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4. The railway company's servants are not allowed to load any cargo which does not bear the customs chop, and, moreover, one of the outdoor officers of the customs is detailed to watch the loading of all cars.
5. When a car is fully loaded it is scaled by two seals, one by the customs and one by the railway company (the customs seal being leaden compression seal with wires passing through the hasps on the car doors).
With broken parcels of cargo, insufficient to fill a car, the car is left open, and a list is made by the customs of the cargo intended for Manchuria. A copy of the list is then sent on the train in charge of the guard. As to cargo for Manchuria received am given to under- at stations between Dalny and the frontier station of Pulantien, stand that this is very small, but a very effective arrangement exists, whereby such cargo is only received by the railway company on the condition that the amount of the duty is deposited at the same time with the station master of the receiving station.
After leaving Dalny, the customs examine and check cars both at Chinchow (a station within the leased territory, 20 miles from Dalny and 30 miles from the frontier) and at Pulantien, the frontier station. Any cargo found in the unsealed cars not bearing the customs chop and not tallying with the list in the possession of the train guard is noted, and if the duty not guaranteed by the loading station, which is communicated with by telephone, such cargo is taken off the train at Pulantien. In addition to these methods, members of the customs staff constantly travel over the railway as far as Wafangtien (a station in Chinese territory, 15 miles from the frontier) watching for shipments from the intervening stations, and so far nothing has been discovered showing any malpractices.
My informant personally visited the wharves to watch the loading of cars and the working of the outdoor staff of the customs, and found the men going about their work in a very businesslike manner; altogether, he states, the Japanese staff in Dalny appear to be a very good type, and quite up to the average of the outdoor staff of the customs at other ports. The staff has been considerably augmented of late, and I am given to understand are much stricter all round than formerly; also that the railway company some time back issued special orders to their employés to give every
assistance to the customs officers.
With regard to frontier smuggling, if it is at all serious, which is doubtful, both the fault and the remedy lie with the customs, as they have no men detailed for preventative duty other than on the railway line. It seems to be purely local, i.e., in the small Chinese towns and villages fairly adjacent to the borders of the leased territory; it also seems to be entirely in the hands of the Chinese, and takes place by road from Pitsuwoa (a small junk port to the east of Dalny, but owing to the confor- mation of the coast fairly close to the frontier) and not through the frontier town and station of Pulantion. One thing that would certainly militate against smuggling across the frontier in any quantity and then reloading on to the railway for transit northwards is the absence of roads (in the popular meaning of the term), the country being both hilly and difficult, and the cost of cartage would probably be more expensive than the payment of duty and straightforward shipment from Dalny.
As far as can be seen, the one actual source of suspicion as to Japanese preference at Dalny, on which Mr. Cloud's Mukden report is based, are the trade returns issued by the Customs. The returns are both confusing and unreliable by reason of the manner in which they have been compiled. The British consuls at both Dalny and Mukden are working on these, but I am afraid they will be unable to give very much elucidation.
The Chinese-Japanese agreement in regard to the customs being established at Dalny provides that every steamer entering the port has to send a manifest of her cargo to the custom-house, and all importers of cargo, whether it is intended for leased territory or Manchuria, have to give the particulars of values, as is done, for instance, at this port. There is, however, no time limit in which this is to be done specified in the agreement, nor are there any means provided for enforcing the regu- lations, and it seems to my committee that the Foreign Office might take up this point, as very often a considerable period elapses before the customs can obtain particulars of the
cargo imported, and in order to close off their returns for one period a number of steamers' cargoes are carried over to the next period. This has been done to such au absurd degree that the returns, as stated above, are unreliable and confusing. As an instance, fifty steamers' cargoes were carried over from 1909 and included in 1910 An explanation of this may, however, be forthcoming in the commissioner's report on the trade of Dalny for the year that has passed.
returns.
In conclusion, I would state that there is no doubt that it would be far more satisfactory to all concerned if the same terms as are now in operation at Kiachow were to be adopted at Dalny, and I can confidentially inform you that the Japanese authorities at Dalny and Tokyo have been induced to favourably regard the Kiachow agreement, and overtures to the Peking authorities for the adoption of a similar agreement are anticipated to be made shortly. It would therefore seem inadvisable to take up this question without some irrefutable evidence to work upon, but perhaps some friendly unofficial representation to both the Japanese and Chinese through the Peking Legation on the advisability of the adoption of the Kiachow agreement, would do more good at the moment.
Yours faithfully,
L. E. CANNING, Secretary.
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