[This Document is the Property of Bis Data M
AFFAIRS OF CHINA.
CONFIDENTIAL.
[45071]
No. 1.
368
80
421
[December 11.]
INGO JAN 10
SECTION 3.
Sir C. MacDonald to Sir Edward Grey.--(Received December 11.)
(No. 322.)
Tokyo, November 11, 1909. Sir,
WITH reference to my despatch No. 276 of the 22nd September last, I have the honour to enclose a copy of a further despatch from the acting British vice-consul at Dairen relative to the apparent smuggling into Manchuria of goods from the leased territory of Quantung.
Mr. Gordon has gone into the matter carefully, and as a result of his enquiries bas formed the conclusion that, though the charge of smuggling has not been wholly disproved, yet it is impossible that it can have been carried on in the wholesale manner that the statistics in the Customs returns would seem to indicate.
A copy of Mr. Gordon's despatch has been sent to His Majesty's Minister at Peking.
I have, &c.
CLAUDE M. MACDONALD.
*
Inclosure in No. 1.
Acting Vice-Consul Gordon to Sir C. MacDonald,
(No. 55. Confidential.) Sir,
Dairen, October 29, 1909. IN a despatch dated the 1st September last, addressed to His Majesty's Minister at Peking, a copy of which was forwarded to the embassy, His Majesty's consul- general at Mukden drew attention to the disproportion between the imports into the leased territory and those into Manchuria via Dairen, as shown in the Customs returns for 1908, and drew the conclusion that smuggling must have been carried on on a large scale. Special notice was taken of the fact that the imports into Dairen, exclusive of railway material, during 1908 were valued at 13,104,834 taels, of which goods to The statistics the value of only 4,645,079 taels went forward into Manchuria. regarding the principal articles imported for the use of the natives, namely, cotton piece-goods, flour, cigarettes, and sugar, were reviewed, and the deduction drawn that the proportion sent into Manchuria through the Customs was far too small.
In my reply (a copy of A copy of this despatch was sent to me for remarks. which was forwarded in my despatch No. 42 of the 8th September) I stated that, from such enquiries as I had been able to make, I could not but confirm the suspicion I did not think, that smuggling must have been carried on to a large extent. however, that it was the fault of the railway company, and suggested that it would be advisable for an investigation to be made into the working of the Customs.
Owing to my approaching departure on leave and to heavy pressure of other work, I was not able to make such thorough enquiries as I should have liked, but the evidence of the statistics seemed to me to afford a clear proof that smuggling must have been carried on, and, as your Excellency is aware, it is practically impossible to either prove or disprove such charges unless specific cases can be brought forward. Since my return I have gone into the subject rather more closely, and I have the honour to submit the following remarks on the articles specially referred to in Mr. Willis's despatch:
Cotton Piece Goods.-Owing to the general depression of trade in Japan in 1907, and to the active encouragement given to exporters by their Government, Japanese manufacturers sent over to this port during 1908 specially large quantities, being attracted by the glowing reports spread by those who had returned from Manchuria in 1907. The market, however, did not come up to expectation, and consequently the stocks held in Dairen at the end of 1908 were abnormally large, and several dealers failed. With the development of the bean trade and the amount of money thus
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