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of the situation which seem to call for special consideration. For the purpose of conciseness and lucidity, I propose to deal with them one by one.
Land Tenure.-According to my Russian colleague, land can now be leased by private parties in any part of the new town. This would appear to mark a new departure, since, in the past, very little land west of the Novotorgovaia Ulitza has been leased to persons unconnected with the railway and it is possible that even now a high price would be asked. In Pristan no restriction has ever been placed upon lease by private parties of Russian nationality.
A
The full term of the railway company's lease is eighty years subject to the right of the Chinese to buy out the company after thirty-six years. The initial cost of the railway was large, and it may be assumed that the total sum which China would be called upon to find in order to repurchase the line and its appurtenances would be a very heavy one. The question which, it would seem, is of more practical importance at the present moment is that of long leases. The railway was completed in 1903 and the longest lease which is now therefore obtainable is one of seventy-three years. lease in perpetuity, which is common to other treaty ports in China, is not, under present circumstances, procurable in Harbin. Sooner or later, more especially if Harbin continues to attract foreigners other than Russian as a place of residence and trade, this matter must, it would seem, call for adjustment. It would, indeed, appear that it is one which cannot even now be ignored in any attempt to form a just estimate of the present situation and to devise a plan for its amelioration or amendment. The question has not escaped the attention of the Russian authorities, though I gathered in conversation with General Horvat that it was not one which he considered gave much concern to Russian subjects, and he did not appear to think that the Chinese Government would, on the expiration of the company's lease, be able to call upon private property owners to remove themselves without further ado. My Russian colleague, however, seems to view the matter in a more serious light, and admitted that the rights of private parties under the 1896 agreement were not adequately protected. It is of course now no secret that at the time when that agreement was concluded Russia looked forward to the inclusion of Manchuria in the Russian Empire. The present anomalous state of affairs--that is, a treaty port which carries with it no right to lease land in perpetuity-is the direct result of China's action in declaring Harbin an open port, without regard to (or, possibly, with a wilful diregard of) the conditions existing in 1905. That which is of chief concern to us is the protection of British interests. Owing to the development of the bean industry our trade in Harbin has already assumed large proportions, and the day may- probably will-come when British firms will desire to lease land and build their own houses. They will wish to do this on terms not less advantageous than those obtainable in other treaty ports, and it is not altogether easy to see how this can be done. Three suggestions have occurred to me, which I venture to set down; they are:-
1. That the Chinese authorities should counterseal the leases given by the railway company to British subjects and guarantee their continuance in perpetuity after the expiration of the company's holding.
2. That the Chinese Government should recognise the present railway area at Barbin or a reduced portion thereof as a Russian concession or settlement, leaving it to us to obtain from the Russian authorities terms equally favourable to those granted in British concessions in China.
3. That the Russian Government should give a guarantee that, on the expiration of their terms of lease through the lapse of the railway company's holding, British subjects shall not be called upon to vacate their properties without due compensation.
I fully recognise that, as regards the first two suggestions, it may be extremely difficult to obtain the consent of the Chinese Government to either one or the other, since both will give to foreigners the right of residence and trade in perpetuity in a considerable area, and it has occurred to me that this consideration may probably account in no small decree for the objection which the Chinese are generally thought to entertain towards any scheme of internationalisation. At the same time, the fact stands out that we are faced with the problem of a treaty port which does not give the usual treaty privileges. The question then arises whether, should it be decided that an agreement with Russia in regard to municipal taxation is desirable, the third suggestion or something of the same nature might not be the best solution,
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and possibly have the effect of compelling the Chinese to come to some arrangement satisfactory to all parties.
The Control of the Railway Administration.-No further steps having been taken towards the elaboration of the detailed regulations promised in the May agreement of last year, things are, as previously stated, very much in statu que ante. In other words, the extensive powers which the railway company possesses under the 1907 regulations still very largely obtain. It is generally felt that the authority claimed by the railway company is greater than a private company can properly be expected to exercise, and there can be no doubt that the position assumed by this company has been keenly resented by the United States. It would seem, therefore, that, if the Russian Govern- ment sincerely desires an adjustment of the anomalous state of things now existing, its chances of success will be considerably enhanced by relegating the railway company to a subordinate position.
The Police.--The police, as before said, are at present under the control of the railway company; should, however, a form of municipal administration become possible to which all parties could assent, it would be more satisfactory if the force necessary for the policing of the municipal area, whatever its designation, could be placed either under the control of the municipal administration or of a representative of the Russian Government attached to the Russian consulate-general-preferably, in any case as regards supreme direction, I am at present inclined to think the latter. As things now stand, the chances, as previously stated, of unwarrantable interference on the part of the police with foreigners who have their own national representatives in Harbin are not great. Cases in which foreigners are concerned will, however, sometimes arise when the services of the police, if order is to be maintained, must be requisitioned. Instances in point are street brawls and robberies; only a few days ago the manager of the Shanghai Life Insurance Company informed me that his office had been forcibly entered during the previous night, his documents disarranged, and some articles stolen, I did not see any objection to addressing an informal note to my Russian colleague, requesting him, under the reservation contained in your despatch No. 10 of the 27th May, to notify the police authorities in the hope that it might be possible to secure the apprehension of the delinquents.
To summarise and recapitulate, Sir John Jordan in his despatch No. 461, Confiden- tial, of the 10th December last, to which reference has already been made, suggested that, if British subjects were willing to accept the Russian municipal regulations provided they could obtain a guarantee that they would be fairly taxed and not subjected to annoyance at the hands of the Russian police, it might be better to obtain safeguards on these points than risk the conclusion of an arrangement between Russia and Japan on the basis of the former's original interpretation of article 6 of the agreement
of 1896.
My Russian colleague has on more than one occasion expressed the opinion that the best hope of a solution of the present difficulty is for the Powers, in the first instance, to come to an agreement with Russia. Whether an arrangement which would satisfy all the Powers is or is not possible, I am naturally not in a position to say, and it may be considered that a better prospect of success is offered by an agreement between ourselves and Russia, irrespective of others. The Russiaus are, I am disposed to think, anxious for our good-will, and, if due regard be paid to actual facts, an understanding of some kind with Russia seems the only feasible plan. If, too, favourable terms can be obtained at Harbin, they might-temporarily, at any rate--be applied mutatis mutundis in the other Russian railway settlements, and should ensure us the grant of not less advantageous conditions in the Japanese settlements along the South Manchurian Railway. Harbin is, as has been previously stated by the acting consul-general at Mukden, to all intents and purposes a Russian town, and Russian interests are largely predominant; while the policy of the Chinese would seem to be now what it has been in the past. On the surface, it lacks consistency-au fond, its aim and object is, I venture to think, to make use of the other Powers against the Russians with the full determination of giving to none more than it can possibly help.
British interest in Harbin, at the moment of writing, are represented by Messrs. Samuel, McGregor and Co., Messrs. Craig and Co., the China Mutual Life Insurance Company, the Shanghai Life Insurance Company, and, in Fu Chia Tien, the British-American Tobacco Company. To give adequate protection to British subjects and British interests is for us the principal consideration, and it is for this reason that I venture to lay stress on certain points which cannot, it would appear, be left out of consideration in any proposed arrangement with Russia.
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