advantages natural and other Newchwang lacks, which are factors in the position, but for which Newchwang can claim no compensation. Dairen, for instance, has a harbour practically ice free and accessible to all but the biggest ships. Improvements are continually being made in the port arrangements for dealing with cargo, &c. Is she to lose these advantages because the approach to Newchwang is obstructed by a bar, because the port is frozen in the winter, or because the Chinese refuse to dredge the river? How, too, shall fair allowance be made for the heavier sea freights at the northern port, when the freights themselves are continually changing? The question seems to me distinctly difficult to solve.
As a matter of fact, the Japanese would appear in practice to recognise to a certain extent that Newchwang does labour under disadvantages. This, I take it, is why the rates for all ordinary merchandise, except kerosene, are, as far as Kung-chu-ling, 399 miles up the line, assessed in its favour. From that point to the terminus, 40 miles further on, they are the same for both places. The next question Can Newchwang to arise is whether this more favourable tariff is adequate or not. merchants, Japanese or foreign, compete ou reasonable terms in the Manchurian markets with those of Dairen ? If they can, I do not see what more can be done for them. If they cannot, the question would seem to demand further investigation in order that we may determine how far their inability to compete is due simply to There is, as Mr. Hobart Hampden points out, freights, how far to other causes. another thing to be remembered. British firms are established in Dairen, and their interests have to be considered as well as those of Newchwang.
The real hardship appears to me to lie not so much in a differential railway tariff as in the geographically inferior position of Newchwang. Dairen, with its ever- increasing facilities, must naturally attract the major portion of the overseas trade with Manchuria, however equitable the railway charges are made. It can only be regretted that so much British capital should have been invested in the less advantageous locality.
I am of The specific instance of kerosene is of a somewhat different nature. opinion that this is distinctly a case of discrimination, and that we may with justice ask, as Mr. Hobart Hampden suggests, "if any special reason exists why kerosene "We might," Mr. Hobart should exceptionally be required to pay equal rates,' Hampden continues, "perhaps argue from the better treatment of the majority of goods against the less favourable treatment of kerosene."
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It takes the shape of a private A special reason undoubtedly exists. arrangement made originally between an individual director of the railway and the agent of the Standard Oil Company. The latter asked that, in return for his erecting tanks here, the railway would promise not to charge a higher rate on oil entrained from Dairen (ie., Standard Oil Company's oil) than on that entrained at Newchwang (ie., Asiatic Petroleum Company's oil). Mr. Tanaka, the director concerned, agreed, and subsequently persuaded the hoard of directors to sanction the arrangement, though one of his colleagues, I understand, objected, and wished to have the promise retracted. Kerosene is thus excepted from the general tariff for the benefit of the We have Standard Oil Company. From this point of view we have, I think, a case. none if we adhere to the attitude taken on the general question, because even now the total charges on this commodity are the same for both places.
On the question of protest I would venture respectfully to assert that, if the normal attitude of the railway here is any criterion of that of the Central Government, representations, unless of a determined character, are foredoomed to failure.
To recapitulate briefly.
Does His Majesty's Government adhere to its original attitude on the subject of discriminatory freights? If it does, I do not think anything can be done.
Is the Newchwang contention about sea freights to be accepted as legitimate ? If it is, Newchwang should then be asked to show (1) if, and in how far, the present tariff is not sufficiently in its favour; and (2) how conditions are to be equalised. This last will, I think, in practice be found an impossibility.
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think, that the company has so far suffered no loss, because the Standard Oil Company has not yet built its tanks here, and still imports the greater part of its oil through Newchwang-at least, so I am informed.
What will happen when the Standard Oil Company does work its business from Dairen I cannot ascertain. The rival companies are ostensibly placed on the same level; whether or not this will prove to be so in reality depends on other points besides sea and land freights: the inaccessibility, for instance, of Newchwang to ships carrying full cargoes, the relative expenses of the rival tank installations--one at Newchwang, the other at Dalny-cartage, &c,
The Mitsui Bussan Kwaisha office here informs me that in the case of goods destined for places south of Kung-chu-ling they find it cheaper to import through Newchwang, but, for places north of that, Dairen is in the better position.
It might be well to remember in connection with the protest of the Asiatic Petroleum Company that their tanks in Newchwang are of very recent erection, and, in fact, that long after the question of discrimination had become a burning one they had still taken no steps to settle at Newchwang. Conditions must therefore have been well known to them when they made their choice.
II. P.
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H. P.
Supplementary Memorandum.
Mr. Hobart Hampden asks if the Asiatic Petroleum Company is being placed at a disadvantage compared with any oil company at Dairen. The answer to this is, I
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