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customs duty. An allusion to this subject was made in my despatch No. 4 of the 1st March last. Another matter which may be briefly mentioned is that the Sungari, though in a sense an inland river, nevertheless leads by way of the Amur direct to the sea.
Salt fish is, as previously reported, imported from Nikolaievsk to Harbin, and during the past bean season the agents of the Danish East Asiatic Company shipped hence by river to the former port 12,000 tons of beans.
The new Sangari regulations, as I have above inferred, appear to me to imply anything but a victory for China, and, as regards the impending negotiations in relation to the treaty of 1881, earlier events in the recent history of Manchuria and present indications do not lead one to think that the Russian authorities are in any way insensible to the necessity for maintaining and strengthening their whole position. in the Far East. A discussion has during the last three months been proceeding at Manchuria between the Russian and Chinese authorities in connection, I understand, with the location of the frontier line in that district. The matter, which is shrouded- in considerable mystery, is, I gather, under the consideration of four Russian generals, two of whom are named, respectively, Olaieff and Kanse, and Chinese frontier commissioners, and, if I am correctly informed, the Russian authorities claim that Manchuria and Dalainor, or Chalainor, which lie west of the Aigan, the boundary fixed by article 1 of the Russo-Chinese Treaty of 1889, are within Russian territory. The Chinese retort that the Aigun has changed its bed, a common occurrence with Far Eastern rivers, and that its course formerly lay to the west of Manchuria, which has no other importance beyond that of a frontier station. There are, however, coal mines at Chalainor.
A factor which cannot be left out of mind in considering the present situation is the recently concluded Russo-Japanese agreement. This instrument, as intimated in your despatch to the Foreign Office No. 244 of the 27th July last, no doubt helped to convince the Chinese that a more conciliatory policy in the matter of the Sungari regulations was advisable, and it is to be expected that it will have its influence on the coming negotiations connected with the revision of the treaty of 1881. It has also, it would seem, not been without value as a reply to the various proposals in regard to Manchuria put forward by the Government of the United States; on the other hand, the opinion of the men on the spot, who are qualified to judge, is that this agreement is merely a temporary expedient and cannot endure as a lasting compact, since in the long run it must be the Japanese, not the Russians, who will have all to gain thereby. To what extent this view may find confirmation in the opinions held at St. Petersburgh, I cannot of course say; but signs are not wanting that the Russian Government does not consider the new arrangement with Japan a reason for relaxing its vigilance. An article in the " Peking Daily News" of the 31st August last referred to certain proposals made by General Unterberger, Governor-General of the Primorsk, for the strengthening of Russia's strategic position in the Far East. He is stated to have suggested that three military centres, each having one and a half army corps, should be formed-one in Manchuria on the frontier of Transhaikalia, another at Blagovestchensk, and a third at Nikolsk, He further proposed that Vladivostock should be raised to a fortress of the first rank. It is true that in June last General Vernander, who is reported to be Russia's greatest fortification expert, passed through Harbin on his way to Vladivostock, having, it is said, instructions to make a thorough examination of the forts there and to do whatever is necessary to give them sufficient strength. He is also stated to bave Information been given considerable licence in arranging the necessary credits. which was supplied me in strict confidence a few days back is to the effect that the above-mentioned statements in regard to Russia's military plans are not without foundation. Thus, I am told that the military authorities at Vladivostock have made au arrangement with Messrs. N. and I. Kooznetsoff, of that port and of Harbin, for the erection by the firm of a brick-making plant to supply 16,000,000 million bricks at the rate of a million a-month, with the promise of so many thousand a-month after the erection of the first order. An advance of 60,000 roubles has been paid, and I understand that a site has been obtained and work will at once be begun. One reason given by my informant for the demand for the bricks is that new barracks are to be erected at Shkotovo, which is 40 miles from Vladivostock, and is situated on a branch line from Ugolnaia, from which it is distant 20 miles. The same gentleman also reports the recent arrival of twelve 6-inch guns. Messrs. Kooznetsoff are large purveyors of meat to the Russian military authorities in the Ussuri and Primorsk provinces, and a considerable part of the supply has in the past heen furnished from Harbin, assisted during the summer months by shipments from Chefoo.
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Vladivostock they have a refrigerating store-ship capable of holding 700 tons, and a store-house is now to be built there by them with a capacity of 1,000 tons.
Owing to trouble with local dealers, their shipments from Harbin may, I understand, be considerably reduced, but the erection of the new store-house at Vladivostock, which it is thought can be fed from Chefoo, Tien-tsin, and Corea, will in any case give a much greater storage capacity there than that existing in the past, In addition, there is a store-ship belonging to the firm of Zimmermann which takes 600 tons, and I understand that a store-house to hold 1,000 tons is to be built by the Russo-Chinese Bank. Messrs. Kooznetsoff have another store-house at Nikolsk able to contain 450 tons, and there is a possibility that they may during the next eighteen months erect one of similar size at Harbarovsk. From another well-informed and confidential source I gather that during the past year both Russians and Chinese have been considerably augmenting their troops in the Amur district from Aigun eastward to the mouth of the Sungari." On the Russian side of the Amur, a zone of the depth of 20 versts from the river is reserved for Cossack settlements, and settlers going there are placed under Cossack regulations, that is, they are liable to military service. My despatch No. 19 of the 24th July last put the number of troops at Novo-Kievsk at 10,000, and I am informed also that in the Ussuri district generally, from Harbarovsk south through Iman to Nikolsk, great strides have during the last two years been made in the matter of colonisation. A new corps of guards, under General Christoforoff, ostensibly to prevent smuggling, has recently been established in the country between Lake Baikal and the Pacific.
As regards the sum of 400,000 roubles due by the Chinese Government to the Chinese Eastern Railway, concerning which I had the honour to report in my despatch No. 22, Confidential, of the 6th ultimo, I learn that the Chinese authorities have expressed their willingness to pay, provided they are furnished with proper accounts. It is thought that the local railway administration, which is being pressed from home, will have some difficulty in complying with this request.
I propose to endeavour to obtain further information regarding some of the Russian military movements above reported.
I have, &c.
H. E. SLY.
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