CO129-362 - Public Offices - 1909 — Page 498

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and expenditure of taxes, suffered within the last few years in the matter of maintenance of roads, inefficient lighting, indifferent policing, sanitation and other municipal services which should for the general welfare and prosperity of the port and of the trade passing through it, be conducted on a more practical and modern system and at a higher standard of efficiency than has up to the present been possible under the existing régime, in spite of the praiseworthy efforts and manifestly good intentions which have on more than one occasion been conspicuously noticeable on the part of the leading Chinese officials of the port,

We have, &c.

BUSH BROS. (And 45 others.)

(No. 6.) Sir,

Inclosure 3 in No. 1.

Sir J. Jordan to Consul Wilkinson.

I SPOKE to the German and American representatives on the question of the

Peking, June 22, 1909. establishment of an international settlement at Newchwang, which formed the subject of your despatch No. 8 of the 28th ultimo.

M. de Mutius, who is at present representing the German Minister, gave me confidentially a copy of a memorandum by the German consul-general at Mukden, of which a translation is enclosed herewith, deprecating the proposed settlement mainly on the ground that Newchwang is doomed to inevitable decay in the future.

Mr. Fletcher informed me that, while he had no personal views on the matter, he understood that the proposal had the cordial support of the American consul-general at Harbin and he would therefore give any assistance which might be required

of him.

I think that in the interests of the comfort and well being of the foreign community and for the better governance of the quarter inhabited by foreigners, the establishment of an international settlement is desirable and I accordingly authorise you to enter into negotiations with the local authorities to that end.

I fear, however, that the Chinese authorities, in their present condition of feeling concerning China's sovereign rights, are not likely to agree readily to the proposal.

I am, &c.

(Translation.)

(Signed) J. N. JORDAN.

Inclosure 4 in No. 1.

Memorandum by Dr. Heintges.

THE answer to the question as to the desirability of pressing for the establishment of an international concession at Newchwang depends largely on what answer is to be given to the further question as to what future can be ascribed to Newchwang us a harbour and centre of commerce. The following observations on this subject may be of interest :-

Newchwang owes its development as a trade centre to two circumstances. For the foreign merchant it was formerly the only entrance into Mauchuria and Mongolia. This monopoly, however, it possesses no longer. In the place of that one port we now find five, besides seventeen other trade centres in the interior of Manchuria, to which, as soon as the proper import duties have been fixed, foreign and domestic products can be brought either by sea or land. The natural result is that all these places share the existing trade, and, although the majority of them are not as yet very serious competitors, some of them at any rate are already making their influence felt. The most dangerous rival is Dalny which, thanks to its better situation and harbour facilities, finds itself in a much more favourable position than Newchwang. It is the terminus of the South Manchurian line, it is ice free and offers the best possible facilities for ships up to 5,000 tons. The export of beans, once the monopoly of Newchwang, is now being attracted more and more to Dalny. Thanks to the decentralisation of trade the foreign merchant can no longer carry on his dealings

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exclusively in Newchwang, but must be represented in the other ports as well, a process which the development of trade is bound to accelerate to the detriment of Newchwang.

The second circumstance which aided the prosperity of Newchwang, was the fact that the port lies at the head of the navigation of the Liao River for sea-going vessels, and that a service of Chinese junks made it possible to carry on a brisk freight traffic with the interior. Further, the place became the centre of a whole network of cart- roads concentrating on Newchwang as the only outlet for exports. Owing to the harbour being closed by ice from the middle of November till the middle of March, the junks and carts divided the traffic between them, the former carrying on the trade in the summer time while the latter took their share of the freight in the winter. Newchwang thus became a great mart for both foreign and domestic goods. Two facts have, however, brought about a change in these favourable conditions. The Liao River has lost a great part of its facilities for navigation. From Tiehling down, the river is in a bad condition; the banks are falling in, making the stream wider and shallower. Extensive dredging and embankment works would be necessary to bring about an improvement in this respect. What particularly threatens the harbour of Newchwang and the junk traffic, which latter is at present but a fraction of what it formerly was, is the recent change in the river's course to the sca, the so-called Shuang Tai Tzu branch having already a greater volume of water than the main stream, a state of things which bids fair to become worse every year. The most effective means of dealing with the lack of water in the Liao River would be the barring of the Shuang Tai Tzu; this is, however, not practicable, as a large population has settled along the shores of this branch and depends on its water for irrigation purposes. For the same reason it would not be possible to build a dam across the Shuang Tai Tzu, allowing the overflow of such water as the Liao did not require, because irrigation is necessary particularly when the river has sunk to its lowest level. A system of sluices is excluded because of the expense entailed, and would, besides, be but of small practical utility. In these circumstances, the only plan would seem to be an artificial narrowing of the Shuang Tai Tzu. We must also add to these unfortunate conditions the danger of the river breaking through its banks at Duck Island, which would directly threaten the town of Newchwang, and also the bad state of the stream in its lower courses.

The improvement of existing conditions would entail the expenditure of many millions of taels with scarcely any hope of return. Who is to advance the money The Chinese treasury is empty, and the Government will scarcely be willing to advance an enormous sum in order to save Newchwang from gradual ruin. From the Govern- ment point of view, it would be preferable to devote the money towards the establishment of an ice-free port in southern Manchuria. Besides, it would be cheaper, if one were ready to face the expense, to utilise the Liao River for the construction of a junk canal. Newchwang itself cannot possibly contribute any large share of the cost.

Secondly, as regards the cart traffic, the construction of railways in Manchuria has already made considerable inroads, and will make its influence still further felt as soon as healthy competition forces the lines to put their freight rates on a sensible basis. The numerous advantages of the railways are so striking that the Chinese trader, who has generally a good eye for such matters, will slowly but surely avail himself of such modern methods of transit, at any rate, where it is a question of long distances. This means unfortunately the ruin of Newchwang as a market, for where railways are concerned it is most ungenerously treated.

This

It cannot be said that in these circumstances Newchwang can reasonably expect a brilliant future. In the near future, however, the unavoidable decay will not be very marked, for the conservative spirit of the Chinese traders will keep them as long as possible in the place where they have now been settled for so many years. characteristic of theirs did not stop them nevertheless from going to Dalny as soon as that port was opened, and although some of them may have since returned, it would seem to be due solely to the tactless behaviour of the Japanese. Apart from this, the volume of trade in Manchuria is growing year by year, and the fact that the statistics of the Imperial Maritime Customs at Newchwang show no decrease, must not by any means be taken to mean that that place has an equal, much less a greater share of trade than it had in the past.

The mere fact that there seems such scanty hope for the future development of Newchwang would of itself lead one to doubt the desirability of establishing an inter- national settlement at that port.