1
2
Inclosure 2 in No. 1.
Note communicated by Wai-wu Pu to Russian Minister.
THE Wai-wu Pu are in receipt of a memorandum from the Russian Minister stating that:----
"The Russian Government
in its terms."
The above statements are fair and reasonable, but the board would point out that, in the matter of the present agreement with the four banks, China has already given her consent regarding the portion of the loan and the various other privileges which are to accrue to the Banque de l'Indo-Chine, and the question whether that bank should hand over a portion of its share to the Russo-Chinese Bank is for the French bank to consider, and the board cannot decide the matter beforehand. If the Russian bank can previously obtain the consent of the French bank, and the British, German, and American banks raise no objection, and provided also that no alteration of the terms of the original agreement is entailed, China, in view of the close friendship between Russia and herself, will not regard the arrangement with disfavour,
September 15, 1909.
[B
[This Document is the Property of His Britannic Majesty's Government.]
C. 0.
30185
(Ree! 3 NOV 09
790 RECE
[October 16.
SECTION 1.
CHINA RAILWAYS.
CONFIDENTIAL.
[38223]
No. 1.
Sir J. Jordun to Sir Edward Grey.-(Received October 16.)
(No 309. Secret.) Sir,
Peking, September 1, 1909. LORD FFRENCH, the agent of Messrs. Pauling and Co., bas during the last few months been actively engaged in endeavouring to induce the Chinese authorities to complete the agreement of the 26th September, 1908, for the construc- tion by contract of the Chinchow-Taonanfu Railway, but beyond general assurances that the Chinese fully intended to give effect to the preliminary arrangement, no progress has been made with the negotiations.
As reported in my telegram No. 122 of the 22nd July last, Lord ffrench again approached the Japanese Minister on the subject, who, although very guarded and non-committal in his language, conveyed the impression that the Japanese attitude had undergone considerable modification, and that serious objections were no longer likely to be offered by Japan to the undertaking.
The Japanese had evidently realised that the advent of America as a com- petitor for railway contract in China had introduced a new factor in the situation, and the appointment of Mr. Straight as the representative of the American group showed clearly the direction which American activity was likely to take.
On the receipt of your telegram No. 131 of the 9th August, I conferred with Lord ffrench as to whether anything could be gained by again discussing the question with the Japanese Minister, and repeated the offer, which I had made several times before, to afford him any assistance which he considered likely to facilitate his negotiations.
Lord ffrench considered that it was useless to approach Mr. Ijuín until the negotiations with the Chinese had made some further progress, and thought that the moment had not yet arrived when the support of the legation could be usefully invoked, He wished especially to have a further interview with the president of the Board of Communications before appealing to me.
Your telegram No. 132 of the 20th August confirmed the view of the Japanese attitude as communicated to Lord flrench by Mr. Ijuin. The Japanese Government, you informed me, were willing to forego their opposition to the Chinchow-Tsitsihar Railway if they could secure participation in financing the line and supplying engineers for its construction. The Japanese Government, you added, could not well approach the Chinese Government on the subject, but they would be ready to entertain any proposals which China put forward of her own motion. Messrs. Pauling and Co. having no objection to an arrangement of this kind, I was instructed to confer with my Japanese colleague and see what steps, if any, could be taken to induce China to take the initiative in the matter.
The Japanese Minister, with whom I had an interview on the subject on the 27th August, explained that he had himself mentioned once or twice to the Wai-wu Pu the reports which were current regarding the intention of China to construct this railway through the agency of a British firm, and had expressed a hope that Japan would be consulted in any arrangements that might ultimately be made. These overtures had elicited no response, but Mr. Ijuin anticipated a more friendly attitude on the part of China as soon as the Manchurian negotiations, which were nearing completion, had reached a solution, and, in the meantime, he thought that any concerted attempt to influence China in the desired direction had better be deferred. In thanking me cordially for my offer of co-operation, he suggested that I might possibly find an opportunity of sounding the Chinese ou the subject, and to this I willingly agreed. An interview yesterday with his Excellency Hsu Shih-ch'ang, the President of the Ministry of Communications, furnished an occasion for doing so.
His Excellency, it will be remembered, was Viceroy of Manchuria when the preliminary agreement of the 26th September, 1908, was signed, and it is with his
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