511
Under the Convention of 1898, Weihaiwei was
leased to Great Britain "for so long as Port Arthur shall remain in the occupation of Russia". The Russian lease of
Port Arthur, which was for 25 years with a power to extend by mutual agreement between Russia and China was transferred
to Japan by the Peace Treaty of 1905.
I do not know whether the view of His
Majesty's Government is that occupation by Japan under this
transfer is equivalent to occupation by Russia, and, if so,
whether the subsequent extension of the lease to Japan by the Sino-Japanese Treaty of 1915 to 99 years is to be regarded as an extension of the period of Russian occupation thus involving automatically an extension to 99 years of the lease of Weihaiwei, but I would urge that, if this is so, the fact should be publicly stated. If it is not so, an endeavour should be made to place the occupation of Weihaiwei on a new basis by assigning a definite term to the lease. The actual length of the lease is a comparative- -ly minor point. If capitalists know what period of British administration they can reckon on as a certainty, they can calculate what amount of capital they can afford to put into business at Weihaiwei. While things are left in a state of uncertainty they have no basis for calculation and will not risk their money when they are faced with the danger of the substitution of Chinese for British administration at any moment, seeing that a change either to direct Chinese administration or to the status of a Treaty Port means the collapse of trade and the loss of any capital invested.
5. These consequences are inevitable owing to the fact that the existence of the trade of Weihaiwei is due to the freedom of the port. As no customs duties are leried, goods can be sold in Weihaiwel more cheaply than in Chefoo and it is worth while for purchasers to come there to buy. Retrocession to China would involve the introduction
of
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