CO129-344 - Public Offices & Foreign Office - 1907 — Page 222

[This Document is the Property of His Britannic Majesty's Government.}

(( CHINA TRADE.

CONFIDENTIAL.

[16218]

No. 1.

221

(May 18.]

SECTION 6.

(No. 169.) Sir,

Sir J. Jordan to Sir Edward Grey.-(Received May 18.)

THE negotiations for the opening of custom-houses at Dalny and on the

Peking, April 3, 1907. Manchurian frontier, which formed the subject of my despatch No. 144 of the 20th ultimo and of preceding reports, continue to make slow progress.

M. Pokotilow, the Russian Minister, informed me some days ago that there were two points of difference to be adjusted between himself and the Wai-wu Pu. The first related to the free zone of 50 versts on each side of the frontier stipulated for in the 1st Article of the Russian Land Trade Regulations of 1881.

The Chinese contended that this provision was no longer applicable with the altered means of communication by railway, but the Russian Government declined to admit the justice of the contention, and claimed the fulfilment of the Treaty obligation.

The second point in dispute was the amount of duty to be levied under Article 10 of the Eastern Chinese Railway Agreement of the 8th September, 1896.

The Chinese claimed that goods entering Manchuria by the railway should be charged the two-thirds overland duty at Mandchourie or Pograuitznaia, and that, if they were carried farther to stations on the line in Manchuria, they should be liable to payment of transit duty in addition. The Russian Government, on the other hand, contended that the two-thirds duty should frank the goods to any point on the railway, and that the additional transit duty should only be payable when they left that for a place in the interior."

M. Pokotilow said that his Government was not prepared to yield either of these points, but he thought it possible, in view of the delay their settlement was likely to entail, that they would consent to the provisional establishment of custom-houses in the meantime. I expressed an carnest hope that something would be done soon to give effect to the promise which the British community at Newchwang had received from so many quarters.

Yesterday I had a long conversation with the Ministers of the Wai-wu Pu on the subject. I reminded them of the repeated promises they had made during the winter that the question would be settled before the opening of Newehwang in the spring, and informed them that, on the strength of their assurances, I had telegraphed to you that the custom-house at Dalny was to be opened on the 14th ultimo. You were probably under the impression that this had already taken place.

The Grand Secretary, Na Tung, said that the Japanese Minister continued to put them off by saying that he was still awaiting the instructions of his Government, whereas the fact was, he suspected, that the Japanese were hanging back, waiting for the Russians to make the first move.

I told the Grand Secretary of my conversation with the Russian Minister, who was willing to agree to the provisional establishment of customs stations on the frontier, and urged that the Chinese Government could, if they wished, accelerate a solution of the question.

The Japanese Minister, whom I saw to-day, told me that he had just received the instructions from his Government, and was going to see Sir Robert Hart, with the view of coming to an arrangement. The Japanese Government, Mr. Hayashi explained, still preferred to adopt the Kiaochow Customs Agreement of 1899, with certain modifications which he was instructed to negotiate. They were unwilling to allow the Customs Postal Department to function in the leased territory, and they asked that the collection of duties, taxes, or li-kin on junks should not, as in the case of Kiaochow, be intrusted to the Customs Administration. They proposed to reserve a portion of the ground which was being made over to the South Manchurian Railway Company as Japanese Government property, which they would lease to the Chinese Government for Customs use.

If these, and a few minor stipulations, met with Sir Robert Hart's approval, Mr. Hayashi saw no reason why the Customs at Dalny should not be

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