CO129-360 - Public Offices - 1909 — Page 682

C.O.

10492

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

AFFAIRS OF CHINA.

CONFIDENTIAL.

RECE RECP 25 MAR 09) [February 27.1

677

SECTION 1.

[7878]

No. 1.

Chinese Engineering and Mining Company to Foreign Office.—(Received February 27.)

Sir,

22, Austin Friars, London, February 26, 1909. REFERRING to my letter of the 18th instant and to the interview which two of my Directors (Mr. Edmund Davis and Mr. W. F. Turuer) had with Sir Francis Campbell yesterday, I have the honour to inform you that, having subunitted for your information a copy of the cablegram of the 5th February received from the Company's agent and general manager in China (containing the proposals referred to in your letter of the 16th instant), together with a copy of the draft cablegram setting forth in detail the proposals which my Board at their meeting yesterday resolved to authorize on the basis of those of the Chinese Government as amended with the approval of the British Minister, the cablegram in question was dispatched last evening.

I have, &c. (Signed) ALF. W. BERRY.

Inclosure in No. 1.

Cablegram communicated by the Chinese Engineering and Mining Company to their

Agent in China.

The

THE Board authorize you to negotiate on the basis of the proposals of the Chinese Government as amended with the approval of the British Minister. Agreement would therefore be as follows:-

1. The mines of Lanchow, Kaiping, and all future mines in the Kaiping Basin will be under an Imperial Administration.

4

2. The mining properties of the Chinese Engineering and Mining Company (Limited) to be transferred to the Chinese Imperial Administration against payment of 1,000,000l. in 7 per cent. gold bonds, guaranteed capital and interest by the revenue of the mines, and in addition by the revenues of the Chinese Imperial Government.

3. After deduction of the royalties to be paid to the Chinese Government on the present basis, and of the necessary sums to provide for interest on the bonds, there would be deducted annually-

(a.) The necessary sum to redeem in thirty years the amount of the bonds, the redemption commencing in thirty-first year. These sums to be deposited in a bank in Europe appointed by mutual agreement by the Chinese Imperial Government and the London Committee.

(b.) 10,000l. to form a fund for reserve and for replacement of plant, which fund the London Committee may employ as may be necessary, the provision to cease when the fund amounts to 100,000, but to be resumed when the fund falls below that amount. After the sixtieth year the fund to be the property of the Chinese Administra- tion. The balance of profit to belong to the bondholders until the complete reimburse- ment of the bonds. When this is completed the whole of the profits to belong to the Chinese Administration.

4. The bonds to be redeemed in thirty years, the redemption commencing in the thirty-first year.

5. The administration of the mines, until the final reimbursement of the bonds, to be placed under the management of a foreign general manager, who would be appointed, supervised, and recalled by the London Committee; and by a Chinese general manager, who shall be appointed by the Chinese Government, and who would have a complete right of supervision, and be charged with any negotiations with the Chinese Imperial Government and with the relations with the Chinese staff. After the reimbursement of the bonds the foreigners shall no longer have the right to interfere with the management.

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