CO129-384 - Public Offices - 1911 — Page 235

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

232

[July 10.] 24603

CHINA RAILWAYS,

CONFIDENTIAL.

[26865]

No. J.

SECTION RES

R£27 JU I

Sir J. Jordan to Sir Edward Grey.-(Received July 10.)

(No. 255.) Sir,

Peking, June 20, 1911. THE question of the nationalisation of the trunk lines of railway, which has recently been engaging the attention of the Chinese Government, was the subject of an Imperial edict issued on the 17th instant, copy of which I have the honour to transmit herewith.

The remarkable progress which the Central Government has made with this question has not been effected without serious opposition in the provinces, and at Canton especially there have been indications of possible resistance which have caused the Government some anxiety. With their usual astuteness the Cantonese discovered a practical way of bringing pressure to bear upon Peking. They engineered a run upon the Ta Ch'ing and Yu Chuan Banks, and as these institutious rest upon an immense system of paper credit the situation became so serious that an appeal had to be made to the foreign banks to come to their assistance. The Hong Kong and Shanghai Banking Corporation alone remitted a sum of 2,000,000 taels (say 269,2701) to Canton to meet the emergency, and for the moment the Government seems to have come through the crisis successfully, but Sheng Kung Pao, against whom the provincial agitation is specially directed, views the future with some uneasiness. There is, however, no question of receding from the policy to which the Government are irrevocably committed.

I have, &c.

J. N. JORDAN.

Enclosure in No. 1.

Imperial Edict of June 17, 1911.

Nationalisation of the Trunk Lines of Railway.

The

THE Tu Chih Pu has presented memorials setting forth detailed particulars for resuming the ownership of the Szechuan-Canton-Hankow trunk lines. nationalisation of railways has the double object of protecting the railway administra- tion and showing sympathy for the distress of the people. Some time ago we issued decrees putting an end to the collection of subscriptions for railway shares in Szechuan, llunan, and other provinces, and have repeatedly ordered that satisfactory measures be devised to deal with the amounts already collected. Now, according to the memorials, it is suggested that the shares in railway companies subscribed by the four provinces, Kwangtung, Szechuan, Hunan, and Hupei, be all examined and taken over by the Government in exchange for special Government railway bonds, which shall be issued by the Tu Chih Pu and the Yu Chuan Pu, and bear interest at the rate of 6 per cent per annum. In the future all surplus profits will be divided among the bondholders according to the number of shares they have. Bondholders who wish to recoup their capital may do so after the lapse of five years by fifteen yearly instalments, but before the instalments are due the "bondholders may at any time borrow money from the Ta Ch'ing Government Bank or the Bank of Communications on the security of the bonds, in accordance with the banking regulations. Those who are not willing to surrender their shares in exchange for Government railway bonds are allowed to settle the matter in a different manner so as to show equity. The Kwangtung Railway shares have been subscribed entirely by the mercantile community, and there has been great extravagance of expenditure occasioned by delay in construction. Consequently the shares are at a discount of more than 50 per cent. But now it is proposed to make a generous repayment of 60 per cent. of their original value in the first instance, and, in order to show special consideration, Government bonds bearing no interest will be

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