The Chinese Minister to the Secretary of State .
Washington , December 22, 1904 .
Sir: I have been instructed to inform you that it is the decision of the Imperial Chinese Government to cancel and annul the agreements made with the American Chain Development Company, bearing date April 14, 1898, and July 13, 1900.
This step has been forced upon the Imperial Government by a course of conduct pursued by the company which leaves the Imperial Government no alternative. Article 17 of the supplemental agreement of July 13, 1900, stipulates that “the Americans can not transfer the rights of these agreements to other nations or people of other nationality.” In spite of this plain provision and of the earnest opposition of the representatives of the Imperial Government a majority of the shares of the company’s stock has been transferred to Belgians and other foreigners, and the control of the company has passed into other than American hands. The representatives or officials of the company have promised to have these shares held by foreigners in violation of the agreements retransferred to bona fide American stockholders, but they still remain in foreign hands.
Article 14 of the agreement of April 14, 1898, binds either party not to impair in any manner or to any extent the value of the obligations created by and under the contract. The said company has sought, against the protest of the Imperial Government and in violation of the terms of the agreements, to compel the trust company in whose hands the bonds have been deposited to deliver a large portion of them to the development company. The said company has sent to China a person as its representative who does not represent the American stockholders, and he has taken without authority from the proper representatives of the Imperial Government the whole charge of the railroad and its affairs contrary to the terms of the agreements. The amount of money spent on the Kwangchow section of the road has far exceeded the estimates. The engineers employed on the road have taken advantage of their position to go into business for their own profit. The company’s foreign employees have repeatedly committed murder by the reckless use of firearms, and some of them have absconded with all the money in their charge. No attention has been paid to the demands for the surrender of the murderers or the return of the misappropriated money. These are some of the flagrant violations of the right of China to exercise supervision over the road and its employees. Repeated warnings [Page 125] from the official representatives of the Imperial Government against the outrageous course pursued by the company in its dealings with the Government and the people of China appear to have fallen on deaf ears.
As the railroad which the American China Development Company undertakes to build passes through three of the most populous provinces of the Empire—namely, Kwangtung, Hunan, and Hupeh—the people of these provinces naturally take a deep interest in the progress of the work. The follies committed by the company have filled them with indignation and astonishment. Public meetings have been frequently called during the last few months to denounce the company and its employees. Public sentiment runs so strong against the company that it can find no defenders. It is the unanimous voice of the people that the contract with the American China Development Company should be canceled. They have presented a petition to the Waiwu Pu on the subject, which has been laid before the Throne. The court, which is always sensitive to public opinion, has accordingly given orders to the Viceroy Chang Chih-tung and other members of the Imperial Chinese railway administration to cancel the agreements with the American China Development Company. The viceroy, who represents the people of the three provinces, considers it impossible to oppose the wishes of tens of millions of people in order to relieve a bad situation attended with such serious consequences as to affect the safety of the country and the welfare of the people.
At this juncture when the commercial relations between China and the United States are steadily increasing and improving my government feels sure that the United States Government, which has repeatedly helped to protect the integrity of China, will not countenance any interference on the part of the people of any country that may injuriously affect American interest in China.
Copies of telegrams from the Imperial Chinese railway administration are herewith inclosed for your information, and I will thank you to favor me with an expression of your views thereon.
Accept, etc.,