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To save time I am sending duplicate copies of this letter and its inclosures direct to the Secretary of State.
I have, &c. (Signed)
R. W. MANSFIELD.
Inclosure 2 in No. 1.
STATEMENT of the Claim of the Hong Kong, Canton, and Macao Steam-boat Company (Limited), the Indo-China Steam Navigation Company (Limited), and the China Navigation Company (Limited), the joint owners of the British steam-ship "Sainam," for compensation for the piratical attack made on that vessel on the 13th July, 1906, while trading in accordance with Treaty rights on the West River, in the Province of Kwong Tung, in the Empire of China.
IN the year 1897, shortly after the opening of the West River to foreign steam-ships, the above-named Companies established and have since maintained under the British flag jointly-owned services between Canton and Wuchow and Hong Kong and Wuchow, calling at intermediate ports.
This service is now carried on with the "Sainam" and four other steam-ships which were especially constructed for the purpose at great expense.
Between Canton and Wuchow the intermediate ports of call are now Yun Ki, Ma Ning, Kum Chuk, Kau Kong, Shiu Hing, Tak Hing, and Wo Sing.
On the 13th July, 1906, at about 8 A.M., the steam-ship "Sainam" left Canton, in the ordinary course of the service, for Wuchow and intermediate ports of call, with 125 passengers, of whom one only was European, the Rev. Dr. Macdonald, of the Wesleyan Mission, bound for Wuchow, and a cargo of general merchandize and treasure. At Yun Ki nine, at Mah Ning two, at Kum Chuk thirty-one, and at Kau Kong thirty-nine passengers, for various later ports, came on board; there was, however, nothing in the appearance of any of these to create suspicion; indeed, nineteen of them travelled as second-class passengers, instead of with the ordinary bulk of the native passengers.
The steamer left Kau Kong shortly after 5 P.M., and nothing unusual occurred until about 7-20 P.M., when the master, Captain Joslin, the chief engineer, and Dr. Macdonald came on deck from the saloon, where they had just dined.
A few minutes later a sudden commotion arose, fire-arms were freely discharged, the Indian watchmen were overpowered, and Captain Joslin was shot in the body. The three men then endeavoured to reach the bridge to get at the steamer's arms, but were unable to do so, and took refuge in the saloon. From the saloon they were driven by a stink-pot. Shortly after reaching the deck Dr. Macdonald was shot dead and Captain Joslin fell exhausted, and lay apparently dead in the front cabin. The chief engineer got away from his assailants, reached the boiler room, and there hid.
In addition to Dr. Macdonald and Captain Joslin, all the Indian watchmen and at least one of the passengers were shot by the pirates.
As soon as the Europeans on board and the watchmen were disabled, the pirates had complete control and compelled the native pilots and engineers to navigate the vessel to their order and to anchor off Fu On. For about an hour they ransacked the vessel and the passengers' luggage, destroying much that was of no value to them. About 8:20 P.M. five boats came off, under cover of an armed party, and took off the pirates with the booty.
The outrage above narrated was obviously not perpetrated by a number of ruffians, who by chance saw an opportunity after they had got on board the vessel, but had been carefully planned beforehand. The leader of the gang is believed to have come from Canton and seemed to have been of better class than the rest, who apparently were men from districts near the actual scene of the attack. The numbers that took part, upwards of 100, including the party which assisted to land the actual assailants, and the precision and rapidity with which the attack on the foreigners on board was carried out, shows that the scheme had been worked out in detail before being put into execution. To complete the elaborate organization required numerous meetings and consultations must have taken place, and detailed instructions been given to all taking part in the affair. That an attack was being planned must have been known to a far larger number than actually took part, and if the local officials knew nothing of what was on foot their ignorance was the result of culpable neglect of their duties.
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The attack took place in a reach of the river so well known as a haunt of pirates that native boats will not navigate it at night. This reach was formerly patrolled by armed steam-boats stationed in the neighbourhood, but the Provincial Government about six months ago, without having taken any other efficient steps to protect the lives and property of those lawfully trading in this part of the river, withdrew these gun-boats. If these boats had been maintained, or other steps taken to keep the evil-doers of the neighbourhood in check, this attack would never have been attempted.
The responsibility for the outrage, therefore, rests directly upon the officials of the province, who have neglected to exercise the most ordinary vigilance, or take the most elementary precautions.
The injury suffered by the owners of the "Sainam" divided naturally into two categories: direct and immediate loss---which can be accurately estimated, and consequential loss, which though far greater is incapable, from its very nature, of exact and detailed statement.
The actual and immediate pecuniary loss which the owners have suffered amounts to 6,955 dol. 78 c. Details of this amount are set out in the schedule hereto attached, and need no further explanation. To this amount should be added the claims of passengers for personal luggage and property stolen from them while on board the "Sainam." The claims already made by passengers against the owners of the "Sainam" amounts to 3,530 taels-say, 4,900 dollars-but these will probably be largely increased.
The consequential loss to the allied Companies, arising directly from this attack upon one of their vessels, is estimated to amount to at least 150,000 dollars. This figure has been estimated after careful consideration of the whole of the circumstances, as the lowest amount which can compensate the owners for the injury inflicted upon the earning power of their vessels by the neglect of the Provincial Government to take adequate precautions against the depredations of the known bad characters within their jurisdiction. This figure has been arrived at by a review of the past experiences of the Companies and a forecast of the probable future course of trade.
As has been already stated above, the Companies began to run vessels on the West River in 1897. From the commencement they have had to meet severe competition from native-owned vessels, which chiefly, by reason of their lower running expenses, have been able to trade profitably at rates with which the Companies could not compete and pay expenses. The consequence was that the trade was carried on until about a year ago at a heavy though gradually decreasing annual loss.
For the last year receipts and expenses have almost exactly balanced, and the Companies were reasonably expecting in the immediate future an adequate return for the sacrifices they had made to obtain this trade. The main reason for the measure of success attained is not a diminution of competition, which is as keen as ever, but the security that the Companies had been able to afford their patrons. For years past all the waterways leading to Canton have been more or less infested with pirates, and native craft of all kinds have been ruthlessly plundered, but the Companies' steamers had been immune from attack. Now the very foundation of the success of the Companies has been shaken; their immunity from attack is a happy condition of the past, and they must start afresh to gain the confidence of shippers and passengers. Confidence is of slow growth though easily destroyed, and the news of this outrage has spread to every port on the river, affecting the business of the Companies in all its branches.
In addition to the native traffic, the Companies were before this attack doing a substantial and rapidly-increasing business in carrying European and American tourists and sight-seers. This business has been especially catered for, expensive advertisements have been issued, and negotiations entered into with one of the great tourist agencies for the inclusion of a trip to Wuchow among their excursions. The expense which has been thus incurred will have been largely thrown away, and much profit, which was reasonably expected, will not be made. The effect on the business of the vessels trading up the coast of the piracy of the "Namoa" is well known, and the effect on the business of these Companies of the piracy of the "Sainam" will not be less.
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As showing that the amount claimed is not excessive, the following figures are illustrative:-
The total expended by the Companies in developing their trade on the West River, including capital and the net annual losses to the end of 1905, is over 1,000,000 dollars.
To reckon 8 per cent. on this sum of the probable injurious result of the piracy for the first year, 4 per cent. for the second year, and 2 per cent. for the third year