines have been for a long time an object jealously coveted and secretly aimed at by all the Powers. They have certainly harboured such thoughts, so that when a quarrel happened to break out between China and foreign countries they immediately seized, without exception, all the important places of the Company, and the Company has therefore lost half of its substance. The Boxer trouble breaking out so suddenly at that time, affairs were in a very dangerous state, and my power was not sufficient to find a means of saving the situation. In my humble opinion this mine is one of China's successful enterprises.

If on the one hand the revenue which the State derives and on the other the merchants' capital were recklessly wasted in one day, the whole situation in Peiyang would have been very much affected. I was in a great state of anxiety, having no one to whom I could report or receive instructions from. At that time I learnt that the former Commissioner of Customs, Detring, happened to be in Tien-tsin, The Com-. missioner had been a long time in China, and has been very just in transacting business-be can be relied upon. Because I thought by getting a foreigner to manage things there might be just a chance of saving the Company, I accordingly appointed the said Commissioner to temporarily act as general manager of the Chinese Engineering and Mining Company's affairs. The Commissioner, after his appointment, conducted affairs in a very zealous manner; unfortunately it was impossible for the strength of the Company to withstand the united forces or the allied troops. In the eighth moon the allied troops unexpectedly moved eastwards from the Poi Tang and Lutai stretch of country straight up to Hsu Ko-chuang, and from there to Tongshan, Linhsi and other places. They seized all the yards and godowns of the Company, and hoisted the flag of all nations on the Company's land at Tongshan. It appears that very luckily when the Tongshan shafts, which are the foundation of the Company, were seized, the staff and workmen did not all bolt. Moreover, in my opinion, the Company is a commercial undertaking and is not on the same footing as Government property. I learn that according to European law although war is going on, no merchant property can be confiscated. If the management of the Company is closely connected with foreign commercial undertakings there may be a chance by this means of saving the Company. Moreover, it appears that there is a clause in the regulations formerly issued by the Railway and Mining Head Bureau, authorizing the inviting of foreign capital in co-operation. At this critical period there is no other means of saving the Company since I dare not let it be ruined or leave everything to fate, and, furthermore. I do not dare by blindly following the public opinion to sit by and lose this opportunity. I have again and again not been able to come to a decision, but apart from the idea of adding foreign capital to co-operate in the Company, there is really no other possible scheme. I accordingly jointly consulted the Commissioner Detring, and the rich English merchant, Moreing, and a satisfactory arrangement was come to by which it was decided to invite capital from all nations for the Chinese Engineering and Mining Company, which, together with the shares originally issued would make up a capital of 1,000,0001., i.e., the Chinese old shares as well as the new Chinese capital added to the Company would make up a total of 500,0004., while the remaining 500,0001. of shares would be divided amongst the merchants of all nations, and the Company changed into a Chinese and foreign co-operative limited liability Company. The meaning of the word liability

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is that in the Company's various undertakings the sum of 1,000,000l. will be the limit of their capital, and apart from this there will be further liability.

An Agreement was then drawn up and a telegram was sent to London to register The the Company coming into operation from the 1st month of the 27th year. Regulations formerly agreed on and the requisite amount of duty to be paid to the State, it was decided to go on with as formerly. As regards the managing staff, Chinese and foreigners would have the same rank and power and Regulations to serve as a guide, were unanimously decided on for managing the Company. After the Agreement had been drawn up I at once ordered the staff of the Company to imme- diately wind up the former accounts, and at the same time I instructed a foreign mining engineer to proceed to Tongshan and other spots in order to reorganize affairs. The flags of the various nations were all removed and replaced by the flags of the Chinese and Foreign Co-operative Company. Workmen were collected and coal began to be extracted from the shafts at Tongshan and Linusi, and again transported by railway to Tien-tsin and Tongku to provide for the needs of the various steamers arriving at those ports. The yards and godowns with former deposits of coal were all recovered, foreigners not being able to confiscate them. The Company's steamers which were seized by the allied troops were also all recovered, and are in our hands now. As regards the duty and li-kin on coal due to the State it was arranged that the amount should be entered up in the books, and that when the allied forces had withdrawn it should be handed over without any shortage. This is the general statement of what happened after the Co-operative Company had been formed. In the midst of the confusion affairs were suddenly righted, and it was really due to the Government's profound kindness and unbounded favour which pervades everywhere and wherever its virtuous influence reached all men were favourably affected, and therefore enabled this Company which was ruined to finally recover itself, a thing which in my humble opinion could not at first possibly be expected. In addition to satisfactorily arranging some matters which had not been finally settled, and forthwith requesting the Railway and Mining Bureau, as well as the Tsung-li Yamên, to take note and put it on record, I, therefore, conjointly with Li Hung-chang (Superintendent of Northern Trade, and Governor of Chihli) respectfully presents this Memorial giving the reasons for the establishment of the Chinese and Foreign Co-operative Company, and humbly beg the sacred glance thereon.

The Imperial Rescript was received: "This has been noted, the said Minister must bear the whole responsibility, and let him zealously and satisfactorily manage the Company in order to protect this source of profit."

Kuang Hsü, 27th year, 5th moon, 26th day.

Annexure No. 11.

Viceroy Yuan Chi Kai's Memorial impeaching Chang Yi Mow.

HAVING carefully found out that the Kaiping Coal Mines and Chingwangtao port were formerly sold to an English Company by the degraded official Chang Yi privately, I memorialized the throne, and have received the Imperial order to strictly order Chang Yi to make entire restoration as marked by the Vermillion Pen.

Last year, on the 30th of the 10th moon, I repeated the Memorial in obedience to the Imperial order for the limit of two months time, and strictly ordered the degraded official to make restoration immediately, and without further delay. Up to the 1st part of the 1st moon this year, the limited time having expired without any reply coming, a despatch was sent to hurry him up, and the degraded official tried to hide his follies. According to his replies to various points they are much different from the Memorial. He has agreed with W. S. Nathan, an English citizen of the Company upon six articles, as follows:-

1. That the English Company shall in no way encroach on the territorial land

of the Chinese Government and the power of Chinese local officials.

2. That all coal duties, taxes, li-kin, and royalties will be paid by the Company. 3. The proceedings and statements of yearly accounts of the Company shall be reported to the Viceroy of Chibli. The laws and regulations which have been enacted by the Chinese Government will be duly conformed by the Company.

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