:
[This Document is the Property of His Britannic Majesty's Government. O.
AFFAIRS OF CHINA.
CONFIDENTIAL.
[32268]
No. 1.
146
30791 [SeptemB&C 5.]
(REG: -AC10
SECTION 1.
Mr. Max Müller to Sir Edward Grey.--(Received September 5.)
Peking, July 19, 1910.
(No. 234.) Sir,
I HAVE the honour to transmit herewith the copy of a despatch which I have received from His Majesty's consul at Harbin, enclosing a report which he has drawn up on the Russian railway settlement and the municipal adininistration of the town.
In his covering despatch Mr. Sly states that the Russian authorities apparently recognise the futility of negotiating independently with the Chinese to the exclu sion of other Powers, and now scem to be in favour of first making an arrange- ment with the foreign Governments, and, in the body of the report, he says that he gathered from his Russian colleague that the Bussian legation here already regarded the agreement of last May as inoperative or lapsed. From a conversation which I have had with the Russian chargé d'affaires, I have reason to believe that these statements are correct. M. Schekine hinted that his Government had come to the conclusion that the May agreement was not workable in practice, and that the treaty Powers would have to be consulted before a definite arrangement was come to with the Chinese Government. He thought that advantage would be taken of M. Korostovetz's and General Horwath's simultaneous presence in St. Petersburgh to discuss the question. He added that he had no instructions as yet to reopen any negotiations. Meanwhile, therefore, the regulations of December 1907 reinain in force.
Another development which is not without interest is the change which is apparently coming over the attitude of the United States, who, after stoutly opposing the Russian contention from the beginning, bave now informed the Russian Govern- ment that they are ready to acquiesce in the payment of the municipal taxes by American citizens, What the reason for this change of front may be I am unable to Say. It may be not unconnected with the fact that there are at present no American citizens in Harbin upon whom the taxes would fall. Mr. Sly conjectures that it may be in relation to Mr. Straight's visit to St. Petersburgh in the interests of the Chinchow- Aigun Railway scheme, and this opinion is shared by many people in Peking. My Russian colleague, however, says that he can hardly believe that the American Government could have hoped to influence the Russian Government by such a trans- parent, and, in the absence of American citizens, worthless bribe. Anyhow, if such was their intention they failed to attain their object.
Mr. Sly's report, which has been compiled with great care and pains, forms a valuable addition to our knowledge of the conditions prevailing at Harbin, and shows clearly that the present administration is faulty in many respects. This is especially the case in regard to the taxation of factories and commercial undertakings and the control exercised by the municipal administration over commercial dealings. Neither the police, who are under the control of the railway, nor the municipal administration, appear as yet to have given proofs of a high standard of efficiency, but improvements are being effected in the face of adverse conditions, and it is perhaps carly to form a judgment.
The principal interest lies in that portion of the report in which Mr. Sly deals, on p. 27 and succeeding pages, with the position of the various nationalities repre- sented at larbin. At the present moment Chinese and Japanese residents pay taxes, and American citizens appear likely shortly to follow suit. British, French, and German subjects, with the sole exception of one German firm, do not pay them. I agree in principle with Mr. Sly that those who share in the benefits of municipal improvements should bear their part in taxation, and representative British firms in Harbin do not appear to dispute the equity of this proposition. But it is equally indisputable that it will be necessary to safeguard British subjects against unfair taxation and unjust and vexatious treatment, and Mr. Sly suggests, inter alia, that, should it be decided that an agreement with Russia in regard to municipal taxation is desirable, the Russian Government on their part should give a guarantee that British
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