File No. 5315/217.
Chargé Fletcher to the Secretary of State.
Peking, June 7, 1909.
Says that the substance of department’s telegram of the 4th June was communicated to the foreign office on the 5th, and that on the [Page 149] 6th agreement was initialed by the representatives of Chinese Government and German, British, and French banks in Peking for a loan of five and a half million pounds sterling, 25 years at 5 per cent, the agreement to be formally signed when approved by Imperial edict to be issued shortly. Says that two million and a half were allotted for the construction of Hupeh-Hunan section of Canton-Hankow line and a like amount for the construction of main line Ichang to Kuang Hsui and branch line from Ching-men-chou through Sha-si to Hanyang, called Hupeh section of Szechuen-Hankow line; that balance of loan was allotted for redemption of bonds issued by American China Development Co.; and that the loan is guaranteed by the Chinese Government and is secured by revenues of the railways above mentioned and likin salt and imported rice taxes of Hupeh and general and salt likin of Hunan. Says that the price of bonds to the Chinese Government is 95. Adds that stipulations regarding construction, purchase of material, and general provisions are same as Tientsin-Pukow agreement.