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and successfully resisted, payment, the Governor has introduced the system of taxation known as "t'ung-shui," or consolidated provincial dues, on payment of which the goods are thereafter freed from further taxation throughout the province, the object being to mulet the goods before they pass into foreign hands.
The custom-houses at Manchuli and Pogranitchnaia are not yet functioning for reasons already stated, and I was informed by M. Konovaloff, the Commissioner of Customs at Harbin, that as the result of inquiries made by him the internal taxation of foreign goods in that part of the Kirin Province amounted to 10 per cent. ad valorem. Duty-paid goods which have entered Manchuria through its sea-board ports are not taxed in the inland marts so long as they remain under foreign control. That they are liable to a consumption tax in Chinese hands is evident from the fact that the Consuls at Mukden have found it necessary to protect a Chinese storekeeper against the tax-gatherer by issuing certificates that the goods sold by him are of foreign origin, and this has saved him from further molestation.
Life and property are still insecure. Chinese highway robbers (usually called "hung hu tzu") have always been rampant in the Kirin Province; but the "hung hu tzu" are not all Chinese. While the Russian and Japanese armies have evacuated Manchuria, they have left behind them the scum of Europe, such as Greeks and Caucasians, who find a living by violence and plunder. In the city of K'uan-ch'eng-tzu the doors of all the large caravanserais where goods are stored are plated with iron as if to withstand a siege, shops are all shut at dusk, the road of 23 miles between the railway station and the city is unsafe after nightfall, and even during the day passengers have been attacked and robbed. Two consignments of silver going south from Kuan-cheng-tzu were recently carried off. The Manager of the Russo-Chinese Bank when he visits the Russian community at the Russian railway station of an evening rarely returns without an armed escort. In spite of the Russian police maintained by the Chinese Eastern Railway within the Railway Settlement at Harbin, cases of armed robbery are of almost nightly occurrence in the town, and visitors are warned against going out after dark. If such things take place in towns where there is a certain amount of protection, it can easily be imagined that where protection is altogether wanting a similar, if not a worse, condition of affairs exists.
The delay in the settlement of outstanding questions between China and Japan in Manchuria, such as the timber question on the Yalu, the transfer of telegraph lines and Government property to China, and the claims of the Japanese to fishing and mining rights and to export salt from the Kuantung territory to Manchuria causes a feeling of uneasiness which reacts on trade.
Over trading, inflated prices, disorganized currency, ill-regulated and excessive taxation, insecurity of life and property, and delay in the settlement of certain international questions resulting from the war account for the present unsatisfactory condition of trade in Manchuria.
The Missing Millions.
Everything points to the fact that a considerable portion of the money spent in Manchuria during the war still remains in the country, and the high prices ruling make its continuance there necessary until drop occurs. As a simple instance, I may mention that the hire of a "jinricksha" is 100 per cent. more than one would care to pay anywhere else in China. There can be no doubt that Russia expended in Manchuria proportionately far more than Japan. The former drew supplies of cattle from Mongolia and the Buriat country, where the prices realized are now hoarded, and wheat from the Kirin and Hei-lung-chiang Provinces, and, in fact, spent money foolishly and wantonly, whereas Japan's commissariat stores, even to fodder, were largely supplied by herself. There are rouble millionaires in Harbin, but, on the other hand, there are millions of roubles sunk in what is under present conditions unrealizable property. Unfortunately, money left in the country is being drained to Japan by Japanese women at the rate of several million yen a-year, and does not find its way into legitimate trade channels in Manchuria.
I may add, in conclusion, that, from my own experience, I can fully indorse and justify the hostile criticisms which every thinking man in Manchuria makes and freely expresses regarding Japan's high-handed policy. China's weakness and Japan's selfishness and arrogance are swiftly undermining the interests of all other Powers in that part of the Chinese Empire.
ALEX. HOSIE.
Peking, November 14, 1907.
(Signed)
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Inclosure 2 in No. 1.
Plan of the Town and Harbour of Tairen.
[Not printed.]
Inclosure 3 in No. 1.
Map of Antung.
[Not printed.]
Q
456