CO129-361 - Public Offices - 1909 — Page 566

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Through the courtesy of His Majesty's Consul-General, I sent you to-day a short telegram to say things had come to a deadlock.

I have, &c.

(Signed)

Inclosure 2 in No. 50.

G. JAMIESON.

· Minutes of a Meeting held at the Imperial Chinese Railway Offices, Shanghac, October 24, 1903 (2nd Meeting).

Present:

Messrs. Chen Shan-yen, Li Wei-ho, Wang Tsun-shan and Yang Hsio-shen, on behalf of his Excellency Sheng Kung Pao, Director-General; and Mr. Jamieson (with his Secretary, S. Y. Kiang), representing the Peking Syndicate.

MR. JAMIESON submitted the Minutes in English of the previous meeting, copies of which had been forwarded to Mr. Chen, and inquired if they were correct. members stated that they were correct.

The Chinese

Mr. Li stated that his Excellency Shêug had instructed them to bring forward another point. It appeared that besides coal the Syndicate proposed to work iron, as one of the estimated sources of earnings of the railway was freight on the transport of iron, and probably they proposed to make steel rails and other railway material. inquire how that was.

He begged to

Mr. Jamieson replied that the right to work iron was included in the Concession, and undoubtedly the Syndicate intended to exercise it. What particular form the industry might take he could not at present say, but they had the right to manufacture irou of

any sort.

Mr. Li then said that in that case the Syndicate would come into direct competition with the Hanyang ironworks, in which his Excellency Sheng was largely interested, and in assisting the Syndicate to build this railway he would be injuring his own particular business. It was, therefore, necessary to find some means of safeguarding the Hanyang ironworks before he could proceed to discuss the terms of the railway agreement.

Mr. Jamieson inquired what proposal his Excellency had to make in the matter. Mr. Li replied that his Excellency's idea was that the Syndicate should undertake not to begin their ironworks for a period of years until the Hanyang ironworks were firmly established, and in reply to a further inquiry of Mr. Jamieson, Mr. Li, after consulting with the Chinese members, said they thought a period of thirty years would be sufficient.

Mr. Jamieson said this was absolutely out of the question. They might agree to consider a short postponement, if it was otherwise made worth their while, and provided it was understood that the term of sixty years, as stated in the Concession during which they had the right to work, received a corresponding extension at the end, but a postponement of thirty years was preposterous.

Some discussion then followed as to the time from which the sixty years were to be deemed to run. Mr. Jamieson stated that the time would run from the date of the issue

of the permit by the Governor of the province concerned, as provided in Article 1 of the Concessions. They had applied to the Governor of Honan for such permit, and it was expected it would be issued in a month or two, and the date of the permit would be the commencement of the term as regards Honan.

As regards Shansi the Syndicate had not yet had time to select areas for working, and no permit had yet been applied for. When issued it would in like manner determine the commencement of the term as regards Shansi. The iron ore, so far as they knew, was found only in Shansi, and it would, therefore, be a few years yet before the Syndicate would be in a position to do much in the way of developing ironworks.

Mr. Jamieson considered his Excellency Shêng's fears that the Ilanyaug ironworks would be injured by the Syndicate's competition were quite unfounded, annually over 100,000 tons of iron of various sorts, not counting rails and railway material, China imported and there was therefore an ample market in the country for all that could be produced in both places for many years to come.

Mr. Li remarked that the import of iron was falling off, and the production would soon exceed the demand, and then both the Syndicate and the Hanyang ironworks would be ruined,

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Mr. Jamieson replied that he was not aware there was any falling off, though the Customs returns would show, but he thought the Chinese members were taking a very shortsighted view of the future in supposing there would be no increase in the demand. With the railway development now going on there was bound to be an enormous growth in the demand for iron and iron manufactures of all sorts in China itself, and it was surely better that China should supply this herself than import it from abroad and have to pay for it. Besides, as soon as the home market was supplied they could export it-to Japan, for instance. The more iron that China could turn out and sell the better. His Excellency Sheng should remember that the Hanyang ironworks were not the whole of China, and consider the advantage of the people at large.

Mr. Chen remarked that his Excellency was naturally bound to look after his own interests first.

Mr. Jamieson then said, as regards the particular point raised, if the members would formulate a definite proposal for postponement for a short period, five or ten years, he would consult the Board, but he could give no sort of assurance that it would be entertained, and, in any case, they would expect some countervailing advantages.

Mr. Yang suggested ten years from date of completion of the railway to Tsechow. Mr. Jamieson replied that he could not accept that, as that part of the railway might never be built; besides, it would be folly to build a railway and cut off one of the main sources from which freight earnings might be expected. Any postponement must date from the siguing of the railway agreement now under discussion. Also, he wished to know what countervailing advantages they could offer for such postponement? Had the members consulted his Excellency the Director-General in regard to the point reserved at last meeting, viz, the consideration to be given for the shares which we were asked to present to the Chinese Government ?

Mr. Li said his Excellency had instructed them that the question of safeguarding the Hanyang ironworks must be settled before anything else was discussed. As to counter- vailing advantages the guarantee itself was the advantage to the Syndicate,

Mr. Jamieson reminded them that the Syndicate already possessed this so-called advantage by virtue of Prince Ching's promise to Mr. Townley. The line was to be taken over on similar terms to those granted for the Bussian Cheng-Tai line. He could not bargain in respect to that.

Mr. Chen said his Excellency Shêng did not admit that at all. His Excellency had himself advised Prince Ching that the line should be guaranteed, and it was in consequence of his advice that Prince Ching had promised it to Mr. Townley, and that was why the matter had now been referred to him to settle. The Syndicate had, in fact, obtained the promise from his Excellency Shêng, and he was free to impose any terms and conditions he might think necessary.

Mr. Jamieson said he knew nothing of what advice his Excellency may have given to Prince Ching, and it did not concern him at all. All he knew was that there had been > definite undertaking given by Prince Ching that the line shonld be put on a similar footing to the Russian Cheng-Tai line, and if his Excellency did not consider that binding on him it was useless for them to go on discussing any longer. With much reluctance he must place the matter again in the hands of the British Minister, and be begged them so to inform the Director-General.

(No. 191.)

(Telegraphic.) P.

No. 51.

The Marquess of Lansdowne to Sir E. Satow.

CHINESE Railway indemnity.

Your telegram No. 257 of the 19th instant.

Foreign Office, November 28, 1903.

His Majesty's Government authorize payment to Chinese Railway Administration

of interest referred to in your telegram No. 257 of the 19th instant. The interest on the 90,000l. advanced by British Railway Administration, as to which we are in communication with the War Office, should not be included in the payment.

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