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

AFFAIRS OF CHINA.

CONFIDENTIAL.

44602

RECEIVED [August 25.]

SECTION 3.

Received 25 August

No. 1.

[28983]

(No. 89.)

Sir C. MacDonald to Sir Edward Grey.-(Received August 25.)

(Telegraphic.) P.

OPENING of Dalny.

Tôkiô, August 25, 1906.

I am officially informed, that from the 1st proximo, Dalny will be a free port, and open to foreign vessels (see my telegram No. 80 of the 13th ultimo).

Goods entering or leaving the Province of Kwantung, by way of Dalny, will not have to pay any duties.

The above has been repeated to Peking.

[28988]

No. 2.

Mr. Carnegie to Sir Edward Grey.-(Received August 25.)

Peking, August 25, 1906.

(No. 159.) (Telegraphic.) P.

CUSTOMS in Manchuria: Please see my telegram No. 154.

I have been informed by the Japanese Minister that the following are the conditions for the restoration to the Chinese authorities of the administration of Newchwang-

1. Recognition by Chinese Government of all the works of improvement which the Japanese military authorities have carried out, and which have been paid for out of customs receipts.

2. That payment of customs duties into Yokohama Specie Bank continues.

3. That the Chinese maintain on the present lines the existing municipal system of police and sanitation.

Mr. Hayashi added that there are other minor questions, such as the recognition by the Chinese of the rights of an electric light and water Company. Condition 2 will, in his opinion, create the most difficulty. There is, he tells me, a balance of 3,000,000 yen from customs duties which the Japanese Government is ready to hand back to the Chinese. He further informed me that the Russian Minister has been approached by the Chinese Government respecting the establishment of custom-houses in North Manchuria.

I have repeated the above to His Majesty's Ambassador at Tôkiô.

[2102 66-3]

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