and stuck to his point. There is every possibility, therefore, that this trade will have a flourishing future before it, though there is little doubt that the loss of 40 taels a picul on all passing silk will be resisted by the native officials with all their vigour, and the commissioner of customs at Tengyuch and the consul will need to fight every case for some time to come. This is, of course, no direct affair of ours, but the silk merchants all have establishments in Burmah, and the carrying trade is one which we cannot resign without a struggle.
I have sent samples both of Tengyueh local torsar and of Szechuan silk to India, and they have been received very favourably. There is every chance of building up a flourishing silk trade here, if the merchants will continue their present activity, and if official interference can be avoided.
Silver Exchange.-The Tengyueh exchanges rest mainly on silver sycee and the Indian rupee. During the open season the rupee can generally be purchased for 50 taels, there being a considerable demand for the purchase of imports in the markets of Rangoon and Mandalay. This year, however, the rupec is as low as 45 of a tael, and is still dropping. I can only explain this fact by (1) the increased price of silver in general, and (2) the Indian import duty of 4 annas an ounce on silver. This import duty is uot levied at Bhamo, and as a result the Tengyueh merchants can send down syeee at a profit for making their purchases in Burmah. Large quantities are now going down every day.
Wheat and Grain.-An Imperial cdict authorises the export of wheat, maize, and beans from Yunnan on the Manchurian precedent. The lack of the opium crops is beginning to tell heavily on the people, and if the excellent wheat lands of Western a great stimulus Yünnan can once be developed, this privilege would mean to trade. Lack of capital and initiative, however, are heavy drawbacks for the farmers.
Gold. A rich gold-field is reported at Chao-chou (near Tali-fu). I am told that several thousand coolies are already at work, but can procure no definite information.
Military.
Hsun Fang Tui (Old Troops).—No changes have taken place since my last report. The Tengyueh garrison, however, has been practically depleted. Numbers of men have been scattered about the district, as the taotai is in constant anticipation of trouble, especially in the Shan States. Two hundred men have also gone north in consequence of the Chungtien affair, which has disorganised all the troops of the district.
Tali-fu (New Troops).-Captain B. E. A. Pritchard, of the Indian army, has visited Tengyueh, Tali-fu, and Yunnan-fu with a view to reporting on the new troops of Yunnan. I understand that he estimates their efficiency quite as highly as I have done. I note with surprise, in one of Dr. Morrison's letters to the "Times" on his recent journey through China and Turkestan, that so keen an observer should throw ridicule on these new troops of Yünnan. From a comparative standpoint their arms and equipment are incomparably superior to the old provincial troops, and I understand that they are better armed than the Burmah military police. At the same time, I do not think that their presence presents any immediate menace to us on the frontier. No steps have been taken to garrison any of the new troops at Tengyueh, and, if my information is correct, there will be insufficient funds for the raising of a second division, or even the completion of the first division in the near future. Heavy expenditure has been incurred in erecting good barracks at Tali-fu, and it appears probable that their head-quarters will remain there for the present. I much regret that I am unable to give more detailed information at present in regard to the work which is being done at Tali-fu. I have no satisfactory source of intelligence there just now, and it would require a man on the spot to obtain reliable information. I shall look forward, however, with much interest to the report of Captain Pritchard, who was untiring in his work of enquiry during the short time at his disposal.
Frontier Forts. In my last frontier report (3rd March), I mentioned that five new forts were in course of erection along the Chinese section of the frontier between the British posts of Bhamo and Myitkyina. Rumours now reach me that the construction of these forts has been very unsatisfactory, and that the officer responsible for them has been summoned to Tengyuch, but dare not come. Old- fashioned opinion, which is led by the retired commander-in-chief and others who
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have done sterling work on the frontiers and is generally sound, ridicules the positions which have been chosen for their erection. The older and more experienced men advised that the military posts should be near populous frontier markets as a protection from brigands and border thieves. The more advanced modern men, however, have insisted that they shall be on hill tops, wind-swept and waterless. "Bad sites, bad plans, bad materials, and shoddy work," says the old general; "they stand on a hill and look for attacks from across the frontier whilst the real enemy is running about just below them and eating up the country-they have bought a new hat and think it is a new head." I hope to pass near these forts during my next frontier tour, and I will make a point of seeing them and reporting.
Roads and Telegraphs.--The only recently built road of which I have any information is that from A-tun-tze to Chamutong (on the Salween, latitude 28°). The remainder of the roads in the frontier districts are inere tracks, where men and mules must march in Indian file, generally with very steep gradients. This applies to the main road from Bhamo to Tengyueb and on to Tali-fu; even on this road animals constantly fall over the narrow tracks, and within the last few days the mail courier from Tali-fu fell over a precipice and was killed.
A telegraph line has been constructed from Tali-fu to Likiang, and the Chinese have just arranged to continue the telegraph line from Tengyuch towards Bhamo along the new road, instead of by the old road through Manwyne.
Chinese Officials.
The Tengyueh Taotai.--The old taotai, Liu Yuan-pi, expired on the 4th July, as a result of malaria contracted at last year's frontier meeting. He was a genial and amiable colleague, and our social relations were very cordial; he was, however, too weak and vacillating to be a satisfactory frontier officer. He was greatly mourned by his people, who were much attached to him, chiefly, I think, because he left them to their own devices, and he was known to be entirely honest. He was succeeded by a young man, Keng Pao-kuci, who has had a meteoric career, and is believed to be Yungchang prefect for seventeen days, and acting taotai at Tengyueh all within a year. His recommendation to his superiors appears to be the fact that he forwards large sums regularly to the provincial treasury, and the Yunnan-fu authorities recognise that he is fierce" ("li-hai "), and therefore presumably a suitable man for the frontier. He has descended upon Tengyueh like a whirlwind, and this very old-world, slow-moving place is still breathless with his impetuous presence. He not only determined to reform his own subordinates, but endeavoured to extend the process to the British officers within his sphere of activity. I have constantly been obliged to advise a little more care and a little less impetuosity before committing himself, and our relations in consequence have occasionally been somewhat strained. The experience of the past has unfortunately fostered the belief that frontier taotais must be violently anti-British in order to get on, and the taotai Keng, by the very force of his character, has managed to overstep every hound. He shows signs, however, of desiring that the past should be forgotten, and I am not unwilling to meet him, as he is sufficiently courageous and independent to be a good frontier official if once he realises the responsibility of his position. At the same time I am reluctant to discuss with him any question of importance until he has given some assurance of more reasonable behaviour in any future dealings.
only 30 years of age. He was pa hsien at Chungking, acting Chungking perfect,
The Yungchang Prefect.-Chiang Wen-ch'en, ex-Ting of Tengyuch, has recently been promoted to this post. His principal recommendation appears to have been his obstructive attitude at the last frontier meeting. He is not a clever man, but is obstinate and uncompromising, and the old taotai was entirely in his hands. I consider him the worst official in the district from our point of view, but he will not affect us in any way if the taotai can be brought to reason. I trust that Mr. Chiang will not attend the frontier meeting.
Salt Commissioner.-Peng Chi-chih, the old Yungchang prefect, lost his post for destroying the Lungchuan pillar. He is an amiable old gentleman with a good knowledge of frontier affairs, and he acted foolishly in the matter of the pillar owing to the weight of advice behind him. He now warns young officers to move very slowly in international affairs, and points to his own fate as the awful consequence of unappreciated zeal. He has now been appointed special salt commissioner, with instructions to keep foreign salt out of Western Yunnan at any cost. He is deeply
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