]
This Document is the Property of His Britannic Majesty's Government.]
CHINA RAILWAYS,
CONFIDENTIAL.
[6670]
No. 1.
251
[February 25.]
SECTION 2,
1
:
Papers communicated by Mr. Addis, February 25, 1908.
(1.)
(Telegraphic.)
Mr. Bland to British and Chinese Corporation.
HANKOW-CANTON Railway, northern section. negotiate loan for; asks definite proposal.
Peking, February 17, 1908.
Chang Chih Tung offers to
I am of opinion can arrange favourable terms for loan with experimental section built by contract.
Chang Chih Tung, while recognizing priority British option, and indifferent as to sources of capital, are opposed to negotiations for, which would involve direct French interests, and particularly are opposed to any stipulation having regard to provision for materials.
Finally intimates if the British do not come to terms he will entertain proposal from Germany.
This is very urgent. I recommend the Foreign Office should intimate to the French Government no possibility of Anglo-French Company successfully competing under restrictions imposed by French Government.
See my letter the 3rd October jointly M. Casenave to the Chinese Central Railways (Limited). Is this correct if he can?
For your confidential information, I understand that the French Banks share these opinions.
Refer to M. Casenave telegram for French group.
(2.)
Mr. Bland and M. Casenave to the Directors of the Chinese Central Railways,
Gentlemen,
Peking, October 3, 1907.
It is within your knowledge that, as the result of the most recent negotiations for Chinese Government Railway loans, important modifications have been made in the terms upon which China will now (and presumably hereafter) borrow funds for railway construction. The Boards of Directors being acquainted with these modifications, we would merely observe that they are the natural result of the steady resistance of the Chinese Government to fulfilment of the terms of the Concessions conceded, as the result of pressure, prior to 1900, and recognition of the fact that Chinese public opinion is strongly opposed to the construction of railways under foreign administration or control.
Assuming that the terms of the Agreements now under negotiation are recognized as applicable to all subsequent railway loans, the position and policy of the Syndicate appear to require reconsideration. The only Preliminary Agreement outstanding (that of the Pu K'ou-Sin Yang Line) will, in due course, be concluded on the same terms as the Tien-tsin-Yang-tsze Railway Agreement; thereafter, in negotiating for capital to build any other lines that may be projected, the Chinese Government, while guaranteeing repayment of principal and interest, offers no further construction rights to foreign Syndicates nor any participation in the profits. These, together with complete administrative control, are reserved for and by the Chinese Government.
Under these circumstances, which must tend to reduce future railway Agreements within the limits of banking transactions, it would at first sight appear that the Chinese Central Railways' prospects of profitable business are but small, and that the conditions which originally led to the Syndicate's combination of interests will cease to exist.
[2856 6b--2]
B
}
This Document is the Property of His Britannic Majesty's Government.]
CHINA RAILWAYS,
CONFIDENTIAL.
[6670]
No. 1.
251
[February 25.]
SECTION 2,
1
:
Papers communicated by Mr. Addis, February 25, 1908.
(1.)
(Telegraphic.)
Mr. Bland to British and Chinese Corporation.
HANKOW-CANTON Railway, northern section. negotiate loan for; asks definite proposal.
Peking, February 17, 1908.
Chang Chih Tung offers to
I am of opinion can arrange favourable terms for loan with experimental section built by contract.
Chang Chih Tung, while recognizing priority British option, and indifferent as to sources of capital, are opposed to negotiations for, which would involve direct French interests, and particularly are opposed to any stipulation having regard to provision for materials.
Finally intimates if the British do not come to terms he will entertain proposal from Germany.
This is very urgent. I recommend the Foreign Office should intimate to the French Government no possibility of Auglo-French Company successfully competing under restrictions imposed by French Government.
See my letter the 3rd October jointly M. Casenave to the Chinese Central Railways (Limited). Is this correct if he can ?
For your confidential information, I understand that the French Banks share these opinions.
Refer to M. Casenave telegram for French group.
(2.)
Mr. Bland and M. Casenave to the Directors of the Chinese Central Railways,
Gentlemen,
Peking, October 3, 1907.
It is within your knowledge that, as the result of the most recent negotiations for Chinese Government Railway loans, important modifications have been made in the terms upon which China will now (and presumably hereafter) borrow funds for railway construction. The Boards of Directors being acquainted with these modifications, we would merely observe that they are the natural result of the steady resistance of the Chinese Government to fulfilment of the terms of the Concessions conceded, as the result of pressure, prior to 1900, and recognition of the fact that Chinese public opinion is strongly opposed to the construction of railways under foreign administration or control.
Assuming that the terms of the Agreements now under negotiation are recognized as applicable to all subsequent railway loans, the position and policy of the Syndicate appear to require reconsideration. The only Preliminary Agreement outstanding (that of the Pu K'ou-Sin Yang Line) will, in due course, be concluded on the same terms as the Tien-tsin-Yang-tsze Railway Agreement; thereafter, in negotiating for capital to build any other lines that may be projected, the Chinese Government, while guaranteeing repayment of principal and interest, offers no further construction rights to foreign These, together with complete Syndicates nor any participation in the profits. administrative control, are reserved for and by the Chinese Government.
Under these circumstances, which must tend to reduce future railway Agreements within the limits of banking transactions, it would at first sight appear that the Chinese Central Railways' prospects of profitable business are but small, and that the conditions which originally led to the Syndicate's combination of interests will cease
to exist.
[2856 6b--2]
B
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