This Document is the Property of His Britannic Majesty's Government.]

AFFAIRS OF CHINA.

CONFIDENTIAL.

C 0.

36382

(September 10th, 1906)

TREG 3 OCT 06 SECTION 2.

692

[30591]

(No. 316.) Sir,

No. 1.

Mr. Carnegie to Sir Edward Grey.—(Received September 10.)

Peking, July 23, 1906.

I HAVE the honour to inform you that I received a telegram from His Majesty's Consul-General at Shanghae on the 23rd May last, stating that the Taotai had announced an intention of creating a Chinese municipality outside but immediately adjoining the international Settlement, and including property owned by foreigners, the object evidently being to block any further extension of the Settlement in that direction. In compliance with my request for further information, Sir P. Warren addressed to me his despatch No. 105 of the 9th June, of which I inclose copy.

It transmits translation of a letter from the Taotai to the Senior Consul, dated the 4th May, which contains the first intimation of his intention, copy of a Memorandum by the Secretary of the Municipal Council respecting the need for an extension of the Settlement (inclosed with the Memorandum is a lengthy Report on the northern extra-Settlement districts drawn up by a Taotai Hsü), and copy of a letter from the Senior Consul to the doyen of the Diplomatic Body, calling attention to the injury which would be entailed should the natural growth of the Settlement be in any way impeded.

This letter was circulated among the foreign Representatives, together with a note from the Wai-wu Pu respecting the collection of taxes by the municipality outside Settlement limits, to which matter Sir P. Warren also refers in his despatch. I have already had the honour to report on that subject to you in my despatch No. 303 of the 11th instant.

In consequence of a suggestion that a Committee should be chosen for examining into these questions, the American and German Representatives and I were requested to undertake the duty, which we agreed to do. We considered that, as little could be effected at Shanghae, it would be advisable for the Diplomatic Body to address a remonstrance to the Chinese Government direct. I have the honour to inclose copy of the draft note drawn up by us, in which the attention of the Chinese Government is directed to the ignorance of Treaty provisions displayed by the Taotai in contending that the renting of land to foreigners outside Settlement limits is a favour and not a right, and a request is made that instructions should be sent to the authorities concerned to abstain from establishing a Chinese municipality in the district proposed, as such a proceeding could only spring from motives hostile to foreign interests or be aimed at the prosperity of the Settlement. This note is now in circulation among my colleagues, and, if approved by them, the doyen will, I understand, send it to the Chinese Government in the name of the Diplomatic Body.

I have meanwhile asked Sir P. Warren to furnish me with copies of any documents he may have in his archives in regard to certain special privileges reported to have been accorded by the Chinese authorities to foreigners in the Paoshan district, to which allusion is made in the inclosed correspondence. The archives of His Majesty's Legation contain no reference to the subject.

I have, &c. (Signed)

LANCELOT D. CARNEGIE.

(No. 105.) Sir,

Inclosure 1 in No. 1.

Consul-General Sir P. Warren to Mr. Carnegie.

Shanghae, June 9, 1906.

IN accordance with the instructions contained in your telegram No. 46 of the 23rd ultimo, I have the honour to forward herewith Report upon the proposed establishment of a Chinese municipality outside and immediately adjoining the international Settlement.

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