[This Document is the Property of His Britannic Majesty's Government.
3
[B]
CHINA RAILWAYS.
CONFIDENTIAL.
[12896]
No. 1.
C.O. 5128
RECR
RECR
MAY 09
[April 5.]
SECMON 1.
285
Sir J. Jordan to Sir Edward Grey,—(Received April 5.)
Confidential.)
(No. 122. Sir,
Peking, March 18, 1909. AS a result of the suggestion mentioned at the close of my despatch No. 96, of the 2nd March, Mr. Bland renewed negotiations with Chang Chih-tung's Delegates on the afternoon of the 3rd March. They categorically refused to consider Canton- Kowloon terms, which they said were impossible, and formally offered Tien-tsin-Pukow terms and conditions, with a request that the British and Chinese Corporation should name alternative prices for 4 per cent. and 5 per cent. loans before Friday, the 5th March. In reply to my telegram No. 54 of the 4th March reporting this offer, you informed me, in your telegram No. 40 of the same date, that the British and Chinese Corporation were refusing Tien-tsin-Pukow terms, and that as those terms excluded control of the loan funds you could not approve their acceptance without the con- currence of the French Government, with whom you had agreed that such control was most desirable. You also informed me that, as a result of Mr. Addis' last visit to Paris and Berlin, the French and German groups had agreed that the loan was to be made jointly, and that the Engineer should be British, and that a meeting of the three groups was proposed to be held in London on the 15th March to settle details.
Mr. Bland's instructions to decline Tien-tsin-Pukow terms reached him on the 5th March. Next morning at 11 A.M. he saw the Delegates and told them that the British and Chinese Corporation could not quote for a loan on the terms offered, explaining that as financial competition was less acute for Chinese railways the Corporation considered it necessary to ask for satisfactory protection of the loan funds, as well as the usual powers for the Chief Engineer. At the request of the Delegates he promised to give this refusal of the British and Chinese Corporation in writing, and as he delayed the fulfilment of this promise by my advice and for obvious reasons, he was, during the next day or so, continually pressed over the telephone for this written refusal, and he was told that application would be made to another country,
The same afternoon (the 6th March) at 3 P.M., I received your telegram No. 41, stating that the Germans had declined to withdraw an offer based on Tien-tsin-Pukow terms, which they had made to the Chinese until the Agreement of the three groups was ratified, and inquiring whether I thought there was danger of the Germans con- cluding an Agreement in the interval and securing the loan. I replied at once in my telegram No. 55 that Mr. Bland, acting under instructions, had declined Tien-tsin- Pukow terms that morning on behalf of the British and Chinese Corporation, and that, though I had no definite information of the German intentions, I thought there was danger of their securing the loan at any moment if they offered those terms to Chang Chih-tung.
No information of any sort reached me on Sunday, the 7th March, but on Monday morning I heard through Mr. Bland that my German colleague had just had a long interview with his Excellency Liang Tun-yen, after which he had gone directly to the Deutsch-Asiatische Bank, and as it seemed only too probable that his visit was connected with the loan question, I communicated the facts to you in an urgent telegram, No. 56. Immediately afterwards a letter reached me from his Excellency Liang Tun-yen, translation of which is inclosed, transmitting a communication from Chang Chih-tung to the effect that he had the previous evening accepted a Memo- randum of terms for the Hankow-Canton loan, which had been offered to him by Mr. Cordes, the agent of the Deutsch-Asiatische Bank. This news I reported to you in my telegram No. 57 of the 8th March.
The situation thus created was decidedly embarrassing. It seems only too probable that information of the combination formed in Europe had reached the Chinese, no
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