Sir,
Inclosure in No. 1.
Consul Wilkinson to Sir, J. Jordan.
Newchwang, September 17, 1909. IN accordance with the instructions contained in your despatch of the 9th instant, I have the honour to report on the progress that is being made with the scheme for the improvement of the navigation of the Liao River.
In my intelligence report for June quarter I informed you that the taotai had successfully negotiated with the Hu Pu Bank a loan of 100,000 dollars to meet the cost of the proposed weir at Shuang Tai Tzu. The security for this loan, which bears interest at 7 per cent. and is repayable in six years, is the tax on native boats referred to in my despatch of the 2nd June, from which the taotai hopes to raise at least 15,000 dollars per annum. The loan is also guaranteed by the Viceroy at Mukden, a condition upon which the bank insisted, although his Excellency in exchange has withdrawn his promised contribution towards the expense of the work of 20,000 taels. The amount raised, however, is sufficient to meet the estimated cost, and operations have already been commenced under the superintendence of Mr. Hughes, the consulting engineer of the Mukden Government. It is probable that the weir itself will not be completed until the end of next summer, but Mr. Hughes hopes by means of a temporary dam across the Shuang Tai Tzu outlet to effect a considerable improvement in the channel below it before the close of the present season. The months of October and November are, I should explain, two of the busiest in the year for the river trade, the boats being then engaged in bringing down to Newchwang the new bean harvest. For this reason it is extremely desirable that something, if possible, should be done before the end of the season to improve the channel in question, which, as Mr. Hughes rightly anticipated, has proved this year the most difficult to navigate along the entire course of the Liao.
The construction, however, of the weir at Shuang Tai Tzu, though a measure of urgent necessity, is but the first, and least costly, of the three distinct works advocated by Mr. Hughes for the proper conservancy of the river. The second of these works is the amelioration of the whole river between Tung Chiang Tzu, the present limit of navigation for junks, and Newchwang. The third is the protection of this port from the danger of the river breaking through the narrow neck of land between Duck Island and the harbour, the result of which would be to ruin the present anchorage, render the existing wharves useless, and probably flood the town. There is a fourth work, too, of which Mr. Hughes makes no mention, but which, if it could be successfully accomplished, would be as beneficial to the port as the other three. I refer to the deepening of the bar at the mouth of the river so as to enable vessels drawing, say, 26 feet of water to come up to Newchwang. At present the depth of water on the bar varies, according to the season, from 18 to 22 feet, which is, unfortunately, not enough for the average ocean-going steamer as distinguished from the coaster, and so places the port at a great disadvantage in the European trade as compared with its chief rival, Dalny,
The cost of improving the navigation of the whole river between Tung Chiang Tzu and Newchwang, if properly carried out, which would mean not only deepening the present shallow, but also narrowing the stream where its width is too great, confining it to one course, where it now divides into two or more, and straightening it where its bends are too abrupt, Mr. Hughes estimates at well over 1,000,000 dollars. As he believes this sum to be prohibitive, he suggests as an alternative scheme the employment of dredgers of large capacity, which can be moved from place to place to remove such obstacles to navigation as have formed or may form in the future. To purchase these dredgers a sum, according to his estimate, of 150,000 dollars will be required, and the annual working expenses will be about 30,000 dollars. For the work at Duck Island he accepts M. de Rijke's estimate of 160,000 dollars. What the cost of deepening the bar will amount to it is impossible to say. It will certainly not be
inconsiderable.
To meet the cost of these various works, all of which are of vital importance to the prosperity of Newchwang, but for which at the lowest estimate 500,000 dollars will be needed, the 100,000 dollars raised by the taotai for the construction of the Shuang Tai Tzu weir are the only funds as yet available. The question which has therefore arisen is, how is the balance required to be provided? The solution which naturally suggests itself is that the money should be furnished by the Provincial or even the
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Central Government, for the river is a national asset which it would be almost criminal to neglect, but, as the taotai points out in the enclosed despatch on the subject, which he has addressed to the consuls at this port, the finances of Manchuria are at the present time in so impoverished a state that it is hopeless to expect any allocation of public funds for the purpose, and he holds out no hope of assistance from the Central Government. The only alternative that suggests itself to him is the adoption at Newchwang of a scheme on the same lines as the Haiho Conservancy scheme at Tien-tsin, by which the money can be raised by a tax of so much per mille on the value of the cargo of all vessels entering the port, and of so much per ton on their registered tonnage.
A meeting of the consular body to discuss the taotai's proposals was held here ou the 14th August, at which the opinion generally expressed was that, rather than that the work should not be carried out at all, it was better to agree to some tax on the trade of the port, but that the tax should be as light a one as possible, as otherwise its effect would be to drive trade to Dalny, which it was the very object of the conservancy works in contemplation to prevent. The only dissentient from this view was the Japanese consul, who stated that his nationals would not hear of any tax on It was finally decided, at my suggestion, the trade to assist a scheme of this nature. that a second meeting should be held, at which the representatives of the foreign and Japanese chambers of commerce should be invited to attend and express their views in person.
The meeting was held, but no representative from the Japanese chamber put in an appearance, the Japanese consul explaining that he was empowered on their behalf to state that they objected in toto to the taotai's proposals, but were willing to consider a scheme for an increase in the pilotage fees, the proceeds to be devoted to the deepening of the bar. The representatives of the foreign chamber, being then asked for their views, expressed very much the same opinion as that of the majority of the consuls at our first meeting, namely, that it was better to pay rather than have nothing done at all, but that the taxes imposed should be moderate, and that, before agreeing to them, every effort should be made to impress upon the Chinese Government the wisdom of bearing the entire cost themselves rather than risk a diversion of the trade to other ports. Since then the committees of the two chambers have met privately to discuss the question without, however, arriving at any understanding.
Two reasons were given by the Japanese for refusing to agree to any taxation of the trade of the port-one, the very excellent one that it would divert trade to Dalny; the other, that the conservancy of the upper river was unnecessary, seeing that the railways now provided an excellent alternative means of communica- tion. They were willing, however, that the profits of the pilotage scheme referred to by the consul should be devoted in the second place to the improvement of the river. This scheme, which I cannot believe to have been seriously meant, was that pilotage should be made compulsory, the number of pilots increased and fixed Salarics paid them, and the fees for pilotage raised to whatever extent was necessary to provide the funds required. This would mean, as Messrs. Butterfield and Swire's agent here pointed out to me, that their regular steamers would each have to pay something like 300 taels per trip, a charge which would more than swallow up their profits in fact, no better method of driving trade and shipping away from the port altogether could possibly be devised.
The consular body is now waiting for a report from the foreign chamber of commerce of the result of their meeting with the Japanesc, and also for an expression in writing of their views as to the extent to which the trade of the port might bear taxation. As soon as this is received a further meeting will be held, at which in all probability it will be decided that each consul shall address his Minister separately, recommending the taotai's proposals, as modified by the chamber, to his favourable consideration. The chamber of commerce will, I believe, recommend a maximum tax of 1 per mille on the value of all exports and imports, and a tax of 24 candareens per ton on the registered tonnage of all vessels entering the port; and, to meet the views of the Japanese, which are also in this respect their own, they will ask that the deepening of the bar be included amongst the works to be taken in hand. The amount that will be raised annually from these taxes, if they should ever be agreed to, will not be less that 50,000 tnels, for the value of the trade last year was 53,300,000 taels, and the tonnage entered 531,000 tons, in addition to which some 7,500 sea-going junks also visited the port; but, in any case, it will not be sufficient to provide the full amount required to carry out the whole work effectively. The ideal
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