(This Document is the Property of His Britannic Majesty's Government.
CHINA RAILWAYS.
CONFIDENTIAL.
C O
15371
[April 10.]
Meet
SECTION 3.
RrGE IT MY II
No. 1.
[13244]
(No. 122.) Sir,
Sir J. Jordan to Sir Edward Grey.-(Received April 10.)
Peking, March 17, 1911. IN continuation of my despatch No. 33 of the 25th January last, I have the honour to report on the progress of the Hukuang loan negotiations.
It will be remembered that at the beginning of the year the representatives of the four groups received an assurance that a complete memorandum, embodying all the alterations which the Board of Communications wished to introduce into the agreement would be furnished to them within ten days. The New Year's holidays and various other pretexts were put forward as an excuse for the delay in complying with this request, and it was only by the exercise of repeated personal pressure with the Board of Communications that I eventually succeeded in extracting from them the promised memorandum which was forwarded to Mr. Hillier on the 25th February last.
This document, copy of which I have the honour to enclose, contained many minor modifications of the initialled agreement, and one vital change which in itself seemed sufficient to make its rejection a foregone conclusion. The so-called branch line from Ching Men-chou through Shasi to Hanyang was entirely omitted from the revised draft.
The representatives of the four groups had an interview with his Excellency Sheng Kung-pao, president of the Board of Communications, and Lord Li, the vice- president, on the 7th March at which the question was fully discussed. Mr. Hillier, speaking on behalf of his colleagues, expressed their surprise to find that, in spite of the assurances received by the Ministers of the four Powers from the Wai-wu Pu and by the representatives of the banks from the Board of Communications, changes of a fundamental character had been made in the revised draft. Mr. Hillier cited as an instance the elimination of the Ch'ing Men-chou-Hanyang line, and said that the representatives would be glad to learn from the president how he reconciled this change with the assurance that the alterations would be merely of a verbal nature, and would not affect the essential provisions of the initialled agreement.
Sheng Kung-pao stated that the Wai-wu Pu had spoken without sufficient appreciation of the difficulties with which the Board of Communications was confronted. By an Imperial edict issued prior to the negotiations of Chang Chih- tung with the banks, the right of railway construction had been granted to provincial companies, and as soon as the terms of the initialled agreement became known the provinces protested against the infringement of their rights. Their protest assumed the form of a violent agitation, and Hsü Shih-ch'ang, the late president of the board, felt himself compelled to conciliate them by the issue of a permit authorising them to collect funds for railway construction. Sheng Kung-puo was unable to ignore this permission, but he had succeeded in persuading the gentry to accept a principle which he had himself laid down many years ago, namely, that all main lines should be constructed by the Government, and branch lines by provincial companies. This explained why the Ch'ing Men-chou-Hanyang line had been omitted.
Mr. Hillier stated that the instructions which he and his colleagues had received from their Ministers precluded them from discussing so radical a change in the agree- ment, to which Sheng-kung-pao replied that he was equally precluded from proceeding with the negotiations unless the omission was made,
The representatives of the four groups reported the result of this interview to their respective Ministers, and then held a meeting to consider the situation created by the attitude of Sheng and his colleagues. Their deliberations appear to have been greatly influenced by the prospect of formidable competition. It was reported that a powerful international group had been formed consisting of the Russo-Asiatic Bank, Banque d'Outremer, the London City and Midland Bank, Lloyd's Bank, the Bank of Scotland, and the Eastern Bank, for the purpose of undertaking Chinese loans. It was understood that the transactions of this group were to be limited by the policy of the Russian Government, which was to leave the four existing groups a free hand as
[1985 k---3]
B
285
No comments yet.
Private notes are available after approval.