CO129-361 - Public Offices - 1909 — Page 596

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"(a.) A company nominated by Hong Kong and Shanghae Banking Corporation, approved by director-general; and

(b.) Deutsch-Asiatische Bank will act as agent for purchase materials by him?"

(3.)

Telegram received from Hong Kong, June 3, 1909.

PEKING wires :-

Chinese are angry at delay, and unless final agreement initialled to-day we are afraid that there will be serious bitch in Deutsch-Asiatische Bank. Banque de l'Indo-Chine have received authority. It is most important give us full power to sign immediately, with or without clause, in terms of our telegram of 30th May. Telegraph reply. Most urgent."

594

C.O. 21011

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

REC

CHINA RAILWAYS,

CONFIDENTIAL.

[20791]

No. 1.

Sir Edward Grey to Sir J. Jordan.

No: 24 JUN 09.

[June 3.1

SECTION 1,

(No. 103.) (Telegraphic.) P.

Foreign Office, June 3, 1909, A SERIOUS difficulty has, I am informed by the Hong Kong and Shanghae Bank, arisen at the last moment about the railway loan. Chang-chih Tung now insists that there is to be no mention of the British and Chinese Corporation in the business, and that the Corporation are not to be given the agency here for the purchase of material for the railway. According to the bank this would apply to all Chinese business, and would involve the dissolution of the Corporation, which would have a deplorable effect.

If China has any complaints against the Corporation on the score of extravagance or otherwise as regards railways built by them, this would not apply to a railway built by China, in which all that the Corporation would receive would be a commission on the materials ordered by the Chinese. There has been no suspicion as to the Corporation's integrity.

The

Please endeavour to get Chang's decision as to the Corporation reversed. French and German groups being ready to sign and urging the bank to send out the necessary instructions, the matter presses.

(Confidential.)

As a last resort the bank say that they could agree to the elimination of the Corporation in article 18 of the loan agreement if an assurance were given by the Chinese that no objection would be raised when the bank herealter nominate the Corporation as agents. If necessary, you may make use of this information,

[20791

(No. 104.)

(Tolographic. P

No. 2.

Sir Edward Grey to Sir J. Jordan.

CANTON-HANKOW negotiations.

Please see my telegram of to-day, No. 103.

Foreign Office, June 3, 1909.

In view of the fact that formal assurances were given at Berlin and Paris that in this particular matter the British and Chinese Corporation would receive the exclusive support of His Majesty's Government, I am inclined to agree with the bank in thinking that to give way now to Chang-chih Tung's unreasonable objections by agreeing to suppress the Corporation or to change its name would involve a heavy blow both in China and in Europe to British credit.

The loan cannot, however, now be permitted to fall through. Do you think that there is any danger of this taking place?

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