[This Document is the Property of His Britannic Majesty's Governmcat.
AFFAIRS OF CHINA.
CONFIDENTIAL.
[12871]
No. 1.
[April 7.]
SECTION 1.
Dear Sir Francis,
Mr Addis to Foreign Office.-(Received April 7.)
Hong Kong and Shanghai Banking Corporation, 31, Lombard Street, London, April 6, 1911.
I ENCLOSE copy of a joint telegram from the representatives of the four groups at Peking.
The gist of it is that the Chinese refuse to make the lenders' approval of the currency scheme a condition precedent to paying over the proceeds of the loan. If, as is suggested, this is largely a matter of face," it should be possible to overcome this objection by some alteration in the wording of the agreement which would secure the substance of control while sacrificing the shadow.
A further complication is introduced by Sheng's attempt to apply part of the loan proceeds to a payment in gold of the Boxer indemnity. This again does not appear to me to present any insuperable difficulty, provided, as proposed, the equivalent amount in silver is paid over to the banks in Shanghai.
As soon as the views of the other groups have been ascertained I shall communicate with you the nature of the reply they propose to make to this joint telegram.
The French having given their consent, the four groups are now agreed provision- ally to nominate Dr. Wissering, the president of the Java Bank, for the post of financial adviser in connection with the currency loan. The United States Government has, I understand, already made certain suggestions to the Chinese Government with regard to the emoluments of the office. As soon as they have been settled, the American group will then proceed to enquire if Dr. Wissering is willing to act.
Yours truly,
C. S. ADDIS.
:
Enclosure in No. 1.
Copy of Telegram from Messrs. J. P. Morgan and Co., New York, to Messrs. Morgan,
Grenfell and Co., London, April 6, 1911.
CHINA. Following just received from Straight, Hillier, Casenave, Cordes -
"Referring to our telegram of the 1st, Sheng informed us Regent had instructed him to state ratification by Imperial edict could not be given agreement containing provision that if banks did not find currency reform programme and statement reliable basis for bonds issue agreement would be null and void. Sheng further stated Regent will not agree to two-and-a-half months antedating. It has developed that first objection largely a matter of face. We have therefore proposed as follows:—
"Omit from article No. 15 draft of the 16th March provision for cancellation agreement in case banks refuse to accept currency reform programme statement.
"Add to article No. 8, section 5, provision that advances shall be repaid in any case within 18 months from signature of agreement unless otherwise mutually arranged between board of finance and banks.'
"From language of section 2, article No. 8, providing for issue loan on notification board of finance that banks have found currency reform programme and statement reliable basis for bonds issue, it follows that no bonds issue will be made unless you accept currency reform programme and statement; and this is fully understood by Chinese, while addition to section 5 secures repayment advances in any case.
"In addition to transfer 300,0001. in any one week, Sheng desires banks in Europe and America under instructions board of finance to pay out up to one-half proceeds of
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