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described as "loti shui" on goods forwarded by rail to Nanking, and though it is true the amount illegally levied in the instance in question, together with a sum levied on a subsequent consignment of goods sent by rail to Nanking under exemption certificate, was refunded to the company, this act of reparation was entirely due to the energetic representations of His Majesty's consul-general at Shanghae. One of the reasons given by His Majesty's consul at Newchwang for the marked decline in the prosperity of that once important post is the heavy hi-kin charges to which cargo conveyed by the Chinese railway is subjected at Koupang-tse; these charges, he states, are killing the trade on the Newchwang line to the benefit of the South Manchurian Railway; and he points out how important it is to the future of Newchwang that her trade should be free from any form of fiscal oppression, which the trade by her rival routes is able to escape.
His Majesty's Government regard the fulfilment by China of the engagements given by ber to this country in the commercial treaty of 1902 as an express condition precedent to the assent of His Majesty's Government to an increase of customs dues. if China desires to explain and discuss the steps she proposes to take to carry out these engagements, they will, however, be happy to join in such a discussion with the view of facilitating an agreement about the increase of customs dues, though I am of opinion that satisfactory guarantees for the fulfilment of these engagements should first be secured.
There would possibly be no objection to an increased tariff coming into operation at a fixed period, viz., six months, after the Powers were satisfied with the steps taken to to carry out the engagements above described, but it must not be forgotten in this con- nection that increased duties can only be levied if and when all the treaty Powers give their assent to such increase; and I have no information to show that either France, Germany, or Russia are willing to come to an agreement with China on this point. If, however, you are in possession of more recent information tending to show that these Powers are no longer averse from an increase of the duties, I should be glad if you would let me know.
I have the honour to request you to bring the above considerations to the notice of your Government,
I have, &c.
E. GREY.
[This Document is the Property of His Britannic Majesty's Government.]
Rece Rrof 28 JAN 10
[B]
CHINA RAILWAYS.
CONFIDENTIAL.
[45781]
Your Excellency,
No. 1.
Sir Edward Grey to Mr. Whitelaw Reid.
[December 29.]
SECTION 3.
Foreign Office, December 29, 1909. I HAVE the honour to acknowledge the receipt of your Excellency's note of the 17th instant, stating that, in the opinion of the United States Government, no time should be lost in placing their proposals relating to the commercial neutralisation of the Manchurian railways before the Governments of the other interested Powers with Your Excellency goes on a view to obtaining their support to the principle involved.
to say that the United States representatives at Peking, Tokyo, St. Petersburgh, Paris, and Berlin would be instructed forthwith in this sense, and that the United States Government are now prepared, as a preliminary step, to join with His Majesty's Government in urging China to consent to participation in the Chinchow-Aigun Railway by Japan and the other Powers interested.
I have the hounur to inform your Excellency in reply that His Majesty's Govern- ment would be glad to learn what views the Governments of the other Powers concerned, and more especially Russia and Japan, take in regard to the above proposals.
Instructions have been given to His Majesty's Minister at Peking authorising him to join with his United States colleague in endeavouring to persuade the Chinese Government to agree to Japanese participation in the Chinchow-Aigun Railway; and I have the honour to add, for your Excellency's information, that I have already approached the Japanese Ambassador in London with a view to ascertaining what measure of participation would satisfy the Japanese Government in regard to this undertaking.
I have, &c.
E. GREY.
[2538 -3]