This Document is the Property of His Britannic Majesty's Government.]
AFFAIRS OF CHINA.
CONFIDENTIAL.
[12628]
316
C.O. 16123
[April 3.]
SECTION 3.
Rece
Teco 13 MAY DO
No. 1.
Sir J. Jordan to Sir Edward Grey.-(Received April 3.)
(No. 77.) Bir,
Peking, February 17, 1909, WITH reference to your telegram No. 28 of the 8th and my telegram No. 42 of the 10th instant, I have the honour to transmit to you copies of two despatches from the United States' Consul at Harbin, which have been courteously placed at my lisposal by my American colleague, and which explain the situation that has arisen there in consequence of the Russian attempt to enforce the Municipal Regulations, a copy of which was forwarded to you in my despatch No. 82 of the 17th February, 1908.
In his despatch of the 16th January. Mr. Fisher reports that the Taotai had arranged a compromise with the Russian authorities on the following basis ---
1. That the taxes prescribed in Article 5 of the Municipal Regulations should not be collected pending a permanent settlemont of the question.
2. That the business tax which the Chinese have been paying to the Railway Company should continue to be paid, but that such payment should not be taken as a precedent or an admission of the right of the Railway Administration to enforce payment of the tax.
3. That negotiations for a permanent adjustment of the question should be com- menced at once.
General Horvat, who combines the functions of Acting Consul-General and Administrator of the Railway Settlement, evidently came to the conclusion that the Municipal Regulations should have received at least the formal assent of the Chinese, and he approached the Taotai with the view of having the whole question adjusted on the basis of the Russian Concession at Tien-tsin. Having failed in this object, he then suggested the possibility of taking the municipal scheme itself as a basis of settle- ment.
Finding that his overtures were not favourably received, General Horvat seems to have set aside the provisional arrangement made with the Taotai and to have procecled to the enforcement of the Railway Company's scheme of administration. A fresh set of obligatory Regulations was issued and made applicable to all residents of Harbin and the various Russian Settlements along the line of the railway. This was followed a few days later by a schemo of assessment for taxation purposes issued by the Town Council.
These documents, read in conjunction with those forwarded in my despatches No. 82 of the 17th February and No. 440 of the 1st October, 1905, show that General Horvat is assuming jurisdiction over foreigners in a manner which is not warranted by Treaty and which cannot be reconciled with the principle of equality of commercial opportunity. In adopting this attitude, General Horvat has received the strong support of his Japanese colleague, who was for many years a resident in Russia and naturally finds it convenient that a policy should be inaugurated under Russian auspices in the north which can be utilized for Japaneso purposes in the south. The indifference or acquiescence of other Powers has also doubtless encouraged General Horvat to persevere in his attempt to convert what was originally intended as a purely railway Settlement into a miniature Russian Colony,
The Russian Minister here, M. Korostovetz, fully realizes that the present position is untenable, and that it must be modified and regularized in accordance with Treaty, but he is powerless to make any hoadway against the military and financial authorities who control the Railway Administration. The land which comprises the railway Settlement is, I understand, hold under a variety of tenures, some in perpetuity, some for the term of the Railway Concession, and some for a period of thirty-six years, and this fact tends to complicate a solation; but M. Korostovetz is inclined to believo that a portion of it should be converted into an international Settlement, and the
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