CO129-361 - Public Offices - 1909 — Page 261

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

AFFAIRS OF CHINA.

CONFIDENTIAL.

[13755]

259

C.O.

[April 13.]

15433

SECTION 1.

PEOP

No. 1. 7 MAY

Sir J. Jordan to Sir Edward Grey.(Received April 13.)

(No. 125.) Sir,

Peking, March 22, 1909. REFERRING to my despatch No. 62 of the 5th February, I have the honour to inclose, for your information, copy of a letter from Major Nathan, summarizing the negotiations which have taken place between him and Sir Walter Hillier in regard to the Chinese Engineering and Mining Company's case up to the date of writing.

I have, &c. (Signed)

J. N. JORDAN,

Inclosure 1 in No. 1.

Sir,

Major Nathan to Sir J. Jordan.

Tien-tsin, March 12, 1909. IN order to make the position with regard to negotiations which have lately taken place at Peking with regard to the Chinese Engineering and Mining Company (Limited) more clear, I have the honour to forward herewith a brief résumé of what has occurred.

In October 1908 the Chinese Imperial Government submitted a Memorandum in response

to your request for the closing of the Lanchow mines, attacking the position of this Company and claiming restitution of its properties. I drafted a reply to this Memoranduin which I submitted to you on the 20th December, 1908, which furnished the material for your reply submitted to the Wai-wu Fu on the 1st February, 1909.

In the meantime you were approached by Sir Walter Hillier presumably acting on behalf of, and with the authority of the Chinese Imperial Government, with a view to commencing negotiations without closing the new mines as had already been requested by you. As a result, a series of interviews have taken place leading to the suggestions which have been summarized in the following documents of which I have already furnished you copies, but which I repeat here for the sake of clearness :-

(a.) Suggestions made by Sir Walter Hillier.

(b.) Proposals of the Directors of the Chinese Engineering and Mining Company (Limited), based on Sir Walter Hillier's proposals.

(c) Further proposals discussed and suggested between Sir Walter Hillier and myself, to which neither party agrees, but which have been formulated as a basis of negotiations on which a settlement might be arrived at.

There are three points on which difficulties will undoubtedly arise in the course

of the negotiations :-

1. The question of joint management;

2. The question of redemption; and

3. The question of the amount and form of payment required to be made to eliminate the interests of the Lanchow Mining Company.

With regard to the first of these points, I am of opinion that it is undesirable, in fact, impracticable, for the present Directors of the Company to agree that the control of either the management, or the funds derived from the property, should be even partially handed over to the Chinese authorities, nor does there seem to be any real reason or justification for such a course. The term suggested with regard to the joint management in document (3), therefore, appear to me to require some slight modifica-

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