CO129-373 - Public Offices - 1910 — Page 354

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A brief comment will suffice. There is no definite statement in the protocol to the effect that the navigation of the Sungari is reserved to the subjects of Russia and China; but it is evident that article 3, despite its somewhat elastic wording, is in close sympathy with article 18 of the Russo-Chinese treaty of 1881, and that its real intention is to confirm the stipulation of the 1858 treaty that the Sungari River is On this point it is open to the exclusive navigation of Russians and Chinese interesting to recall the difficulties which the Russian authorities are placing in the way of the two steamers ordered by a local Chinese steam-ship company, which it is sought to bring from Nikolaievsk to Harbin. I had the honour to report on this matter in my despatch No. 31 of the 24th ultimo, and will shortly furnish you with further details. The Russian authorities apparently place their own interpretation on the meaning of article 1 of the 1858 treaty, and have no desire to see Chinese steamers navigating the Amur and the Ussuri.

Article 4 of the protocol is explained by the fact that the barge of the Imperial Maritime Customs at Harbin is moored alongside the railway settlement, a concession which is not to be taken as a precedent when considering any future point of principle.

Article 5 exempts all articles and materials required for the working, construction, repair, and protection of the Chinese Eastern Railway both from customs duties and native taxation inland.

Article 6 refers in the main to the procedure to be adopted in giving effect to the two-third duty scale in respect of grain products transported partly by river and partly by rail, and is chiefly interesting in that it provides for the extension of the same principle to other goods similarly conveyed should a trade develop.

It is clear that the protocol, though it contains no new departures of any great moment, strengthens the advantageons position acquired by Russia under the published regulations.

In concluding my despatch No. 27 of the 12th ultimo, I adverted to the conflict in spirit existing between the new Sungari regulations and the Aigun regulations issued last year.

Confidential information is to the effect that the Russian authorities have already drawn attention to this matter, and it seems that a modified set of Aigun regulations may become necessary. The main points of principle have, of course, been decided in the new Sungari regulations, and I venture to predict in my above- mentioned despatch that a modus vivendi should not, with a little give and take, be difficult to obtain. In general, this should be so; but there is one matter which may not be altogether easy of solution. I gather that, from the Russian point of view, the question of chief material importance is that of live-stock exported from Aigun, or, rather, Taheiho, to Blagovestchensk. The cattic are driven from Hailar via Tsitsihar to the Aigun free zone, after entering which they are charged Imperial Maritime Customs duty-vide article 10 under "Dues and Duties" in the Aigun regulations. The levy of this duty is obviously not in accord with the new Sungari regulations, the provisions of which, in regard to the free frontier zones, do not, as stated in my despatch No. 30 of the 24th ultimo, require that the place of origin of the goods shall be situated within the fifty versts limits. It is sufficient for commodities to be destined for the free zoues to warrant the exemption from duty. Again, the Russians complain bitterly of the heavy native taxation levied on the live-stock during the overland journey, and yet raise objection to the transit-pass system which requires a deposit of three times the export duty on the arrival of the cattle at the Imperial Maritime Customs barrier. The principal reason for this is that the cattle are often kept for months grazing in the Chinese free zone previous to export across the Amur, during which time the deposit money is lying idle.

It is estimated that 10,000 head of live-stock are annually sent across the Amur to Blagovestchensk and furnish about two-thirds of the duty levied by the Aigun customs.

[This Document is the Property of His Britannic Majesty's Government.]}

со

34588

AFFAIRS OF CHINA,

RECE Reg? II NOV 10

C

CONFIDENTIAL

[October 28.]

SECTION 1.

138134]

(No. 371. Confidential.) Sir,

No. 1.

Sir Edward Grey to Mr. Max Müller.

Foreign Office, October 28, 1910. I HAVE given my careful consideration to the terms of your despatch No. 234 of the 19th July last, enclosing a report by the acting British consul at Harbin upon the Russian railway settlement at that town and commenting upon the situation with regard to the administration of the Russian railway settlements in Manchuria.

His Majesty's Government favour the conclusion of a reasonable understanding with Russia which the growing commercial interests of Great Britain at Harbin and elsewhere in the railway zone appear to render desirable, and they concur in the principle advocated by Mr. Sly and endorsed by you, that those who share in the benefits of municipal improvements should bear their part of the cost of the administration. You are therefore authorised to enter into negotiations with your Russian colleague, at the time and in the manner which may appear the most expedient to you, for the conclusion of an agreement which will provide for the payment of municipal taxes by British subjects, provided that such payment is accompanied by guarantees as to expenditure, and on other points in regard to which it may appear during the negotiations desirable that such guarantees should be obtained.

Sir John Jordan has expressed the opinion that the progress of the negotiations would be facilitated if the Russian representative in Peking were alone charged with their conduct on the Russian side, and were freed from the obligation of consulting the authorities of the Chinese Eastern Railway, whose attitude, in Sir John Jordan's experience, has in the past been guided by military rather than economic considerations, It is not possible for His and has consequently not conduced to a settlement. Majesty's Government to require from the Russian Government an undertaking in regard to whom their legation should, or should not, consult in the course of the discussion, but I am sending a copy of this despatch to His Majesty's chargé d'affaires at St. Petersburgh, with instructions to ask the Russian Government to entrust the conduct of the negotiations to their diplomatic representative at Peking.

You should thank Mr. Sly for his interesting report.

[2958 ee-

e-1]

I am, &c.

E. GREY.

I have, &o.

H. E. SLY.

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