CO129-345 - Public Offices & Foreign Office - 1907 — Page 408

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delay as demanded by His Majesty's Government on the 31st December last year, and my Directors earnestly trust that this will be insisted on, at least as a debt due from the Chinese Government to the Syndicate, and to be paid, in case of need, out of royalties. To forgo this claim would, my Directors think, be a palpable confession of weakness and a most mischievous precedent, leading the Chinese to think they might tamper hereafter with the Syndicate's rights with impunity. Sir John Jordan, in presenting this claim, informed Prince Ching (vide Foreign Office letter to the Syndicate of the 5th March last) that His Majesty's Government considered the delay in issuing the permit to be a distinct breach of the Syndicate's Agreement concluded under the sanction of an Imperial Decree," and the breach is no less a breach because the Syndicate is now willing, for the sake of conciliating native opinion, to enter into a compromise for future working. My Directors trust that in the event arising this point will be made clear to the Chinese Government,

My Directors observe that Sir John Jordan contrasts the somewhat passive attitude of the Syndicate with the activity displayed by the agents of other Companies in modifying their original grants to suit the altered conditions of the time. There is not, however, any real analogy between the two cases. Each of the other Companies had a Final Agreement to negotiate, based, it is true, on a rough Preliminary Agreement, and one of the altered conditions of the time was the improved credit of the Chinese Government in European markets, which enabled them to give better terms both as to the price of the loans and as to the security than the Preliminary Agreements called for without pecuniary loss to the Companies themselves. But in the case of the Peking Syndicate none of these considerations prevailed. The Final Agreement was complete. It had been signed and ratified, and nothing remained to be done but that the Chinese authorities should give permission to work. On the strength of its undisputed validity the Syndicate appealed to and obtained from the public subscriptions amounting to a very large sum of money, the statements in the prospectus having been submitted to the Foreign Office before publication. Moreover, the Agreement had been accepted in Honan as a practical Working Agreement, and all we asked was that the Shansi authorities should adopt the same course.

The Syndicate relied, and could not but rely, on His Majesty's Government to remove obstruction by diplomatic pressure, and it is only now, on the express representa. tion of Sir John Jordan, that some modification is absolutely necessary that my Directors consent to reopen the question of terms. No effort will be spared on the part of the Syndicate's agent to bring about a satisfactory settlement, but my Directors venture to hope that the support of His Majesty's Minister, which they gratefully acknowledge as to the past, will be equally accorded in the future.

I have, &c.

(Signed)

THOS. GILBERT, Secretary,

K

This Document is the Property of His Britannic Majesty's Governm.ut.]

AFFAIRS OF CHINA.

CONFIDENTIAL.

[35569]

(No. 208.) Sir,

No. 1.

405

[October 28.]

SECTION 1.

Sir C. MacDonald to Sir Edward Grey.-(Received October 28.)

Tokió, September 27, 1907. WITH reference to Sir J. Jordan's despatch No. 265, Confidential, of the 30th May last, in regard to the Dalny Customs arrangement, I have the honour to transmit herewith copy of a despatch from Mr. Parlett, offering some observations on the subject.

Mr. Parlett has forwarded a copy of his despatch direct to Peking.

(No. 49.)

I have, &c.

(Signed) CLAUDE M. MACDONALD.

Inclosure in No. 1,

Vice-Consul Parlett to Sir C. MacDonald.

Sir,

Dairen, September 12, 1907. I HAVE the honour to return herewith the copy of Sir J. Jordan's despatch No. 265 of the 30th May, to the Foreign Office, which formed the first inclosure in your Excellency's despatch No. 15 of the 31st August.

The question of levying duty on junk-borne commodities has been settled in the affirmative by a private agreement between the Commissioner of Customs and the Governor-General at Port Arthur, which came into force on the 1st of last month. In accordance with its terms, junk stations have been established, at which junk-borne cargoes are subjected to examination and duty when necessary levied on them, as would be the case in China. In fact the system in force is practically, so I am informed, in all but name the same as that of the so-called "native Customs.

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With regard to opium, Mr. Kurosawa tells me that he thinks it unlikely any considerable quantity will be imported into Manchuria by way of the leased territory, because the former region, particularly the Heilungcheng district, produces plenty of opium of a quality so eminently suited to the requirements of the natives, that there is but little demand for any other. Before the Customs opened here, large stocks were imported, mainly for consumption in the leased territory, and it is anticipated these will suffice for the rest of the year. The trade is in the hands of the Ahen-kyoku (opium bureau), which is under Government supervision, but I am led to infer that the supervision is nominal rather than real.

I have, &c.

(Signed)

HAROLD G. PARLETT.

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