CO129-362 - Public Offices - 1909 — Page 474

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[This Document is the Property of His Britannic Majesty's Government.]

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on the local agitation. His Majesty's Minister has from the first been anxious to avoid interfering officially between the Board of Communications and the British and Chinese Corporation, but the attitude of the former has left him no option. The conditions of the Loan Agreement were designed to secure an honest and economical construction of the railway, and it is to this end that His Majesty's Government have been obliged to authorise Sir J. Jordan to intervene so frequently in these railway

loan matters.

They sincerely hope that the Imperial Government will lose po time in remedying the irregularities to which attention is called in this memorandum, and which must have a most deplorable effect upon public opinion in this country when the facts become known.

Foreign Office, August 11, 1909.

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CHINA RAILWAYS.

CONFIDENTIAL.

[31271]

No. 1.

REGP 25 SEP 09

[August 19.]

472

SECTION 2.

Consul Carlisle to Sir Edward Grey.-(Received August 19.)

(No. 1. Confidential.)

Hanoi, July 10, 1909. Sir,

IN my despatch No. 2, Commercial, of the 20th May last, I had the honour to inform you of the opening of the Yunnan Railway as far as Amichou, and to inclose a summary of some of the principal charges for the conveyance of merchandise to that town and to Mongtze. I have now received a copy of Mr. Acting Consul- General Wilton's despatch No. 26, Confidential, to His Majesty's] Minister at Peking, dated Yunnan-fu the 26th June last, in which he describes an alternative route from Hong Kong into Yünnan viâ the West River. It appears to me that the develop- ment of such a route, or the mere knowledge on the part of the Indo-Chinese Government and railway authorities that its development was feasible and likely to be undertaken, would have a salutary effect in removing any temptation to further discriminate in favour of French or Indo-Chinese goods. I take this opportunity of mentioning a discussion which has recently arisen here between the railway authorities and some of the local merchants on the question of rebates granted to large customers, and which has just been decided by the Government in favour of the railway.

The Compagnie française des Chemins de Fer de l'Indo-Chine et du Yunnan, which works the Yunnan Railway, is obliged by the terms of its contract to obtain the sanction of the Indo-Chinese Government to its scale of charges and to any changes therein. At present these charges have only been fixed for the portion of the line which is open to traffic, i.e., as far north as Amichou. (Even these have not yet been published in a collected form, so that I am not able at present to forward complete copies of the tariff.) I may mention here that the French consular officer at Mongtze, and, I believe, also his colleague at Yunnan-fu, have already expressed their opinion that the Government has allowed the company to fix its rates on too high a scale.

The company some time ago came to the conclusion that it would be good policy on its part to grant rebates to large customers forwarding over 500 tons of goods per half-year, the rebates to vary from 3 to 15 per cent., according to the quantity of merchandise dealt with. It was aware, however, that this would operate mainly in favour of the Chinese shippers importing goods from Hong Kong, who alone did business on a sufficiently large scale to enable them to benefit materially thereby, and that therefore it was likely to meet with opposition from the local French merchants. To placate the latter, therefore, a preferential railway rate was given in favour of goods of French or Indo-Chinese origin sent by truck-loads, as will be seen from my Commercial despatch referred to above. This preference, in the case of manufactured products (including cotton yarns, the principal item of import into Yünnan), came to 5 dollars per ton on the journey from Haiphong to Mongtze, equivalent to a reduction of about 10 per cent.

Unfortunately this preference was given before the question of the rebates was settled, and as soon as the latter proposition was made known it aroused lively opposition from the local charbers of commerce, and principally from the repre- sentatives of the cotton spinning mills, of which there are three in Tonquin. They complained that the railway company was taking away with one hand the meagre advantage which it had just given with the other. The Chinese on their side formed combinations to make joint shipments of sufficient size to entitle them to the maximum rebates. The Government was loudly called upon, in the press and elsewhere, to disallow the rebates. The governor-general referred the question to the Permanent Commission of the Conseil Supérieur, which sat on the 1st instant, and, after hearing the arguments on both sides, upheld the action of the railway company and allowed the rebates, though nominally for one year only, after which they will be liable to revision. They came into operation immediately.

So far matters went well, as the tendency of the rebates is to equalise the treatment of foreign imports to that accorded to those of French or local origin.

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