The Pall Mall Gazette on the Kaiping Mines in 1903

A historical document: From the Pall Mall Gazette, February 2, 1903:

Chinese Engineering and Mining Company: An Interesting Story from Tientsin: Some Facts that Await Explanation:

The report of the meeting of Chinese shareholders in the great Chinese Engineering and Mining Company... is very interesting reading indeed. To all appearances, the European directors owe the Chinese shareholders... a tardy explanation of their apparent failure to comply with the terms of the memorandum....

Excellency Chang Yen-Mao sketched the events of 1900... thought advisable to register the company under British laws for the dual purpose of protecting the property and opening the doors for... European capital....

The next speaker was Mr. Detring... consulted [in 1900] by his Excellency... as to the best means of securing the property from aggression. It was ultimately decided to admit foreign capital and register the concern as an English company.... Mr. Hoover, as representative and adviser of Messrs. Bewick, Moreing, and Co... undertook a mission to London, where he formed a company of £1,000,000, out of which the Chinese script should rank as £375,000; of the balance, £100,000 was to be called up at once, and the remainder as required....

[N]ow a crowd of employees arrived from Europe without the slightest knowledge of the China board that they were coming.... Two months previously news had casually come to Mr. Detring's notice of a [London company] debenture issue of £500,000 at 6 percent. The debentures carried a bonus of £250,000 in shares standing at 70 to 100 percent premium at the date of issue. "So the reason for the issue," as Mr. Detring truly goes on to say, "was not apparent."

Nothing satisfactory by way of explanation of these strange happenings could be gained....

The Chinese board contend that the £625,000 [in par value of stock] allotted to the promoters is excessive.... [O]n the face of it, a very strong indictment indeed is made out against the European heads of this remarkable company...

If I understand the transaction correctly, the old shareholders of the company received 37.5% of the stock, the promoters--Bewick, Moreing, and Company--took 37.5% of the stock for themselves in return for a capital contribution of £100,000, and a bunch of bond buyers not otherwise identified received 25% of the stock and bonds of £500,000 principal value with coupons of £30,000 per year in exchange for their contribution of £500,000. At the moment of the bond issue, Detring claims, 25% of the stock had a then-current market value of between £425,000 and £500,000.

As I said, Herbert Hoover's testimon at the London Chancery trial appears to have been that he negotiated with Chang Yen-Mao in good faith but that his bosses at Bewick, Moreing misinformed him--but Hoover appears to have remained on excellent terms with them even so.