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Excellency that, in view of certain negotiations that had been proceeding between the Board of Communications and the corporation and between Vice-President Shen Yuu Pei and the Kiangsu Company, I had held my hand for some time, but I did not wish him to conclude, therefore, that the legation had lost interest in the question and was not following it with close attention. I did not wish to exercise pressure at an inopportune moment or to interfere with the efforts of the Board of Communications to recover control as long as they were likely to be attended with success and the corporation were prepared to exercise patience a little longer. In the end, however, I should be obliged to insist on the strict fulfilment of the terms of the loan agree- inent. His Excellency promised to let me have a reply to Sir John Jordan's note of the 21st December.
I have, &c.
Enclosure in No. 1.
W. G. MAX MÜLLER,
Mr. Mayers to Board of Directors of the British and Chinese Corporation, London.
Gentlemen,
April 13, 1910. WITH reference to my letter of the 16th March respecting the Shanghae- Hankow-Ningpo Railway, I have the honour to report the results of several conversations which I have held with the director-general, Mr. Liang Shih Yi, respecting this line.
The first point upon which I sought definite information from Mr. Liang was in regard to the proposal of the Board of Communications to change the loan agreement, under certain eventualities, to one for the construction of a railway from Kaifengfu to Istchoufu. I told his Excellency that the proposal had been carefully considered in London, and that its execution presented considerable difficulties. It was desirable, therefore, to know whether the hoard adhered to the plan of action outlined in their draft letter of the 20th January before going further into the question of its practi- cability. I understood that the provincial companies were at the end of their resources, and the time seemed ripe for the Board of Communications to put an end to this long drawn-out controversy, by assuming control and proceeding with construction to Ningpo under the loan agreement.
Without giving me a direct reply in regard to the proposed transfer of the loan, the director-general evinced no interest in this branch of the subject. The position of affairs at the present time was, he stated, tending towards a resumption of control by the Board of Communications over the Kiangsu section of the line. The vice- president of the board, Shen Yun P'ei, who is a Kiangsu man, had been influencing his fellow-provincials for the past three months to recognise the futility of prolonging the struggle. There was already an inclination on the part of the Kiangsu Company to place itself in the hands of the board, but any drastic action on the part of the latter would only defeat the object in view. Delegates of the company were now in Peking, and the director-general was leaving all initiative to come from their side, feeling confident that by these tactics an admission that they have no funds must soon be made.
An application to the board from independent Chinese residents of Shanghae to proceed as soon as possible with the junction of the Kiangsu and Shanghae-Nanking railways has been referred to the provincial company, and their official reply is now awaited. Verbally they have pleaded lack of funds, and the director-general is satisfied that their written auswer will be to the same effect. the same time a section of the provincial company seeks permission from the board to construct the IIsüchoufu-Haichou line in Northern Kiangsu, and it is anticipated that this project, for which no funds are forthcoming, will contribute to expose the financial embarrassments of the company.
At
If the board's anticipations are fulfilled in respect to the Kiangsu Company, the recovery of control over the Chekiang line will, in their opinion, speedily follow. But direct initiative on their part, would, they assert, morally result in a recrudescence of feeling in the two provinces, and their policy therefore is to wait patiently, till bankruptcy throws the railway into their hands.
Such being the director-general's description of the situation as it stood at the beginning of the month, I called yesterday officially at the board, and told Mr. Liang that I had not yet written to my directors on the subject of this railway, since my
3
arrival in Peking, but could not longer defer doing so. I begged him therefore to acquaint me with any further particulars, or with any expression of views which might assist my board in forming a just appreciation of the case.
The director-general replied that he had little to add to what he had said in our more informal conversations of the past fortnight. He could, in fact, merely confirm the statement that the Kiangsu Company was being gradually worked upon by the Vice-President Shen, and that in his own opinion success was within sight.
On my remarking that the position he took up was virtually the same as had been assumed by the Wai-wu Pu towards the question since its inception, namely, that with time and patience a solution would eventually present itself, the director- general admitted that it was so, but he was able now to foresee the end; and on my pressing him to hazard an opinion as to how long it would be before he got control of the Kiangsu section, he replied, with what impressed me as an honest conviction, that it would take two or three months.
I then asked him whether the board's recent appointment, of which I had been notified officially, of a young Chinese engineering student uamed P'u to be manager of the line was to be taken as an indication that they were going to play a more active part in the railway's affairs. To this Mr. Liang replied in the negative. Under pressure from the notorious Mr. Tang, of the Chekiang Company, the board had accepted the nomination of Pu, but only as temporary and probationary"
He would have no power.
manager.
I pointed out that there was always a danger of Mr. Foord's patience becoming exhausted, as it was humiliating for a professional man of his standing to be kept month after month in a state of inaction, and I quite expected that friction might arise between him and the inexperienced nomines of Mr. Tang. The director- general said he hoped no such difficulty would occur. The appointment of Pu was merely nominal, and he trusted that Mr. Foord would stick by them. In regard to two of his assistant engineers, he anticipated that the Chekiang Company would seek shortly to dispense with their services, and if this came about he would deal with the matter. As he had mentioned this point before, I asked what line he proposed to take in such circumstances, but he would not give me a more precise answer than to say that they should not suffer, and that he would guarantee them employment.
The policy of the Board of Communications, then, still is to let this problem shape its own solution, while doing what they can to influence provincial opinion in favour of State control of the line. As I observed to the director-general, in resting content for the time being with this prospect of further delay, we have only his word for it that success will be achieved by these means, and in inviting the corporation to exercise further patience, the responsibility rests on him to see that his anticipations are not falsified.
I am communicating a copy of this letter to His Majesty's chargé d'atlaires, with whom I have been in consulation, and I understand that he concurs in my opinion that we cannot for the present do otherwise than accept the statements of the Board of Communications on this subject as being made in good faith. If Mr. Max Müller should see fit to mention at the Wai-wu Pu the position which has been reached in my conversations with Mr, Liang, it may prove useful later ou in the event of no progress being effected.
I should add that in our conversation of yesterday the director-general made no allusion to the proposal of transferring the loan, and I therefore take it that this proposal has been laid aside.
I have, &c.
S. F. MAYERS.
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