Mr. Hayashi seems to think that Newchwang may decline as a Treaty port, its competitor, however, being not Dalny, but Tientsin, which is more favourably situated for the bean trade, and will enjoy superior railway facilities.
The railway between Chang Chun and Kirin will, he explains, be constructed by the Chinese themselves, who will receive any financial assistance they may require from Japan.
My American colleague informs me that the United States' Consul-General at Newchwang, who recently visited Antung, reported that all the available water frontage at the port was occupied by the Japanese under the plea of military necessity, and that there seems no immediate prospect of its restoration in accordance with Article 4 of the Supplementary Agreement appended to the Treaty between Japan and China of the 22nd December, 1905. The lumber trade on the Yalu, which formerly found an outlet at Ta Tung K'ou, has now been diverted by the Japanese to the Korean side of the river at New Wijn, the point where the railway crosses the Yalu. This deprives Ta Tung Kou of any importance it may have had as a port, and involves a loss of revenue of 200,000 Haikwan taels (£30,000) a year to China. The change has probably been made in anticipation of the formation of the Joint Stock Forestry Company, contemplated by Article 10 of the Supplementary Agreement alluded to above.
Mr. Rockhill is of opinion that there should be free trade throughout the interior of Manchuria, and that no duties should be levied either at Mukden or any of the sixteen places opened by the above Agreement.
I assume that foreign goods entering Newchwang, Antung, or any other maritime port in Manchuria, would, on payment of the ordinary import duty, receive an exemption certificate and be forwarded in bond to their destination.
The question of foreign Settlements is one which is likely to present some difficulties. The Chinese consider that at Mukden and Antung, being opened "by China itself," they can allot areas for foreign residence in the same way as they have done at places like Chinan-fu, and that outside those areas they are free to exercise their favourite device of taxing foreign goods as they please. The American Minister considers, and I agree with him, that this growing desire to restrict the limits of the port to the actual area occupied by foreign residence is a practice which ought to be resisted, not so much perhaps for the prejudicial effect it would have upon trade in Manchuria, as on account of the danger of establishing a precedent which the Chinese would endeavour to extend to the older established ports in China proper.
I have, &c. (Signed) J. N. JORDAN,
[This Document is the Property of His Britannic Majesty's Government.]
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AFFAIRS OF CHINA.
CONFIDENTIAL.
[39466]
No. 1.
[November 21.]
SECTION 4. C. O.
45640
RECEIVED THE 11 DEC
Sir Edward Grey to Sir J. Jordan. (No. 413.) Sir,
Foreign Office, November 21, 1906.
The Chinese Minister informed me to-day of the progress which had been made in connection with the Shanghae-Nanking and Canton-Kowloon Railways.
I expressed satisfaction that a step in advance should have been made in each of these cases.
He then referred to the indemnity demanded for the disturbances at Shanghae. He represented that the guilty persons had been punished, and that the indemnity would fall upon innocent persons, and have a very bad effect. He also thought that the actual damage done had not been very great, and that the Taotai had been in a very difficult position, because inside the Settlement he could not depend upon his own forces, but only upon the municipal police, who were not under his control.
I answered that I had not all the details of the case in my mind, but my recollection was that the worst damage had been done by people who came in from outside the Settlement, and who ought therefore to have been under Chinese control. I also thought that the damage done was considerable. We had certainly sent instructions at the time that an indemnity should be asked for. It seemed to me that this was necessary in order to prevent the recurrence of similar events.
The Chinese Minister pressed the matter of the indemnity very strongly, and I said that the question had been dealt with at Peking, so that I had not all the details in my mind, but I would look into the case, and see what the exact position was at the present moment, and what was the amount of indemnity asked for.
I am, &c.
(Signed) EDWARD GREY.
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