The Wai-wu Pu have the honour to observe that the objects of the Chinese Government in extending the North China Railway from Hsinmintun to Fakumen are to augment the facilities for communication in that region and to increase the revenues of the North China Railway. The South Manchurian Railway is not affected in the slightest; the extension is not a parallel trunk line, nor a branch line which would damage the interests of the South Manchurian Railway, and its distance from that railway is not less than is customary and general in the case of railways in Europe and America. This Board received various communications to the above effect from the high authorities of Manchuria and the Board of Communications in the course of October and November last year.
Your Excellency, in quoting the records of the Conference and stating that China is disregarding a Treaty engagement and taking action which is injurious to the interests of the South Manchurian Railway, is not aware that at the time this engagement was concluded by the Japanese and Chinese Plenipotentiaries the latter considered that the meaning of the word "parallel" was too wide, and that the distance in miles should be definitely stated within which a parallel line could not be built. To this the Japanese Plenipotentiary objected that if the number of miles was fixed it would look to other countries as if the intention was to restrict Chinese railway enterprise. Then he was requested to agree that the distance should be stated to be such as was general in Europe and America, and he again objected that this was unnecessary, as there was no uniform general rule. Moreover, the Japanese Plenipotentiary declared that Japan would in no case oppose any future steps taken by China for the extension of communications in Manchuria. These statements were made in all sincerity and under circumstances when the relations between the two countries were of the friendliest, and must, of course, be observed on both sides.
There is no more important means for extending communications in a country than the construction of railways. The Fakumen line is far from the South Manchurian Railway, and cannot really be considered a parallel line in the neighbourhood of that railway. As for damaging the interests of the South Manchurian Trunk Railway, not only is this not so, but those interests will profit, for the more branch lines there are the greater the traffic of a trunk line. The relation of the Kirin-Chang-ch'un line to the South Manchurian Railway is the same as that of the Fakumen line.
Again, the Fakumen line connects directly with the Imperial Railways of North China, and those communicate with the seaports of Newchwang and Tien-tsin, which are both ice-bound in winter. The South Manchurian Railway connects directly with Dairen, which is an ice-free port, and the greater proportion of the produce exported will take advantage of the more convenient route of the South Manchurian Railway, direct to Dairen. If the Mongol territory west of Fakumen is penetrated by a railway, communication will be facilitated and business stimulated, and the traffic of the South Manchurian Railway must increase pari passu. Of the foregoing statements ample and trustworthy evidence is obtainable, and it is clear that any real endeavour of China towards the important reform of increasing the means of communication must begin with the extension of railways. But the South Manchurian Railway Company takes no steps to inquire into these matters, and merely insists that the Fakumen line will damage their interests, with the result that Japan is opposing the efforts of China to improve communications in her own territory. That is not a situation which the Chinese Government had any reason to anticipate.
We have the honour to request your Excellency to be so good as to place the considerations urged above—that in building the proposed Fakumen line China's desire is to increase the means of communication in her own territory, and in no way to injure the interests of the South Manchurian Railway—before the Japanese Government, and avail, &c.
[This Document is the Property of His Britannic Majesty's Government.]
CHINA RAILWAYS.
CONFIDENTIAL.
[June 29.]
SECTION 6.
[22277]
No. 1,
Sir J. Jordan to Sir Edward Grey.—(Received June 29.)
(No. 209.) Sir,
Peking, May 11, 1908. WITH reference to your despatch No. 131 of the 9th March, transmitting a copy of a private letter from Mr. Gundry, President of the China Association, on the subject of discrimination in railway freight rates in Manchuria, I have the honour to state that regulations concerning the allowance of rebates to persons who pay annually over a certain amount of freight were issued by the South Manchuria Railway Company towards the end of September, and came into force on the 1st October, 1907. By these regulations rebates do not commence until the amount of freight exceeds 100,000 yen. Under 150,000 yen the rebate is 3 per cent., and increases by 1 per cent. on every additional 50,000 yen of freight up to 500,000 yen, and when the latter sum is reached or exceeded the rebate remains fixed at 7 per cent.
As no distinction is made in regard to the nationality of the owner or to the provenance of the goods, there would appear to be no valid grounds for objecting to the regulations, while the actual volume of trade in Manchuria scarcely warrants the apprehension that British trade will be adversely affected by the system of rebates in its present shape.
I may add that every care is being taken to safeguard British interests against any attempt at discrimination in favour of Japanese merchants or goods. I have, &c. (Signed) J. N. JORDAN.
[1814-6]
96