[This Document is the Property of His Britannic Majesty's Government.]
CHINA TRADE.
CONFIDENTIAL.
C. O. [May 23. 21577]
SECTION 1
No. 1.
R: 13 JUN OF 202
Mr. Townley to the Marquess of Lansdowne.--(Received May 23.)
Peking, April 8, 1903.
No. 127.) My Lord,
ON the receipt of your Lordship's despatch No. 16 of the 20th January, 1903, I requested His Majesty's Consul at Newchwang to furnish me with such information as he could procure with regard to Russia's reported intention to secure a monopoly of the trade of Manchuria by the levy of differential rates on the Chinese Eastern Railways.
I have now the honour to transmit to your Lordship herewith copy of the reply which I have received from Mr. Fulford, in which he explains that the differential rates referred to by Mr. Morgan, M.P., in his conversation with Viscount Cranborne, do exist in the shape of a scale of freight tariffs drawn up in such a way as to favour goods consigned to Dalny, by charging a considerably lower freight on them than on similar merchandise consigned to Newchwang.
Mr. Fulford states that further developments of this policy are probable, but points out at the same time the difficulty of turning the trade from its present channel, and states that the trade of Dalny is still practically non-existent, and that the Chinese merchants of Newchwang, who are masters of the situation, show no inclination to place themselves under Russian control.
I have, &c. (Signed)
WALTER TOWNLEY.
(No. 9.) Sir,
Inclosure in No. 1.
Consul Fulford to Mr. Townley.
Newchwang, March 27, 1903.
I HAVE the honour to acknowledge receipt of your despatch No. 2 of the 12th instant, transmitting copy of a despatch from the Marquess of Lansdowne, informing you of a statement made by Mr. Morgan, M.P., to Viscount Cranborne, with regard to Russia's intention to secure a monopoly of the trade of Manchuria by the levy of differential rates on the Chinese Eastern Railways. You direct me to endeavour to ascertain what are the intentions of the local Russian authorities in regard to railway rates in Manchuria, and to furnish you with a Report on the subject.
In his despatch No. 60 of the 30th September, 1901, Mr. Hosie reported upon rates then prevailing on the Chinese Eastern Railway, and pointed out the probability of the attempt being made to divert traffic to the Russian port of Dalny. Again, in his Report upon Dalny forwarded to His Majesty's Minister in despatch No. 19 of the 25th March, 1902, and in his Trade Report for 1901, Mr. Hosie stated that it had been decided to grant more favourable rates from stations north of Moukden to Dalny than to Newchwang.
The immediate intention of the Russian railway authorities is, doubtless, to attract as much of the trade of Manchuria to Dalny as possible by means of a lower scale of railway rates. They have built the town of Dalny at enormous expense, and naturally seek a return for their outlay. The short line connecting this port with the main line of the Manchurian Railway was intended for construction purposes only, to be withdrawn when the main line was completed, thus leaving Newchwang isolated. But the Chinese built another line from Shanhaikuan to Newchwang, with a northern branch towards Moukden, and the Russians, finding that the trade could not be so easily diverted to Dalny, modified their designs, and the present scheme of differential rates for the two ports was adopted.
[2004 z- z-1]