CO129-372 - Public Offices - 1910 — Page 196

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

194

CHINA RAILWAYS.

CONFIDENTIAL.

[18218]

No. 1.

May 23.1

со

T8595

SECTION 4

RECP REG 18 JUN 10,

Mr. Maa Müller to Sir Edward Grey.—(Received May 23.)

(No. 140.) Sir,

Peking, May 4, 1910. WITH reference to my despatch No. 121 of the 22nd ultimo, regarding the formation of a Hupei Railway Company, I now have the honour to forward the following particulars in regard to the proposals of the promoters which Mr. Hillier has kindly communicated to ine.

1. The promoters will subscribe 5,000,000 dollars, of which 2,000,000 dollars are already deposited with the Taching Bank at Hankow, while the balance is to be paid up by the end of the sixth moon, i.e., early in August.

2. The people of the province have voluntarily consented to an additional land tax of ten to fifteen cash per mow, estimated to produce 2,000,000 dollars a-year. The ärst payment of 2,000,000 dollars will be due at the end of the eighth month, ie., the 2nd October. Persons paying the land tax will receive railway scrip for the actual amount of the additional tax paid by them.

3. Share capital to the amount of 25,000,000 dollars will be issued in 5,000,000 shares of 5 dollars each, payable in five annual instalments of 1 dollar, thus producing an annual revenue of 5,000,000 dollars for five years.

4. A rough survey of the proposed lines, which it is presumed include the Ichang-Hankow and Ichang-Kuangshui lines, as well as the Hankow-Yochow section of the Hankow-Canton Railway, is being carried out at the present moment gratuitously by students of the Peking-Hankow Railway. The detailed survey and the general direction of the works are to be entrusted later to a fully qualified Chinese engineer, if such is obtainable; if not, to a foreign engineer. The permanent way, &c., will he constructed by the company's own engineers, but all the bridge work will be put up to contract.

Mr. Hillier in transmitting the above information to Mr. Addis, has expressed the opinion that though it is very improbable that the 25,000,000 dollars of share capital will ever be forthcoming, the 5,000,000 to be put up by the promoters, and the annual revenue of 2,000,000 dollars from the land tax can probably be relied on. Others appear to doubt whether even these two last-named sources of revenue are as sure as Mr. Hillier supposes. I hear from M. St. Pierre, the Peking agent of the Banque de l'Indo-Chine, that their compradore at Hankow has explained that he was forced practically by threats of assassination to put himself down for 1,000,000 dollars, but apparently though owning a large amount of land he has no realisable property, and could not possibly pay down such an amount; and this is likely to be the case with others of the promoters.

A rumour having reached me that Japanese agents were discussing with representatives of the Hupei Company proposals for providing them with funds to carry out the building of the projected railways, I enquired of the Japanese Minister whether he had heard of any such negotiations. Mr. Ijuin told me that that was the first he had heard of any such project, adding that he was sure that his Government would not support any Japanese financial institution in such an undertaking, but he pointed out that it would be difficult, if not impossible, to interfere with private Japanese agents who might be willing to embark on such business on their own responsibility. However, the question of how far the provincial company may be able, from one source or another, to provide the necessary funds, though certainly of great interest, appears to be one of secondary importance compared with the question of how far the four Governments concerned, when once they and the four financial groups have satisfactorily concluded the negotiations as to the allotment of engineers, are prepared to insist on the observance by the Chinese Government of the terms of the initialled agreement of the 6th June.

Mr. Hillier has informed Mr. Addis that until the gentry have proved their inability to carry through their scheme and their efforts come to a standstill for want

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