186
2
Enclosure in No. 1.
Messrs. Samuel and MacGregor to Mr. Max Müller.
5, Canton Road, Shanghai, November 24, 1910. Dear Sir,
WE beg to thank you for your favour of the 17th instant, and have now to inform you that the purchase by us of the 11,000 Anhui provincial government bonds was completed on the 17th instant.
A bond was sent by His Britannic Majesty's consul-general to the Shanghai taotai, who expressed his opinion that same was genuine, and another bond was sent to His Britannic Majesty's vice-consul at Wuhu, who reported it to be in order.
We enclose one of the bonds for your inspection and will be glad if you will kindly return same to us.
You will observe that the loan is repayable in six years by six yearly instalments, and that the provision for the repayment of the principal and interest is stated on the bonds to be as follows:-
per annum. Clause 14.-Auhui Treasury: Miscellaneons revenues, 140,000 taels Clause 14.-Li-kin collectorate: Li-kin on exported rice up to 150,000 taels per
annum.
Clause 15.-The above annual total of 290,000 tacls is especially allotted for the any other purpose, no repayment of this loan, and this fund cannot be touched for matter how urgent.
You will doubtless recollect that this was confirmed by the Wai-wu Pu in their letter to you of the 31st May, 1910, and we consider it advisable to draw your attention to this, as our London friends, Messrs. M. Samuel and Co., addressed a letter on the 4th instant to his Excellencey the Chinese Minister in London pointing out that in the prospectus of the Imperial Chinese Government 5 per cent. Tien-tsin-Pukou Railway supplementary loan recently issued, copy of which we enclose, it is stated that among other things the loan is secured upon the li-kin and internal revenues of the province of Anhui to the amount of 700,000 Haikuan taels a-year, and further, that with the exception of the first charge created by the loan agreement of the 3rd January, 1908, the whole of the provincial revenues enumerated are declared to be free from all other loans, charges, and mortgages.
Messrs. M. Samuel and Co. also requested his Excellency to cable to Peking for information as to the exact position, and up to the present we have no further news on the subject.
We are, &c.
DOUGLAS MACGREGOR.
[This Document is the Property of His Britannic Majesty's Government.]
AFFAIRS OF CHINA,
CONFIDENTIAL.
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1168
ECP REGS 13 JAN 11
[December 23.]
SECTION 2.
No. 1.
Sir J. Jordan to Sir Edward Grey.-(Received December 23.)
(No. 438.) Sir,
ON the receipt of your despatch No. 372 of the 28th October relative to the so-
Peking, December 6, 1910. called Imperial Chinese Government 7 per Cent. Peking-Hankow Railway Redemption Loan, Mr. Max Müller addressed a note to the Wai-wu Pu, pointing out that, according to the terms of the prospectus, the loan was not an Imperial Government loan in the sense in which that term had hitherto been used, and requesting to be informed whether the Chinese Government accepted responsibility for it or not. The copy of Mr. Max Müller's note is enclosed herewith.
On the 1st December I had the honour to receive your telegram No. 154 of the previous day, in which you were good enough to inform me of the substance of a letter which had been published in the "Times" from the President of the Chinese Board of Posts and Communications, and desired me to report whether (1) the loan was, as stated, a direct obligation of the Chinese Government to the foreign bond- holders; (2) whether payment of principal and interest was guaranteed in sterling by the Chinese Government; and (3) whether an Imperial edict sanctioning the loan had been communicated to His Majesty's Legation.
No reply had then been received to the note of the 18th November, but shortly after I had dispatched my telegram No. 191 of the 1st December, informing you that I was in consequence addressing a further communication to the Chinese Government, I received the note, of which I have the honour to inclose the translation. As I have pointed out in my note to Prince Ch'ing of the 3rd December, the statement of the Board of Communications, forwarded to me by the Wai-wu Pu, is not an answer to the enquiry addressed to His Highness on the 18th November, for no decree has been communicated to His Majesty's Legation, and no notification has been received from the Chinese Government of the terms and conditions of the loan for which they have entered into a contract with the London City and Midland Bank and Messrs. Dunn, Fischer, and Co. I have drawn Prince Ch'ing's attention to the fact that the eircumstances attending the issue of the loan differ fundamentally from the formalities and practice hitherto adopted in the case of Imperial Chinese Government loans, and have requested His Highness to favour me with an answer to the enquiry as to the responsibility of the Central Government.
The matter formed the subject of some conversation yesterday at an interview with his Excellency Na Tung, who explained that the transaction had been entered into by the Board of Communications without the knowledge of the Wai-wu Pu, but added that he hoped in the course of a few days to be able to return an affirmative answer to the questions put by His Majesty's Government.
I have, &c.
Enclosure 1 in No. 1.
J. N. JORDAN.
Your Highness,
Mr. Max Müller to Prince Ching.
Peking, November 18, 1910. I HAVE the honour to inform your Highness that I have been instructed by His Majesty's Government to invite your Highness's attention to the question of a loan recently issued in London by the London, City, and Midland Bank and Messrs. Dunn, Fiselier, and Co., under the name of "The Imperial Chinese Government 7 per Cent. Peking-Hankow Railway Redemption Loan."
An analysis of the prospectus shows that the loan is not an Imperial Govern- ment loan at all in the sense in which this term has hitherto been used, but only a departmental loan without Imperial guarantee. It is sanctioned indeed by an edict, but the edict, which is two years old, has not been communicated to His
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