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[This Document is the Property of His Britannic Majesty's Government.]
[B]
CO
621
AFFAIRS OF CHINA.
RECR Rraf 7 JAN ||
[December 15.]
CONFIDENTIAL.
SECTION 1.
[44595]
No. 1.
Memorandum communicated to Count Benckendorff, December 15, 1910.
IN the memorandum left at the Foreign Office by the Russian Ambassador ou the 8th instant the hope is expressed that, in view of Russia's special interests in the financial position of China, His Majesty's Government will, before becoming a party to the signature of the loan agreements under discussion at Peking, inform the Russian Government what security China will be asked to give, and what object she has in view in raising a loan.
The memorandum goes on to say that the Russian Government consider that they should take part in the pourparlers for the eventual establishment of any form of financial control in China should such a measure be held necessary.
As regards the latter point, His Majesty's Government know nothing of proposal having been put before China by any of the Powers concerned, nor do they any such think that the Chinese Government would readily consent to anything of the kind, as recent events in China all tend to show that emancipation from foreign tutelage is the primary aim of both Government and people at this moment.
The facts with regard to the agreement between the four financial groups for the joint undertaking of financial business in China are briefly as follows:-
A preliminary loan agreement for 10,000,0001. has been come to between an American financial group and the Chinese Government. The latter objected to the inclusion of any other parties in the ncgotiations for, or as signatories to, the said loan agreement, though they were willing that the money should if necessary be found in Europe. Subsequently, an agreement was signed between the American group in question and the British, French, and German financial groups who were parties to the Hukuang Loan Agreement of 1909, with a view to sharing all future loans in China which might henceforward be given to any one of them. This loan of 10,000,000% was, however, excluded from the scope of the arrangement, though the United States Government. have since promised to use their best endeavours to persuade the Chinese Government to permit joint signature of the final contract by all four groups. The proceedings of the British, French, and German groups have received the approval of their respective Governments, and the latter have agreed to await the result of American diplomatic action at Peking.
It will therefore be seen that the matter is rather commercial than political, and that for the present it is primarily one between the American group and "Government and China.
Nothing is known as to what security China will be called upon to give, the question having been reserved at the express wish of the Chinese Government for the final agreement, now in course of negotiation.
As regards the employment of the funds, it is understood that 6,000,0001. are to be devoted to the reform of the Chinese currency, and that the remaining 4,000,0001. are "for Manchuria," presumably for developing industrial and commercial concerns in that province, but no authentic information on the point has so far reached His Majesty's Government.
We have also heard that a further loan of 5,000,0001. for naval and military armaments is being discussed between the representative of the American group and the Chinese authorities, and enquiries are being made as to whether the report is well founded.
Foreign Office, December 15, 1910.
[1810 p−1]
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