This Document is the Property of His Britannic Majesty's Government.
28381
Rece JE 4 AUG 08, [May 7.]
378
AFFAIRS OF CHINA.
CONFIDENTIAL.
[15751]
No. 1.
SECTION 4,
Mr. Babington Smith to Sir Edward Grey.-(Received May 7.)
(Telegraphic.) P.
THE information that the main points in the dispute in regard to the telegraphs in South Manchuria has been conceded by Japan is confirmed by Decsing. He states that they have offered to conclude a Convention with China, in regard to the telegraphs of South Manchuria, on lines similar to the Agreement for North Manchuria come to with Russia.
The following conditions will be accepted by Japan :----
1. To accept limitations of through traffic similar to those accepted by Russia.
2. To pay royalty on all traffic to China.
3. To agree to suitable conditions for working Dalny-Chefoo cable for local traffic.
4. Except stations in a few towns, open to foreign trade and immediately adjacent to the railway, and those on the railway, to close all stations in Manchuria.
These terms are according to the advice which Sir C. MacDonald was instructed to give, and appear reasonable; China, however, objects to maintenance at towns adjacent to the railway of Japanese stations, and now declines. About twenty stations would be closed, and these stations are only six or seven in number.
The arrangement is strongly favoured by the Great Northern and Eastern Companies. They fear that if it is not concluded, when notice expires in November Russia will cancel her Agreement, it would appear desirable that pressure should be brought to bear on China to accept, as such a cancellation on the part of Russia would be much to be deprecated.
It is very improbable that Japan will make any further concessions. Although details can be negotiated by Japanese Delegates here, Decsing cannot proceed unless authorized by China.
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