370
421
[December 14].
SECTION 1.
JAN 10
maritime Customs office at Dairen"" as including the appended rules to the tariff. It would be advisable therefore to insert in the article the phrase "and the appended rules thereto" after the word "tariff."
The third clause in article 1 of the provisional regulations reads:
Foreign goods imported from a Chinese treaty port, if consumed in the leased territory, or re-exported from the leased territory, and when they are accompanied by duty-paid certificates, are entitled to drawback at the port of duty payment."
This is evidently at variance with article 9 of the agreement :
"For Japanese and other non-Chinese merchandise, on being shipped to Dairen from a Chinese treaty port, the import duty paid at the latter port shall be refunded by drawback according to treaty stipulations."
Mr. Tachibana closes his report by saying that he desires a fundamental change in the position of the Customs, and that he does not propose to enter into detailed points relating to desirable alterations in the agreement or the provisional regulations.
Upon reviewing the whole situation, I think that the following conclusions will be reached:
1. That sufficient answer has been made to the charge of wholesale smuggling to prove that it is impossible for this to have been carried on to the extent that the statistics in the Customs returns would seem to indicate, but that the charge has not been wholly disproved. I am sure that smuggling is carried on to a certain extent, but whether it can be prevented is another matter. It might be to the advantage of the Chinese authorities to keep a close watch on junks arriving from the leased territory at Fuchow and Kaiping in the Liaotung Peninsula and Chinchow-fu in the
Liao-hsi district.
2. That such smuggling as is carried on is not connived at by the South Manchurian Railway Company or the Japanese authorities in any way.
3. That goods produced in the leased territory ought not to be allowed into the interior without payment of duty. I imagine that as regards the cement of the Onoda Company, this is done on purpose to compete with the Tongshan works. While the latter, however, have to pay a yearly sum in lieu of h-kin charges, not only are the former able to import all their materials free of any import duty, but their produce may circulate in the interior without paying any charges whatever. As has been pointed out before, it will be execedingly difficult for the Chinese authorities to collect any duty on goods passing out of the various railway settlements. This will also apply to other goods manufactured here, and it is quite possible that in the course of a few years this place may become a considerable manufacturing centre.
4. Better methods should be employed for the discovery of the proper quantity and value of the goods imported into Dairen. There appears to be some leakage in the offices regarding imports, as by joining a certain news agency, it is possible to learn exact particulars of all the cargo brought in the day previously. Many importers probably wilfully mis-state the nature of their cargo to prevent their rivals knowing what has been brought in. I understand that the leakage is in the wharf
cffe.
5. With regard to the commissioner of Customs' recommendations, I do not think it likely that the Japanese authorities can be induced to abolish the free area. It seems only fair, however, that the commissioner should be enabled to confiscate goods and impose fines in the same manner as in the treaty ports.
There seems to be a general idea abroad that foreign merchants are still being discriminated against in places where the Japanese have control. My experience during the past fourteen months is that this is not the case.
As this dispatch contains the gist of the private report of the commissioner of Customs, I have the honour to request that it may be treated as confidential.
I have, &c.
E. L. S. GORDON.
0
[This Document is the Property of His Britanic Majesty's Govern
AFFAIRS OF CHINA.
CONFIDENTIAL.
[45361]
(No. 647.)
Sir,
No. 1.
Sir A. Nicolson to Sir Edward Grey.--(Received December 14.)
St. Petersburgh, December 10, 1909. I HAVE the honour to transmit herewith summary of an article which has appeared in to-day's issue of the "Novoe Vremya on the subject of the protest by China against the Harbin convention,
I have, &c.
"
Inclosure in No. 1.
A. NICOLSON.
Précis of Article in the "Novoe Vremya" of December 10, 1909.
THE Eastern Chinese Railway exists apparently chiefly for the purpose of draining the State Treasury and for the creation of endless diplomatic tangles. By the treaty of 1896 the rights of the railway were quite clearly and precisely defined. Both the company and the Chinese authorities thoroughly understood the position and all practical questions which arose were decided on the basis of the treaty. This was the position of affairs till the end of last year when some well-meaning hand interfered. The misunderstandings which arose with Chinese merchants residing in Harbin led to the closing of their trading establishments; in this connection it would have paid the company to have insisted on their legal rights, and it is regrettable that it should have been found necessary to have recourse to diplomatic representations. The Russian Minister in Peking, without sufficient reason, played too active a part in the negotiations respecting an alteration in that part of the treaty which gave the company exclusive rights of administration within the radius of the alienated land. As a result the convention of this year was signed between the company and the Chinese Government. The new agreement materially reduces the powers granted to the company by the treaty of 1896. Blame must attach to the Russian Minister in Peking for having signed such a document. Until this new agreement was concluded --an agreement which places all foreigners under the Chinese authorities--foreigners, "with the exception, of course, of Germans and Americans," lived quietly and obeyed the regulations legally established by the company. Of course, foreigners will not consent to live under these new conditions, though at the same time they are quite ready to take advantage of the clauses in the Russo-Chinese agreement of this year in so far as they increase the rights of foreigners.
A contrast between the present state of affairs at Harbin with the conditions prevailing previous to the signature of this last agreement is very much in favour of the latter. By her protest China has rendered this new instrument invalid and the position reverts to that existing under the treaty of 1896; and if any questions of administration arise in the alienated area, they should be decided without considering this last agreement, the validity of which is disputed by China and by third parties alike. There is only one thing, however, of which we are afraid, and that is Russian diplomatic methods. Russia is not claiming any new possessions, but she should and she must defend her existing rights from all attacks. Those who are directly connected with the negotiations must not forget that every international agreement is a legal act in which the force and extent of real and moral obligations must be taken into consideration. Those who do not understand this had better desist from diplomatic action, the significance of which they are often unable to foresee. The Chinese Government dispute the validity of this new agreement and we may be thankful for it; a fresh agreement, the necessity of which cannot be denied, will be drawn up by more experienced hands.
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