Inclosure 2 in No. 1.
Mr. Root to Baron Takahira.
485
This Document is the Property of His Britannic Majesty's Government.C.O
40270
CHINA RAILWAYS.
CONFIDENTIAL.
[November Fic
SECTION 5.
THE 17 DEC 08,
November 30, 1908.
Excellency,
I HAVE the honour to acknowledge the receipt of your note of to-day, setting forth the result of the exchange of views between us in our recent interviews defining the understanding of the two Governments in regard to their policy in the region of the Pacific Ocean.
It is a pleasure to inform you that this expression of mutual understanding is welcome to the Government of the United States as appropriate to the happy relation of the two countries, and as the occasion for a concise mutual affirmation of that accordant policy respecting the Far East, which the two Governments have so frequently declared in the past.
I am happy to be able to confirm to your Excellency, on behalf of the United States, the declaration of the two Governments embodied in the following words :-
1. It is the wish of the two Governments to encourage the free and peaceful development of their commerce on the Pacific Ocean.
2. The policy of both Governments, uninfluenced by any aggressive tendencies, is directed to the maintenance of the existing status quo in the region above mentioned, and to the defence of the principle of equal opportunity for commerce and industry in China.
3. They are accordingly firmly resolved reciprocally to respect the territorial possessions belonging to each other in the said region.
4. They are also determined to preserve the common interests of all Powers in China by supporting, by all pacific means at their disposal, the independence and integrity of China and the principle of equal opportunity for commerce and industry of all nations in that empire.
5. Should any event occur threatening the status quo as above described, or the principle of equal opportunity as above defined, it remains for the two Governments to communicate with each other in order to arrive at an understanding as to what measures they may consider it as useful to take.
Accept, Excellency, &c. (Signed) ELIHU ROOT.
[39624]
(No. 439.) Sir,
No. 1.
Sir J. Jordan to Sir Edward Grey.-(Received November 14.)
Peking, October 1, 1908.
IN reply to the new proposition of the Board of Communications referred to at the close of my despatch No. 420 of the 16th September, Mr. Hillier was authorized from London to make a final offer at 94 for one issue up to 5,000,000£, at 5 per cent. for the first fifteen years and 4 per cent. for the second fifteen years, provided that a satisfactory written assurance was given that the proceeds of the loan would be applied to the redemption of the Peking-Hankow Railway bonds. M. Casenave was at the same time informed from Paris that a clear statement of the purposes for which the money was required, either in the loan contract itself or in a separate official letter, was a necessity, as the French Government refused a quotation to a loan the object of which was not plainly indicated.
When this offer was submitted to the Board of Communications by Mr. Hillier on the 18th September, he was informed that they were prepared to consider all the terms with the exception of the written assurance, to which they would not agree, although he offered to surrender the letter in which it was given as soon as the redemption was completed. They requested him to inform his principals that if this condition was insisted upon they would break off negotiations, but if it was withdrawn they might be prepared even to reconsider the 93 basis. In reply, London expressed the opinion that the demand for some statement of the object of the loan which would be satisfactory should be maintained, and stated that both you and the French group concurred in this opinion.
I saw Mr. Tong Shao-yi forthwith privately, explained the situation, and prevailed upon him to represent to Yuan Shih-k'ai and the other members of the Grand Council the reasonableness of the condition required by the banks. On the 23rd September, in calling to bid him good-bye before his journey abroad, he told me that he had spoken to Prince Ch'ing and Yuan about the loan, and both of them saw no objection to giving the assurance wanted, but they recognized that the Board of Communications might have good reasons for refusing it, and were unwilling to bring pressure to bear in the matter. Suggestions were made to increase the security, which did not touch the real difficulty, and it was finally arranged that I should see Mr. Liang Shih-yi, of the Board of Communications, with Mr. Hillier and endeavour to bring them together.
We met at the Board of Communications on the 25th September, and for the first two hours Mr. Liang merely fenced, making a series of impracticable proposals which gave both Mr. Hillier and myself the impression that he was not genuinely anxious to come to terms. At length I informed him that, having exhausted every effort to bring about a reasonable arrangement, I should consider it my duty to explain to Prince Ch'ing and Yuan Shih-k'ai the circumstances which had led to the miscarriage of the loan. He was aware, I said, that representations had been made to them through Tong Ta-jên, and the result left no doubt whatever in my mind that they both saw no objection to stating the real purpose for which the loan was required. Mr. Liang strongly deprecated this, insisting that the negotiations had been of a purely business character and had no political significance whatever; he had made certain offers to Mr. Hillier, who had been unable to accept them, and there the transaction ended. I argued that the failure to conclude at the last moment, when it was a matter of common report that the loan was definitely settled, could not fail to have some effect on the financial affairs of both countries, and that I should not rest satisfied until I had convinced the Central Government that we had done all in our power to meet their wishes. Both the Prince and Yuan, I said, realized that there was nothing derogatory to China's dignity in making a statement such as all Great Powers made when they applied to foreign markets for money, and Tong Ta-jên, who shared these views, had specially asked me to bring the parties together. Having failed to do this, an explanation was, I contended, due to the Chinese Government.
2
Inclosure 2 in No. 1.
Mr. Root to Baron Takahira.
485
This Document is the Property of His Britannic Majesty's Government.C.O
40270
CHINA RAILWAYS.
CONFIDENTIAL.
[November Fic
SECTION 5.
Se
THE 17 DEC 08,
November 30, 1908. Excellency,
I HAVE the honour to acknowledge the receipt of your note of to-day, setting forth the result of the exchange of views between us in our recent interviews defining the understanding of the two Governments in regard to their policy in the region of the Pacific Ocean.
It is a pleasure to inform you that this expression of mutual understanding is welcome to the Government of the United States as appropriate to the happy relation of the two countries, and as the occasion for a concise mutual affirmation of that accordant policy respecting the Far East, which the two Governments have so frequently declared in the past.
I am happy to be able to confirm to your Excellency, on behalf of the United States, the declaration of the two Governments embodied in the following words :-
1. It is the wish of the two Governments to encourage the free and peaceful development of their commerce on the Pacific Ocean.
2. The policy of both Governments, uninfluenced by any aggressive tendencies, is directed to the maintenance of the existing status quo in the region above mentioned, and to the defence of the principle of equal opportunity for commerce and industry in China.
3. They are accordingly firmly resolved reciprocally to respect the territorial possessions belonging to each other in the said region.
4. They are also determined to preserve the common interests of all Powers in China by supporting, by all pacific means at their disposal, the independence and integrity of China and the principle of equal opportunity for commerce and industry of all nations in that empire.
5. Should any event occur threatening the status quo as above described, or the principle of equal opportunity as above defined, it remains for the two Governments to communicate with each other in order to arrive at an understanding as to what measures they may consider it as useful to take.
Accept, Excellency, &c. (Signed) ELIHU ROOT.
[39624]
(No. 439.) Sir,
No. 1.
Sir J. Jordan to Sir Edward Grey.-(Received November 14.)
Peking, October 1, 1908. IN reply to the new proposition of the Board of Communications referred to at the close of my despatch No. 420 of the 16th September, Mr. Hillier was authorized from London to make a final offer at 94 for one issue up to 5,000,000%, at 5 per cent. for the first fifteen years and 4 per cent. for the second fifteen years, provided that a satisfactory written assurance was given that the proceeds of the loan would be applied to the redemption of the Peking-Hankow Railway bonds. M. Casenave was at the same time informed from Paris that a clear statement of the purposes for which the money was required, either in the loan contract itself or in a separate official letter, was a necessity, as the French Government refused a quotation to a loan the object of which was not plainly indicated.
When this offer was submitted to the Board of Communications by Mr. Hillier on the 18th September, he was informed that they were prepared to consider all the terms with the exception of the written assurance, to which they would not agree, although he offered to surrender the letter in which it was given as soon as the redemption was completed. They requested him to inform bis principals that if this condition was insisted upon they would break off negotiations, but if it was withdrawn they might be prepared even to reconsider the 93 basis. In reply, London expressed the opinion that the demand for some statement of the object of the loan which would be satisfactory to me should he maintained, and stated that both you and the French group concurred in this opinion.
I saw Mr. Tong Shoa-yi forthwith privately, explained the situation, and prevailed upon him to represent to Yuan Shih-k'ai and the other members of the Grand Council On the concerned the reasonableness of the condition required by the banks. 23rd September, in calling to bid him good-bye before his journey abroad, he told me that he had spoken to Prince Ch'ing and Yuan about the loan, and both of them saw no objection to giving the assurance wanted, but they recognized that the Board of Communi- cations might have good reasons for refusing it, and were unwilling to bring pressure to bear in the matter. Suggestions were made to increase the security, which did not touch the real difficulty, and it was finally arranged that I should see Mr. Liang Shih-yi, of the Board of Communications, with Mr. Hillier and endeavour to bring them together.
We met at the Board of Communications on the 25th September, and for the first two hours Mr. Liang merely fenced, making a series of impracticable proposals which gave both Mr. Hillier and myself the impression that he was not genuinely anxious to come to terms. At length I informed him that, having exhausted every effort to bring about a reasonable arrangement, I should consider it my duty to explain to Prince Ch'ing and Yuan Shih-k'ai the circumstances which had led to the miscarriage of the loan. He was aware, said, that representations had been made to them through Tong Ta-jên, and the result left no doubt whatever in my mind that they both saw no objection to stating the real purpose for which the loan was required. Mr. Liang strongly deprecated this, insisting that the negotiations had been of a purely business character and had no political significance whatever; he had made certain offers to I Mr. Hiller, who had been unable to accept them, and there the transaction ended. argued that the failure to conclude at the last moment, when it was a matter of common report that the loan was definitely settled, could not fail to have some effect on the financial affairs of both countries, and that I should not rest satisfied until I had convinced the Central Government that we had done all in our power to meet their wishes. Both the Prince and Yuan, I said, realized that there was nothing derogatory to China's dignity in making a statement such as all Great Powers made when they applied to foreign markets for money, and Tong Ta-jon, who shared these views, had Having failed to do this, an specially asked me to bring the parties together. explanation was, I contended, due to the Chinese Government.
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