CO129-372 - Public Offices - 1910 — Page 70

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shall be given to this requirement is one for arrangement between the Governments of Russia and China.

The stand now taken by the Russian authorities is, according to reliable information, one of total objection to the Imperial Maritime Customs regulations introduced last year, and is based, firstly, on the treaty stipulations already mentioned; and, secondly, on the position of Khabrarovsk and Blagovestchinsk, which are situated within the free frontier zone of 50 versts (100 l) on the Russian side of the border-see article 1 of the Regulations for Trade by Land annexed to the treaty of 1881.

At an interview with the Taotai shortly after my arrival here, be mentioned, in referring to the commission, that the Russian members were raising many frivolous objections, and seemed to regard with no little satisfaction the maneuvre by which the Imperial Maritime Customs regulations were prepared and issued without allowing the Russian authorities a sufficient opportunity either for consideration or protest. What exactly happened was, I gather, as follows :---

The Russian authorities, having learned that a proposal of the kind was on foot, reminded the Chinese of their obligations under the treaties of 1858 and 1881. The reply received was that nothing had been definitely settled, and that, in any case, previous notice would be given. It was subsequently, apparently, considered only necessary to forward a copy of the cut-and-dried regulations to M. Korostovetz, the Russian Minister in Peking, two or three days before their publication. It is, of course, true that in article 3 of the Treaty of Portsmouth, Russia declared that she had in Manchuria no territorial advantages or preferential or exclusive concessions of a nature prejudicial to China's sovereign rights or inconsistent with the principle of equal opportunity, and that in the succeeding article both Russia and Japan mutually undertook to put no obstacles in the way of any general measures applying equally to all nations which China might elect to take for the development of the commerce and industries of Manchuria. At the same time, the fact remains that Russia, by her possession of the Chinese Eastern Railway alone, does enjoy special privileges, and it would not seem unreasonable that she should have expected to be previously consulted in the preparation of regulations contrary to the spirit of her earlier treaties with China herself. It is, indeed, difficult to see what substantial advantage China can expect to derive from tactics of the kind, and the mere fact that she has agreed to the present joint commission would in itself appear an admission that the Russian authorities were not treated with due consideration. The subjects of no other foreign Powers are at the present time directly interested as shipowners in the navigation of the Sunggari and Amur rivers.

The contention that Blagovestchensk and Khabarovsk, being situated within the 50 versts free frontier zone, goods for these places are not liable to pay duty to the Imperial Maritime Customs gives ground both for argument and reflection. In the first place, traffic along the Sunggari and Amur rivers is river, not land trade; and, even if the contrary were admitted, a reasonable construction put upon article 1 of the Regulations for the Trade by Land annexed to the treaty of 1881 would seem to indicate that it was only intended to apply to trade between places situated within 50 versts of the frontier on either side. In the second, the observance of the free frontier zone is, there is good reason to think, calculated to lead to considerable difficulty in levying duties properly chargeable, and to a state of things similar to that obtaining with regard to the leased area of Kuantung in respect of goods entering that territory free, and afterwards finding their way into South Manchuria without payment of duty to the Maritime Customs. I may instance, in the north, China tea sent by rail from Vladivostock to the station of Manchuria, and declared for the Russian free zone. Knowing the aptitude of Chinese as smugglers, it will be under- stood that it can be no easy matter to prevent the conveyance of this commodity out of the Russian free zone into Manchuria proper without passing the foreign customs. Another example is that of marmot skins obtained mostly in the mountains north of the railway between Tsitsihar and Hailar, 19,000 of which were, I am confidentially informed, imported through the Maritime Customs at Manchuria during the nine months January to September 1909, while only 10,000 were exported. It does not seem possible that the balance can have been used in the Russian free zone. That the Maritime Customs appreciate the situation, though probably not at present desirous of pressing for a more equitable arrangement, would appear to be shown by the wording of articles 3, and 8 under "dues and duties" in the Aigun provisional regulations. All of these articles refer to the free zones, and it will be noted that they provide only

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for a temporary exemption from duty. The commodity chiefly affected by the Sunggari regulations is wheat, which, as reported in my immediately preceding despatch, is (shipped during the summer months down the Sunggari and down and up the Amur to

Khabarovsk and Blagovestchensk respectively,

I beg to enclose herewith copies of the Aigun regulations, the Sunggari regulations, and the provisional regulations for the working of the Chinese customs-house at the stations Manchuria and Pogranitchnaya (Suifenho).

I have, &c.

H. E. SLY.

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