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to meet at Namkham on the 7th January, 1911, and the Yunnan Viceroy has been invited to depute a taotai as his representative. A number of murder cases await trial and discussion, but the lists of ordinary claims are smaller than usual owing to the efficiency and activity of the frontier deputy Chao, who has done excellent work during the summer months. Apart from the Tengkeng-Hpimaw affair there have been no serious frontier raids.
Tampering with Frontier Pillars.--It will be remembered that the Chinese have constantly pressed for the removal of certain of our frontier pillars, alleging that they are wrongly placed and that the frontier should run farther west. They have been informed that His Majesty's Government is unable to enter into any discussion of this question so long after the delimitation of the frontier and the erection of the pillars.
Early in the autumn the taotai sent a party to the northern frontier with instruc- tions to destroy pillar No. 38, situated near the extreme north of the delimited boundary, at the top of the Shingaw Valley and immediately south of Manang Pum. The deputies entrusted with the task begged the taotai to put his instructions in writing, doubtless remembering the fate of Mr. Peng, the Yungchang prefect, who The was dismissed from office for undue zeal in destroying the pillar in Lungchuan. taotai refused to record his responsibilities in this way, however, and sent the deputies on their business. The Government of Burmah has since receive a report that the pillar was defaced by the party. When the deputies returned to Tengyueh they presented separate reports; one said that the frontier was wrongly demarcated, that he had been anxious to destroy the pillar in accordance with instructions, but that his colleague had resisted such extreme measures. The taotai was greatly enraged, and immediately dismissed the protesting deputy from office. The unfortunate man tells me that they did not actually deface the pillar, and that they merely took a rubbing of the inscription. I am unable, however, to vouch for the accuracy of his statement.
I fear that the Government of Burmah had some misgivings in regard to my attitude towards the destruction of the Lungchuan pillar in the spring, believing that I took too serious a view of a triffing incident. I adhere, however, to my original opinion that it is not safe to allow the least latitude to the Chinese in such a question, and I am convinced that we should have had serious trouble in regard to a number of the pillars during the past year if Mr. Peng's action had been allowed to pass without à serious protest. The subordinate officers on the Chinese side of the frontier unfortunately know that they are sure of support from the higher authorities in any act of aggression which does not bring down a prompt and vigorous rebuff from their Burmah neighbour, and I submit that the greatest watchfulness will be required along the frontier in the near future if we desire to avoid serious trouble and annoyance in connection with the already delimited sections.
Undelimited Frontier.--The imprisonment of my former interpreter has so frightened the people that my scurces of information in the direction of the undelimited frontier have now failed. I have certain information, however, that the Chinese propose to continue their administrative work during the coming open season, unless they are forestalled from the direction of Burmah. The officers who were concerned in the expeditions during last spring have all received promotion. The taotai proposed to visit Tengkeng in person this autumn, but his impulsive activity has received several shocks during the last few months, and it is now believed that he will abandon the project of a personal visit to the disputed area.
Burmah Frontier Forts.---I have been obliged to call the attention of the taotai to the fact that the Burmah military posts at Kut-kai, Pankham, Lweje, Laokham, Warapum, Nampang, Alawbum, Šima, Sadon, and Loingu in no way infringe our treaty obligations, and that their erection was provided for by the Burmah Convention of 1894 (article 7) and by clause 2 of the Manni Agreement of 1902.
Commercial.
Bhamo-Tengyueh Road.-The most important factor in the commercial situation has been the successful work on the trade-route, which has enabled traffic to proceed during the whole of the summer season in spite of a record rainfall. It will be remembered that for many years our trans-frontier trade has followed a natural mule-track, which becomes so bad in the rains that there is a constant loss of life both to men and animals. A road was made for a third of the distance between Tengyuel and the frontier during the last open season, and a gang of maintenance men has been
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employed throughout the summer. The reserve fund of the road committee, however, is exhausted, and our income derived from the mu@taxis insufficient to carry on the work. I am exceedingly anxious to push forward the road construction during the coming season, in the hope of bringing the roll right up to Tengyueh, even if it be but roughly constructed. Mr. Carey, the present/commissioner of customs, has given me loyal support in this matter in dealing with our Chinese colleagues, and I feel that the best interests of our trans-frontier trade will be served by laying the foundations of a road whilst conditions are thus favourable. We have approached the Hong Kong and Shanghai Bank with a proposal for a loan of about 2,000l., to be guaranteed by the mule tax, but the taotai and the ting do not at all like the idea of a loan and the responsibility attaching to it. I have suggested the abolition of the "pao shang ying," or trade protection levy, which has swallowed up 9,000 taels a-year for the past eight years without any corresponding advantage. I still await the sanction of the Government of Burmah before pressing this unwelcome proposal on the taotai and sub-prefect-who divide most of the funds in their private interest- and I trust that they will support my efforts to ensure the completion of the work on the trade-route. The mule tax now amounts to nearly 50 per cent, of the total customs collection here, and I feel that the time has come to stop the present leakages, to get a road through as soon as possible, and then to remove or to substantially reduce this tax, which is an undue burden on the trans-frontier trade.
Imports.It is interesting to notice that the first three-quarters of the
year show an entry of 20,492 piculs of cotton yarn-our main import-as compared with 16,199 piculs during the same period of 1909. The merchants showed much anxiety at the beginning of the year lest this trade should be deflected from the Tengyueh route by the Tonquin-Yunnan-fu Railway. The fact remains, however, that they can still import at a profit, and can actually lay down yarn as far as Yunnan-fu itself at prices which will compete with railway-borne yarn. I can scarcely think that the French railway authorities will allow such an anomaly to continue for long, and it seems only reasonable to suppose that they will eventually lower their rates sufficiently to make the mule rates for thirty-two days' transport from Bhamo to Yunnan-fu probibitive. In the meanwhile, however, the Tengyueh route holds its own, and, as population is greatly on the increase in Western Yünnan, there seems every prospect that the projected railway from Bhamo will have no difficulty in paying its way.
Drawback Privileges.-Most of the imports into Yunnan coming by the Burmah route are taxed by the customs at Rangoon, but are granted drawbacks of seven-eighths of their import duty when they leave for China. Since the enforcement of the new Indian tariff, however, cigarettes have been withdrawn from the privileged list, with the result that this flourishing trade has dropped entirely from the Burmah route and the markets of Western Yunnan are supplied entirely from Tonquin. American kerosene also obtains no drawback; the import figures for this article show a return of 22.080 gallous as compared with 13,000 for 1909, and there is no doubt that there would be a great opening for this article if the same favourable treatment were accorded by Burmah as by Tonquin. I have represented these facts to the Government of Burmahi, and I trust that the Indian Government will see its way to removing present disabilities, as it is of importance that the carrying trade on the Burmah- Yunnan trade-route should receive every encouragement in view of the new competition from the Tonquin railway, and the possibility of a railway from Burmah in the future.
Exports: Silk-A great stimulus has been given to the export trade by the demand for Szechuan silk in Europe. Merchants find that it pays them to send "huang ssu" (raw yellow silk), and "kai-chuang ssu" (silk specially reeled for the European market), from Szechuan by the Tengyueh route rather than by the Yang-tsze and Shanghai, not entirely because the freights are lower, but because any export cargo assists their exchange business if their produce can be laid down in Rangoon without actual loss. This is an important factor.
Transport Passes.-We find also that it costs 40 taels a picul to cover the li-kin and other native taxes between the producing centres in Szechuan, whereas a transit pass will cover the same amount for the same distance for 2:10 taels. The commissioner of customs therefore issued the first native transit pass ever granted in Tengyuel during last month. The taotai offered the most vigorous resistauce, and even tried to find an excuse for imprisoning the bold merchant who thus endeavoured to avoid his duties to the local authorities. The taotai claimed that transit passes were privileges not open to native merchants, but the commissioner pointed out the error of this view,
[1810 k―2]
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