CO129-383 - Public Offices - 1911 — Page 473

6

and development of Russian trade in Manchuria and, incidentally, Mongolia are many of them of a very sweeping nature, and it will be at once observed that, in their opinion, the concession which it is of chief importance to secure is a reduction in the duties now levied by the Imperial Maritime Customs on imported Russian goods. Their first suggestion is that the importation into Manchuria of Russian goods should be free; failing this, they propose the following principal alternatives :---- (a.) The increase of the extent of the present free frontier zones from 50 versts (100 h, or 33 miles) to 150 versts (300 l, or 100 miles) each side of the Russo- Chinese frontier--Vladivostock to be excluded from the operation of this stipulation.

(b.) The formation of a free zone extending 150 versts each side of the Chinese Eastern Railway.

(c.) The reduction of the import duty on goods imported into Manchuria by rail from two-thirds to one-third of the tariff rates.

(d) An amended duty-free list.

(e.) Exemption from inland transit duty for Russian goods sent into the interior from places along the Chinese Eastern Railway, provided these goods have been examined by the Imperial Maritime Customs and paid import duty at the time of their importation into Manchuria, and other customs requirements have been fulfilled.

(f) The establishment at Harbin of a customs godown to which imported goods consigned to commercial houses in Harbin shall be conveyed under the guarantee of the Chinese Eastern Railway Company without being subjected to examination at the frontier stations.

(g) Restriction of the powers of the Imperial Maritime Customs in respect to the valuation of goods on which ad valorem duties are charged.

(h.) The settlement and public notification each month in advance of the tael- rouble rate of exchange for customs transactions.

A consideration of these proposals seriatim is now desirable.

1. The free importation of Russian goods into Manchuria.

This is an extension of the concession granted under existing treaties to Russian trade with Mongolia. It means very special treatment, and, if conceded, would, it seems, enable the preferment of a similar claim by Japan in respect to the trade between Corea and Manchuria (see the Sino-Japanese treaty of 1905, article 11). The proposal is likely to be strongly resisted by the Chinese Government if for no other reason than that the revenue collected by the Imperial maritime custom-houses functioning under the direction of the commissioner of customs at Harbin is urgently needed. The total revenue paid to these custom-houses in 1910 was 1,031,000 Haikwan taels.

2. The extension of the limits of the free zones from 50 versts to 150 versts on

either side of the frontier.

This concession would appear to be of value, not necessarily for a bond fide purpose, in the country bordering the Ussuri and in the Hunchun district on the east in part of the country along the western frontier and in the neighbourhood of Aigun, and in the country stretching along the Amur from the point of its junction with the Sungari as far as Ilarbarovsk on the north. A distance of 150 versts or 100 miles, measuring on the map as the crow flies, would bring the station of Hailar within the free zone. It is between Hailar and Manchuria that the bulk of the marmot or tarabagan skins are collected which are exported to Europe. In the past exporters, in order to escape Chinese export duty, have conveyed these skins by cart into the Russian free zone and there shipped them by rail to Europe. the export duty, involving them in less expenditure than the cart hire, has now, it is A reduction in understood, induced them to send their goods by train to Manchuria station and pay export duty in the regular way. Should Hailar, however, be brought within the Chinese free zone, it would be possible--unless the Russian authorities were prepared to assist in preventing it-to declare these goods for the Russian free zone, and convey them thence to Europe without payment of duty to the Imperial Maritime Customs. The opinion has frequently been expressed that the Russian customs authorities themselves are opposed to the idea of the free zones, and would welcome their abolition, since they fully realise that they are a great incentive to smuggling, and largely increase the difficulty of collecting revenue. It is not, however, altogether

7

easy to reconcile this view with the attitude adopted by the Russian authorities at the negotiations held last year in connection with the revision of the Sungari. regulations. M. Latkin, the chief of the Amur Customs, was a member of the commission which considered this question and the revised Sungari regulations, so far from abolishing the free zones, gave a more liberal interpretation to the treaty stipulation in regard to them than the strict wording of the Russo-Chinese convention of 1858 would seem to warrant (see Harbin confidential despatches Nos. 30 and 33 of the 24th September and 1st October, 1910).

3. The formation of a free zone extending 150 versts each side of the Chinese

Eastern Railway.

Comment on this suggestion need only be brief. The proposition, if Northern Mauchuria is still to be regarded as an integral part of the Chinese Empire, is altogether untenable. A proposal that all stations along the Chinese Eastern Railway should be declared open trade marts, though not likely to be acceptable to the Chinese Government, would certainly be much more reasonable and would conform better with the arrangement reached by the Sungari regulations of last year under which, as stated in Harbin despatch No. 27 of the 12th September, all places along the Sungari are open to Russian trade and navigation.

4. The reduction of the import duty on goods imported into Manchuria by

rail from two-thirds to one-third of the tariff rates.

The chief argument on which this demand is based, namely, that Russia is the only country from which China receives goods by land, and that land transport is more expensive than sea carriage, is in part entirely false. No account has been taken of the fact that the frontiers of Tongking, Burmah, and India are also contiguous with that of China, that a French railway runs from Haiphong, through Tongking, to Yunnan-fu, and that the Burmah railways reach as far as Bhampo from which and other places goods are sent into Yünnan. A point which should, however, be mentioned is that British goods conveyed to Manchuria, whether via Pogranitchnaya or Manchuria stations, would, like Russian goods, pay only one-third of the tariff duty should the proposed reduction be granted, just as (vide despatch No. 27 from this consulate of the 12th September last) beans brought from Hulan and Petuna by water to Harbin and thence transported by rail to Vladivostock for export to England now pay, under the revised Sungari regulations, only two-thirds of the tariff duty. At the same time, merchants have been heard to declare that the present saving of one-third duty is, on ordinary imported goods, a matter of small account and does not encourage them to import their wares via Vladivostock owing to the delays and other inconveniences which they experience at that port.

5. Proposed amended duty-free list.

Particulars of the proposed additions and omissions from the duty-free list of the 1881 treaty are given in Annex (F) in which a comparison is drawn between the two exempla of the draft treaty. It will be noted that, as drafted, article 6 of the second exemplum applies only to certain goods imported from Russia, whereas the exemption under article 14 of the regulations for trade by land attached to the treaty of 1881 is equally applicable to the same classes of goods when exported from China to Russia. If this is an unintentional omission as it would seem to be, and if the duty-free list is to apply to goods carried by rail, then the most significant of the suggestions made is, perhaps, the addition of grain products a term which in Russian phraseology includes beans. The export of pulse and grain would become free and the privileges accorded under the railway agreement of 1896 and the Sungari regula- tions of 1910 would be still further extended. The duty-free list of the 1881 treaty, though (vide Harbin despatch No. 27 of last year) tacitly accepted as applicable to trade on the Sungari and though actually in use on the Chinese Eastern Railway, has not been definitely admitted by the Chinese Government as applying to goods carried by rail. It may further be observed that in article 6 of the second exemplum of the draft treaty, which enumerates the duty-free goods, nothing is said as to the mode of transportation. Seeing, however, that the railway is expressly mentioned in the preceding article and other articles, it would seem that the intention must be that rail-borne goods of the kinds in question should also be exempt from import duty.

[2023 h-5]

D

468