(Translation.) Sir,
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Enclosure 1 in No. 1.
Prince Ch'ing to Sir J. Jordan.
Peking, December 23, 1910. I HAVE the honour to acknowledge the receipt of your note stating that you had received instructions from His Majesty's Government by telegraph to report whether the 7 per cent. Peking-Hankow Railway redemption loau is a direct obligation of the Chinese Government to the foreign bondholders, and whether the payment of the principal and interest of the loan is guaranteed in sterling by the You desired to be furnished with an answer to these Imperial Government.
questions.
Again, you stated at an interview that the reason for your note of some days previously was that the loan bonds placed on the market in London by the Board of Posts and Communications are sealed with the official seal of Lord Li, the Minister to Great Britain. You maintained that my note in reply only quoted the language used by the Board of Communications, without making any really definite statement in addition, and that the procedure of the Board of Communications in this instance was a breach of the regulations governing loans.
All your representations were communicated by my Board to the Board of Posts and Communications, which has now sent the following reply
"The present issue of a loan at 7 per cent. for the redemption of the Peking- Hankow Railway is placed on the market by China, and may be taken up by any persons whatsoever, the bonds therefor being payable to bearer and transferable. It is consequently widely different from an ordinary loan, under a loan agreement drawn up with a foreign country. Moreover, the loan bonds placed on the market by any European country are purchasable at will, whether directly or indirectly, by persons of other nationalities without any question of international relations being involved. There should therefore bo no occasion to address a note to the British Minister on the subject. As regards the present loan, this Board reported to the Throne that it was handed over to the Chiao-Tung Bank to place on the market; the circumstances of the manner of its issue were naturally left to the convenience of the bank to dictate.
"Since the memorial of this Board was answered by an Imperial decree sanctioning the issue of the loan, that is in itself a guarantee for repayment in full.
"As for the statement that the loan bonds placed on the market in London by this Board are sealed with the official seal of Lord Li, the Minister to Great Britain, as a matter of fact the seal stamped on these loan bonds is that of this Board; they are not sealed with the official seal of Lord Li, the Minister to Great Britain."
The loan bonds in this instance are offered for subscription by the Board of Posts and Communications, and the Peking-Hankow Railway loan is of a genuinely different character from other foreign loans.
The sanction accorded to the memorial of the Board of Posts and Communications is on record, and constitutes a guarantee of the responsibility for repayment. Persons holding these bonds, no matter what their nationality, are all on a footing in all respects identical with that of Chinese subjects in regard to the rights to which they are entitled.
I have the honour to address this reply to you for your information, and avail, &c.
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loan," no matter what their nationality may be, are on a footing in all respects identical with that of Chinese subjects in regard to the rights to which they are entitled.
In taking note of this declaration, I would ask leave to correct a misapprehension which would seem to have arisen in connection with my interview at the Wai-wu Pu. I did not state, as your Highness appears to have been informed, that the bonds of this loan had been sealed with the official seal of the Chinese Minister in London. What I did say was that the Chinese Minister had written a letter to Messrs. Dunn, Fischer, and Co., which was published as part of the prospectus of the loan, and in which he stated that the Board of Posts and Communications of the Imperial Chinese Government had undertaken to guarantee the repayment of the capital and interest of the loan. I explained that the Chinese Minister had taken this step under instructions from the Board of Posts and Communications, and I enquired whether, in these circumstances, the Chinese Government recoguised the loan as a direct obligation of the Chinese Government.
I avail, &c.
J. N. JORDAN.
Your Highness,
Enclosure 2 in No. 1.
Sir J. Jordan to Prince Ch'ing.
Peking, December 27, 1910.
I HAVE the honour to acknowledge the receipt of your Highness's note of the 23rd instant, in which you are good enough to inform me that subscribers to the bonds of "the Imperial Chinese Government 7 per cent. Peking-Hankow Railway redemption
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