respectively, a difference in this case of 32 sen only in favour of Newchwang, although the distance from Dalny to Tielling is nearly twice as great as from Newchwang to Tiehling. Lastly, from Dalny to Changchun is 433 miles. From Newchwang to Changchun is 297 miles. That is, Dalny is one-third again as far from Changchun as Newchwang is. Yet the rates from both places are the same.
Against such obvious discrimination in favour of Dalny there might perhaps be no ground for complaint were the rates from Newchwang to the places mentioned reason- able ones. But this they are not. On the contrary, they are grossly excessive, and obviously intended to handicap the trade of the port in competition with that of Dalny. If further evidence of the fact be needed we have only to compare them with the rates on the Chinese line. On the latter the car-load rate for beans between Mukden and Newchwang is 3 dollars per ton (2,240 lbs.), as compared with 3-36 gold yen (4 dollars) per ton (2,000 lbs.) on the Japanese line. But by the Chinese line the distance between the two places is 52 miles greater than by the Japanese, so that the rate per mile works out at less than half the Japanese rate. Yet the Chinese rate is, I am told, a very profitable one. It is only the heavy li-kin on the Chinese line and the delay and expense entailed by the examination of goods at Koupangtzu that prevents the whole of the trade between Newchwang and Mukden from travelling by it, and it is for the same reason, of course, that the Japanese are able to maintain their present rates with- out fear of serious competition. When we consider, too, that the large majority of the cars conveying produce from the interior to Dalny travel back empty for lack of merchandise to fill them, whereas those coming to Newchwang--which is still the chief centre for imports into Manchuria--as a rule find some freight to take back with them; and further, that, owing to the heavy gradients in the Kuangtung Peninsula, the section between Ta Shih Chiao and Dalny entails the heaviest running expenses on the line, the injustice of these heavy rates to the trade of Newchwang and that of Manchuria generally becomes even more obvious. The port is the milch cow out of which the chief profits of the railway are being drawn, at the expense and to the detriment of the valuable trade of which Newchwang is the natural centre. Whether or not the Japanese succeed in their object of diverting this trade to Dalny, there can be no question, in my opinion, that the method they have adopted is injurious to foreign interests, and, there- fore, a genuine subject of complaint. At the same time it should be mentioned, in justice to the South Manchurian Railway Company, that in their tariff as at first drawn up the rates were considerably more favourable to Newchwang than they now are, and that they were only altered under strong pressure from the Japanese mercantile community at Dalny, who protested that any advantage to Newchwang would ruin the bean-cake industry at their port.
The new tariff, though more advantageous in certain respects than the last, introduces certain innovations which have made it highly unpopular with the Chinese. What has excited most feeling against it is a new compulsory charge of 20 sen per ton for loading goods on to the cars and 15 sen for discharging them again. Hitherto the Chinese have been allowed to do this work with their own coolies, and they therefore strongly object to the charge. Another new demand is one of 30 sen a-ton per half- day on goods which are not removed from a station within twelve hours of their arrival, which, owing to the weather or lack of notice, must often happen. These charges between them have so exasperated the Chinese that they have started a boycott of the railway, which up to date has been most rigorous. I understand, however, that a compromise is about to be arrived at.
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[This Document is the Property of His Britannic Majesty's Government2
AFFAIRS OF CHINA.
CONFIDENTIAL.
[44128]
No. 1.
Sir Edward Grey to Sir J. Jordan.
309
RECR
Res 17 FC 09 [December 3.]
SECTION 1.
(No. 361.) Sir,
Foreign Office, December 3, 1909. WITH reference to my despatch No. 351 of the 26th ultimo, I have to inform you that the Portuguese chargé d'affaires called at this department on the 26th ultimo and informed Sir F. Campbell that, according to a telegram which had reached Lisbon from General Machado, the Viceroy of Canton had taken possession of certain islands in the neighbourhood of Macao.
Sir F. Campbell expressed doubts, and informed M. Manoel that a telegram had just been dispatched to you to the effect that the Portuguese Government agreed to arbitration at The Hague, but were anxious that there should be no change in the status quo meanwhile, and that you had been instructed to inform the Chinese Government that I agreed with the Portuguese view.
M. Manoel expressed his acknowledgments.
[2548 c-1]
I am, &c.
E. GREY.
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