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[This Document is the Property of His Britannic Majesty's Government.]
noi
AFFAIRS OF CHINA,
CONFIDENTIAL.
654
[July 29.1-
SECTION 1.29968
RECE
\REC 21 AUG 07
[25172]
(No. 278.) Sir,
No. 1.
Sir J. Jordan to Sir Edward Grey. (Received July 29.)
Peking, June 11, 1907. REFERRING to your telegram No. 58 of the 30th May, and my reply No. 97 of the 31st May, I have the honour to report that at an interview which I had with the Wai-wu Pu on the 4th instant, I took an opportunity of inquiring as to the progress of the negotiations with Russia on the subject of the Manchurian custom- houses. M. Pokotilow had, I stated, informed me some days previously that the Chinese Government did not appear anxious to come to an agreement, and naturally Russia could not be expected to be in any hurry to put an end to a situation which enabled her goods to pass duty-free into Manchuria. The Russian contention, as I understood it, was that the two-thirds duty should free the goods from further taxation along the railway and at the various places open to foreign trade within a defined area of the railway property. This view appeared to be reasonable, for it must have been intended by the negotiators of the Agreement of the 8th September, 1896, that the goods which were conceded the reduction of one-third duty should reach some market, and the Chinese interpretation would prevent them from doing so until they had paid the additional transit duty. This would, in effect, nullify the privilege of the one-third reduction. There was a growing tendency everywhere in China to treat the Customs Tariff as conveying a mere right to unload goods from a train or a ship, and as leaving China the liberty to impose what further taxation she pleased. This was a limitation of Treaty rights which all foreign Powers were equally interested in resisting.
The Ministers replied that the chief difficulty in the way of a settlement lay in defining the limits of the railway area, and that they were really anxious to come to a speedy arrangement with the Russian Minister.
I reverted to the question at the Wai-wu Pu this afternoon. It was pointed out to the Grand Secretary Na that the date of the opening of the custom-houses at Dalny only rested upon an understanding between Sir R. Hart and the Japanese Minister, and that if the conclusion of the Russian Agreement was unduly delayed, the Japanese might conceivably make difficulties about opening the customs there on the 1st July. This would reopen the whole question and cause grave complications.
The Grand Secretary assured me that he was fully alive to the importance of arriving at an early settlement, and took credit to himself for having made con- siderable progress during the short time which had elapsed since he took over the conduct of the negotiations from his Excellency Tong Shoa-yi. They had now gone more than half way to the solution of the question, and though he scarcely expected to reach a conclusion by the 1st July, Fet he hoped that it would not be many weeks later.
I have, &c. (Signed) J. N. JORDAN,
[2570 -1]