560
36
There are many "ifs" attached to the Arrangement, but I am inclined to think that this element of uncertainty has its advantages also for the British capitalists likely to be interested in the Szechuen and Yencheng-Puk'ou line.
There is every reason to believe that it would be no easy matter to procure the necessary capital in England for the construction of the lines under present circumstances, and it may, therefore, not be disadvantageous that no date should have been fixed for the drawing up of final Agreements. There is not the smallest chance that China will herself be able to find the requisite funds for the construction of the Szechuen line, and there is good ground for supposing that she will have recourse to the foreign assistance provided for at no very distant date, since Prince Ch'ing repeated to me what he had previously said to Mr. Townley, namely, that it was recognized that it is most desirable in China's own interests that a railway should be made into Szechuen.
As far as I can ascertain, the immediate desire of the Peking Syndicate is to make some satisfactory arrangement with the Chinese authorities whereby their financial responsibilities in the line from Taokou to Tsechou will be lessoned. The first clause of the arrangement provides a sound basis for such a settlement, and the Syndicate's Agent. in Peking is now at Shanghae for the purpose of coming to an agreement with the Director-General of Railways.
It is improbable that the amalgamated Syndicates will be very keenly desirous of constructing the Yencheng-Puk'ou line until the necessary funds have been raised for the British section of the Tien-tsin-Chinkiang line, or until it has been clearly demon- strated that the output of the Honan mines is such, both as to quantity and quality, as to call for a special means of communication with the Yangtse.
In their letter to the Foreign Office of the 15th July last, the British and China Corporation lay great stress upon the importance to them of the Puk'ou-Siuyang line, adding that its construction should not be delayed beyond the necessary time for careful survey and the negotiations for the final Agreement. The arrangement provides for the maintenance of the Concession which by the terms of the preliminary Agreement the Chinese Government had some grounds for claiming had lapsed, and the Corporation's Agent, who is now at Shanghae, has been informed that Sheng Ta-jên has been instructed to negotiate with him in a friendly spirit. Should it be found after survey that the Puk'ou-Sinyang line is the really valuable railway that the British and China Corporation believe it to be, there would, of course, be good grounds for asking that Sinyang should be the eastern terminus of the Szechucn line, but it can hardly be denied that the Chinese Government, in expressing an opinion that Hankow is a more natural terminus, is possessed of good arguments, seeing that the latter place is one of the most important trade centres on the Yangtse, whereas the former is a small and quite insignificant town. The statement in the Corporation's letter that a line starting from Hankow for Chengtu would run for a considerable extent parallel to the Luban line, does not seem to be borne out by examination of the map, inasmuch as the former would follow up the Han River valley to Siung-yang, and for the first half of the distance would be at right angles to the Luhan line to Sinyang.
My American colleague has kindly furnished me with information respecting the American interests he has been supporting for some time past in their efforts to secure the Szechuen Railway. It would appear that Mr. Thurlow Weed Barnes, of New York, is the organizer and principal representative in the United States, and that the following British firms are interested :-
S. Pearson and Sons.
Arthur G. Evans and Company.
Sir Douglas Fox and Partner.
George Cawston.
Henry Bessemer and Company.
Ibbotson Brothers and Company.
Houlder Brothers and Company.
J. A. II. Drought.
Ebbw Vale Steam and Iron Company.
North British Locomotive Company.
Metropolitan Amalgamated Carriage and Wagon Company.
I am furnishing Messrs. Brenan and Jamieson with copies of the notes exchanged between Prince Ching and myself for their confidential information, but I am of opinion that it is desirable that for the present not more should transpire of the arrangement come to than that a settlement satisfactory to the parties interested has been arrived at
While inclined to entertain considerable doubts of the commercial and financial
37
prospects of a railway from Puk'ou to Sinyang and thence into Szechuen, I am at the same time fully alive to its importance from a political and strategical point of view, and of the desirability of securing that it shall be regarded as a British Concession.
I have, &c. (Signed) ERNEST SATOW.
Inclosure 1 in No. 46.
Sir Ernest Satow to Prince Ch'ing.
Your Highness,
Peking, September 15, 1903. WHEN your Highness called on me a few days ago, I said that I proposed to place on record the arrangement come to between your Highness and Mr. Townley with regard to various railway questions that had heen under discussion, and your Highness was good enough to agree to this being done.
The Agreement as regards the various points is, I understand, as follows:- (1.) The Peking Syndicate line from Tackou to Tsechou to be placed on the same footing as the Russian line from Taiyuan to Cheng-ting. The mode of giving effect to this Agreement is now under discussion between Sheng Ta-jên and the Syndicate's Representative, Mr. Jamieson, at Shanghae.
(2.) Fair rates to be secured for the conveyance of the produce of the Peking Syndicate's mines on the Luhan line.
(3.) If the Chinese Government is not obliged to make up a deficit on the Luhan line, and is willing that a line should be built from Yencheng to Pukow, the Peking Syndicate shall have the right to construct it.
(4.) The preliminary Agreement for the construction of the line from Sinyang to Puk'ou remains intact, and the details of the final Agreement will be arranged between Sheng Ta-jên and Mr. Brenan at Shanghae.
(5.) As regards the line from Hankow to Szechnen, if China desires to construct such a line, and Chinese capital is insufficient, she will obtain the necessary foreign capital from Great Britain and the United States. As to the proportion to be con- tributed by each, and the non-alienation of the same to the nationals of a third Power, I have read Mr. Townley's Report of his conversation with your Highness on the 9th August, of which he furnished a copy to His Excellency Lien Fang on the 14th August, recording the promise made to him by your Highness at that interview.
I shall be glad to learn from your Highness that the above account of the arrange- ment with Mr. Townley is correct.
Sir,
I have, &c. (Signed)
Inclosure 2 in No. 46.
Prince Ch'ing to Sir Ernest Satou.
ERNEST SATOW.
Kuang Hsi, 29th moon, 6th day (September 26th, 1903).
I HAVE the honour to acknowledge your letter just received, to the effect that you proposed to place on record the Agreement arrived at between. Mr. Townley and myself on the subject of railways.
As regards the first point, your letter states that the Tsechou to Tackou line is to be placed on the same footing as the Cheug-ting to Taiyuan line. Since Mr. Jamieson is discussing with Sheng Ta-jên at Shanghae the mode of placing them on the same footing in accordance with this Agreement, it will be proper to wait till Sheng Ta-jên has come to a definite settlement and reports it to the Board, when it can be considered and decided.
The second point is that fair rates are to be secured for the conveyance of the produce of the Peking Syndicate's mines by the Luhan line. The Luhan line is not yet completed, and there is as yet no definite point to which the products of the Peking Syndicate's mines are to be conveyed. It will be proper, therefore, to wait till the Peking Syndicate have come to a definite agreement with the Administrator General of the Luhan Railway as to these fair rates.
The third point is that if the Chinese Government is not obliged to make up a
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