[This Document is the Property of His Britannic Majesty's Government.
C.0.
13950
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M. Cordes has telegraphed to the Deutsch-Asiatische Bank on the 23rd March as follows:-
"J. O. P. Bland has declared to the Chinese they will not be able to obtain loan, the Germans depending upon the English."
The possibility of bringing the conditions for the loan business of 3,000,000, to the desired level has, in my opinion, been greatly diminished. We certainly consider ourselves joined in the efforts of coming to an understanding, but we cannot run the risk to bring the Chinese authorities under the impression that our Syndicate was not able to enter into conditions which previously had been declared as being acceptable.
Believe me, &c. (Signed) FR. URBIG.
(4.)
Mr. Hillier to Mr. C. S. Addis.
(Extract.)
March 12, 1909. Hankou-Canton Railway.-As far as I can ascertain, the Agreement signed by the Germans on the 8th instant consists of a simple Memorandum, undertaking to provide the 3,000,0001, required for the Ifupei and Hunan sections on the conditions of the Tien-tsin-Pukow Agreement, price and rate of interest to be arranged later on terms "even more favourable" to the Chinese Government than those of that Agree. ment. There is, therefore, a good deal still to be settled; and I bear further that, while the loan is of course guaranteed by the Chinese Government, the terms are subject to the approval of the gentry representing the two provincial construction Companies who are to have the expenditure of the funds, and who will be responsible to the Chinese Government for the repayment of principal and interest. This is borne out by a remark of one of the Delegates deputed to negotiate, who said that, while it was easy enough to borrow the money, he felt very doubtful if the provincial Companies would be able to repay it, in which case the Chinese Government would have to pay up the guarantee. The conditions are, in fact, almost similar to those of the Shanghac-Ningpo Railway, with this difference: that, while in the one case the local Companies decline to use the foreign funds, in the prosent instance they accept them, subject to a nominal official control, the degree of which will be determined by the amount of independence which the provincial party is in a position to assert.
CHINA RAILWAYS.
CONFIDENTIAL.
[11796]
RECO
REGO 24 APR OC
[March 30.]
SECTION 1.
151
No. 1.
Sir Edward Grey to Sir F. Bertie.
Foreign Office, March 30, 1909.
(No. 248.) (Telegraphic.) P.
CANTON-HANKOW Railway Loan.
Sir J. Jordan's telegram No. 71 of the 29th instant and previous telegrams to and from Peking will have shown you that Germans are being pressed by Chinese Govern- ment to sign Final Agreement.
It is suggested by British and French Agents in Peking that, in order to prevent this, their respective Governments should point out to German Government that it is inadvisable to conclude loans on terms which, in the opinion of the two Governments, do not assure any proper control over funds nor even guarantee the construction of the line.
You should ascertain whether such a course would be approved by French Government, and whether they would be willing to instruct their Ambassador in Berlin in this sense.
[11796]
(No. 59.)
No. 2.
Sir Edward Grey to Sir J. Jordan.
(Telegraphic. P.
CANTON-HANKOW Railway Loan.
Foreign Office, March 30, 1909.
Your telegram No. 76 of the 29th instant. Instructions have been sent to His Majesty's Ambassador at Paris to ascertain whether French Government would co-operate with His Majesty's Government in pointing out to German Government that it is inadvisable to conclude loan on terms which do not guarantee control of funds or even the ultimate construction of line.
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