{
6
The arrangement with the taotai, reported in my despatch No. 36 of the 13th ultimo, whereby work on the existing mains of the two British companies was to continue as before pending discussion of his proposals, continue to work satisfactorily, and gas and water services have been laid on some eight different properties during the past month.
The taotal's proposals were communicated to me shortly after my interview with him on the 4th ultimo, and, as I foresaw, they amount to a final limitation of the British companies' operations to the roads where their mains already exist, and a claim on behalf of the Chinese company to the right to lay its mains in municipal roads and foreign-owned property.
These proposals, copy and translation of which I enclose, have been communicated by me to the British corapanies with the request that they will formulate counter- proposals, which will be submitted to the taotai in due course.
The difficulty of reconciling the Chinese point of view with that of free com- petition, as outlined by me in my despatch before referred to, is apparent, and the negotiations to this end will, I fear, prove long, and be complicated by the possibilities of friction unless a solution can be provided through the medium of settlement
I have, &c. extension.
Enclosure 8 in No. 1.
P. WARREN.
Tuotai's Proposals respecting Gas and Water Companies referred to in his Despatch of May 3, 1910.
OUTSIDE the limits of the international settlement in the Chinese district of Chapel, the British companies to be allowed to instal service pipes from their existing mains only to the first row of houses immediately adjoining the roads on both sides and to the end house of each public alley-way opening on to the roads, but no pipes shall be laid to houses not immediately adjoining the roads, nor in alley-ways not immediately opening on to the roads, nor to houses in alley-ways not running at right angles to the roads, nor in places where mains do not already exist.
2. Services can only be laid in houses on roads where mains exist at the request of the owners themselves. The British companies shall not use any compulsion in the matter.
3. When the Chinese company is in operation the British companies shall not interfere with house-owners who may wish to patronise it, or to change their custom from the British companies to it.
4. The North Szechuan road extension, although built by the municipal council, If in the is outside the limits of the settlement, and since the British companies have been allowed to lay pipes in the Chinese-built North Honan road extension. future the Chinese company wishes to lay pipes in the North Szechuan or other municipal roads or in foreign-owned property, the municipal council and foreign owners of property shall not raise objections.
[This Document is the Property of His Britannic Majesty's Government.]
AFFAIRS OF CHINA.
CONFIDENTIAL.
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11
[August 8.
C
SECTION 42913
No. 1.
Rcc? Rrot 8 SEP 10
Sir C. MacDonald to Sir Edward Grey.-(Received August 8.)
(No. 171.) Sir,
AFTER reading your despatch No. 78 of the 23rd April last on the subject of
Tokyo, July 23, 1910. rates on the South Manchurian Railway from Newehwang and Dalny respectively, I came to the conclusion that it would be advisable before proceeding further to enquire the views of His Majesty's consul at Dairen. The papers were accordingly forwarded to Mr. Parlett, together with some notes by the Japanese secretary of this embassy, of which copy is enclosed, and Mr. Parlett's opinion is embodied in the accompanying despatch and memorandum. He has since specially paid a visit to Newchwang and Mukden, but now informs me that he has nothing material to add to his despatch just mentioned.
In submitting this further information for your consideration, I venture to suggest that no useful purpose would be served by joining issue with the Japanese Government on doubtful ground. It would seem desirable that His Majesty's Government in making any complaint should be in a position to speak with no uncertain voice, particularly in dealing with a large question involving the principle of equality of commercial opportunity in Manchuria, where there has been on the part of the public so much vague suggestion of unequal treatment and so little substantiation of general allegations or demonstration of the proper criteria to apply to so complicated a subject.
The contention that the application of varying rates per mile on the conveyance of goods from two given ports amounts to discrimination is an intelligible line of argument, but I understand that His Majesty's Board of Trade find that such differentiation is not unusual elsewhere, and as a principle is not open to criticism unless pushed to an extreme, which can hardly be suggested in the present case. then, the railway rate on kerosene oil from Newchwang to Mukden cannot be objected If, to on the score of its being relatively higher than the rate from Dairen to Mukden, there would appear to be no valid ground of complaint, unless it is absolutely higher. which is not here the case, freight from the two ports to the destination named being equal.
It has, however, been urged by Mr. Wilkinson, His Majesty's consul at Newchwang, and Mr. Parlett theoretically agrees with him, that account should be taken of the higher sea freights to Newchwang as compared with Dairen; and while I hardly think that such sea freights, which are not under exclusive Japanese control, stand on the same footing as railway rates in Manchuria, which are imposed by Japan, I hope that due weight may be given to this and other points noted in the corre- spondence in deciding whether, in the light of the fresh information furnished, there is a tangible cause of complaint to lay before the Japanese authorities.
I have, &c.
CLAUDE M. MACDONALD.
Enclosure 1 in No. 1.
Memorandum by Mr. Hampden.
NEWCHWANG has pronounced on this question, but I think it would be well to have the opinion of His Majesty's consul at Dairen before further action is taken. I hope a strong protest will be made if there are solid grounds for it; but, if not, I deprecate a blank cartridge demonstration, as it weakens future action in other cases of complaint.
It appears to me that the system of differential railway rates may, on the one hand, be a just means of ensuring perfect equality of opportunity, or, on the other, if carried to an extreme, an unjust means to producing inequality of opportunity.
[2862 h-4]
B