[This Document is the Property of Flis Britannic Majesty's Government:1
2
diverted to other purposes. It is now therefore necessary to draw the required revenue from other sources. This is particularly difficult in a year when the resources of the Treasury are particularly low, and the needs of the country correspondingly great. Appropriations for the army and the navy are the most pressing needs, but in addition there is the expenditure incidental to the reform movement as well as to other most In the present important measures, from none of which is it possible to divert funds. year there are also extraordinary items of expenditure, such as the erection of His Majesty the late Emperor's mausoleum, the raising of the new guard regiments, military expansion in Yünnan, the opening of trade-marts at Kirin and Chang-ch'un-- items amounting in all to well over 12,000,000 taels. There is already grave danger therefore of supply not being equal to demand, and there is certainly no surplus in the Treasury from which to draw so large a sum.
In view, however, of the grave importance of naval requirements to the expansion of the country, and in pursuance of the desire of the throne to strengthen the fighting forces of the country, in our capacity as at the head of the finances of the Empire, we felt it our duty to examine thoroughly the resources of the entire country. Since we realise, however, that these are in a precarious condition in every district, we consider that efforts should be confined for the present to laying the ground-work of a navy, and no attempt can be made to form an efficient fighting unit.
Upon a minute consideration of all possible sources of supply, we have resolved that on repayment by the Board of Communications of Kuei Ping 5,000,000 tails, borrowed from the Treasury by that Board for the redemption of the Peking-Hankow Railway and repayable between the years 1911-1915, the whole shall be devoted to naval purposes.
As regards the viceroys and governors of the various provinces, to whom we sent instructions to make contributions in accordance with the sums named and the times fixed in the original memorial of the naval commissioners, the substance of their replies is as follows:-
Yünnan, Kueichow, Kausu, and the New Dominion plead their position as frontier provinces and their poverty as excuses for making no contribution whatever. The remaining eighteen provinces promise contributions towards the initial expenditure required to a total amount of 11,340,000 taels, with an annual subsidy of 1,680,000 taels. A detailed list of these contributions is set out in the attached memorandum.*
The sum required for naval purposes a large one. In addition, the time given for its collection is not wide. The provinces have offered their help, but the contri- butions still fall short of the sums mentioned in the original memorial. There is no question but that the finances of the country, both with the Central Government and in the provinces, are in a very weak condition; the surplus in the Treasury is completely exhausted; in the provinces, whatever methods were adopted to raise the shortage, no scraping or paring could achieve the desired result. Again, in the telegrams sent to our board from the various provincial Governments, with the exception of Hunan and Honan, no source of revenue is earmarked for this naval contribution; the remaining Governments ask that more time be given them, either to raise their contribution or to devise some means for diverting moneys used for other objects to this purpose. Though expressing their utmost readiness to make any contribution possible, they at the same time fully recognise the many difficulties that beset their path. Any sums now lying in the provincial and customs treasuries are already fully earmarked for the upkeep of the army or for other essential and national requirements, and cannot in any way be diverted for this purpose, under risk of causing delay and friction in the whole machinery of government.
It is our humble opinion that orders should be given by the Throne to the naval commissioners to reconsider their programme, and to accept the fact that the contri- butions promised are all that can now be obtained. They should select the items on that programme which they consider the most necessary, and carry them out as far as funds will allow, on the principle that every foot gained brings them nearer the completion of their object. We, ou our side will take every possible step to ensure the amounts promised being paid punctually by the provinces concerned into the treasury, where they will lie at the disposal of the commissioners. A similar procedure will be adopted with the loan funds, now in the hands of the board of communications, as they fall due.
Appended is a complete list of funds at our disposal, and of amounts promised by each of the provinces.*
* Not printed.
[B]
AFFAIRS OF CHINA.
CONFIDENTIAL.
[41854]
No. 1.
2 DEC 09
DECUS!
[November 15.]
SECTION 2.
186
Sir J. Jordan to Sir Edward Grey.-(Received November 15.) (No. 390.) Sir,
Peking, October 25, 1909. I HAVE the honour to transmit herewith copy of a despatch from His Majesty's acting consul-general at Mukden, describing the attempt which is being made in Manchuria to introduce a boycott of Japanese goods as a retaliation for Japanese action in commencing the reconstruction of the Antung-Mukden Railway without awaiting the approval of the Chiuese Government.
The movement is unlikely to assume serious proportions, but the fact that it has heen made at all has a far-reaching significance. Manchuria is mainly inhabited by an immigrant population, amongst whom the guild system is far less effectively organised than in the central and southern regions of the Empire, and the Japanese are especially fortunate in having been able to select such a region for the enforce- ment of a strong line of policy. Had the scene being laid elsewhere in China, it is safe to assume that the experience which followed the "Tatsu Maru" incident would have been repeated.
I have, &c.
Inclosure in No. 1.
Acting Consul-General Willis to Sir J. Jordan.
J. N. JORDAN.
(No. 55.) Sir,
Mukden, October 23, 1909. THERE can be little doubt but that since the decision of the Japanese Govern- ment early in August last to commence the reconstruction of the Antung-Mukden line without awaiting the conclusion of the negotiations, there has been a gradual recrudescence of anti-Japanese feeling in Manchuria. It is of course well known that the high provincial authorities strongly disapprove of the terms of the China- Japan Manchurian convention recently concluded at Peking, and under the circum- stances it was only to be expected that an attempt would be made to introduce an anti-Japanese boycott.
During the past six weeks Mukden has been placarded with proclamations urging a strict boycott; Japanese policy in Manchuria, especially with reference to the Antung-Mukden Railway and the Chien-tao question, is denounced in the most virulent invective, and Chinese merchants who deal in Japanese goods are branded as traitors to their country, and described as little better than animals.
"
The proclamations are signed Manchurian Japanese Boycott Society
or " The Peoples' Society," the organisation of which bodies is generally attributed to Cantonese students.
As a result of the representations of Mr. Koike, the Japanese consul-general, official proclamations forbidding the boycott have recently been issued by the Com- missioner of the Education Department, the Commissioner of the Interior, and the taotai in charge of the Board of Agriculture, Industry, and Commerce.
In Mukden itself the boycott up to the present seems to be a somewhat half- hearted affair, although Major Sato, the director of South Manchurian Railway affairs at Mukden, recently informed me that it was causing considerable incon- venience. At Antung, Mr. Savage informs me, a determined attempt to promulgate the boycott was started by emissaries from Mukden; but the commercial relations between Japanese and Chinese at that port are so intricately connected that the boycott society has met so far with but little success.
It is reported, however, that in Kirin province the feeling is much stronger, and it would seem that the strenuous efforts that are being made by the provincial authorities to obtain control of the bean trade are prompted largely by a desire to thwart Japanese enterprise.
I have, &c.
ROBERT WILLIS.
SC
Jum
[2495 p-2]