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Shangpu to arrange this at Peking and thus evaded all responsibility. at Urga.
Such is the plot
Act 1 may be said to have been the perpetual lending, with and without security, to the Mongols by the Russian Bank. Security when this existed for the loans being the land or live-stock of the tribes, possibly in some district minerals. All the Mongols from the Bogdo and Princes down to the lower classes must have money to indulge their extravagant vices and with a friendly bank so ready to lend it to them gladly avail themselves of the offer. I asked the bank what they did if the Mongols did not pay their debts, and M. Stephanow said that he informs the Amban that the bank is thinking of closing as it finds no trade. The Amban replies that this is the best thing to do and the bank beg his assistance to first collect their outstanding debts. This scheme seems only lately to have been put into force, as I imagine its thinness would be seen through after use on one or two occasions, for the Amban informed me with some pride in our conversation about the Taching Bank, that the Russian Bank were going to close. I asked him if he ever helped them collect their debts and he replied that he did so when they had security, but if the debts had been contracted on no security he declined to assist.
The consequence of this policy is the gradual impoverishment of the Mongols and such increase of distress among the lower classes that bands of robbers are formed while more strips of land become Russian property. As their impoverishment advances so much the more do the Mongols look with a certain amount of longing at the prosperous state of Mongols under Russian rule.
Act 2 may be called the tardy arrival of the Chinese Government Bank on the scene to second the Chinese money-lenders and perhaps to take their place. This step causes some uncasiness among the Russians, especially when combined with the Government intention of introducing Chinese farmers to open up the land to cultivation. They therefore desire the status quo maintained. It must be noted that the Mongols, though they despise the Chinese and probably aspire to independence, do not find Chinese rule irksome. It is really no rule for they are governed by their own Princes practically entirely. They would not probably be anxious to exchange it for Russian
rule.
It must also be noted that the Chinese garrison at Urga is extraordinarily weak- 250 men in all and no cannon, and that it is not even composed of the new Luchün. They cannot even cope with the present occasional robber bands. The nearest troops are eighteen days to the south and twenty-one to the west, and even by forced marches ammunition could not reach Urga under ten days.
Act 3 has yet to be played. If the brigand bands increase the Russian Con- sulate will increase their guard and the Russian Government will declare themselves obliged to protect their frontier and trade, and might even be urged by their local authorities to occupy the disturbed portion. If, on the other hand, the Chinese strengthen their guard the Russians will find ground for complaint and will follow suit either in Urga or on the frontier. If the Russian Government put down the brigands, history cannot hold them guiltless of being the fons et origo, by their intrigues and money- lending, of the situation they will invite themselves to crush. Two of the steps taken by the Amban are of tardy but great use: (1) The establishment of the State Bank; (2) The fixing of a price at which the animals belonging to the Mongols are to be taken over for a debt. If the first were supported by a proclamation forbidding land and especially minerals being pledged except to the Chinese Government, and if the rate of interest charged for money lent were never higher than that charged by the competitor bank, if given time, it would drive the Russians from an illegitimate field. The second step requires modification. The price of an animal should never be fixed higher than it would fetch at market at Kalgan or Kweihuacheng. The other step desired by the Chinese Government, i.c., the introduction of Chinese farmers and the gradual develop- ment of the land is fraught with dangers, and I cannot see what advantages would accrue to the Chinese Government. The Mongols will not adopt farming habits, and the same results would ensue as have done in the Yellow River basin, i.e., that the Mongols would be ousted. And if ousted they will be driven northwards (not south to the barren Gobi) to join their compatriots, the Buriats, whence they will always aspire to return to their original country. The Central Government would do far better to encourage immigration of the shopkeeper class, and the increase of the settlements already estab- lished in Northern Mongolia, and to try to improve trade by rapid communication with the south and abolishing squeezes and anything to hamper trade. One of the best methods of improving trade would be to declare Urga open to foreign trade and residence.
Personal relations between the Russians and both Chinese and Mongols are of the most friendly nature.
The Russian ladies visit and receive visits from the Bogdo's wife and some of the Mongol Princesses from time to time. To all and each the most acceptable offering is invariably brandy or champagne.
The result of Act 2 was the annoyance of the Russians and their serious fear that the energetic action of the Chinese Government betokened danger to their interests. They therefore called for the maintenance of the status quo, which presumably means that the Chinese are to cease from trying to administer their own dependency firmly by bringing Chinese settlers and a bank into the country and developing the land. If such be so then the Chinese garrison, which is insufficient to put down the present brigandage, must not be strengthened. Brigandage, however, is likely to increase with the impoverishment of the Mongols and Russia will see in this a danger to the frontier, and to trade in the interests of which she will inform the world she has a mission to suppress it. Lest the world should blame her for having created the situation she exaggerates the occasional visits of Japanese (whose only crime probably is that they report what they see and hear to the Japanese Government) into visits of emissaries to stir up the Mongols.
As regards the frontier Russia has no need for extra military arrangements (unless there are no troops along it at all which is highly unlikely) in order to cope with the small and inefficient Chinese garrisons at Urga, &c., while any movement of troops from China proper could not take place in any haste nor without the knowledge of the Russian agents at Kaigan and elsewhere, while as regards Mongol brigands the ordinary military measures would probably suffice even if the Mongols were armed (as was complained by the last Amban by the Russians themselves) with modern weapons.
Mongolian Reforms.
The evils from which Mongolia is suffering are poverty and inability to develop its natural resources (ponies, sheep, cattle, goats, wool, hair, &c.). This reacts on the Chinese Government, who complain that Mongolia is a drain on the Imperial Exchequer; this is alleged by all Chinese officials with whom I conversed on the subject, and there is a tendency to let Mongolia drift away.
That the dependency is a drain on the Imperial finances is due to the following conses: (1) the vast sum spent on a non-existing army; (2) the excessive number of officials, and therefore wastage of money on salaries; (3) the cost of the upkeep of the Tai system, the greater portion of the money for which drifts into the hands of the officials, owing to the prevalence of squeeze.
These might be set off by flourishing trade, but this is hampered by li-kin charges at the town of entry, and again on arrival at that of destination, while the Russian competition, even if goods are not allowed to enter duty free, of which I am by no means certain, and even if the goods are of a different nature from those produced by China, and therefore do not clash with Chinese, at any rate diminishes the Mongol buying powers vis-à-vis the Chinese.
The poverty of the Mongols causes universal stagnation of trade, and is due to a large extent to the slow means of communication. This could be remedied by the following sebeme, which would produce these beneficial results: (1) steady expansion of trade, and thereby the lessening of the cost of administration by the increase of Customs dues at the stations of entry; (2) the opening up of Mongolia and the penetration of Chinese, as desired by the Chinese Government, while the Mongols would be brought under the influence of civilization quietly along their own lines; (3) the maintenance of the Chinese rule, and thereby the integrity of the Empire.
The scheme is in brief the revision of the Tai system and its extension to all traders and travellers. An annual subsidy to be paid by the Chinese Government, as now, but according to the expenses incurred by each Tai, books being kept and inspected from time to time; any merchant or person to be allowed to travel along the Tai with merchandize on payment of a certain charge per animal per stage (there would be a fixed tariff). The money accruing from this to go to the Mongols according to expenses incurred and as shown by their books; official work to be free, as now, but to be also noted in books and be carefully checked. The charges for merchandize to be such that traders would be induced to send it by Tai, and not by caravan.
Such an extension would cause more and more trade to travel annually by the Tai, and goods would pass at double the present pace, while there would be no delay,
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