1914-03-11 — Page 5

INTERNATIONAL NTRI- GUES IN CHINESE RAILWAYS.

Belgium, French, and Russian Railway Policies in China.

THE HONGKONG TELEGRAPH.

national rights in the Pukow Sin-

yang lino which were ontrustad to their chargo for enfeguarding. The 190g Agreement and

Monopoly,

"

EXTRA

HONGKONG, EDNESDAY, MARCH 11, 1914.

immenso amontat of labour Stanislas Simon, ropreeanting a Langtze Companhe British This document allots 65 per cent construction, and obstructing thetion of Jardine, Matheson & compete.

Бесаге

ment for this purpose.

the

China In a False Position.

been made

contract

mission. In the division of the

Pukow-Singang and Sinjang which has passed unchalleng-system which provided for the Matheson & Co., one of its ought to make known, their eyes Chongtu railways. The essential ad, that the French interest purchasing of material through component parte. feiture of the agreement was to in

will be opened to a trae concep the Peking Syndicate the banks acting as Purchasing As this firm is also the aotive combine for the purpose of op was 90 per "cent," If only Agents and receiving a commis selling agent for certain British tion of the situation. posing and defeating all com- 50 per cent. is accepted sion of five per cent. for their manufactures of railway material, With the pull. ation in fall As this agreement has materi-petition with the new Company as the French participation services.

rightly or wrongly the iden ha in this issue of the 1905 ally modified the position of in their plans for the construc-it is sufficient for the point wo It is this feature which places been created in the minds of Great Britain in the Yangteze tion of Chinese railways.

destro to accentuate. In the last the British Government in the theircompetitora,that they favour-mont, the independent [The article which follows is Valley a brief synopsis of its In the distribution of the force

taken from the Far Eastern Review,

principal alauses should prove 100,000 shares of the new Com-published in December, the its own independent financiers represented. ...

of the resons why they could It will be read luminating. It was signed be any the French were to allot Directors publicly state that the and manufacturers, for the There are with interest not only for

many instances aot secure fair play in the con- twen Carl Meyer, of Landen, on 7,500 shares out of their 50,000 Syndicate participates as to about Government, by supporting the where this is not true, and where struction of Chinese railways and the wealth mati n it contains but atsisting of the British and Cuinera pagnie Internationale d'Orient ways, Ltd., which is their pro. maintenance of an unjust mono-coured large orders in direct they will now fully understand

of behalf of a British Group con- to Belgian Group, or the Com-20 per cent. in the Chinese Rail-greement, becomes a party to the the independent firms

bave in the supply of materials, and As an example of enterprising Corporation Limited, the Peking the Belgian Group were portion of the shares allotted ply fastening on Ohios the most compeition with the firm. It is the inner rearons which compel- jurn diem. Our reviors cannot fail to appreciate the taza Valley Company ; and by

Syndicate, Limited, and the Yang in turn to transfer 2,500 of under the 1005 Agreement. expensive system of railway only fair to state that the poei-led them to organize in order to

hese barCH

Limited; the of the shares to the French and right of independent British Company in this matter is an and rearareh which must have been entailed in body of Frecek capitaliste, con- British Group were also to allot Belgians, If we add to this the pre-manufacturere or railway con extremely delicate one, and they If the independent British collection of the outs horesisting of the Banque de Lino 5,000 of their shares to the portion of French holdings in the tractors to do business with are abe fully to justify their engineers an1 contractors have given. In previous issues the Nationalo de E-compte

Chine

Comptour Belgien Group, and a further Peking Syndicate, or, say, 50 per China.

position. For although this firm legitimate grievance, what can de 7,500 sharea to su approved cent, and the Syndicate has a 20 growth of Russia's railway Paris, the Societe Generale, the American Group, and, in the per cent. share in the Chinese under the protection of the Brit the railways under construction, Chinees Government, compelled The fact that this monopoly, acte es Purchasing Agents for be said of the position of the policy, with the aid of France and Belgium bas

Regie Generale de Chemin de event of the Americans not Central Railways, Ltd., it is quite ish Government, was used to do the actaul awarding of the as it was to submit to and accept For, and Messieurs N. J. and S. participating, the final allotment clear that the actual position of feat all competition has been renders has been made by the the ironclad conditions of the been discussed. The orea Bardac, and by the Chinese of the shares would be 45.000 to the French and Belgians in this fully attested to by the experience Managing Director of the lines, extravagant departmental system tion of the Chinese Cent Central Railways, Limited. the French, 45,000 to ral Railway, Lid, is now]

the British Oficial institution would of independent British manufact and the firm, thus relieved of the of construction forced on it by being considered}

The object of the agreement British, and 10,000 to the be 65 per cent, or if the Editor urers and contractors who have responsibility of being the actual the Banks and the foreiga. was to form a new combination Belgians.

of the Peking Gazette is sure of spent large sums in the useless purchaser, has at times openly Governments in order to main- The British and Chinese Corpor for tho mn poly of railway con- The object of the agreement se his foots, it would be increased endeavour to do business in Obina, competed for tenders, which were tain a monopoly, the chief of ation thus shared their interest instruction in the Yang'sze Valloy, so forth in the document is, in to about by 3 per cent.

and which, on several occasions, subsequently turned over to them which is the side profit to the two live and valuable concessione est coially as concerned the port, as follows, "and whereas the

In other words the Chinese has led to official protests against or execution. There may be Banks in the shape of the pur- in exchange for the elimination of

Chinese Central Railways, Central Railways, Limited which the system.

many fair and reasonable arga-chasing commission the claim of the other eydilicate

|Limited, is at present entitled to poses as the official British in- As it is professedly against mente adduced to justify a firm The services to a line terminating within its of shares shall have been returned railways to be constructed from and the Pukow-Sinyang Rail Government to discriminate in gents for railways secured by America could be secured on the

of the bes Britishoting as the official purchasing purchasing agents in Earope of the babefit of two agreements for stitution in the Tientsin-Pak w the principles of the sphere of rotivity. Competition and thereafter the deferred sbares Pakow to Tientsin, and from ways, is no longer a British such matters and uphold a com-the British Government to ad- with its main business was, how are to be entitled to bave divided Pakow to Sinyang, and whereas | Company except in name only, bigation in restraint of the rights vance the national interests, inPayment of two per cent, com- ever, thereby defeated, and the amongst them one-half of any the Company has been negotiat and proves irrefutably that the of other legitimate British enabmitting tendera io competition five per cent. among the four official Corporation was ostensibly surplus assets. Voting power, left in command of the railway one vote for every ordinary share, ing for some time past to obtain a great British Government is be- terprises, the existenos of the with other firms, but a careful groups in the Hakuang Bailwor eitustion north of the Yangtze and 100 votes for each deferred concession and other rights in ing atilized as the catspaw of agreement has been carefully examination of all the points in Loan, one per cent, is set aside

The British objective, as already share.

connection with a railway from international finance to force concealed. Otherwise those firms volved, indicates that the attitude to defray the actual cost of con stated, was to

The Peking Syndicate, Limited, the Hankow-Siayang district to through French and Bilgion who have unsuccessfully tried is ethically incorrect, By per- ducting the purchasing by the tension of the Pukow-Singyang for the purpose of obtaining and Group have been for some time

ano was registered on March 17, 1897 Chengan end "the. French interests in China.

to conduct business in China mitting themselves to be placed two Agents, while the remaining line to Chongtu, in z chuan, developing concessions for win negotiating to secure a concession

would have a legitimate grievance in this falas position, the official four per cent is divided equally and the continued efforts of the iog, railway, and other under-for railway from Hankow to Company was kept a profound for the losses involved. Leaving incurred the onen hostility and

The change in the status of the and legal rights to compensation British Parohising Agents have between them!. Legation and the Company wore takings in China. In May. 1898, concentrated in persuading the the syndicate acquired the sole Chongin and have come into com secret, for no cope of the agree these phases of the situation out criticism of the independent

Excessive Cost of Railway Chinese to cede the right. At right for sixty years to open and petition with each other, and for meut was ever filed with the of the question, however, it is British manufacturers and their

Construction. the same time a group of French work coal and iron mines and putting an end to such competi- Chinese Government, who was clear that the monopoly did exist, gents, who lave failed to secure and Belgion capitalists, beaded petroleum deposits throughout tion the Company and French most vitally interested, nor was and that the essential features of business in China. Several

It is no exaggeration to state by the Binque de l'Indo-Clie, certain specified districts in the Group agree to sayoofute them-it published. It is difficult to be the Anglo-Franco Belgian 1905 proteste bavo were also deeply interested in province of Shansi, China, cover selves in the manner and on the lieve, too that the British Govern- combination, having the support to the British Legation against ways in China under the cum- that the cost of constructing rail. securing the concession for a line an area of approximately terms appearing."

ment could consistently recognise of the British Government, was the operation of toie 20,000 square miles, and shortly

barsome departmental system, from the Hankow-Siayang dis afterwards a contract on smilar vides that "The engineers and the agreement and preserve lion with the main business of the to rectify the unfortunate situa-than the coat would have been Article 8 of the agreement pro- or condone the stipulations of to oppose and defeat all competi-system, but no steps were made his keen 25 to 33 per cent, higher trict westwards to Chengtu, and terms was signed covering all that were bringing political pressure part of the province of Honan other Europeans engaged upon "face" with the Chinese, for we Company

rion until recently when the if the construction had been to boar on the Chinese Govern-which lies to the north of the the said railway from Pakow find that the official British Cor- Rightly or wrongly the British British Government was com- entrusted to experienced and Yellow River. Certain railway to Chengtu, and of each railway poration deliberately banded over Government has been made anelled by the danger of losing the reputable railway contracting rights were given under the con- that may be formed or controlled fifty-five per cent, in this purely party to this agreement by its important railway Two American syndicates had cessions. The Chinese govern- by the Company (other than the British undertaking to the very continued support to the Oom secured by the independent firm of railways in China under con- concerns. But the construction previously entered ibe field

ment is to receive a royalty of 5 railway from Pakow to Tientsio) interests to which China had pany, thereby creating a preced-f Pauling and Company, and by tract, with experienced builders, for the same concession and per cent. on the prime cost of all shall, so far as possible, be in granted the Peking-Hankow con- ont contrary to all ideas of a free the "Belgian" successes, to would terminate the rich and the then

American Minister minerals extracted; and of the equal proportions of British and cession in 1898, and for which government. (Mr. Conger) at Peking approach-net profits, after providing for 6 Bitish and French nationalities, act she was penalised.

recognise that a change of policy profitable departmental system, ed the Chinese Government on per cent. interest on capital em- and all orders for materials and

with its tidy five per cent. pur their behalf as acon as it became ployed, and setting aside 10 per rolling stock and plant and all for granting this concession

China was punished by Britain Why Independent Firms Could was absolutely compulsary,

Under the terms of the 1905 chasing commission for the com not do Business. known that a French combina-cent, of the profits as a sinking contracts for construction of said to Belgium and we know that on

Agreement, with its essential me cial end of the official organi tion was active. The Weisupu in fund the Chinese government is

The situation arising out of feature to oppose and defeat all zations and thus interfere in its railwaye (other than aforesaid) the authority of the French this monopoly bears an import competition with the company's main business. So to preserve its perplexity between the claims to receive 25) per

ahall be divided in equal pro Yellow Book 60 per cent, of the ant relation to the organization main business, the British Go the system, and prevent the of the various syndicates com.

portions between British and Peking-Hankow syndicate shares of independent British engineers vernment unfortunately becomes Chinese Government from ever promiced by promising the The Yangtze Valley Co., Ld. Freach manufacturers and con- were owned in France, yet the to advance their interests in a party to this method of con- realizing the truth by the admis American Minister in writing was registered on December 23,

British official Corporation, after China. In the issue of The Far ducting business, and is open to ion of contractors to the field, that if foreign capital became 1900, in amalgamation of the

Article I says: "The British they had been paid the fine Eastern Review for August, 1911 the severest criticism from the the entire power and influence of necessary for the constraction of Yangtaze Valley, Syndicate, Ltd., she line, prefer crime would be registered on May 27, 1899 and the and French Groups shall re: wrung from China, complacently was published a comprehen- British engineers and manufac the official groups has been given to Americans and British, Upper Yangtsze Syndicate, Ltd. epectively agree that so long as divided the spoils with the sive review of the question of turers for the maintenance of an brought to beat in opposition to who were the first applicants. registered on June 27, 1899, to they hold any share in the com- french and Belgians. Was it a supplying Chiness railways with anjust and unholy, monopoly.

deal with properties and con-pany respectively they will re-wilful insult to China or a simple materials, and for special reasons. Dangerous competition thus cessions in China: The authoris-pretively use their best endeavours betrayal of the national interests the article was written on behalf British engineering firms

The failure of the independent

When the British and Chinese entered the field to wrest from ed capital is £500.000, £200,000 to oppose bud defeat any schema entrusted to their care? the British Corporation the right being in priority shares of competing with the company's

of American manufacturora, al- secure a fair share of the railway

Corporation was first organized for this exceptionally valuable £199,255 in ordinary shares of £main business."

In view of the facts concerned though the main argument was business in China, led to the or-in 1893, the leading firm of commercial and essential British and £225 in deferred shares of Is,

the granting of the equally in support of the inde-ganization of the British En British railway contractors was The above agreement, then, Pakow-Sinyong concession to pendeat British manufacturers. gineara Association. political line - and

admitted as a shareholder and an to avoid The priority shares are entitled

The or- discloses thot any possible interference with to receive out of the mounts administrative control remains in British Corporation surrendered of the Open Door by China, or British engineers in China to the the firm would construst under whereas the Great Britain it is clear that the It was entitled, "The Violation ganizera sacribed the failure of agreement was reached whereby its commercial plans, and of the company dividenda amount. apparently dieregardful ing in all to 100 per cent, and the hands of the Chiness Central the interests they were selected the reasons why American Manu-operation of American and Ger- contract the Shanghai-Nanking when such dividend shall have Railways, Limited, the financial to safeguard, without dus regard facturers of Railway Materials man diplomacy and their emine. The commercial element in been paid all distinction between control passed to the French to the position of the Chinese ould not secure Fair Play in the merciel methods, being ignorant the Corporation was, however, British Corporation octored int the priority and ordinary shares and Belgian bankere,

Government, or the honour of the Awarding of Tenders under the of the 1905 Agreement by which able to prevent the construction an agreement with the group of is to cease, and the net profits are French and Belgian Control of British Government. Somebody present system of Railway Con- their rights had been transferred of the line by contract, and French capitalists and absorbed then to be divided-50 per cent, them by

blundered. And by signing the struction." surrendering a amongst the ordinary shares, 40°

to France and Belgium, and un-carried on the work depart large share. of the per cent. amongst the deferred In the amalgamation of the final Singang-Pakow loan agree "Although the 1905 Agreement der which their Government was mentally. The construction cost shares, and 10 per cent, amongst Peking Syndicate with the British went in November last with the was in our possession at that a party to barring them from the It may be asid, however, that the of the line was £11,000 per mile. the directors. Only seven and Chinese Corporation for their Chinese Central Railway, Limited, time, and we were fully cogniz field. of the ordinary shares have railway rights mirth of the Yang the Chinese Government has ant of all the situations which

Eastern Engineering in its average cost of constructing The Chinese Central Railway been issued; of the priority capital taze River, the official organis-again been placed in a fales had arisen as a consequence of ignorance of the fundamental railways in China under the Company, Limited was registered £9f, 150 has been subsoribed and ation contributed as its assets two position with respect to the the monopoly, we refrained from lasts underlying the situation, departmental system on January 7, 1904. The autho paid up, and all the deferred bona fide acknowledged railway British Government for it has publishing or quoting it, feeling rather narrow-mindedly secribed 1,000 per mile aver ordinary zised capital is £101,000 in stares shares have been fully paid. concessions (the Tientsin Pukow unwittingly been led into a pure that the British Government the failure of British Ongineers country. There are no figures of £1, £100,000 being in ordinary The company holds 26,800 fully-

for contract work, except the cost and PHP Far East n Review share, and the whole amount has Traction Company of Hongkong, and naturally secared the con- it found itself in 1898. China istence,

(the Tao-Obing line) which was been subscribed, and £41,000 paid Limited: 1,710 fully-paid shares of trolling interest of 60 per cent. becomes a party to another We recognized at that time that bitterly condemned us as up, the ordinary shares having £1 in the the Association General, of the stock of the original Chinese "breach of faith by signing a the independent British manu- being anti-Brition for our open constructed under contract by the Be called, and the deferred shares Limited (the pioneer of the Slog Contral Railways, Ltd. The contract for a purely British con-facturers and their agents in China comments on the very facts which rent British firm of engineers, being fully paid. The deferred spore Electric Tramwaya; Ltd); PekingSyndicate, whose only asset cession with a company whose could never hope to secure free gave justification for the Messre Pearson & Sons, and which shares are entitled to receive half 2,500 ordinary shares of £1 185. was an indefinite claim for a line financial control is vested in the scope to obtain business ander afmation of the Association. Oxist to-day as one of the best the profits of each year (which paid), and 90 fully-paid deferred: from the mines to deep water at French and Belgions,

system which delegated to a com- The paper has since carried actual cost of the line was under built lines ing the country. The the directiors may determine to shares of £t in the Chinese Pukow, fecured only 40 per cent. The British Coverament

mercial concern the sole par on a systematic campaign £7,000 per mile, which included divide) after the holders of the Central Railways, Limited, one of the shares of the company.

Compromised.

chasing rights for the materials amongst the engineering firms of the contractor's profits. This is ordinary shares for the time being fourth interest in the Province The exact proportion of the shares The essential feature of the to be used in construction of the Great Britain to undermine our $2,000 under the average cost of Issued shall have received in of Yunnan concession, hold by

position and destroy our useful dividends a sum equal to the the Syadient du Yunnan, Limited; of the Pekin Syndicato, Ltd., held agreement entered into between railways.

and French groups In all of the British railway nesa, but if those firms will pause 34,000 per miles oheaper than departmental built lines and amount paid up therood, and upon 5,000 ordinary shares of £1 (58. in France and Belgium, can

only the British and all in their loan agreements with the official to realise how the Pauling non- any return of capital in a winding paid), and 730 deferred shares of be ascertained correctly by in 1905, was to up or otherwise the referred £1 fully paid in the Nippon Syndi reference to the books of the power to oppose and defeat all group, the department system of tract, with its great possibilities And for the purpose of Chinese the Shanghai-Nauking railway, shares are to be entitled to par- cafe, Limited and 2,000 ordinary dyndicate itself, but it is generally competition with the Company's construction has been rigorously in the way of sale of railway rathe the Too-Obing line meets ticipate pari-passu with the or shares of £5 (158.-paid), and accepted that the French hold main business. The Company's enforced, and the purchasing materials, got to England, and dinary shares for the time being 250 deferred shares of 1s. (fully the controlling interest, and the main business was the financing rights have always been delegat how the policy of the British the requiremente of the country Issued until the fall amounts of paid) in the British and Japanese editor of the Peking Gazette and construction of railways in ed by the Corporation to the Government was changed, as well as the more expensive line the capital paid up on both classes Finanos Corporation, Imited scently esile the statement, China under the departmental commerical firm of Jardine, which fiets Bastern Enginering (20 49. Continued To-morranil

"national considerations,

the

cent.

tractors."

a British Company.

with

·4*

६.

to

heir entrance.

is about

shares and £1,000 in defer ed paid shares of £1 in the Electric and the Siayang-Pakow lines) similar position to that in which was not officially aware of its ex- to the machinations of the of the Peking Syndicate Railway

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