[This Document is the Property of His Britannic Majesty's Government.] 196
CHINESE LOANS AND CONCESSIONS.
CONFIDENTIAL.
[December 29.]
SECTION 1.
(245235]
(No. 352.) Sir,
No. 1.
Sir J. Jordan to Mr. Balfour.-(Received December 29.)
Peking, November 5, 1917. HIS Majesty's Ambassador at Tokyo has been good enough to furnish me with copies of bis despatches Nos. 572 of the 31st August and 695 of the 6th October, respecting the reported terms of the recently concluded Changchun-Kicin Railway Loan Agreement with Japan.
It will be remembered that the original Agreement of 1907 and the Supplementary Agreement of 1908 were forwarded to your predecessor in my despatch No. 185 of the 16th April, 1907, and my despatch No. 538 of the 28th November, 1908, respectively. I had hoped to be in a position to supply you equally with a copy of the new agree- ment, but I regret to report that I have not so far been able to secure a copy.
The terms of the new agreement have been published in the press here as in Tokyo, and there appears to be nothing to add to the particulars already reported to you by Sir C. Greene. I venture, however, to forward an apparently well-informed article on the subject that appeared in the "North China Daily News" of the 23rd October, in which the events leading up to its signature are reviewed.
A reference to my earlier despatches will show that, under article 2 of the original Agreement of 1907, China undertook to borrow from the South Manchurian Railway Company 50 per cent. of the funds necessary for the construction of the line; this sum was subsequently fixed at 2,150,000 yen in the Supplementary Agreement of 1908.
According to Sir C. Greene's information, the 6,500,000 yen of the agreement just signed are to include the 2,150,000 yen already advanced under the 1908 Agreement. The writer of the enclosed article is, however, evidently under the impression--to judge by the final paragraph of his article that this is not so, and that the 6,500,000 yen are In the absence of the text of the agreement over and above the original loan of 1908.
If
it is of course impossible to say which is correct, but it seems probable that the tenor of the agreement as published in the Japanese press is more likely to be correct. this is so the new loan will only bring in a fresh 4,350,000 yen for use on the railway.
I do not consider that the signature of the new agreement need be regarded as of special importance. It would seem merely to consolidate the hold which Japan had already acquired on the line, which, with the prospective extension of 240 miles to Hunchun, is no doubt of considerable value to her from a military point of view.
I have, &c.
J. N. JORDAN.
Enclosure in No. 1,
Extract from the "North China Daily News" of October 23, 1917.
KIRIN-CHANGCHUN RAILWAY. THE JAPANESE LOAN AGREEMENT.
(From Our Own Correspondent.)
Peking, October 16. AS there seems to be an impression in Shanghai that the Kirin-Changchun Railway Loan is something more than a bad transaction from the Chinese point of view, it may be worth while stating a few of the facts. Nobody in Peking has taken any interest in the negotiations, for the reason that the terms of the new arrangement were practically fixed long ago. That the negotiations have lasted for nearly two years is a tribute at once to Japanese patience and to the Chinese capacity for spreading themselves infinitely about inessentials.
When the Chinese decided to build the Kirin-Changchun Railway the Government supplied half the capital and borrowed the other half from the South Manchuria Railway. In consideration of the loan the amount was 2,150,000 yen--the Chinese
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