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opened at Harbin, Manchuli, or Pogranitebnaia, but an immediate settlement of the dispute regarding the duty on goods coming into Manchuria by rail was anticipated when a Commission would set about defining the 10 radius from the railway station, With the station as the centre, much of the Railway Settlement will lie outside the circumference of the circle.
There are said to be 2,000 railway guards in Harbin, and I witnessed a parade of six sotnias of cavalry. A naturalized Russian, a native of Scotland, informed me that there are 80,000 troops in Irkutsk, 60,000 at Chita, and 300,000 along the Amur and in the Frimorsk, and he hinted that they were being kept in readiness for the next trouble in China, and that their objective would be Mongolia. He further stated that a special grant of 32,000,000 roubles had been made for military purposes at Irkutsk, and that, as there was a fear that the Primorsk Province was now more casily assailable, the long projected railway from Stretensk along the north bank of the Amur to Khabarovsk was being seriously taken in hand,
Japan is playing in Manchuria the game which has proved so successful in Corea. She is allowing, if not abetting, the flooding of the country with undesir- ables, her object being to establish paramount interests and influence in these three provinces. Nobody who knows anything of Manchuria believes for a moment that the result of the late war has ended the struggle for the mastery in that country. It is to either Russia or Japan a land flowing with milk and honey. Had Japan secured by Treaty the line from Kuan-ch'eng-tzu to Harbin, a severe blow would have been dealt to Russia, for Harbin is the strategic key to the whole of Northern Manchuria. That she will hand over that key to Japan seems most unlikely, and any disposal of the line could only be due to the direst necessity. Poverty often drives people and nations to extremities, but Russia will be poor indeed when she agrees to part with it.*
Return to Mukden. Proposed Extension of Chinese Railway from Hsın Min Fu to Tsitsihar.
I left Harbin at 10 P.M. on the 15th October, and arrived at K'uan-ch'eng-tzu at 8 A.M. next morning. From the latter to Mukden, which I reached at 5.30 A.M. On the 18th, the run was 12 hours. On the 18th I again called on the Governor, who talked of the projected extension of the Imperial Railways of North China from Hsin Min Fu to Fa-ku-men and Tsitsihar, of which a preliminary survey was then being made. His Excellency seemed to think that Russia had now no say in the matter of the proposed extension, but the attitude of Japan may have to be reckoned with, as the extension would undoubtedly affect in no small degree the South Manchurian Railway. Even now it is a curious fact that the Mitsui Bussan Kaisha are sending beans from Mukden by the Chinese instead of by the Japanese railway to Newchwang.
The Mukden--Hsin Min Fu Line.
As soon as China acquired by purchase the line from Mukden station to Hsin Min Fu, the engineers of the Imperial Railways of North China at once began to widen the gauge, and the work was completed in eight days. The construction of an iron girder bridge across the Liao was also taken in hand, and the piers are already well advanced. The bridge will be much higher than the old Japanese bridge, and will probably allow the passage of junks without having to unship their masts. This somewhat laborious process was taking place when I passed over the bridge. At present the Imperial Railways of North China utilize a part of the Japanese railway station, but they are building a new station, and putting up sheds a short distance to the west of the Japanese line.
I loft Mukden at 7.40 A.M. on the 19th, and, spending the night of the 20th at Tien-tsin, I returned to Peking on the evening of the 21st October. At Tien-tsin I heard that a German firm there bad secured the contract for a Chinese light railway from Tsitsibar or Pu-k'uei, the capital of the Hei-lung-chiang Province, southwards to the Russian line, a distance of 17 miles.
The two main points which I tried to clucidate during my visit to Manchuria were: Is trade unduly depressed, and, if so, why? And what has become of the millions spent in the country by the belligerents?
* A wireless telegraphy installation has recently been set up south of New Harbin.
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Is the Trade of Manchuria Depressed, and why?
When I visited Manchuria in March 1906 the war had come to an end, and Russia and Japan were withdrawing their armies from the field. During the war the trade of Manchuria, with the exception of supplies for the belligerents, languished, and during the evacuation railway transport within the occupied zone was little available for commercial purposes in face of military requirements; but carts and junks, by which, previous to the introduction of railways into Manchuria, the whole internal trade of the country was carried ou, continued to be used when not commandeered by the two armies, and a certain volume of trade was thus maintained, and was augmented by the Imperial Railways of North China from Chinwangtao and Tien-tsin, and by the Chinese Fastern Railway from Vladivostock. Great expectations were entertained that on the cessation of hostilities there would be a large demand for foreign goods in Manchuria, and extraordinary preparations were made to meet it; but in my Report on the Foreign Trade of China for 1906 I endeavoured to show that the heavy importations in 1905 did not justify the expectations that had been formed in regard to the consuming capacity of the éountry. It is perfectly true that the belligerents brought large sums of money into Manchuria, and that much of that money remains unspent; but it must be remenibered that the country, especially in the north, is sparsely peopled, and that its require- ments in the shape of foreign goods, if annually increasing, are somewhat limited, Although trade is now showing signs of recovery in the chief distributing centres, there still exist many obstacles to its free development.
With the war came war prices, and these are even now too high. Producers made money during the war, and they still try to dictate terms to buyers. Time will, however, rectify this condition of things, especially when the farmers and middlemen realize that Manchuria's great export, beans and their products, can be purchased in the Valley of the Yang-tsze.
The currency of Manchuria is in a state of chaos. In the south and as far north as K‘uan ch'eng-tzu (Chang-ch'un Fu), the northern terminus of the South Manchurian Railway, subsidiary silver coins known as "small money" constitute the currency. All transactions, great and small, are based on this currency, which is at a discount of nearly 20 per cent. on its face value. Silver dollars, whether Mexican, British, or Chinese, are scarce, while Yokohama specie and Russo-Chinese Bank dollar notes (the former issued by the Newchwang branch of the Bank) are common, but at a discount of some 4 per cent. vis-à-vis the silver dollar. To add to the confusion, the South Manchurian Railway Company recently issued an order that from the 1st October of the present year only gold yen would be accepted by the railway, and dollar notes issued by the Chinese Hu Pu (or Government) Bank are now being put into circulation. In Northern Manchuria roubles (silver and paper) and silver and bronze copeck pieces are the currency, and no other coins are accepted by the railway between K'uan-ch'eng-tzu and Harbin on the Chinese Eastern Railway.
In the city of K'uan-ch'eng-tzu subsidiary silver coins of the Kirin, Mukden, Canton, Nanking, Wuchang, and Tien-tsin mints are common; Mexican and Pei-yang (Tien-tsin) dollars are scarce; silver roubles are also in use; while rouble and dollar notes, Japanese war notes (gradually disappearing), and Kirin Government bank tiao (1 tiao about 40 cents) notes are all represented. "Sycce," or shoes of silver, are also in use. With such diversity it can readily be imagined that, while the money-changer prospers, trade has great difficulties to contend with. A new dollar said to be better than the Pei-yang dollar has been coined at the Tien-tsin mint, and is held in readiness there for introduction into Manchuria. This has been done at the request of the Governor of Feng-tien.
If the currency of Manchuria is in a state of confusion, so is taxation. In the three provinces twenty-three different taxes, each having a separate name, are levied on goods of various classes. Mr. Oliver, the Commissioner of Chinese Customs, who was sent to Manchuria with the object of establishing custom-houses there, drew up a scheme for the taxation of goods between the marts opened by the Additional Agreement between China and Japan of the 22nd December, 1905, and it was put in force in the southern province of Feng-t'ien until the arrival of the present Governor, who at once raised objections to it, and has since introduced another system. By Mr. Oliver's scheme native produce carried from mart to mart paid 1 per cent. ad valorem at the first mart and 2 per cent, at destination-a total of 34 per cent. These taxes were known not as export and coast trade duties, but as production and consumption levies. As, however, Japanese merchants engaged in this trado refused,
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