CO129-350 - Public Offices - 1908 — Page 432

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

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Corporation; but the Railway Administration shall have the option of settling exchange with that Bank at any date or dates within six months previous to any due dates for the repayment of interest and principal.

After payment of interest and repayment of principal of the loan for the current year, the Railway Administration shall deposit with the Hong Kong and Shanghae Banking Corporation in Tient-tsin any surplus of the net revenue of the extension for that year up to the amount required to pay the following year's instalments of interest on the loan, the rate of interest on this deposit to be allowed at the Bank's rates for current accounts or fixed deposits, as the case may be, to be arranged.

Art. 13. The Chinese Government hereby unconditionally undertakes to pay the principal of the loan and the interest on the loan on the due dates fixed therefor. If at any time the earnings of the extension, together with funds available from the proceeds of the loan, are not sufficient to meet the interest on the bonds and repayment of principal in accordance with the Schedule hereto attached, the deficiency shall be met, in the first place, from the salt li-kin revenues specified in Article 7, and if there should still remain a deficiency, the Railway Administration shall devise means of meeting the same, and should its inability to do so appear probable, the Viceroy of Manchuria, or in his absence his duly authorized representative, shall memorialize the Imperial Chinese Government to take measures to make up the deficiency from other sources, and thus be ready to pay off the indebtedness, so that the required amount may be placed in each case, at least fourteen days previous to the due dates of such payments, in the hands of Hong Kong and Shanghae Banking Corporation,

Art. 14. The bonds of this loan, together with their coupons, and the income of the extension, shall be exempt from all Chinese imposts and taxes.

Art. 15. The term of the loan shall be thirty years, Repayment of principal shall commence after the expiry of ten years from the date of the loan, and shall be com- pleted in twenty years by equal annual instalments to the Hong Kong and Shanghae Banking Corporation as agents for the service of the loan, acting for the Corporation, under the terms of this Agreement, in accordance with the Schedule hereto attached.

If at any time after the lapse of ten years from the date of the loan the Imperial Chinese Government should desire to redeem the whole outstanding amount of the loan, or any part of it, not yet due for repayment in accordance with the Schedule of repay- ments hereto attached, it may do so until the twentieth year, by payment of a premium of 24 per cent: on the face value of the bonds (ie., by payment of 1021. 10s. for each 100% bond), and after the twentieth year without premium; but in each and every case of such extra redemption, the Imperial Chinese Government shall give six months' notice in writing to the Corporation, and such extra redemption shall be effected by additional drawings of bonds to take place on the dates of ordinary drawings, as provided for in the prospectus of the loan.

Art. 16. It is understood and agreed that, so long as this loan is unredeemed, the extension shall under no circumstances be mortgaged to any other party.

As soon as this loan has been completely redeemed, this Agreement shall become null and void.

the

Art. 17. This Agreement is signed under the authority of an Imperial Edict, dated which has been officially communicated to the British Minister

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in Peking by the Wai-wu Pu.

Art. 18. Five sets of this Agreement are executed in English and Chinese, three sets to be retained by the Imperial Chinese Government and two by the Corporation. Should any doubt arise as to the interpretation of the Agreement, the English text shall be accepted as the standard.

by the Contracting Parties this

day of year of the Emperor Kuang Hsü, being the

the

Signed at

month of the day of

190 .

CHINA RAILWAYS,

CONFIDENTIAL.

[1045]

No. 1.

[January 11.]

SECTION 2.

Sir J. Jordan to Sir Edward Grey,-(Received January 11, 1908.)

(No. 553.) Sir,

Peking, November 26, 1907. WITH reference to my despatch No. 529 of the 12th November, I have the honour to report that the Wai-wu Pu have practically carried out their engagement recorded in my previous despatch to bring the draft Agreement for the Hangehow Railway up to the point reached by the Tien-tsin-Yang-tsze Agreement. In order to facilitate the execution of this promise Liang Tajen asked Mr. Bland to recast his draft so as to make it word for word the same as the Tien-tsin-Yang-tsze Agreement in all its essential points.

This has now been done, in English and Chinese, and although the formality of initialling the document has not been gone through, it may be considered to stand now on the same footing as the Tien-tsin-Yang-tsze contract.

I regret to state, however, that no material progress has been made towards signature. Overtures have been made to Mr. Bland to accept another loan contract instead, the suggestion being that if the Corporation will give up their claims in Chekiang the Chinese Government would take a loan from them for the Wuchang- Changsha section of the Wuchang-Canton Railway. Putting other considerations aside, this proposal is not practical on account of the engagements already existing with regard to railways in Hupei, and the complication of French participation in such a loan.

Another suggestion made to me indirectly by Yuan Shih K'ai was that the Corporation should accept a loan agreement for a line from Peking to Jehol and beyond, to connect at some undefined point with the Siberian Railway.

I have turned a deaf ear to any proposal of this nature, and have continued to urge strongly on the Wai-wu Pu the necessity of carrying out the Chekiang Agreement as it stands without seeking for alternative solutions of the question.

During the past few days rumours have been current that the Chinese Government have determined to take up a firmer position against provincial agitation, but there is no reason to believe that a settlement is yet within sight. The native press continues to clamour for the defence of the people's rights, and to denounce the subserviency of the Wai-wu Pu to a foreign Minister. The Government is warned in the most inflammatory language that if they yield in this matter, claims for concessions long since abandoned will be revived; that the spirit of the nation will be broken if the custodians of the country give away to foreigners the rights which are the people's. Exasperation will follow, leading to anti-dynastic risings, assassinations, &c,

A perusal of such effusions leaves one in no doubt but that the Government has a grave problem to face. But I am by no means satisfied that they cannot deal with the situation if they choose, by displaying firmness for a few consecutive days, and I have to-day warned the Wai-wn Pu once more of the serious dangers they are incurring by allowing the agitation to continue.

I was assured by the Grand Secretary, Na T'ung, that the policy of the Chinese Government remained unchanged. They would carry out their obligations, but must be given time to pacify the feelings which had been aroused. A representative deputation of the Chekiang and Kiangsu gentry was expected to arrive in Peking early in December, and the Government would then explain to them the true aspect of the case.

I protested against this course of action as being unlikely to lead to a satisfactory issue, but was unable to obtain any other decision.

I have, &c. (Signed) J. N. JORDAN.

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