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The principal points at issue in these are said to be :-

1. The Timber Concession on the Hulankei;

2. The Concession of some 225,000 acres of agricultural land lying partly in Mongolia and partly in Manchuria near the station of Mongol;

3. The Concession of the Dalai Nor coal mines;

4. Concessions of various gold mines in Manchuria,

The point that has caused the most friction at Harbin, and it is reported has threatened the breaking off of the negotiations at three different times, is the Hulankei Timber Concession, which lies in the upper courses of the Hulan River to the north- ward of Harbin, The Hulan River empties into the Sungari about 12 miles below Harbin.

In 1903 the railway made a contract for the delivery of a large quantity of wood with a General Jao Men, the agent of the branch of the Tsitsibar Diplomatie Bureau at Harbin. The contract was a private one. After delivering to the extent of about 15,000 roubles Jao Men was unable to complete the contract. The railway in the mean. time had learned of the valuable resources of this timber district from which Jao Men had obtained the wood. It is reported that the only terms on which Jao Men could reach a settlement for his deliveries were that the timber district be granted to the railway in order that it might complete the contract. Jao Men executed the conveyance and affixed the seal of the Tsitsihar Bureau, but when the paper was taken to the Tartar General at Tsitsihar for approval its legality was denied on the ground that the seal could not be used legally without his sanction in each instance. The Concession was a subject of much contention, but as a large force of Russian soldiers was kept at Tsitsihar the Tartar General realized the wisdom of holding himself in. However, as

soon as the main forces of the Japanese* army had been withdrawn he is reported to have sent a force of Chinese soldiers to the Concession and bodily ousted the timber cutters. He now holds possession,

The Russian Minister is said to take up the position that these Concessions have been granted in good faith, and insists upon their recognition. China's reported position is that they were obtained through connivance with subordinate officials, who placed the seals upon the documents without competent authority, and that, as the Eastern Chinese Railway is not a private but a Government institution, it has no authority in matters of such nature to deal with any one but the Chinese Government at Peking.

The Russian Minister is reported to be pressing these points in order to reach a settlement before the expiration of the evacuation period when the influence of the military force is to be withdrawn, and the Chinese Government is said to have taken a firm stand in refusing to recognize the Concessions. The reported private opinion of prominent Russian officials in Harbin is that nothing short of a resort to arms will induce China to yield, and that Russia is not prepared to take that action.

There are indications that Russia has no intention of disregarding her Treaty obligations regarding the withdrawal of the balance of her troops; this seems to be the general opinion of all, both Russians and Chinese, and the Chinese officials are beginning to show a spirit of independence not only towards the Russians, but in a degree towards all foreigners.

Railway.Contrary to their former policy, the Railway Company seem now disposed to meet in some spirit of friendliness the coming of foreign merchants and capitalists. On the 30th October, 1906, the "Harbin Vestnik," the official organ of the railway, stated the conditions under which foreigners would be permitted to hold leases and reside within the Russian Settlement. The Article translated runs :—~

"Foreigners in Harbin,

"A telegram from the head office of the Eastern Chinese Railway in St. Peters- burgh has recently been received here, stating that foreigners are allowed to lease property on long terms on the Concession belonging to the Eastern Chinese Railway on condition that they shall comply with all rules and regulations made by the said Com. pany as to the payment of taxes, sanitation, police, &c., and that each foreigner shall give a pledge accordingly, which must bear the indorsement of his Consul as a guarantee.

(?) Russian.

name.

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"We are informed that only a few applications have been entered at the Land Office from foreigners, with the exception of numerous Greeks who have long lived here, and all properties owned by them being entered at the Land Office under the names of juridical persons. This telegram now allows them to hold the property in their own

As regards other nationals, not many of them have their representatives." The population within the Settlement is estimated at 95,000, of whom 62,000 are Russians and 33,000 Chinese; the number of Russian railway officials and clerks is given as 5,000, and the number of mechanics and other workmen as 7,000. The total number of Russian residents directly dependent upon the railway is placed at 33,000. These figures do not include soldiers or railway guards. The organization of the Eastern Chinese Railway Company consists of twenty-four departments. The office of General Superintendent is held by Major-General Dimitri L. Horvat; he has two Assistant Superintendents--one for railway affairs, the other for municipal affairs.

The railway guard in Manchuria number about 28,000, and the military railway brigade about 12,000; the military give the number of the latter as 500. These men are regularly enlisted, and consist of skilled mechanics, engineers, &c. Their proper designation would seem to be the Engineering Corps. It is said that the organization of railway guards after the evacuation will consist of 15,000 railway guard and 10,000 military railway brigade, which total will practically be within the Treaty stipulations (1,600 versts of line).

As Harbin is still under martial law, the policing of the town, the telegraph posts, &c., are under the military.

Newspapers.--The more important daily papers published in Harbin are:----

1. The "Harbin," which was started during the first part of 1906. It is owned by a M. Popoff, a rich Russian Jew, who is also its chief editor. Its sub-editor is a Mr. Weber, a naturalized American citizen. Its policy is democratic, and it advocates self-government for Harbin and equal privileges to foreigners. It is opposed to any aggressive policy in the Far East. It is probably the most popular paper published in Harbin,

2. The "Novic Krai," which was published in Port Arthur during the siege, and was subsidized by the Russian Government. Its editor is a former Russian naval officer. The paper is Conservative, and advocates purely Russian interests.

3. The "

Harbin Vestnik," the official organ of the Eastern Chinese Railway Company. Its editor is a subordinate official under General Horvat.

It began publication in 1903. It often publishes very interesting information regarding the commercial and industrial conditions in Manchuria.

4. The "Yunden Pao," owned by the Eastern Chinese Railway Company, and receiving a subsidy from the military authorities. It is published in Chinese, but has a Russian editor. It advocates a progressive policy for China and closer relatious with Russia. There will also soon be published in the same office a Mongol paper, which is to receive a subsidy.

Its policy appears to be

5. The "Golos Manchuria," which has recently started. Liberal. Its circulation is small, and the paper is unimportant.

Commercial-As soon as the main forces were withdrawn trade at Harbin suffered an enormous depression. For two years business had been conducted on the basis of war prices. Evidently the merchants had not given much credence to Russia's intention to evacuate, as they continued to stock up even after the evacuation was well under way. Most of the Russian stores now are stocked to their limit with goods, much of which is now unmarketable in Harbin, or at least the demand is greatly limited. These stocks have been bought chiefly on credit. One merchant alone has a stock of 1,500,000 roubles of underwear and clothing. The meeting of the credits as they have fallen due has drained most of the money out of the hands of the Russian merchants.

Since the commencement of the Manchurian Railway scheme, Russian merchants themselves have made little or no energetic efforts to secure the Chinese trade of North Manchuria. Such efforts as have been made in that line were conducted by the Eastern Chinese Railway and the Russo-Chinese Bank through agents who seem to have lacked foresight and business ability and, in some instances, integrity. The con- sequence is, so far as the Chinese trade is concerned, Russian commercial interests have received practically no benefits from the predominating influence that Russia has held over this portion of Manchuria for the past ten years. The Russian merchants at Harbin have been satisfied with such business as the railway and the army have thrown

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