C.O 31859
[This Document is the Property of His Britannic Majesty's Government.]
4
by the Shanghae representative of the Vulcan Foundry (Limited); on discovering this when he opened the tenders Mr. Z. D. King applied to be allowed to amend Messrs. Brighten, Malcolm, and Co.'s tender.
Whatever may have been the real reason, it is certain that while the repre- sentatives of the tenderers were engaged, as is customary, in making copies of the list of tenders (enclosed*) on the conclusion of its discussion by the directors, a representative of the bureau withdrew the list hefore some of the copies had been completed, alleging that a mistake had been made; and thus some fourteen foreign firms have been put to considerable trouble and expense in making tenders to no purpose.
I have, &c.
• Not printed.
PELHAM R. WARREN.
CHINA RAILWAYS.
CONFIDENTIAL.
[30255]
No. 1.
c# 25 SEP 09
[August 11.]
470
SECTION 3.
Memorandum communicated to Lord Li Ching Fong, Chinese Minister.
THE attention of His Majesty's Government has from time to time during the past twelve months been drawn to the unsatisfactory state of affairs which exist in regard to the Shanghae-Ningpo Railway, and more especially to the treatment of the funds raised in this country under the Railway Loan Agreement of the 6th March, 1908.
His Majesty's Minister at Peking reported as long ago as October last that the agreement in question was to all intents and purposes being ignored by the provincial railway boards, and that neither the managing director, Shih Chao-Tseng, nor the engineer-in-chief, Mr. Foord, who had been appointed in accordance with its terms, had been allowed by the Kiangsu and Chekiang railway boards to exercise their functions; the latter, for instance, had been over two months in Shanghae without receiving the powers and authority to enable him to enter upon his duties, notwith- standing the fact that article 17 of the said agreement expressly provided that the work of construction should be confided to the engineer-in-chief. Nothing in fact had been effected towards the construction of the line under the terms of the agreement, and the work already locally undertaken by the provisional railway board had been so badly done that the traffic upon it was subject to great risk of accident owing Sir J. Jordan accordingly made to faulty workmanship and inferior material. representations to the Wai-wa Pu, with the result that Mr. Foord's agreement was in fact sigued at Shanghae on the 14th November, and an undertaking was given that his powers would be in accordance with that agreement. This did not, however, appear to affect the methods of the Kiangsu Railway Bureau, as Sir J. Jordan shortly afterwards reported that Shil Chao-Tseng, who had arranged with the vice- president of the railway for an inspection of the line by Mr. Foord and himself from Shanghae to the boundary of Chekiang province, so far as it was constructed, had found on arriving at the Shanghae terminus of the railway on the 19th November that no preparation had been made for their reception, and that they had been obliged to proceed over the line as ordinary passengers. Any enquiries made on the journey for assistance had been met by the reply that no instructions had been received concerning them. On returning to Shanghae Shih Chao-Tseng addressed a protest in writing to the vice-president, but he received no reply, and the only result was a scurrilous paragraph which appeared in the next day's issue of the "Shin Pao." Sir J. Jordan felt compelled to complain to the Wai-wu Pu of the contemptuous treatment of these two gentlemen. An explanation was indeed offered, and he was informed by the Wai-wu Pu that a telegram of reproof would be sent to the
bureau.
On the 20th January Mr. Bland, the agent of the British and Chinese Corporation, received a telegram from the Corporation's agents at Shanghae stating that the managing director had tendered his resignation owing to the impossibility of working with the president of the Chekiang Railway Bureau, who openly repudiated the loan agreement and the authority of the Board of Communications.
A third and far more serious question arose in connection with the treatment of It transpired that very large the loan funds by the Board of Communications. amounts had been requisitioned on what seemed to be inadequate certificates, a sum of 500,000/, having for instance been transferred suddenly in January from the railway loan funds in London to the credit of the railways account and to the order of the Board of Communications in Shanghae. It was alleged by way of explanation that the remittance was made in order to take advantage of the rate of exchange, but such procedure on the part of the Board of Communications amounted to gambling in exchange and certainly did not come within the scope of the loan agreement. The case for immediate intervention on the part of His Majesty's Government was too strong to be ignored, especially in view of the recent dismissal of the President of the Board of Communications as the result of charges of malversation, and Sir J. Jordan accordingly addressed a note to His Highness Prince Ching on the
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