CO129-361 - Public Offices - 1909 — Page 210

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there may have been, the German Group were under the belief that they had informed Mr. Addis by telegram that they were only prepared to withdraw their offer to the Chinese if an arrangement was arrived at between the three groups, and that the German Group considered themselves to have a free hand to negotiate with the Chinese until such agreement between the groups was arrived at. To the question put by Mr. Addis, Mr. Urbig stated that his group could not be brought into the position of having it said by the Chinese about them that the Germans could not fulfil their engagements. He said that the contract with the Chinese had been made by the German Group in good faith; that the terms known as Tientsin Pookow had worked smoothly so far as the experience of the German Group was concerned, but there could be no question of telling the Chinese that the German Group had entered into a contract which they were no longer prepared to carry He suggested that the Hankow business should be excluded altogether, and a mutual arrangement made for the future as to other concerns, but he definitely stated that the German Group could not, in the event of their not being able to secure better terms, bind theinselves to withdraw from their contract with the Chinese.

ont.

In the general discussion which ensued Mr. Rehders and Mr. Erich confirmed this last statement by Mr. Urbig. Objection was taken by the German Group to the alleged statement by Mr. Bland, on behalf of the British Group, to the Chinese that the German Group were incapable of carrying out their contract. Mr. Keswick, on behalf of the British Group, stated that Mr. Bland had categorically denied having made any such statement as alleged, and repudiated any knowledge or responsibility for any cable sent through Reuter's Agency.

Mr. Carl Meyer proposed, on behalf of the British Group, that the German Group should alone sign the final Agreement with the Chinese for the Hankow-- Cauton Railway, and then allow the two other groups to participate, in return for which Concession the German Group should agree to withdraw from their contract with the Chinese in the event of the terms described as "Canton-Kowloon " terms not being obtained. The German Group did not accept this proposal. As a last resource it was proposed by the German Group that they should cable to-day to their Agent in Peking, Mr. Cordes, and ascertain whether the Chinese would consent to the addition of the following words to their Loan Agreement, viz., "and counter- signed by the Chief Engineer," so as to insure that all requisitions on the loan funds should, in addition to being signed by the Managing Director of the railway or his duly authorized representative, be countersigned by the Engineer and so controlled or vetoed by the lender's nominee.

"Cantor-Kowloon " terms, as was agreed, mean in the above discussion terms which give the lenders the right of control or veto over expenditure before the with- drawal of the money takes place.

The meeting then adjourned until 3 P.M.

(Signed) S. SIMON.

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Minutes of Meeting, April 3, 1909.

Parties present as before except Mr. Rolders.

The German Group reported that no telegram had been received by them from Mr. Cordes.

Mr. Simon and Mr. Addis then stated that they considered that the French and British Groups were no longer bound to maintain the status quo. Mr. Urbig agreed

that this was so.

Mr. Addis then explained some of his observations of yesterday relating to the negotiations between the groups, and maintained that the French and British Groups had been placed in an unfair position, and suggested that the German Group, if they could not withdraw from their offer themselves, could perhaps induce the Chinese to withdraw from their acceptance of it. He stated that it might be of some assistance to them in this direction if, as was intended, the French and British Groups were to submit a formal protest to the Chinese through the British Minister at Peking against the Chinese concluding the Hankow-Canton Railway Loan business without submitting the same to the British Group in accordance with the Convention of 1905, and that he desired the German Group to know what the intention of the British Group was.

Mr. Urbig, in reply, again stated his view as to the negotiations between the Groups, and repeated that the German Group relied upon telegrams exchanged, as baving given the British Group notice of the intentions of the German Group. He stated that, in his opinion, it would be as impossible for the German Group to get the Chinese to withdraw from the Contract as for the German Group themselves to withdraw. He further stated that the German Group would have no complaint if by reason of the protest at Peking the Chinese were to determine the contract themselves.

Mr. Addis then, on behalf of the French and British Groups, read the following protest to the meeting :-

"The British and French Groups beg to place on record their deep regret at the decision arrived at by the German Group, in consequence of which they are unable to continue these negotiations any longer, but having laid down the principle that some reasonable measure of control over the expenditure of the loan funds is absolutely necessary as a safeguard to the European hondholders-they have no alternative but to part company with their German friends. They wish also to state that they now hold themselves at liberty to take whatever steps they may deem necessary in their own interests, relieved of any obligation under the Protocol."

The above Minutes having been read and confirmed, the proceedings then terminated.

(Signed) S. SIMON,

At 3 P.M. The Minutes of the meeting held this morning were read over and approved.

The German Group reported that they had cabled to Mr. Cordes.

Mr. Simon and Mr. Addis stated that if Mr. Cordes reply was unsatisfactory the French and British Groups would again ask the German Group whether they would now withdraw from their Agreement with the Chinese.

Mr. Urbig stated that in such event the German Group would decline to withdraw.

The meeting adjourned until to-morrow at 11 A.M. to await Mr. Cordes' reply.

S. SIMON.

(Signed)

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