I understand that the market for woollen cloth is quite promising, and that Indian yarns have a better sale than any others over the whole province. Fancy and miscellaneous goods are for the most part German or Japanese, and the same, I believe, is the case with the cheaper forms of farming implements. Though I do not wish to speak dogmatically, it seems to me that the demand for foreign goods generally must improve as the north and north-eastern parts of the province are gradually brought into touch with the outer world. I would therefore ask if it is not possible for the north Manchurian markets to be made the subject of careful investigation by experts under the auspices of some representative body like the China Association. It is obvious that with the best intentions in the world the ordinary Consular officer has not the technical training necessary to determine with real accuracy the latent possibilities of these new markets. And, as "God helps those who help themselves," it would be more to the point if British merchants laid aside their methods of verbal complaint against their Japanese rivals in favour of the more practical system of endeavouring to forestall their ambitious designs.
In connection with the railway Settlements, I should state that of those I saw the most promising was Tiehling. Though the work of construction here was only commencing, there was an air of comparative prosperity about the place which promised well for the future. This is easily intelligible because Tiehling is an important centre for the bean and bean-cake trade, and at the same time a port of shipment on the Liao for merchandise destined for Newchwang.
Careful and systematic plans have been drawn up of all the Settlements along the line, and there is no doubt in my mind that these places will, when they are completed, by the mere force of their respectable organization attract merchants both Chinese and Japanese to reside within their borders. Trade will naturally follow suit.
Kharbin.
Kharbin is full of an air of despondency. The trade, such as it is, appears from inquiries I made to be mainly in the hands of the Jews and the Germans, with whom the Russian, who is a child in business matters and fated for years to be exploited by others, cannot hope to compete. It has frequently, if I recollect rightly, been stated that Kharbin's prosperity depended entirely on the recent war, and perhaps from the Russian point of view this is correct. This dictum does not, however, take into account the fact that of far more importance than the trade just alluded to, which is a parasitical one of Russian preying on Russian—an exact counterpart of what is happening to-day on a smaller scale in the Japanese railway Settlements—is that with the Chinese. This, by reason of Kharbin's situation within the wheat-belt and on a broad and navigable river, the Sungari, seems likely to become full of promise when the period of depression and despondency succeeding the war passes away. It is difficult, nevertheless, to anticipate what share will fall to the British merchant.
The United States' Consul, of whom I made inquiries generally, told me that there was quite a respectable demand for British woollen articles, which came apparently by way of Newchwang or Vladivostock. He could not, however, instance any other English-made goods for which there was any sale. Nor were there any British subjects in the town. There was no room, in his opinion, for a foreign bank at present. Any business going was willingly taken up by the Russo-Chinese Bank. Mr. Kawakami, the Japanese Consul-General, was even stronger on the same subject. According to him, the Siberian Commercial Bank had endeavoured to open a branch in the town, but had been warned off because the place was regarded as a preserve of the other institution. I think this is probably the reason why the Yokohama Specie Bank, which has branches as far north as Kwanchengtzu, has not yet put in an appearance at Kharbin.
The United States' Consul was very anxious to persuade me of the necessity of establishing a British Consular officer at this place, asserting that if this were not done we should find too late that our share of the trade had been captured by the Germans. I take it, however, that his anxiety was really mainly prompted by his desire to have someone to back him in his attitude against the Chinese Eastern Railway. The uses of the stalking-horse are quite familiar to both Americans and Germans in the Far East.
The other Powers represented at Kharbin are Russia, by a Consul-General; Belgium, by a Consul; France, by a Consular Agent; and Spain, by a Commercial Attaché. It is also reported that a German Consulate is shortly to be opened.
Considered from the point of view of actual existing trade interests, it does not appear to me that the presence of a British Consular officer in Kharbin is immediately necessary; on the other hand, the political situation is such that it may in the near future become highly desirable, for the safeguarding of British interests, that His Majesty's Government be represented on the spot. Signs are not wanting of Japan's desire to effect a rapprochement with Russia, and though it by no means follows that the consummation of such an object would necessarily be attended with disadvantage to ourselves, it nevertheless appears to me distinctly desirable that the actions of the two Powers in the north of Manchuria should not be allowed to pass disregarded. I can think of no locality more suitable for purposes of scrutiny or the acquisition of intelligence than Kharbin, and for these reasons only would I recommend that the establishment of a Consular officer at Kharbin be taken into serious consideration. Pending the decision of His Majesty's Government in the matter, I would suggest that British interests in the town be confided to the care of His Majesty's Consul-General at Mukden.
In addition to Kharbin, there is another trade-mart in Manchuria which seems to me worthy of attention. This is Kirin, which is presently to be linked by a branch line to the South Manchuria Railway's system. There is no reason why at this place, which lies in one of the most fertile districts of Manchuria, promising openings should not be found for British trade. I would therefore recommend that it be made the subject of investigation when the railway linking it with Changchun is completed.
Finally, I would beg leave to submit the following suggestions for the consideration of His Majesty's Government:
1. That an Assistant from the Japan Consular Service be attached to His Majesty's Consulate-General at Mukden, to enable the officer in charge of that post to keep in close touch with the Japanese. On this suggestion I wish to lay some emphasis. Mukden is the senior Japanese Consular post along the line, and to it all the other Consulates report. It is also, next to Dairen, the most important of the Railway Company's offices. It is, finally, the Chinese seat of government in this part of Manchuria, and consequently the place to which every question affecting the Japanese throughout the province must at some time or other be referred. For His Majesty's Consul-General at Mukden to form a correct opinion of questions concerning Chinese and Japanese, or Japanese and foreigners, he should have an accurate knowledge not only of the Chinese language and ways of thought, but also of the Japanese. This, under present circumstances, is an impossibility. Yet if he does not possess this knowledge, he is unable to form a correct estimate of the reasons and objects directing Japanese action, or to obtain full and correct information on matters concerning Japanese policy, railway or political. Mukden is a city which appears to me to be almost as important from a Japanese point of view as from a Chinese, and for His Majesty's Consul-General to be in a position to report authoritatively on both, it seems to me distinctly necessary that he should receive assistance from the Japan establishment. I would therefore, subject naturally to the approval of His Majesty's Minister at Peking, and His Majesty's Consul-General at Mukden, strongly recommend that an assistant be selected from the Japan service for temporary service in the Consulate-General at the latter place, and that the appointment depend solely on qualifications, and not on seniority;
2. That, even at the risk of overlapping, His Majesty's Vice-Consul be authorized to report on any question in Manchuria in which the Japanese are concerned. It will be remembered that the limit of his jurisdiction is the frontier of the leased territory. I do not think it is necessary to advance reasons in support of this proposal, but if considered necessary they will be forthcoming;
3. That, as I suggested in a private letter to His Majesty's Embassy in Tokyo last year, copies of despatches of general interest be exchanged between the Consulates in Manchuria; or
4. That, if this be found impossible in practice, they be supplied with copies of the print when it refers to Manchuria.
I venture to offer these suggestions because it appears to me that their practical realization would result in the increased usefulness to the public service of the officers concerned. It is obvious that in the open markets of Manchuria, every one of which is a piece of China and a piece of Japan, questions in which the latter are concerned cannot be treated as isolated and independent, but as a part of a whole.
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