CO129-372 - Public Offices - 1910 — Page 480

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

Dear Mr. Grenfell,

Enclosure 3 in No. 1.

Mr. C. S. Addis to Mr. Grenfell.

31,

Lombard Street, London, July 1, 1910. 1 HAVE your letter of the 20th June, in which you say you are informing your New York friends that the British, German, and French groups are not in favour of issuing any provincial loans."

32

The

This, as it stands, is not quite an accurate statement of our position. distinction wo make is between loans "authorised or "sanctioned" as opposed to Joans "guaranteed " by the Chinese Government. We have no objection at all to issue provincial loans, the due repayment of which is unconditionally guaranteed by the Imperial Chinese Government.

It is probably in this sense that you have communicated with your New York friends, in which case this letter requires no reply.

Enclosure 4 in No. 1.

Mr. Grenfell to Mr. C. S. Addis.

Yours truly,

C. S. ADDIS.

Dear Mr. Addis,

22, Old Broad Street, London, July 9, 1910. REFERRING to your letter of the 1st July, I beg to confirm on behalf of the American group of bankers that they do not care to entertain a proposition for any Chinese provincial loan unless bearing an unconditional Imperial guarantee, and believe it would be prejudicial to the interests of all concerned to have other groups entertain provincial loans unless so secured.

I think this communication should make our action on behalf of the American conform with that which we understand is to be taken by your group and the German and French groups in such matters.

I leave it to you to communicate the contents of this letter to our friends on the continent.

Dear Mr. Grenfell,

Enclosure 5 in No. 1.

Yours faithfully,

E. C. GRENFELL.

Mr. C. S. Addis to Mr. Grenfell.

31, Lombard Street, London, July 11, 1910.

I AM glad to learn from your letter of the 9th instant that your Americau group is opposed to the issue of Chinese provincial loans except on condition that the repayment is secured by the unconditional guarantee of the Imperial Chinese Government.

This I believe to be in conformity with the views entertained by ourselves as well as by the French and German groups, to whom I am sending a copy of your letter.

Yours truly,

C. S. ADDIS.

AFFAIRS OF CHINA.

CONFIDENTIAL.

[25949]

C O 24838

[July 18.]

SECTION 1.

REC?

REG 12 AUG 10

No. 1.

Mr. Max Müller to Sir Edward Grey.-(Received July 18.)

(No. 212.) Sir,

Peking, June 28, 1910. IN my despatch No. 98 of the 7th April I said that I had been given to understand that there was little probability of my colleagues taking any action in regard to the works of the Whangpoo Conservancy till after the receipt of the report* on M. de Rijke's scheme, which is being drawn up by Sir J. Wolfe-Barry, Sir W. Matthews, and Mr. Lyster.

I found, however, that I had been mistaken, as in the early days of May the Austrian Minister, in his capacity of doyen, informed me that he and the German Minister had now received instructions as to the line they were to pursue in negotiations with the Chinese Government for the completion of the Whangpoo Conservancy work, and enquired whether I was prepared to attend a meeting of the beads of missions principally interested in the question.

Accordingly on the 31st ultimo the German, Japanese, French, and American Ministers and myself met, under the presidency of M. de Kuczynski, to discuss the question.

I need not trouble you with full details of the lengthy discussion, but it soon became apparent that neither the German nor the Austrian Ministers was prepared either to adopt the de Rijke scheme in toto or to request the Chinese Government to complete the conservancy work to the extent and within the limits stated in the final protocol of 1901, which would have been the natural corollary to the note of the diplomatic body of the 14th December last.

Count Rex explained that, in the opinion of his Government, it would not be correct to urge the Chinese Government to provide more funds, seeing that they had already paid the amounts stipulated in the 1905 agreement, but that the proper course to pursue was to endeavour by friendly means to prove to the Chinese that it was in their own interest to complete the works.

M. de Kuczynski said that he had received similar instructions, with this difference, that his Government held that if the friendly representations failed, it would be necessary to request the Chinese Government to return to the conditions of the 1901 protocol and contribute to the carrying on of the works until their final completion.

Count Rex then admitted that his instructions also authorised him to join in such action, if absolutely necessary and as a last resort.

All the representatives appeared to agree that, in the present state of the works, it was impossible to consider the Whangpoo Conservancy as completed, and it was, therefore, decided that the first thing to do was to ascertain from the Chinese Government (1) whether they regarded the works as completed or not; and (2) if not, what works they considered must still be executed. This would be done by requesting the Chinese Government to communicate to us officially the report of the Chinese commissioner, to whom I referred in the last paragraph of my despatch No. 98 of the 7th April. I pointed out, however, that this report, if received, would probably be of a technical nature, and deal with subjects on which we should be incompetent to pass judgment without further expert advice, and it appeared to me that we might equally well wait for the report of the three great English authorities at present under preparation. It then appeared that my German and Austrian colleagues were not prepared to attach much weight to this report, for the absurd reason that it would not be the result of international collaboration, and had not been drawn up at the request of either the diplomatic or consular body or of the conservancy board. The German Minister held that, if necessary, the Chinese report should be submitted to an international expert commisssion on which Germany would insist on having a delegate, and this delegate was evidently to be the technical attaché to the German Consulate-General, who has, I believe, been the prime mover in all the German

* Not printed.

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