[101]
In 1898, an American company had gained a concession for a railroad between Hakou and Sichuan, but the Chinese revoked the agreement in 1904 after the company (which was indemnified for the revocation) breached the agreement by selling a majority stake outside the United States. The Chinese imperial government got the money for the indemnity from the British Hong Kong government, on condition British subjects would be favored if foreign capital was needed to build the railroad line, and in 1909, a British-led consortium began negotiations.[102] This came to Knox's attention in May of that year, and he demanded that U.S. banks be allowed to participate. Taft appealed personally to the Prince Regent, Zaifeng, Prince Chun, and was successful in gaining U.S. participation, though agreements were not signed until May 1911.[103] However, the Chinese decree authorizing the agreement also required the nationalization of local railroad companies in the affected provinces. Inadequate compensation was paid to the shareholders, and these grievances were among those which touched off the Chinese Revolution of 1911.