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unless their lease agreements were countersigned by their respective consuls. I replied that under the treaties with China British merchants had no general right to acquire land in the interior, and that if they wanted ground at the Chinese Eastern Railway stations they must perforce acquire it from the railway company, but at the same time I could hardly see how I could engage to enforce regulations of which I had no knowledge. I added that this question seemed to me distinct from the Harbin settlement, seeing that Iarbin had been opened to international trade.
Assuming that the Russian officials are sincere in their expressed desire to reform the railway administration, they have undoubtedly an arduous task before them. There are about 11,000 employés in all, most of whom have been in the service for several years. The staff of the central administration at Harbin consists of 800 persons.
As the whole length of the line is less than 1,100 miles, and that with the exception of Harbin there is no large centre of population throughout the route, there can be no doubt but that the railway is absurdly overstaffed; under their agreements however the employés are entitled to a gratuity of one month's pay for each year of service in the event of their services being dispensed with, consequently it may be assumed that dismissals will only take place very gradually.
There is also, I was led to believe, considerable dissatisfaction against the administration on the inside, amongst the subordinate employés, and if M. Kokotseff's policy is to be carried through it would appear that radical changes will have to be effected in the higher posts of the service.
As regards the report that the Russian Government are contemplating the sale of the Harbin-Ch'ang Ch'un hranel to Japan, I can hardly think that the Russian finances are in so desperate condition as to compel them to part with a line of such strategic importance. General Horwarth in his interview with me certainly stated that the opposition of certain Governments to the Chinese Eastern Railway settle- ments would necessarily force the Russian Government to come to an arrangement with Japan and little doubt is felt in Harbin that the recent visit of Prince Ito was mainly with the view of coming to a joint understanding as to the status of the railway settlements; the return of M. Kokotseff to Russia, without visiting Japan, and the recent arrangement as regards freight which the Chinese Eastern Railway have come to with the British and other foreign firms engaged in the bean export from Chang Ch'un make it appear probable, as far as I am able to judge, that after his visit of inspection the Russian Finance Minister has formed a more favourable opinion of the commercial prospects of the line, and that it has now been practically decided to try the effect of a more liberal policy on the financial aspect of the line.
From the point of view of the great commercial Powers, it would seem more desirable that the Chinese Eastern Railway should become a competitor of the South Manchurian line than that the two railways should combine.
The powerful Chinese syndicate which is purchasing beans in Kirin province, is, as I mentioned in my despatch No. 46 of the 20th September last, operating under the supervision of the territorial taotai, and, I understand, has the support of the Provincial Government. It would appear that a similar syndicate has been formed in Heilungchiang province, also with the knowledge and consent of the high provincial authorities.
The agent of Messrs. Samuel Macgregor and Co. informed me that his firm had recently been approached at Shanghae through the medium of a high Chekiang official, and had concluded a contract for the purchase of 30,000 tons of beans to be delivered at a point on the Chinese Eastern Railway between Harbin and Tsi-tsibar where last year the Mitsui Bussan Kaisha had purchased largely and had crected two godowns for storage purposes.
With all the resources of the local government at their disposal it seems obvious that no one can compete in the purchase of beans in the interior with these official syndicates, and I understand that more especially in the Heilungchiang province the Chinese merchants are resenting the action of their officials. Yet without some such plan of campaign it would be difficult to break the practical monopoly that the Mitsui Bussan Kaisha have hitherto held, and there can be no doubt but that this is the motive which has impelled the local officials in their action. Mr. Yen, the Taotoi of Ch'ang Ch'un, who has been the leading spirit of the movement, is now in Peking.
The price of beans has risen considerably since the signature of his first contracts, and it would not surprise me to find that he anticipates difficulty in getting the farmers to fulfil their contracts, and that his visit to the capital is with the view of obtaining support from the Central Government.
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The names of the principal British firms now engaged in the purchase of beans and grain in Northern Manchuria, or examining into the conditions with the view of purchase are: Messrs. Samuel Macgregor and Co., of London and Shanghae; Messrs. Jardine, Matheson and Co., Messrs. Craig and Co., of Shanghae and Harbin ; Messrs. Robert Shaw and Co., and Messrs. Montgomery and Jones, both of London.
Up to the present Messrs. Samuel Macgregor and Co. are the principal buyers, and they are at present, I understand, endeavouring to form a syndicate, in which German capital is to be largely employed, to place them in a more favourable position for competing against the Mitsui firm.
There is also a scheme on foot, under which this same Anglo-German syndicate, in conjunction with the Kirin Government, is to bring under cultivation a large area of undeveloped land in North-Eastern Kirin. No details of this plan have, I believe, as yet been arranged.
I have, &c.
ROBERT WILLIS.
P.S.--During the past few days I have been asked to bring important American and Dutch firms into correspondence with the British firms engaged in the bean trade.
R. W.
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