C.O
[This Document is the Property of His Britannic Majesty's Governme40792
[B]
AFFAIRS OF CHINA,
CONFIDENTIAL.
[44302]
No. 1.
310
RECE
Rec 17.09
[December 6.]
SECTION 1.
(No. 624.) Sir,
Sir A. Nicolson to Sir Edward Grey~(Received December 6.)
St. Petersburgh, November 26, 1909.
I CALLED on M. Kokowtsoff yesterday, as he had returned from the Far East a few days previously. After having given me an account of the assassination of Prince Ito, he was good enough to impart to me the general impressions which he had gathered from his visits to Harbin and Vladivostock. He said that during the war an artificial stimulus had been given to Harbin, which had been flooded with speculators and contractors of all kinds. Flour mills had heen erected with feverish haste, and, as everyone expected that the war would continue for a year or a year and a-half longer than was the case, there arose a keen desire to make fortunes rapidly, with a complete disregard of prudential business considerations. The results were that on the conclusion of the war a collapse occurred and many were ruined. During the last year or two Harbin was recovering, and there were evident signs that before long it would enter on a path of comparative prosperity. He had been much struck with the energy and confidence which animated the Russian colony there, and he had been surprised to find a town so well equipped and so prosperous in a locality which but a few years ago had been an uninhabited district. The town had been created solely by Russian capital and Russian enterprise, and he was surprised and pained that foreign Powers, by what he could but term their unjust protests, were raising difficulties in the way of the development of the place. The question of municipal administration was one which naturally preoccupied the Russian residents, who had complained bitterly to him that foreigners declined to pay rates and taxes, and threw all the burden on the Russians and Chinese, while benefiting from the conveniences which the municipality afforded to them. This was a question on which he would like to speak to me more fully on his return from Livadia, whither he is proceeding to-morrow to make his report to the Emperor. He was highly satisfied with the railway administration, though he recognised that the railway rates were high. This was inevitable, as the up-keep of the line was an expensive undertaking in those distant regions. He had been assured by all those whom he had seen both at Harbin and at Vladivostock that a great deterrent to more active development of commerce and industry was the want of confidence which was felt in the immediate future. He had been surprised to find universally a great anxiety as to the intentions of Japan, and there was a general feeling that Japan was making active preparations for a fresh war. Her railway construction and other measures were, in the opinion of all whom he had met, evident proofs that she was employing all her energies for a fresh campaign, and until they could rest assured that Japan had no hostile intentions merchants and others hesitated to embark capital in new enterprises. He had done his best to reassure his compatriots, but he doubted if he had met with much success. He himself did not believe that Japan could be so foolish as to be meditating a fresh war with Russia. Even in the most favourable circumstances she could not gain anything by a war, and she had not the means to incur the huge expense which a fresh campaign would entail. Even supposing that she was able to capture Vladi- vostock, he did not see that this would be a gain commensurate with the risks and the sacrifices, as that port, though of great importance to Russia, would be of little advantage to Japan. The most successful war would never bring a rouble into the Japanese exchequer, as whatever might occur Russia would never pay an indemnity, and he could not conceive that Japan would wish to incur the undying enmity of an Empire of 150,000,000 inhabitants. He therefore excluded the idea of a war, and his explanation of all that Japan was doing was that she would entirely incorporate Corea within her dominions, and at a favourable opportunity annex the whole of Southern Manchuria. His prognostic might be wrong; he was not a diplomatist, and had no great intimacy with matters of foreign policy; but after mature reflection, the conclusion which he had reached seemed to him to be the most probable.
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