CO129-373 - Public Offices - 1910 — Page 343

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

AFFAIRS OF CHINA.

CONFIDENTIAL.

[38201]

CO

34588

[October 20.]

SECTION 1.

RECE

Rro2 11 NOV 10 No. I

342

(No. 341.) Sir,

Mr. Max Müller to Sir Edward Grey.-(Received October 20.)

Peking, October 2, 1910. ON the 29th ultimo I telegraphed to you the fact of the signature of the Anglo- German Supplementary Loan Agreement for the Tientsin-Pukow Railway, and in reply to your enquiry I reported in my telegram No. 163 of to-day that the Chinese Government had informed me that au Imperial edict had been issued sanctioning the

loan..

I have the honour to enclose the copy of the agreement, as also of the Wai-wu Pu's note informing me of the issue of the Imperial ediet.

The loan is for 4,500,000l., of which the first series of 3,000,0001. will be floated in London and Berlin within a few days, the German portion of the loan being two-thirds.

The terms of the agreement follow closely those of the original Tientsin-Pukow Railway loan of January 1908, when 5,000,000% were borrowed to cover the first two years' expenditure on construction.

Article 15 of the agreement of January 1908 provided for the subsequent negotiation of a supplementary loan on similar terms for the completion of the line. The only modifications in the present agreement to which attention need be drawn are those contained in article 5, whereby repayments of principal will be made yearly, instead of in half-yearly, instalments as heretofore, thus removing an obvious injustice to the Chinese Government, which exists in all previous similar loans, and in article 10, whereby the counter-signature of the bonds is to be performed in London, instead of in London and Berlin.

I understand from Mr. Mayers that it was the difficulty of arranging for satisfactory security that has protracted the negotiation of this loan over a period of three months. As will be seen from article 9, a second charge is established on the security of the original loan, together with a first charge on additional provincial revenues amounting to 3,600,000 taels a-year.

Under article 3 it is estimated that the line will be completed within two years from the date of the agreement, that is to say, by September 1912, but the southern (British) section, 236 miles, should be finished a year earlier. According to a report of the engineer-in-chief, the position of the southern section in August was that 220 miles of earthwork were completed and the formation ready for the rails, of which 120 miles were already laid. All'important bridges in the first 200 nules were in progress, and many of them completed, and 93 miles of line, from Pukow to Lin Huai-kuan. will be opened to traffic as soon as the passenger rolling-stock, now on order, has been delivered. A further 118 miles, to Hsuchoufu, will be ready for traffic at the end of 1911, and the remaining few miles can be opened whenever the northern section is ready to effect a junction.

Although I have not received any recent official reports from His Majesty's consul at Nanking, I gather from the above information, which has been supplied to me by Mr. Mayers, that work on the southern section is progressing smoothly and satisfactorily.

I have, &c.

W. G. MAX MÜLLER,

Enclosure in No. 1.

Prince Ch'ing to Mr. Max Müller.

Sir,

Peking, September 28, 1910.

I AM in receipt of a communication from the director-general of the Tientsin- Pukow Railway to the effect that on the 22nd instant he memorialised the Throne, * Not printed.

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