2
This question will be dealt with shortly in a separate despatch, as it involves the status of this Treaty port, and has been brought definitely before the Consuls by the Mukden Government. The Consuls will, of course, contend that the whole city is opened to foreign trade, and foreign merchants and goods cannot be taxed therein beyond the provisions of the Treaty tariff.
The Chinese authorities hope evidently that, with the termination of the military occupation in April, they will be in a position to discuss the matter with the foreign Consuls on a purely Treaty basis, and rely upon the wording of the American and Japanese Treaties of 1903 to support their contention that the town of Mukden is not open to foreign trade, but only a restricted area outside the mud wall, to be selected in consultation with the American and Japanese Representatives. They have, in the meantime, waived in several cases the collection of the duty from foreigners other than Japanese, in consideration of the argument that if they did not euforce the tax on Japanese they should not enforce it upon other foreigners.
The only foreign merchants who have opened establishments in the town or its vicinity other than Japanese are the British-American Tobacco Company and Arnhold, Karberg, and Co,, a German firm, who have no resident foreigner here. Other New- chwang firms have Chinese agents only. The Japanese have opened many retail shops, a few merchants' " hongs," and a great many disreputable restaurants, which are practically brothels, and gambling dens.
The trade of the town is in the dullest condition. Ready money is very scarce, and the Chinese authorities are trying to put an end to the old system of trading on credit, The grain business, beans and millet, which formerly constituted a great proportion of the wealth of the city, seems to have forsaken Mukden. This is partly the result of the diversion of the traffic to the railway. There is no longer any need to collect grain at Mukden during the winter for carriage to Newchwang in the spring by river. The tendency is to collect it now near the railway stations or the higher shipping marts on the River Liao. The large grain firms of Mukden formerly traded on credit, that is, issued money orders for the grain and redeemed them on sale of the grain. They are now forbidden to do this, and this prohibition further affects their business. The great producing districts of Manchuria are tapped by other towns than Mukden under the new conditions of transit.
The improvements which the Tartar General has introduced into the city are costing a great deal of money, and the necessary taxation to provide for the expenses is causing much discontent among the people. The result is a marked tendency on the part of all traders to await events and hope for easier times next year.
A new police system modelled on that of Tien-tsin has been introduced, and seems to be remarkably efficient for a Chinese organization. The town is divided into six districts with 200 men to each, and they certainly appear to be constantly on the alert, and to perform their duties thoroughly. There is also a rural police, who control the country for some 12 miles on every side of Mukden.
Modern schools have been built in each quarter of the town in semi-foreign style, and are well attended. Some Japanese instructors are employed.
Sanitary needs are attended to, and public slaughter-houses provided. The Palace and the city walls are in course of thorough repair. The Imperial tombs north and east of the city have also been restored. Taking example from the Japanese, a Yoshiwara of great size has been built, where all the prostitutes of the town are to live under supervision and regulations.
Labour being dear and materials of all kinds at ruinous prices, it may be imagined that all these measures, excellcut as they undoubtedly are, necessitate a great outlay, and the Treasury must find money by every possible means,
The Japanese military authorities are still in control of the railway, as above stated. They appear to be adopting a hand-to-mouth policy with regard to it, and to be making as much money as possible without incurring any avoidable expense, preparatory to handing it over to the Commercial Association, which will have the task of changing the gauge and providing proper rolling stock. The Hsin Min Tun to Mukden line was hurriedly put in working order last summer, apparently for the above-mentioned purpose, and the passenger traffic alone must justify the enterprise. About 1,600 are carried each day at fares amounting to 2,000 dollars, the only accommodation provided being covered baggage cars.
I have, &c.
(Signed)
II. E. FULFORD,
This Document is the Property of His Britannic Majesty's Government.]
CHINA RAILWAYS,
CONFIDENTIAL.
[2974]
Sir,
No. 1.
[January 26.]
SECTION 2.
British and Chinese Corporation to Foreign Office.-(Received January 26.)
22, Abchurch Lane, London, January 25, 1907. IN our letter of the 17th December last, we acquainted you, for the information of Sir Edward Grey, that, in defiance of the Corporation's rights, the Chekiang Railway Bureau was proceeding with the construction of the first section of the Soochow-Ningpo Railway, viz., from Soochow to Kashing.
We now beg leave to submit, for the information of Sir Edward Grey, some parti- culars of the work which is proceeding, which particulars have reached us in a letter from Messrs. Jardine, Matheson, and Co., dated Shanghae, the 14th December, 1906, as follows:---
"From information which we are able to obtain here an reliable authority, survey work has been commenced between Soochow and Kashing, and construction work and a certain amount of earth work have been started at Hangchow.
"Chang, one of Mr. Grove's late assistants on the Shanghae-Nanking Railway, has been appointed Engineer-in-Chief.
"The Chinese are also reported to be buying ballast and sand at Hangchow, and it is also reported that contracts have been entered into with the 'Hanyang' ironworks to supply rails, and the Tongshan works of the Northern Railways to supply rolling stock.
"They have opened an office at Shanghae."
We further beg leave to state that we have received a telegram from Messrs. Jardine, Matheson, and Co., dated Shanghac the 23rd January, 1907, in the following
terms:
"Chinese Railway Shanghae to Kashing, 35 miles; first sod was cut 21st January outside Shanghae city; large demonstration. We are telegraphing to J. O. P. Bland."
The proceeding this telegram reports is an additional infraction of the Corporation's rights, inasmuch as the contemplated railway from Shanghae to Kashing will be a railway detrimental to the business of both the Shanghae-Nanking Railway and the Soochow Ningpo Railway, and in direct contravention of Article 17 of the Shanghae- Nanking Railway Agreement, which Article applies equally to the Soochow-Ningpo Railway. This Article is as follows:-
"It is further agreed that without the express consent in writing of the Director- General and the British and Chinese Corporation, no other rival railway detrimental to the business of the same is to be permitted, and no parallel line to the Shanghae-- Nanking Railway is to be allowed to the injury of the latter's interest within the area served by the Shangbae-Nanking main line or branch lines,"
We think it probable that a railway might be desirable from Shanghae to Kashing, but we submit that it ought not to be constructed without the consent of the Corpora- tion, and with due regard to the interests of the Shanghae--Nanking Railway and the Soochow-Ningpo Railway.
For convenience of reference we inclose a sketch-map showing in red the Shanghae- Nanking Railway and the Soochow-Ningpoo Railway, and in green the intended railway from Shanghae to Kashing. (In the map Kashing is spelt "Kia-Hing.")
We are, &c.
The British and Chinese Corporation (Limited),
(Signed) W. KESWICK, Chairman,
P.S.~Sir Edward Grey is aware that Kashing is not the objective point of the railways.which are intended to go on to Hangehow (where earthworks seem to have been started) and presumably to Ningpo.
W. K.
[2326 cc-2)
* Nut reproduced.
376
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