CO129-383 - Public Offices - 1911 — Page 490

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la cote de cet emprunt sur notre marché et par conséquent de la participation du groupe français.

Sans doute, il n'est actuellement question que d'une avance de 400,000%., sur l'emploi de laquelle la Russie ne soulève aucune objection; mais nous avons quelque hésitation à participer à cette avance comme aux suivantes sans être assurés de pouvoir participer à l'emprunt lui-même; nous nous efforçons d'obtenir à cet égard une déclaration formelle de notre Gouvernement et ne pouvons en tous cas prendre de décision qu'après avoir consulté notre syndicat.

J'ai cru devoir répondre très franchement aux différents points soulevés dans votre lettre afin de continuer à vous tenir personnellement informé; au reste, je suis en communication constante avec M. Harjès à ce sujet, puisque les Américains demeurent officiellement chargés de la conduite de cette affaire.

[This Document is the Property of His Britannic Majesty's Government.]

[B]

AFFAIRS OF CHINA.

CONFIDENTIAL.

[18834]

19007

[May 20.]

SECTION 2.

REC?

悉

RE 16 JUN 1

No.1

485

Dear M. Simon,

Enclosure 2 in No. 1.

Mr. Addis to M. Simon.

Croyez moi, &c.

S. SIMON.

Hong Kong and Shanghai Bank, 31, Lombard Street,

London, May 20, 1911.

IN reply to your letter of the 19th instant, I agree that certain reservations were made at the Brussels Conference by M. Ullmaun and yourself "sur l'emploi des fonds en Mandchourie," but not one word was said, in the recollection of Mr. Whigham and myself, "sur l'affectation à la garantie de l'emprunt des revenus de cette province."

It is to the latter of these reservations which I referred as having been made for the first time. The particulars of the revenues pledged were known to all parties concerned as far back as the 13th March. If objected to, the objection should have been lodged then, and not sprung upon us a month after the agreement had been signed.

With regard to your second point, that you are entitled to delay the payment of the preliminary advance until the Chinese have furnished us with a complete pro- gramme of expenditure in Manchuria, you appear to have overlooked the fact that this objection has been already waived, and that, in terms of Straight's telegram of the 16th March, which was submitted to the Brussels Conference, the banks agreed to make the preliminary advance on account of Manchuria "prior to, instead of after, bank's acceptance of statement of expenditure." It was only in the case of the currency advances that the approval of the programme was made a condition precedent to payment.

Will you please refer once more to the printed minutes of the Brussels Conference of the 18th March for confirmation of these facts ?

Believe me, &c.

C. S. ADDIS.

Sir Edward Grey to M. Cambon.

Your Excellency,

Foreign Office, May 20, 1911. THE Chinese Government have, as your Excellency is doubtless aware, recently made application, under article 8, section 4, of the Currency Reform and Industrial Development Loan Agreement signed at Peking on the 15th ultimo, for the inmediate advance by the banking groups of the sum of 400,000%., as a first instalment of 1,000,000l. to be held at their disposal in America and Europe, for certain purposes connected with Manchuria.

I understand, however, from the representatives of the British group that, in deference to the views of the Russian Government, who have intimated that they are not disposed to assent, without certain reservations, to the provisions of the loan agreement, the French Government are withholding their consent to the advance of the above-mentioned sum of 400,000! until the complete programme of the whole amount of that portion of the loan destined for industrial development in Manchuria has been submitted to, and approved by, the Russian Government. It would, further, appear that the French Government will also require, as a condition precedent to the co-operation of the French group with the other signatories to the loan agreement, a notification from the Russian Government that they agree to the earmarking, as security for the loan, of the various Manchurian revenues enumerated in the loan contract.

I have no hesitation in stating that I entirely concur in the view, which I gather is held by the French Government, that the four Powers would be justified in withholding their assent to the advance in question until they were satisfied that the proposed expenditure in Manchuria will not be devoted to projects which the Russian Government might fairly claim to be detrimental to their interests. But the objects for which this advance of 400,0001, is said to be required would appear to be quite unobjectionable, and in no way connected with the railway to which exception was taken some time back by the Russian Government. In the event of farther advances of the same nature being required, it would be open to the Powers concerned to consider the manner in which they are to be employed, and, if necessary, to refusc their assent to their being made.

As regards the other condition imposed on the French group, I would only observe that the revenues pledged were specifically enumerated in the loan agreement, and it is not quite clear to me why the French Government should now make the appropriation by China of her own Manchurian revenues contingent upon the consent of another Power.

I should, however, be very glad if these considerations could be placed before the French Government, and if your Excellency could be authorised to inform me of the views held by M. Cruppi on the subject.

I have, &c.

[2023 π-2

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E. GREY.