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written reply (copy and translation of which I enclose), and the secretaries, when they came on the 29th ultimo, stated at first that they had nothing to add to it. On being told, however, that in this case work would be resumed forthwith, and that the responsibility for any disturbance would rest with the taotai, they began to discover fresh meanings in the Chinese text of the taotai's letter. The permission to repair existing mains must, they thought, include the connection of new service pipes to the mains within a reasonable distance, and Taotai Wang, moreover, had denied that he had ever given orders to intimidate intending consumers. They asked that plans should be supplied showing the existing mains laid by the two companies; these I undertook to supply as soon as possible, but added that in the meantime work on new services from existing mains would proceed.
The following day the taotai asked that no work at all should be done pending the production of the plans, but this I refused to agree to, and between the 30th ultimo and the 1st instant three new gas services, which were urgently required on the North Szechuan road extension, were completed without further interference.
The plans were completed on the 4th instant and taken to the taotai on that day by Mr. Barton together with my despatch, copy and translation of which I enclose.*
The taotai explained that the object of limiting the operations of the two companies was to preserve a field for the Chinese Water and Light Company which was about to be inaugurated. It was pointed out to him that this could not possibly form any ground for arbitrary interference with vested British interests or for curtailing the freedom of trade secured to British subjects by treaty.
My despatch to the taotai also refers to the repeated and emphatic protests lodged by His Majesty's Legation with the Wai-wu Pu in 1906 (and communicated to me in legation despatches Nos, 75, 85, and 88 of that year) against the establishment of the chapei municipality in an area which already contained a large foreign population and much British-owned property, and it was impressed on the taotai that the present arbitrary action of the Chinese police was such as the Chinese Government had been warned would not be tolerated by His Majesty's Government.
The taotai stated that these protests had not been communicated to his office, but he understood that the Chinese Government had not acquiesced therein.
The taotai promised to give me within ten days a written reply to my statement of the terms as set forth in my despatch, on which alone I was prepared to agree to a temporary limitation of the right of the two companies to extend their mains on Chinese-owned property. He has since agreed to the immediate installation of five gas and water services for consumers who were urgently in need
of them.
The Shanghae taotai himself is not unreasonable in this matter, but it is very difficult to bring home to him his responsibility, as far as foreigners are concerned, for the acts of his nominal subordinate, Police Taotai Wang. The latter is a headstrong, anti-foreign young man, to whom the task of employing some hundreds of so-called policemen to check settlement extension is a thoroughly congenial one, as he showed in the Paoshan Road dispute last September.
In dealing with a situation created by such a man, determined action is, I venture to think, essential, and I trust that you will approve my communication to the taotai that, in the event of his declining the proposal contained in my despatch, I shall be forced to take steps myself to afford protection to the British companies engaged in their legitimate business outside settlement limits.
As regards the proposed Chinese waterworks, the only detailed information obtainable is that contained in the Nanking Viceroy's memorial which appeared in the "Shih Pao" of the 7th instant (extract and translation of which I enclose). It will be observed that eight months' unceasing work will be required for the completion of the undertaking, and up to date the erection of a bamboo fence round the site is all that has been done.
It is doubtful whether the best machinery and skill can produce healthy water from the Soochow Creek, owing to the small volume of the stream and the number of factories discharging impurities into it. The site chosen by the Chinese is immediately adjacent to the Cantonese Cemetery, which is a much-used mortuary covering several acres; the pumping machinery and pipes are, I believe, being made by a local Chinese engineering works, and in any case it is doubtful whether the work can be executed for the sum named, viz., 200,000 taels.
* Not reproduced.
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Even supposing the works to be erected as described in the memorial, it is quite certain that they can only be run at a heavy loss, for the greater part of the better- class buildings in the Chinese municipal area are already supplied by the British companies, and the number of such buildings shows little sign of increasing under the existing régime, except on the foreign-owned roads,
The object, then, of this new Chinese somi official undertaking is the same as that which prompted the founding of the municipality itself, namely, the prevention
of settlement extension.
The pursuit of this object has been an expensive one for the Chinese authorities, for the revenue derivable from the few people forced to inbahit the area under their exclusive control cannot bear anything but a small proportion of the cost of maintaining a large police force and a public works department.
The knowledge of this fact can only embitter their feelings towards foreigners, and now it is proposed to throw more good money after bad in the hope of thereby sealing once for all the fate of the foreigner's demands. The effect of this can only be to still further embitter existing relations, and unless the foreign representatives are prepared to sacrifice their large vested interests in the northern suburb by relinquishing the demand for extension, it would appear fairer to endeavour to prevent this further useless waste of money by the Chinese authorities.
It will be observed that the memorial refers to the proposed scheme as being preferable to making connection with the British company's pipes. In the spring and winter respectively of last year the Chinese police negotiated with the gas and water companies for supplies of gas and water, and the taotai states that he personally has always been in favour of such an arrangement, but was overruled by the Viceroy, who insisted on a purely Chinese company.
The attitude of the companies throughout these negotiations, so far as it is shown to me, was entirely reasonable, and the terms offered by them were fair. The water company, owing to its agreement with the council, was in a more difficult position than the gas company; but these difficulties could have been removed had the Chinese been really desirous of obtaining good services of gas and water at reasonable rates. The unofficial element among the Chinese residents would, I believe, have welcomed an agreement with the British companies; but as a weapon against extension such an agreement would have been useless, and so was discarded in favour of an independent Chinese company, regardless of economic considerations.
With regard to the question conveyed in your despatch No. 14 of the 31st ultimo, which has just reached me, as to whether any practical steps have been taken by the Chinese authorities to improve the sanitation and policing of the district north of the settlement boundary, the answer must be in the negative.
The general condition of the area in question, to which your attention was called during your recent visit to Shanghae, remains practically unchanged. The number of beggar huts has increased, and on the side of broad roads, built at great expense three years ago, are now being crected rows of hovels only one degree better than these, The two-storeyed Chinese shops and dwellings erected by the speculative builder on some portions of these roads remain unoccupied for the most part, or are used as coolie quarters or as stables for the Chinese mounted police.
In the Stone Bridge Road district and on the immediate boundary of the settlement the population which was there before 1906 remains, but shows little sign of expansion or improvement. Beggar villages intrude themselves even here, and open cesspools abound in all quarters.
In the district beyond the North Szechuan Road the proposed Chinese Road, referred to in my despatch No. 79 of the 27th October, 1909, which cuts the Dixwell Road extension, remains unmade, while the Municipal Road is completed and houses are springing up along it.
As regards the police arrangements, the circumstances under which Major Menzies was selected as the reorganising officer are cloquent testimony to the object of his appointment.
I understand that he is not allowed to effect much in the way of improvement, even if he could. The most elementary reforms, such as the control of pawnshops and removal of beggar colonies, are neglected; and the great gambling sheds of Li Hongkew continue to flourish as before, with the result that a convenient Alsatia is provided for many of the criminals who prey on the settlements.
Under these circumstances I am of opinion that the only way in which the Chinese objections to the operations of British companies outside settlement limits can be satisfactorily met is by pressing to a successful issue-as a condition precedent
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