[This Document is the Property of His Britannic Majesty's Government.]
AFFAIRS OF CHINA.
CONFIDENTIAL.
[19894]
No. 1.
[June 17.1
530
27192
SECTION 30 JUL 07
Sir J. Jordan to Sir Edward Grey.-(Received June 17.)
(No. 210.) Sir,
Peking, May 1, 1907. CONSIDERABLE progress has been made since my despatch No. 169 of the 3rd ultimo was written towards the establishment of custom-houses at Dalny and on the Manchurian frontier, but the question still remains without a definite settlement.
The Customs Commission which sat at Harbin has, I understand, disposed of all the local questions which it was charged to determine, and one of the two points of difference between the Russian Minister and the Wai-wu Pu, that relating to the tree zone of 50 versts, has been settled in favour of Russia.
There remains, however, the question of duties, on which an agreement still seems remote. The Russians, as I explained in the above-mentioned despatch, hold that the two-thirds duty should exempt the goods from taxation during conveyance on the railway and anywhere within railway territory, and that the transit duty of one-third should become operative only when the goods pass out of that territory.
The Chinese, on the other hand, adhere to their original contention and point out that the ground acquired by the railway was not for railway requirements proper, but largely for speculative purposes. At Harbin, for instance, the railway property comprising New Harbin is, it is alleged, some 2 or 3 miles square.
To this the Russians retort that Harbin is a place opened by Treaty, and that the arca marked out by the Chinese for a so-called International Settlement is a swamp some 3 or 4 miles distant from the railway station, and that their proposal is in the interests of the trade of all nations.
It seems to me that the Russian contention is the more reasonable of the two, and Sir R. Hart agrees in that view. The goods which have paid the two-thirds duty under Treaty are entitled to reach consumers of some kind, but the Chinese would debar them from going into consumption at all until they had discharged the full duty.
As regards the Japanese negotiations, Mr. Hayashi informs me that only one or two points remain to be arranged, and that on their settlement the custom-house at Dalny will be opened without waiting for the conclusion of the Russian Agreement. The Arrangement will be a modification of the first Kiaochow Agreement, although it will contain no reference to that instrument, and will be provisional for one year.
The acquisition of a site for the custom-house at Dalny is to be arranged between the Commissioner of Customs, Mr. Kurosawa, and Baron Goto on the latter's return from Japan about the 6th instant.
In two Reports, copies of which I have the honour to transmit herewith, Mr. Fulford makes reference to the junk navigation of the Liao and the question of the land frontier dues on goods passing into China from Corea.
As regards the first, I understand that the Japanese claim the right of trade only between Treaty ports; but as some of the newly opened places are some distance from the river, they evidently anticipate objections on the part of the Chinese.
Sir R. Hart, who was at first inclined to treat Corean overland trade on the footing of the Treaties, was recently instructed to collect full duties pending the conclusion of an Overland Treaty which China is willing to negotiate with Japan as the Power charged with the conduct of Corea's foreign relations.
I have, &c. (Signed) J. N. JORDAN,
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