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PUBLIC RECORD OFFICE

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C.O. 882

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PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO

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line from Tientsin to Chin kiang. This enterprise has, apparently, been abandoned now, but if an English company were to revive it and obtain sanction to drive a branch line from this Tientsin-Chin kiang line to Wei-hai-wei, with another short line to Chefoo, the commercial fortune of Wei-hai-wei would probably be a great and assured success. Arrangements with the Chinese Government about the collection of the Chinese customs on exports and imports could easily be negotiated, either by estab- lishing customs stations on the Wei-hai-wei frontier, or by allowing the Chinese customs to collect the duties at the port of Wei-hai-wei. It would be necessary to come to an understanding with the Chinese Government on this point first, because although Wei-hai-wei has great natural advantages over Chefoo as a commercial port, it would not be reasonable to expect the Chinese Government to support a railway scheme that would otherwise deprive the provinces of Chili and Shantung of a Jucrative customs revenue. As regards the obligation under which the British Govern- ment lies to maintain Wei-hai-wei as a free port, it would be necessary either to abandon that undertaking by an agreement with the other Foreign Powers, or to retain it as a free port in name with a Chinese customs on the barrier line where English jurisdiction ends. This is a big enterprise, but it is of no use considering it unless His Majesty's Government is prepared to support a British or Anglo-Chinese Syndicate in carrying it out.

It is true that the British Government has given Germany an assurance that it will not make railways inland from Wei-hai-wei. But Wei-hai-wei was originally taken to be a naval station, and not a commercial port. As the station is not to be fortified, but is only to be used as a summer sanitorium for the fleet, its commercial possi- bilities become of more importance now, and the question arises how far Germany can claim to object to a British or Anglo-Chinese Syndicate building the suggested line. Germany's policy in Shantung forced the Chinese Government to grant her monopolies of railway building and mining. Germany had very little trade in Shan- tung in 1898. Foreign trade in Shantung has been entirely developed by the English and American merchants during the last thirty years, and it is the chief centre of the American and English missions as well. Chefoo is the third largest shipping port in China. But no other Foreign Power has directly recognized these privileges, and all Foreign Powers are entitled under the favoured nations' clause to equal rights with Germany in Shantung. On the other hand, Germany informed Lord Salisbury in 1899 that a British claim in the Yang Tsze Valley to similar monopolies of mining and railway making there, as in Shantung, could not be admitted by Germany, because the British Government had not made an effective occupation of the Yang Tsze Valley in the same way as Germany had done in Shantung (see China Blue Book, No. 1, 1899, pages 82, 83). The Anglo-German Treaty of 1900 is very indefinite, but it seems to admit Germany's special claims in Shantung, and to grant Germany equal rights on the Yang Tsze with the British, but the matter itself appears open to further discussion.

To-day there appears to be a further change in the German policy in Shantung, and Germany informs the American Government and the other Foreign Powers that she claims no exclusive privileges in Shantung.

The Tientsin-Wei-hai-wei railway line proposed is intended to bring part of the trade of Tientsin by rail to what is admittedly the best commercial harbour in North China. Much of that trade is outside the German sphere of influence in Shantung, and would be brought from the outside surrounding Northern Provinces through North-Eastern Shantung to Wei-hai-wei. The railway would not, therefore, directly clash with the interests of the German line (which is a purely local Shantung one, centreing between Chinan the capital and the harbour of Kiao Chou), though it would compete with it running parallel to it from cast to west for 100 miles odd.

offers

51. It is necessary to refer to the above proposal at this length, because it alone any chance of converting Wei-hai-wei into a commercial port, and making it a self-supporting and prosperous part. Whether it is to the interest of the British Government to support the enterprise suggested (if it be proved to be capable of execution), is a matter of State policy that the British Government must settle for itself.

Further information in detail concerning the German railway system in Shantung and its bearing upon making of a railway from Wei-hai-wei inland are set out in Appendix No. 3 attached hereto.

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Mining.

52. Several mining engineers have visited the leased area and very roughly inspected its mineral resources. Mining and prospecting regulations have been pre- pared to deal with the necessary details, but up to date only two applications for nining leases have been made. It is generally thought doubtful, however, if Europeans can find any mineral in the leased area that will pay to work. No coal has yet been found in the leased territory. The Chinese wash a little sand gold in two of the villages by Three Peaked Point on the mainland. Good building stone is cheap and plentiful.

A Mining Ordinance has been prepared, but it is not proposed to bring it into force unless actual mining operations are begun.

Chinese Education.

53. There are approximately over a hundred village schools on the mainland, but the great majority of the Chinese here are illiterate. The average salary of a village teacher is about $35 per annum, and the primary education of a boy in a village school costs his parents about $4 per annum. It has been suggested that a small grant in aid of these village schools should be made by Government.

54. It has been agreed by the Chinese and British Governments that the Chinese students resident within the leased area of Wei-hai-wei shall be allowed to present themselves at the Yung-Cheng and Wen-Teng District Magistracies for the first Chinese degree.

After the Chancellor of Education for the Province of Shantung has published the honour lists, these two Chinese Magistrates report the results to the District Officer at Mahto.

55. Incidentally it may be pointed out that this practice, as it were, admits that the Chinese living within the British area are still regarded as retaining their Chinese nationality so that it is apparently necessary to regard Chinese residents in Wei-hai- wei, when abroad or outside the territory, as Chinese subjects retaining their allegiance to the Emperor of China, and not as British subjects.

Hospitals and Sanitation.

56. The medical duties of a Colonial Surgeon are performed by an officer of the Royal Army Medical Corps. The present acting officer is Major Starr, who resides on the mainland. He has established a small native hospital with 15 beds and dis- pensary, where Chinese are treated free of charge. The hospital is a rented Chinese house, and quite in its infancy, but it has already attracted over a hundred patients since it was opened. The Chinese treated suffer chiefly from tumours and eye dis- cases. The Chinese of the district as a rule are a people of wonderfully fine physique, with great powers of endurance, and there is very little sickness to be found amongst them. Small-pox and scorbutic diseases are most noticed, but the cases are really very few in number. The question of the introduction of bubonic or other contagious disease into Wei-hai-wei has lately occupied attention, and it is proposed to appoint one of the Naval or Military Medical Officers as Health Officer to the Port, and to make it compulsory to report all deaths amongst the Chinese on the island and at Mahto on the mainland, and take other precautions against the introduction of plague, which is still found in North China, Manchuria and Korea.

It will be very advisable to prevent plague being brought here if possible by inspection of the passengers and others arriving by Chinese junks, as, if such an epidemic were once allowed to get a footing in the territory, it would be very difficult to eradicate, and would do harm to the reputation of the Settlement as a health

resort.

The port of Mahto and the native quarters on the island are kept very clean, and are constantly inspected by the Medical Officers, Commissioner, and Assistant Com- missioner.

The retention of Chinese jurisdiction in the walled City of Wei-hai-wei. 57. This Chinese town lies about half a mile from Mahto, the port of Wei, hai-wei. It was left by the Convention under Chinese jurisdiction, and still remains 50. The experience of the last three years shows that it is possible for the District Magistrate on the mainland to exercise such control over the Sub-Magistrate in the

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