[This Document is the Property of His Britannic Majesty's Government.]
AFFAIRS OF CHINA.
CONFIDENTIAL.
[18041]
No. 1.
[May 26.]
SECTION 1.
(No. 183.) Sir,
Sir J. Jordan to Sir Edward Grey.—(Received May 26.)
Peking, April 28, 1908. MR. LEECH applied to Major Nathan for information regarding the complaint of the Chinese Engineering and Mining Company, referred to in your telegram No. 61 of the 25th March, and was informed by that gentleman in a letter of the 13th April that the Concession obtained by the Luan Chou Company last year from Viceroy Yuan had never been cancelled, that the Company had not really stopped operations, but had merely shifted the position of their workings, and that they were still actively developing a considerable mine within the Chinese Engineering and Mining Company's area. Major Nathan had, like myself, been under the impression that my action of last year had resulted in a stoppage of the work, and it was only lately, on his return from England, that he discovered what was actually proceeding.
On the 14th April His Majesty's Consul-General at Tien-tsin was instructed to see the Viceroy at an early opportunity on the subject of this infringement, and repeat the warning which he had communicated to Viceroy Yuan on the 10th July of last year. Mr. Hopkins was at the same time informed that the terms of the proposed compromise which has been agreed upon in London by representatives of the Chinese Engineering and Mining Company and Chang Yen-mao would reach me shortly, and was directed to apply to Major Nathan for such information regarding it as he might desire to know for the purposes of his interview with the Viceroy.
Mr. Hopkins saw the Viceroy on the 22nd April, and endeavoured to obtain a promise that he would order the Luan Chou Company to cease mining operations pending consideration of the proposed compromise. The Viceroy said that he was unable to give such a promise then, but he would examine into the matter, of which he personally knew little. He was aware that, with the approval of the Viceroy Yuan, it had been denied that the Luan Chou Company's operations were within the sphere of the "Estate Kaiping Coalfield," and he felt that if he ordered even a temporary cessation of work his relations with Yuan would suffer. He promised, however, to write to Mr. Hopkins on the subject in a week's time after a personal investigation.
At a supplementary interview next morning (23rd April) with the Customs Taotai, who had been sent by the Viceroy, Mr. Hopkins learnt that the denial of any infringe- ment of the Chinese Engineering and Mining Company's rights was based on the old ground that the Chinese Government do not admit the validity of the deed of transfer in which the "Estate Kaiping Coalfield" is specified.
I instructed Mr. Hopkins, in a telegram of the 25th April, that he should lose no time in clearly informing the Viceroy that I could permit no infringement of the deed of transfer, which was executed by responsible authorities, and the validity of which I was prepared to uphold.
In an interview with Major Nathan yesterday I gathered the impression that the proposed compromise, which is referred to in your telegram No. 61, was not likely to recommend itself to the Chinese Government. I expressed a strong opinion, therefore, that the Chinese Engineering and Mining Company should invest him with full discretionary power to treat in case the compromise fails of acceptance, and do their utmost to close a controversy which is particularly irritating to his Excellency Yuan Shih-k'ai. There was no denying, I said, that, however strong a position the Company appeared to be in as a result of the litigation in London, the deed of transfer had not been directly ratified by an Imperial Decree, and that this flaw lent some force to the Chinese contention.
Major Nathan himself seemed to share these views, but finds it difficult to convince his Company that their position is not so impregnable.
I am reluctant to approach the Wai-wu Pu on the subject, except as a last resort, as that merely means applying to Yuan Shih-k'ai, and I propose at present to exhaust every effort at Tien-tsin to procure the stoppage of the new workings before protesting to the Central Government.
I have, &c. (Signed) J. N. JORDAN.
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