The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1898-12-04
SUIT
FOR A MILLION
DOLLAR FEE
Claim for Obtaining a
Franchise.
AN AMERICANS Achievement
GOT A RAILWAY CONCESSION
FROM CHINA.
Now Goes to Court to Compel the
Syndicate for Which He Acted
to Remunerate Him for
His Services.
AN AMERICANS Achievement
GOT A RAILWAY CONCESSION
FROM CHINA.
Special Dispatch to The Call.


morrow will say: Thurlow Weed
Barnes has brought suit in the Supreme
Court against the American China De-
velopment Company for s1,000,O00 for
services in obtaining railroad conces-
sions from the imperial Chinese Gov
eminent, through the Chinese Minister
at Washington. The concessions are
worth in net profit at least $4,000, 900
to the company and they may be worth
$24 100000. They are the most valuable
grants ever made by the Chinese Gov
eminent to foreign capitalists and the
terms are more favorable than the con-
cessions obtained in recent years by
French, Belgian, English and Russian
syndicates.
The chief spirit Of the American
China Development Company is Calvin
S. Brice. His associates are James H.
Benedict, banker; Anthony N. Brady,
the Carnegie Steel and Iron Company
(Andrew Carnegie), J. H. Jarvis of the
Arbuckle Sugar and Coffee Corpora
ton; Frederick P. Olcott, president of
the Central Trust Company; w. E.
Reed of Heremile & Co.; General Sam
uel Thomas, railroad owner; Henry r.
Wolcott of Colorado. Richard ]. Cross
Of Morton, Bliss & Co., Levi P. Morton,
Thomas G. Platt, Henry w. Cannon of
the Chase National Bank, Thomas F.
Ruan, street railway owner; James r.
Stillman of the Standard Oil Company,
representing the Rockefellers; Moore Sc
Shipley, bankers; John r. Hegeman Of
the Metropolitan Life Insurance Com
pany; Clarence Carey, as trustee of H.
NICK. Twombley and various Wander
bilt interests; Hartley & Graham, arms
manufacturers; ]. p. Mcdonald, rail-
road contractors; James McNaught,
counsel for the Northern Pacific;
George r. Sheldon, banker; Charles H.
Coster; c. r. Randall, president of the
Southern Trust Company, and many
others of like prominence in the finan-
cial world.
All of these are defendants in the
suit, as they are copartners in the syn
dictate which controls the concessions.
Barnes alleges that after Brice's en-
voys, including ex-senator William d.
Washburne of Minnesota, had failed to
obtain the concessions sought, Brice
sent for Barnes and asked him to un-
dertake the work Barnes has spent
many years in the Orient and had made
several friends among the natives in
high power, and, moreover, was
friend of WI Ting Fang, the Chinese
Minister at Washington.
MT. BARNES dSISGu W uO Tic WOlh, IL
is said, on the verbal understanding
that he would be duly compensated
for any valuable results he might ac-
eomplish. He and Clarence Carey were
appointed as a committee to obtain
the concessions, Mr.. Barnes being
known as the managing member of
the commission. Associated with them
was A. w. Bush. They set to work in
January of the present year. Mr..
d 6,,cf orb h &c
friends in Picking by cable to have the
Chinese Cabinet confer upon WI Ting
Fang the special power to make any
railroad concession he might agree to
with the American syndicate. He was
successful in this and negotiations with
Ting Fang were begun.
In April an agreement was reached.
During these months an immense
amount of correspondence passed be-
tween Mr.. Barnes and the Chinese Min
lister and between Barnes and Mr..
Brice and other members of the COM
pany and also between Barnes and Mr..
Carey and Mr.. Bash. These letters and
kilograms, it is asserted, will prove that
Barnes got the concessions. The draft
of the agreement reached by Barnes
and the Chinese Minister was drawn up
by Barnes and was accepted by both
sides without change, ex-Seeretary of
State John w. Foster acting in an adj
visory capacity to the Chinese Minister.
This agreement was reached on April
13 and signed the next day. Suisse
quently 1t was ratified by an imperial
edict by the Chinese Government.
The concessions obtained by the COM
pany provided for the building of
trunk line railroad from Hankow south
to Canton, a distance of about 1000
miles. 1t will run through the richest
and most fertile regions of China.
The population of that section of
China is 200,000,O0O From Hankow
north to Peking runs a proposed rail-
road, the concession for which was OBJ
tanned by Belgian syndicate. From
Peking northwest runs a short road
owned by China, which will connect with
the great trans Siberian railroad built
by Russia. Thus the road permitted by
the American concession will have
through connections with the Russian
tranS-Siberian road. The most valu-
able part of the concession obtained by
the Americans is the financial terms.
These have never been published
The road, it is estimated, will cost
$40, 100000 Bonds for 10 per cent more
than the total cost are to be guaranteed
by the imperial Chinese Government
The 10 per cent additional or $4,000, 900
is clear profit to begin with. The bonds
are to be paid in gold, to run fifty
".
The Chinese Government also agreed to
pay the American China Company 5
per cent on the total cost of the road
for experimenting the construction.
In addition, the Chinese Government
agreed to pay 20 per cent of the net
profits of the road in the form Of de-
benture bonds bearing per cent in
terest and running forty-three years.
After paying all expenses of the road,
including the redemption bonds. the
road is to become the property of the
Chinese Government. The Chinese Gov
eminent has the right to redeem the de-
benture bonds at par and to give per
cent gold bonds at 1924 in the first
twenty-five years and at par thereafter.
By the concession the American COM
pany also obtained the right to mine
the rich coal fields which extend along
parts of the route of the road.
An even more valuable feature of the
concession is that in the event Of the
contract with the Belgian syndicate be-
ing Cancelled the concession to build
that road will revert to the American
China Development Company on the
same conditions governing the Ham
kow-Canton road.
The American company also obtained
the right of building the road under
American management and free from
the supervision of Chinese officials. The
company agreed to establish and main-
tain at its cost school for the instrue-