CO129-471 - Public Offices - 1921 — Page 35

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

CHINESE LOANS AND CONCESSIONS.

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[May 17.]

SECTION 1.

CONFIDENTIAL.

31374

[F 1863/333/10]

No. 1. Rec

(No. 179.) My Lord,

Sir B. Alston to Earl Curzon. Received May 17.)

Peking, April 1, 1921. IN continuance of Mr. Clive's despatch No. 775 of the 1st December last, I have the honour to transmit herewith copies of further correspondence between the Ministry of Communications and the representatives of the Hukuang Railway group bunks respecting the conditions for a further loan for construction work on the Hukuang railways.

any

The director-general's reply of the 22nd February indicates a lack of disposition on the part of the Chinese, for the present at all events, to accept the conditions put forward by the groups even in principle, and there

appears small likelihood of any advance being made in the negotiations in existing circumstances. It will be observed that the director-general definitely states that it would be impossible for the Chinese Government to agree to the admission of another national group (viz., the Japanese) into the consortium of banks party to the Hukuang Loan Agreement.

I have, &c.

B. ALSTON.

Enclosure I in No. 1.

Memorandum of Interview between Mr. Kuan Keng Lin, Director-General Hukuang Railways, and the Representatives of the British, French and American Groups. -Wednesday, December 8, 1920.

MR. ALLEN informed the director-general that the groups' representatives had received his letter of the 20th November. They had requested the present interview repre- partly because the letter in question showed clearly that the attempts of the sentatives in the letters of the 28th April and the 1st November to explain the views and policy of the groups had not been successful, and partly because, though they had not yet received the reply of the groups to the proposals contained in the director- general's letters of the 5th and 9th October which had been referred home for consideration, they had in the meantime received a communication from their groups— now merged in the new consortium-which, while confirming the absolute necessity of the conditions for the successful flotation of a loan stated in the groups' repre- sentatives' letter of the 1st November, definitely undertook to issue a loan for the completion of the Canton-Hankow Railway if an agreement based on the acceptance of the conditions in question could be concluded.

The director-general was then informed of the chief conditions contained in the American group telegram of the 4th November, as follows:-

1. Recognition of German Bonds and Coupons of Railway Loans without distinction.

The following resolution of the consortium conference on the subject was read to the director-general in full :---

"It was resolved without questioning that the course hitherto pursued by the Chinese Government has been followed in good faith, that it is now manifest that the successful flotation of further Chinese loans in foreign markets, which are necessary if the work of the consortium for the benefit of China is to be carried out, imperatively requires a public announcement by the Chinese Government with reference to the German issue of bonds forming part of the Hukuang loan, to the effect that, after consideration of all the facts and the doubts in favour of the holders of such bonds, the Chinese Government has determined to recognise the entire issue without distinction."

Asked for further information as to the nature of the declaration and/or evidence required from holders, the director-general stated that since his last interview with the

[6210 r-1]

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