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Having no objection to your proposal that the question might he treated in the first instance between the British and Russian consuls in the above-mentioned city, I beg your Excellency to instruct your consular representative to communicate with M. Poppe, who has already received necessary directions on this matter.
(No. 1.) Sir,
Enclosure 3 in No. 1.
I avail, &c.
KOROSTOVETZ.
Sir J. Jordan to Acting Consul Sly.
Peking, January 14, 1911. MR. MAX MÜLLER forwarded to the Foreign Office a copy of your despatch No. 13 of the 3rd July last, enclosing your report on the railway settlement and the municipal adininistration at Harbin. It will be seen from the enclosed despatch from Sir Edward Grey that His Majesty's Government favour the conclusion of a reasonable understanding with Russia, which the growing commercial interests of Great Britain at Harbin and elsewhere in the railway zone appear to render desirable, and I am authorised to negotiate an agreement with the Russian Minister for the payment of municipal taxes by British subjects, provided that such payment is accompanied by guarantees as to expenditure and on other points in regard to which it may appear I have during the negotiations desirable that such guarantees should be obtained. suggested to M. Korostovetz that the negotiations might be conducted in the first instance between you and your Russian colleague. His Excellency having no objection to this course, I have to request that you will approach M. Poppe in this sense. Copies of my correspondence with the Russian Minister are enclosed herein.
I have no information as to the instructions which have been furnished to the Russian consul-general beyond that contained in M. Korostovetz's letter of the 6th January, but I understand that his Excellency does not object in principle to giving reasonable guarantees as to the expenditure of the taxes levied from His Majesty's subjects. I understand from your report that British firms would not object to paying taxes of an equitable and proper nature, but that the present conditions on which the Russian railway settlements are administered would not in all respects protect them from exposure to unjust and vexatious treatment.
So far as I am able to judge from the comparisons you draw, the present land, building, and lodging taxes and the annual licences do not appear to be unduly heavy, and might be agreed to, provided the Russians meet us on other points. I agree with you that the taxes on factories and commercial undertakings, if inevitable, should be consistent. It is evident that the method by which an estimate of the amount of Messrs. Craig and Co.'s business was arrived at might lead to grave abuses and to unfair discrimination against particular firms. Your suggestion that taxation should be based on an examination of the firm's books seems to be a practical one for meeting the difficulty.
I note that you state in your report that the powers of control of the municipal administration over the regularity of commercial dealings are fully set forth in article 2 (i) of the 1907 regulations, and you add that the authority given is obviously very extensive, and is, as far as foreigners are concerned, in certain respects entirely inadmissible. This point is only very briefly alluded to in the summary of the regulations which was forwarded to His Majesty's Legation from Mukden. It will be well to bear in mind the general principle which we always uphold, that there shall be no taxation without representation, and, in this connection, you might, perhaps, suggest to your Russian colleague the expediency of having foreign interests represented at least on the taxation committee, if not on the municipal council. Foreigners are not excluded either from voting or from personal representation on the municipal councils in British concessions nor in the Russian concession at Tien-tsin, and the admission of a similar principle at Harbin might go some way towards mitigating the objectionable features to which you allude. At the same time I realise that the election of British subjects, either to the assembly of delegates or to the municipal council, is improbable in present circumstances, and it would, therefore, be well to obtain an undertaking that His Majesty's consular officers should be officially notified of any proposed new tax or municipal regulation. A further safeguard might be found in your suggestion that British subjects should have a general right to carry any legitimate objection to their consul, This would
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seem to be a corollary of the recognition by the Russian authorities of the principle of extra-territoriality as stated in your report.
In view of the present anomalous position and of the uncertainty as to the future ownership of the area held by the railway, the Russians might profess themselves unable or unwilling to give any definite pledges in regard to British subjects who may establish themselves there. For similar reasons, it is not desirable that you should take any initiative in invoking the authority of the Chinese. It might be possible to embody a clause by which the Russian authorities would give assurances that they will do what in them lies to protect British subjects against being called upon to evacuate their property without compensation upon the expiration of the company's lease. In any event, I see no reason to anticipate that the Russian authorities will extend less equitable treatment to British subjects in this respect than that accorded to foreigners, for instance, by the regulations of the Russian concession at Tien-tsin.
The question of the status of the police may possibly require consideration. In the event of British subjects requiring their services or seeking redress against their action, it would obviously be more convenient that the control of the police should be vested in the Russian consulate-general than in the railway administration.
I have indicated the important points to which your attention should be directed in your discussions with the Russian consul-general, and I have endeavoured to give an outline of the conditions on which I should be prepared to conclude an arrange- ment with the Russian Minister. Your knowledge of local conditions and the
oppor- tunities which you have of consulting British firms on the spot will very likely suggest to you other considerations which I am not able fully to appreciate at the distance. You should keep me informed of any developments of interest which may occur in the course of your discussions, and you should use your discretion in referring doubtful points to me. Any observations which you may wish to make on the subject of this despatch will have my careful attention.
I need only add that if a satisfactory arrangement is concluded the intention is that it should be applied mutatis mutandis to the other Russian railway settlements in Manchuria.
There should, of course, be an understanding that in the event of more favourable treatment being accorded at any time to the citizens and subjects of other Powers, British subjects will be entitled to benefit by it.
I am, &c.
J. N. JORDAN.
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