This Document is the Property of His Britannic Majesty's Government.
AFFAIRS OF CHINA.
CONFIDENTIAL.
(38620)
No. 1.
376
[November 17.]
SECTION II.
45640
JE LI DFC 06
Sir J. Jordan to Sir Edward Grey.-(Received November 17.)
(No. 395.) Sir,
Peking, October 4, 1906.
IN his despatch No. 364 of the 3rd September last, Mr. Carnegie reported that the Russian Representative here had recommended his Government to agree to the establishment of two customs stations on the Russo-Manchurian frontier, one at Manchuria—the point where the Chinese Eastern Railway enters Manchuria from the north—and the other at Pogranichnaya, where the railway quits Manchuria on its way to Vladivostock.
I took occasion, while on a visit to the Wai-wu Pu yesterday afternoon, to remind the Ministers of the disabilities under which Newchwang was suffering in consequence of the anomalous customs arrangements that prevailed in Manchuria, and I inquired as to the progress of the negotiations that were being carried on with the Russians and the Japanese with the view of securing equality of treatment for foreign trade.
The Ministers explained that they had approached the Russian Minister on the subject, who had telegraphed to St. Petersburgh and received an assurance from the Minister of Finance that the proposal for the establishment of custom-houses on the Russian frontier would be favourably entertained. The only difficulty in acceding to the request was the necessity of keeping the troops still in Manchuria furnished with supplies without undergoing the formalities of customs examination. The Chinese Ministers had agreed to make an exception in favour of military stores, and it was thought that, so far as Russia is concerned, the question is practically settled.
The Ministers also informed me that some few days ago the Japanese had signified their intention of restoring Newchwang, but that up till the present effect had not been given to the promise. Their Excellencies declared that the port must be restored unconditionally or not at all. The sanitation and municipal arrangements would be continued by China of her own motion.
As to Dalny, the Japanese, as the successors of the Chinese Eastern Railway, were entitled by Article 5 of the Supplementary Agreement of the 24th June, 1898 (see inclosure No. 1 in Mr. Carnegie's despatch No. 364), to act as Agents for the Chinese Government in the collection of the customs duties. An Agreement had subsequently been made with M. Lessar, the late Russian Minister, by which only Chinese were to be employed in the custom-houses that it was then contemplated to establish at Dalny.
Mr. Hayashi, the Japanese Minister, with whom I had a conversation on the subject some days ago, gave me a somewhat different account of the negotiations with regard to Dalny. He said that the Chinese were anxious to retain the customs at Dalny under the control of the new Revenue Board, but that he himself was extremely averse to any arrangement which would constitute a departure from the recognized practice of intrusting the collection of the duties on foreign goods to the foreign Inspectorate.
Mr. Hayashi is in favour of an arrangement similar to that which obtains at Kiao-chau; but the Chinese, I believe, are inclined to think that the 20 per cent. of the customs duties which are returned to the German authorities there would be too large a contribution in the case of the Japanese at Dalny; the reason given, so far as I understand it, being that this amount originally represented the duty on the estimated consumption of foreign goods at Kiao-chau, and that the local consumption in the leased territory at Dalny would be considerably less.
There has been much discussion between the Japanese Minister and the Wai-wu Pu regarding the cost of the improvements at Newchwang during the Japanese occupation.
The Japanese contention was that they had spent 400,000l. on this head, and that they were entitled to recoup themselves for the outlay from the customs duties which they had collected. The Chinese asserted that a portion of this represented money spent on the purchase of the land occupied by the Japanese Military Administration.
[2226 r-11]