CO129-361 - Public Offices - 1909 — Page 313

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remainder restored on conditions to the Chinese. A small part might, he thinks, be reserved for the bona fide uses of the Railway Company.

It is very doubtful whether a compromise of this kind would be acceptable to the Chinese, who are intent upon recovering their rights over the whole territory, but the Russians would naturally be in a much stronger position to deal with the Chinese if they succeeded in disarming the opposition of other Powers.

The Chinese are certain to claim a share in the administration of any international Settlement that may be constituted, and I have furnished M. Korostovetz with a copy of the Municipal Regulations of the Settlement at Kulangsu (Amoy), and suggested the possibility of their serving as a basis for what is required at Harbin.

Mr. Willis, the Acting Consul-General at Mukden, informs mo that the Sun Life Assurance of Canada is now established at Harbin, and that, in reply to an inquiry as to what action they should take in the event of taxes being demanded from them by the Russian authorities, he has advised them to lodge a protest at the Russian Consulate and immediately communicate full details to himself.

In a private letter which I have just received, Mr. Willis mentions that in the course of a conversation which he had with his Japanese colleague on the 11th instant the latter told him quite frankly that the Japanese Government were awaiting the issue of the Harbin negotiations with great interest, and that they of course would claim whatever privileges the Russians secured in Harbin.

Mr. Willis will be relieved towards the end of this month by Mr. Fulford, and I have instructed him to pay a visit to Harbin before proceeding to Newchwang and furnish me with a Report on the situation.

Sir,

I have, &c.

(Signed)

Inclosure 1 in No. 1.

Mr. Fisher to Mr. Rockhill,

J. N. JORDAN.

American Consulate, Harbin, January 16, 1909. WITH reference to the question of the Municipal Administration for Harbin, I have the honour to report to you that the Taotai of Harbin called upon me yesterday and informed me that he had arranged a modus vivendi with the Acting Russian Consul-General here, pending a permanent settlement of the question, as follows : (1) That the taxes mentioned in Article 5 of the Regulations drafted by the manage- ment of the Eastern Chinese Railway Company (translation of which was forwarded to you with my despatch dated the 20th December, 1907) will not be collected pending the negotiations; (2) that the business tax which the Chinese and others have been paying to the Railway Company, irrespective of the Company's municipal scheme, shall be paid to the Railway Company (not to the so-called Town Council under the above-mentioned scheme) pending negotiations, but this payment shall not be taken as a precedent or as an admission that the Railway Company now has the right to enforce the payment of this tax (this tax amounts to 3 roubles per annum for ordinary business enterprises); and (3) that the negotiations for a permanent adjust- ment of the question shall be undertaken at once, and that this arrangement shall not necessarily continue beyond the end of the first moon of the Chinese calendar.

This arrangement was the outcome of an attempt about a month ago on the part of the railway authorities to close a number of Chinese liquor establishments which had refused to pay the Railway Company's so-called Municipal Administration the business tax under its new scheme, which for liquor establishments amounts to several hundred roubles. The establishments were closed by the Railway Company's police, but were opened by the Chinese authorities the following day; the next day they were again closed. With the conclusion of the above arrangement the places were reopened.

It was the intention that the so-called Municipal Administration should commence the collection of its taxes from the 1st of the Russian New Year (14th January). When, however, the Taxation Committee called upon some of the foreign business houses to produce their books in order that the assessment of the business or income tax against them might be fixed, they met with a refusal. For instance, the firm of Sennet Frères, a French house, declined to produce its books or pay any taxes other than for the actual maintenance of the streets and for general policing.

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Recently the Russian railway police were withdrawn from the Chinese post- office and Customs offices, and Chinese police are now doing duty there. The railway authorities now permit Chinese police to enter the railway territory of Harbin and make arrests of Chinese, providing they are notified, which has resulted in bringing to an abrupt end the reign of robbery, murder, and other outlawry, so far as Chinese disturbers are concerned. In this matter the work of the Taotai in the apprehension and execution of notorious Chinese criminals who have preyed upon the community for years, evidently with the knowledge of the Russian police, is worthy of commendation.

Some time ago, General Horvat, the Acting Russian Consul-General, stated to the Taotai that he realized that the Chinese should have been consulted in formulating the scheme for the Municipal Administration of Harbin, and he asked the Taotai if the question could not be adjusted between Russia and China without the participation. of the other Powers on the basis of the Russian Concession at Tien-tsin. The Taotai replied that, inasmuch as Harbin was open to international trade, the rights of the other nations would have to be taken into consideration. General Horvat then asked the Taotal if the railway's municipal scheme, as put forward during the first part of last year, could not be used as a basis for the adjustment of the question; to which the Taotai replied that, while a number of the conditions of that scheme, if taken by themselves, might be acceptable, inasmuch as China did not recognize the Railway Company's right of administration over Harbin, the general principles of the scheme could not be accepted.

During his call yesterday, the Taotai asked me if I would, confidentially, give him a rough draft of a project for a Municipal Administration that would be acceptable to us, which he and I could afterwards go over together and revise, and which he would then submit to the Viceroy for his approval; after the Viceroy's approval, it would be used as a basis upon which the Chinese would enter into negotiations with the Russians for the settlement of the question. He asked that I have the draft ready next week, as the time was limited. He added that, as we had supported the Chinese position here, it was due to us to have an Administration that would be accept- able. He urged that I treat the matter confidentially, as the Bussians are sensitive in negotiating the question, and will insist upon saving as much face as possible.

The present phase of the situation appears to offer an opportune occasion for an amicable adjustment of the question by mutual action of all the Diplomatic Representatives at Peking who are interested in the matter. As other nations than ourselves are interested in this question, I realizo quite well that their wishes should also be considered. However, as their acceptance of any adjustment that might be made would have to be obtained before it could be applied towards their interests, I see no objection to complying with the Taotai's request, providing such action meets with your approval, and he be informed at the time that my views in the matter might not necessarily be those of my Government. Therefore, unless you instruct me by telegraph not to do so, I will attempt to comply with the request, conforming myself with the general lines indicated in my various despatches forwarded to you on the subject.

In

In this connection, I have the honour to refer to my despatch dated the 10th October, 1908, to the Department, especially to the latter part of p. 4, copy of which was forwarded to you with my despatch of the 12th October, 1908. the instruction, dated the 20th November, acknowledging the receipt of the above despatch, the Department stated that it agreed with the views expressed therein: "That it would be desirable if an international Settlement, wherein the interests of all could be protected and respected, and which should be administered by a Council elected by all residents, including Chinese, could be established at Harbin."

In my opinion, the functions of a Municipal Administration over Harbin should be restricted strictly to the actual requirements of public peace and good order, and should not include the maintenance of schools, churches and, religious organizations, charities, theatres, or any other establishment of a nature that would benent residents belonging to any one nation more than the others, or matters regarding the develop- ment of trade and industries. These matters belong to the parties interested, and should be directed and maintained by them. For instance, the present Board of Trade of Harbin, which is receiving aid from the Railway Company's so-called Administration, is devoting itself solely to the development of Russian trade and industries here.