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Railway Protection Movement

1911 political protest movement in China

  • 6 min read
  • 3 chapters

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Background

From the 1890s to 1905, nearly all railways in China were planned, financed, built and operated by foreign powers pursuant to concessions from the Qing government. To help local economies develop and retain earnings from railways, the Qing government granted the provinces the right to organize their own railway construction ventures.

In 1905, Sichuan Province established the Sichuan-Hankou Railway Company. To raise funds for the 1,238 km railway from Chengdu to Wuhan, the company sold shares to the public and the provincial government levied a special 3% tax on harvests paid by land owners, who were also given share certificates. In one way or another, much of the Sichuan gentry and merchant class became shareholders of the railway venture. By 1911, the company had raised 11,983,305 taels of silver of which 9,288,428 or 77.5% came from tax levies, 2,458,147 taels from public investments and 236,730 taels from government. The company was beset by corruption and mismanagement by government-appointed administrators, and construction efforts made little progress. In 1907, the company management was replaced by a board of trustees consisting of gentry, merchants and retired officials. In 1909, Zhan Tianyou, the Yale-educated builder of the Beijing-Zhangjiakou Railway, was hired as chief engineer. But the board remained divided by squabbles over the route of the planned railway and only about 10 miles of track had been laid by 1911.

Meanwhile, the Qing government, impatient with the progress of locally funded railway projects, returned to foreign lenders. At the time, the Qing authorities were under the financial pressure of having to pay back huge debts under the terms of the Boxer Protocol. By nationalizing the local rail ventures and then selling the rights to those ventures to foreigners, the government could raise money to pay debts owed to Great Britain, Germany, France and the United States. In early May 1911, lenders of the so-called China Consortium including Hongkong Shanghai Banking Corporation (HSBC) of Britain, Deutsch-Asiatische Bank of Germany, Banque de l'Indochine of France, and J.P. Morgan & Co., Kuhn, Loeb & Co. and First National City Bank of New York (CitiBank) of the United States, agreed with the Qing government to finance the construction of railways in central China. On May 9, Sheng Xuanhuai, Minister of Posts and Communications, ordered the nationalization of all locally controlled railway projects and on May 20, signed a loan agreement with the China Consortium pledging the rights to operate the Sichuan-Hankou and Hankou-Guangdong Railway in exchange for a 10 million pound loan, to be repaid by custom duties and salt taxes. The Guangdong-Hankou Railway was a locally backed venture in Hubei, Hunan and Guangdong Province.

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