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In a despatch of the 3rd instant (copy inclosed) Mr. Werner has reported to me the action taken by the Council in pursuance of the above instructions. A tonnage one of half a candareen (192.) per ton will be levied on the French steamers, which will amount to a contribution of 1,200 taels per annum, as against 1,000 taels paid by each of the other Companies for the Bund licence.
But Mr. Werner, it will be observed, still considers that an effective check should have been put upon the subsidy-favoured competition of the French steamers by excluding them altogether from the Bund of the British Concession and obliging them to anchor in the river.
While fully sympathizing with the British Companies in the keen competition they have to face from subsidized rivals, I regret that I cannot concur in the views expressed by Mr. Werner.
It was open to the British Companies to apply for the lease of this particular portion of the Bund frontage, and, had they done so, their application would have received priority over all competitors. In the absence of British applicants it was leased by the Council to the Nippon Yusen Kaisha on the same terms as the remainder of the frontage is held by the two British Shipping Companies. The Nippon Yusen Kaisha is heavily subsidized by the Japanese Government. I cannot sec, therefore, how we can refuse to a French subsidized Shipping Company privileges which we grant freely to a Japanese subsidized Company.
It is well known that the frontage of the Kiukiang Concession lies idle most of the day, and if the holders of a licence are willing to share their rights with others, aud we meet them with an absolute refusal, the French or any other Government may, think, reasonably charge us, as the owners of the only site for a Concession immediately available at the port, with exercising a monopoly detrimental to the general interests
of trade.
(No. 4.) Sir,
I have, &c. (Signed) J. N. JORDAN.
Inclosure 1 in No. 1.
Consul Werner to Sir J. Jordan.
Kiukiang, February 23, 1907. WITH reference to your telegrams Nos. 1, 3, and 4, of the 9th, 14th, and 16th instant, and to my telegrams Nos. 1, 2, and 3 of the 9th, 13th, and 15th instant, I have the honour to report that when, at the annual general meeting of land-renters, &c., held on the 30th ultimo, the application of the Nippon Yusen Kaisha to lease the western end of the Bund frontage was about to be put to the vote, questions were asked and an understanding arrived at that the lease would admit of the steamers under the management of the Nippon Yusen Kaisha only using the frontage, and it was on these conditions that the lease was granted by the meeting to that Company.
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When the new French steamers of the "Compagnie Asiatique de Navigation began last year to call at Kiukiang, Messrs. Jardine, Matheson, and Co. and Butterfield and Swire represented to me that the access of these steamers to the Yang-tsze Shipping Company's hulk was prejudicial to their interests. With the object of supporting those interests the meeting decided that a form of licence should be adopted which would not admit of the Nippon Yusen Kaisha allowing the steamers of the French Company the use of their hulk.
Clause 2 of the form of licence in use in Hankow was referred to, and it was taken as meaning that though it permitted occasional outside steamers or steamers chartered by the lessees to use the hulk under the conditions specified, it would not include a whole line of foreign steamers regularly running, which could, however, anchor in the river and discharge their cargo either at the public steps or public jetty. The agent of the Nippon Yusen Kaisha at Kiukiang accordingly gave notice through his principals in Shanghae to the Directors of the " Compagnie Asiatique de Navigation" that their steamers would no longer be allowed the use of the hulk.
On the 11th February the agent of the Nippon Yusen Kaisha at Kiukiang received a telegram from his Company in Shanghae saying that "the French are going to moor their steamers alongside your hulk without our consent.
Have them under protest." The steam-ship "Li Fong," belonging to the French Company, arrived on the 13th instant and moored alongside the hulk. Captain Smith, agent of the
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Nippon Yusen Kaisha and Secretary of the Municipal Council, referred the matter to me and requested me to accompany him on board, and after we had explained the circumstances to the captain of the "Li Fong," and he had refused to take his steamer away from the hulk, merely saying that he would go when he was ready, we entered verbal protests, there being no time to put them in writing, and I reported the case to you by telegraph, since it seemed impossible otherwise to put into force the wishes of the land-renters as expressed at the annual meeting.
On receiving your instructions to communicate with His Majesty's Consul-General at Hankow, I immediately wrote to Mr. Fraser, and was informed by him that clause 2 of the licence form in use at Hankow would be interpreted as admitting any number of outside steamers, providing they conformed to the conditions specified in the licence form. I am not aware, however, whether a similar case has actually occurred at that port, since the French have their own Concession.
It was obvious, therefore, that the licence form was not so worded as to enforce the wishes of the ratepayers and British Shipping Companies at Kiukiang as expressed at the annual meeting. The Council, deeming it to be their duty to give effect to these wishes, have accordingly adopted another wording of clause 2, which now reads as follows:-
"2. The lessees shall not at any time during the said term permit any ship or vessel which is not a (British) ship or vessel the bond fide property of and managed and controlled by a (British) Company or Corporation or by a (British) subject or subjects to make use in any manner whatsoever of such hulks, pontoons, bridges, and jetties, or the Bund frontage hereby leased or any part thereof; and in order to insure the effectual carrying out of this provision, only the ships and vessels specified in the margin hereof or vessels temporarily employed in their stead belonging to or under Charter to the lessees shall be allowed to make use of such hulks, pontoons, bridges, jetties, and Bund frontage."
I have the honour to request your sanction to my approving the above wording of
this clause.
My reason for doing so is solely to enable the Council to enforce the wishes of the ratepayers and to comply with the request of Messrs. Jardine, Matheson, and Co. and Butterfield and Swire to protect their interests in this respect.
I am informed (though I have been unable to verify the statement) that the condition under which the Nippon Yusen Kaisha allow the French steamers access to the hulk is that they shall pay the licence fee due to the Municipal Council-an arrangement which seems antagonistic to the spirit of the Agreement.
Should you not see your way to comply with the wishes of the ratepayers as expressed at the meeting, their only course will be to adopt clause 2 as originally worded, with its wider interpretation, and to call upon the Nippon Yusen Kaisha, as the lessees, to pay the dues of the French steamers, as well as any damages which may be assessed for non-fulfilment of the conditions of the Agreement.
Mr. Fraser informs me that "the point of our licence form is that no steamers, except those indicated in its margin, may use the frontage or hulk without the consent of two parties: (1) the licensee; and (2) the Council. If the licence is adopted in its original form, it will therefore still be possible for the Council to disapprove of the Nippon Yusen Kaisha admitting the French steamers. In case the Council should eventually adopt this attitude, I have the honour to request your instructions as to whether or not I should give it my approval, in compliance with the wishes of the Council and ratepayers.
Whilst, strictly speaking, the question is one between the Council and the lessees, in small ports like this any point involving dispute immediately referred to the Consul. Had the question remained entirely with the Council, there can be no doubt that they would have considered it their duty to carry out the wishes of the ratepayers and prohibit the Nippon Yusen Kaisha from allowing the French steamers to make use of their hulk to the prejudice of British interests. The decision of the matter would then, in all probability, have been referred to Peking by the Directors of the French Company at Shanghae. As the agent at Kiukiang of the Nippon Yusen Kaisha and the Municipal Council have sought my intervention, I have the honour to request your sanction to my approving the revised wording of clause 2 of the licence form, as quoted above, or your instructions to inform the Council and ratepayers that the original form with its wider interpretation is to be adhered to.
That the Council are in earnest in their endeavour to fulfil the wishes of the ratepayers is shown by the fact that they gain nothing by the exclusion of the French
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