2
co-operate with the American group for the working of two coal mines in the vicinity of the railway, in which Pauling and Co. would also be interested.
A further letter from the administration, dated the 30th April, 1910, referred to the use of loan funds for colonisation purposes and the opening of an ice-free port at Chinchou
The letters from the Viceroy, dated the 26th April, 1910, were accepted by Mr. Straight on that date, his acceptance of the final loan agreement, however, being made conditional upon the receipt of the assurances which were eventually embodied in the two letters received from the administration on the 30th April, 1910, together with an engagement on the part of the Viceroy that the construction contract with Pauling and Co. (Limited) was practically concluded.
On the 30th April, 1910, therefore, Mr. Straight addressed to the Viceroy a letter finally accepting the loan agreement and the letters supplementary thereto,
Messrs. Pauling and Co., who were parties to the preliminary agreement, concluded their construction contract with the Manchurian administration early in May. This contract was recognised as final in a letter similar to that addressed by the Viceroy to Mr. Staight with regard to the final loan agreement.
By private arrangement between Messrs. Pauling and Co. and the American group it is provided that Pauling and Co. shall pay to the American group 24 per cent. on the contract price for the line, certain provisions being made for additional payments in case Messrs. Pauling and Co.'s profits exceed a certain percentage on the total cost. Messrs. Fauling and Co. have also engaged, where foreign materials are used in the construction of the railway, that one-half shall be American and one-half British.
The American group is authorised by Messrs. Pauling and Co, to state that, in case the other parties to the interbank and intergroup agreements concluded on the 10th November, 1910, accept the offer of the American group to participate in the Chinchou-Aigun loan, they shall be entitled to a pro rate share of the 24 per cent. to be paid by Messrs. Pauling and Co. on the contract price, and Messrs. Pauling and Co. will, in so far as possible (in view of the fact that their contract price has been based on all foreign materials used being one-half American and one-half British), use German and French materials in addition as nearly as possible in equal proportions. In case the other parties to the interbank agreement accept the American offer of participation in the Chinchou-Aigun loan on the basis above outlined, Messrs. Pauling and Co. will be prepared to exhibit their construction contract.
The Russian Government has informed the Chinese Government that it objects to the construction of the Chinchou-Aigun Railway, and in the face of this opposition China has not yet seen fit to ratify the detailed agreement,
Japan bas informed China that she has no objection to the Chinchou-Aigun Railway, but that should it be constructed she desires such participation as may be agreed upon by the interested parties, and desires also that China shall engage to construct a branch line between the Chinchou-Aigun Railway and the South Manchurian Railway.
In order to secure the withdrawal of the Russian opposition various alternative schemes have been proposed; none of these, however, has as yet been adopted.
A suggestion has recently been informally put forward by the Russian Minister in Peking, which is now being considered by the group, and which, if acceptable to China, would provide for the construction of a line from Chinchou via Taonan-fu to Hailar, and of another line from Harbin to Aigun.
It is hoped that, since Russia shows no disposition to obstruct all railway construction in Manchuria, a solution of the present difficulties may be reached satisfactory to all parties.
It is probable, in the light of the Russian objection to the Chinchou-Aigun Railway as originally contemplated, that certain amendments must be introduced in both the loan and the construction contracts to meet new conditions, and it is in this connection that the American group anticipates it will be possible to so amend the final agreement, as now accepted, as to permit of the admission of the other parties to the interbank agreement.
W. D. S.
November 9, 1910.
[This Document is the Property of His Britannic Majesty's Government.]
C
1168
Ο
€
AFFAIRS OF CHINA.
Prof 13 JAN
CONFIDENTIAL.
[November 16.]
SECTION 3.
[41692]
(No. 122.)
No. 1.
Sir Edward Grey to Sir E. Goschen.
(Telegraphic.) P.
Foreign Office, November 16, 1910, 10,000,0001. loan to Chinese Government. Your telegram No. 69 of yesterday. We hoped that German Government would encourage United States Government to continue their efforts to induce Chinese Government to agree to joint signature of loan. United States Government are alone in a position to bring influence to bear on Chinese Government in this sense.
[2982 q-3]
173
No comments yet.
Private notes are available after approval.