CO129-373 - Public Offices - 1910 — Page 114

[This Document is the Property of His Britannic Majesty's Goverfiment]

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AFFAIRS OF CHINA.

CONFIDENTIAL.

[30296]

(No. 344.) Sir,

No. 1.

RECE Rege 3 OCT 10

[August 20.1

SECTION 1.

Mr. O'Beirne to Sir Edward Grey.—(Received August 20.)

St. Petersburgh, August 17, 1910.

I HAVE the honour to report that the semi-official " Rossia" publishes to-day "The Question

a leading article in reply to a recent article in the "Times," entitled of Manchuria," of which the following is a summary:--

The London paper has taken upon itself to express the doubts of English commercial circles as to how far their interests remain safeguarded in the new situation created by the Russo-Japanese agreement. These doubts are ill-founded, and due principally to misunderstandings. The "Times" have been unfortunate in their choice of the Chin Chow-Aigun Railway question as a reason for their uneasiness. This scheme is far more important politically than economically: the line cannot be expected to pay, but it will be the first step towards the creation in Manchuria of a Chinese railway system independent of existing Russian and Japanese lines. The measures taken by the Russian Government during the construction of the Eastern Chinese Railway to protect the interests of the company are perfectly intelligible; and, apart from this special case, it is impossible to point to a single instance of Russia violating the principle of the open door. Even the Times" admits that since the set-back caused by tho Russo-Japanese war British trade has again begun to expand in Manchuria. Foreigners are admitted and given equal rights with Russians in the alienated strip of land alongside the Chinese Eastern Railway. No distinction is made as regards the tariff between Russian and foreign forwarding agents. The English firms engaged in the export of beans enjoy the benefit of the Russian railways without let or hindrance. In short, Russia is persevering in the policy which enabled foreign trade to develop in Manchuria before the war. Such commercial progress is closely connected with the Eastern Chinese Bailway; without it Manchuria would still be a deserted waste, where no trade would be possible, however widely the principles of most-favoured-nation treatment or the open door were interpreted. How, then, can it possibly be argued that the Russo-Japanese agreement of 1910, which upholds the status quo, is threatening the open door?

The Times" also detects a violation of the Anglo-Russian agreement of 1899, in the fact that the Russian Government are favouring the participation of Russian capitalists in the financing of the Hankow-Szechuan Railway, whereas the British Government have refused to support Messrs. Paulings in their endeavour to obtain the contract for the construction of the Chin Chow-Aigun line; but the two cases are not analogous. In the one case Russian capitalists desire to take part in an under- taking which has been carefully thought out by Englishmen, and approved by the English Government; and the English themselves wished to give the concern an international character by calling in French, German, and (later) American capital. In the other case, an English firm wants to construct a line about which Russia has never been consulted, which must vitally damage the Chinese Eastern Railway--the chief Russian enterprise in Manchuria.

The " Times" may rest assured that the lawful interests of Englishmen will not suffer by the Russo-Japanese convention, which will materially advance commercial prosperity in Manchuria by creating a stable situation. The doors to Manchuria are open, and behind them a Russo-Japanese railway awaits international trade-a railway which the two Governments are mutually bound to improve.

I have, &c.

HUGH O'BEIRNE.

[2862 u-1]