Htljata, Wtm lark CHARLES WILLIAM WASON COLLECTION CHINA AND THE CHINESE THE GIFT OF CHARLES WILLIAM WASON CLASS OF 1876 1918 DATE DUE^ GAYLORD PRINTED IN U S / r^o -..- Cornell University Library DS 740.S.G7A3 1898 ''"'^'ifnRSiMnifKi '■sspecting the affairs of 3 1924 023 185 154 ri \<=^. M XI Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924023185154 ■y - " '^ ' BRITISH PARLIAMENTARY PAPERS REGARDING AFFAIRS OF CHINA Presented to both Houses of Parliament by Command of Her Majesty 1898-1899 ^^ ^. .:V^'^^- -^ -^ 7 / LONDON 18?8-1S99 ^ U R N li L \y UNfVI usn Y CONTENTS Correspondence respecting the Affairs of China, 1898 Despatch from Her Majesty's Minister at Peking, forwa-rding Copies of the Notes exchanged with the Chinese Government respecting the Non-alienation of the Yang-tsze Region, 1898 Correspondence respecting the Affairs of China, 1899 Correspondence between Her Majesty's Government and the Russian Government with regard to their respective Railway Interests in China, 1899 CillNA. No. 1 (1898). CORRESPONDENCE KESPECTING THE A^FEAIKS or CHINA. Presented to loth Houses of Parliament by Command of Her Majesty. April 1898. LONDON: PRINTED FOR HER MAJESTY'S STATIONERY OFFICE, BY HARRISON AND SONS, ST. MARTIN'S LANE, PRINTERS IN ORDINARY TO HEB MAJESTY. And to be purchased, either directly or through any Bookseller, from EYEE AND SPOTTISWOODE, East Hardino Street, Fleet Steeet, B.C., and 32, Abingdon Street, Westminster, S.W.; or JOHN MENZIES & Co., 12, Hanover Street, Edinburgh, and 90, West Nile Street, Glasgow; or HODGES, FIGGIS, and Co., Limited, 104, Graftox Street, Djblik. rC— 8814.1 Price Ihd. TABLE OF CONTENTS. No. Name. j Date. Subject. Page y \ Sir C. MacDonald Telegraphic Nov. 17, 1897 Kiao-chau visited hy German men-of-war in consequence of murder of two missionaries, and Chinese Commandant ordered to evacuate I 2 » )) Telegraphic 18. Kiao-chau. Report confirmed. Germans have occupied barracks 1 ^' 3 To Sir C. MacDonald •- 19, Occupation of Kiao-chau. Chinese Minister has delivered message from his Government respecting 1 4 Viscount Gough •• 19, Occupation of Kiao-chau. Keception of newrs by German press 2 5 Sir C. MacDonald . . Telegraphic 22, Occupation of Kiao-chau. German demands.. 2 6 To Sir C. MacDonald Telegraphic 23, Occupation of Kiao-chau. He may advise acceptance of first four German demands, if appealed lo . . 3 7 Sir C, MacDonald .. Telegraphic 25, Kiao-chau. Yamen informed that it cannot be evacuated until demands conceded 3 8 Sir E. Monson • • 27, Occupation of Kian-chau. M. Hanotaux' remarks 3 9 Sir C. MacDonald . . Telegraphic 30, Railway concessions to a British subject in Shantung. Negotiations fell through some time ago. . 4 10 )i )i •• Telegraphic 30, Area round Kiao-chau to be administered under German law 4 11 Viscount Gough •• 29, Sir R. Hart's successor. Ofiicial denial in the press of rumour that Germany will support appointment of a Russian 4 12 Sir C. MacDonald .. Telegraphic Dec. 1, German Consul-General at Shanghai going to Kiao-chau Bay 4 IS >> )j • . • • Oct. 17, Engineer-in-chief on northern railway lines of China. Russian attempts to procure Mr. Kinder'* dismissal 4 14 ti ji •• • • 19. Russian attacks on Mr. Kinder. Conversation with M. Pavloff 5 15 Mr. Goschen •• Dec. 1. Occupation of Kiao-chau. Conversation with Count Mouravieff. 'J'ransmits precis of article i»"Novosti" 6 16 Sir C. MacDonald . . Telegraphic 6, Occupation of Kiao-chau. Yamen have ap- pointed two Ministers to conduct negotia- tions. They are prepared to concede German demands 7 17 To Sir C. MacDonald Telegraphic 8, German demands. Her Majesty's Government will demand most - favoured - nation treat- ment 7 18 Viscount Gough Telegraphic n, Kiao-chau. No foundation for report that Germany is about to evacuate 8 19 To Mr. Goschen . . 14, Mr. Kinder. To call Count Mouravieff 's atten- tion to nature of M. Pavloff's demands 8 20 Sir C. MacDonald . . Telegraphic H, Kiao-chau negotiations. Present state of 8 21 To Sir C. MacDonald Telegraphic 16. Any exclusive concessions to Germany will be opposed by Her Majesty's Government 8 TABLE OF CONTENTS. lU No. 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 -11 42 43 ? ^ A4 Name. Sir C.SMacDohald 1) 1, " j> " » )» »» •> !1 Mr. Goschen Sir E. Satow To Sir C. MacDonald Admiral on China Station Sir C. MacDopald . . China Association Sir C. MacDonald » !I Sir E. Satow Mr. Goschen Sir F. Lascelles Sir C. MacDonald '» J5 Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic 28, Telegraphic 29, Telegraphic 30, •• 31, Telegraphic 31, Telegraphic 3), • • 1, • 4 26, 28, Date. De Telegraphic . . ! Telegraphic To SirC. MacDonald I ,: To Mr. Goschen I'elegraphic Telegraphic 17,^1897 20, 21, 22, 22, 23, 28, ' 23,. I ■ Jan; 30, 3. 1898 5, 5, 5, Subject. J 371] Five Russian men-of-war to winter at Port Arthur. Provisions telegraphed for Russian ships at Port Arthur and Talienwan. Report of Her .Majesty's ship ''Daphne" .. Kiao-chau will probably be made a Treaty port, with German coaling-station and dock. . German Minister states that Germany has refused offers of coaling-station in south of China ., .. .. .. Offer for loan made by Russia. Yamen have asked if Anglo-German Syndicate would now grant terms refused in June last .. Russian fleet given permission to winter at Port Arthur .. .. .. .. Port Arthur. Conversition with Count Moura- vieff respecting presence of Russian ships Lllci C «« •« ,a •• Japanese Government informed by Russian Government that Port Arthur has been temporarily lent to Russia . . . . What could Her Majesty's Government ask for in return for guarantee or advance of a loan ? Movements of British ships. Reportis . . List of concjsessions which might be asked for in return for loan If China Loan were guaranteed by Her Majesty's Government, advantage to England would be great Dismissal of Tartar General in Shantung de- manded by German Minister Yamen have telegraphed ordering dismissal of Tartar General . . , , Occupation of Kiao-chau. Reception of news in Japan Russian ships at Port Arthur. Language of Count Mouravieff on the subject . . . , Attack on Mr. Kinder's position. M. Basily Rays no instructions sent to M. Pavloff to press for dismissal of any foreigner Occupation of Kiao-chau. Account of conver, satioii with Herr von Giilow KiaO'chaii. Present state of neu;otiations. Chinese have agree Sir N. O'Conor Sir F. Lascelles To Sir C. MacDonald Telegraphic Telegraphic Sir C. MacDonald . . Telegraphic To Sir N. O'Conor . . To Sir F. Lascelles .. Sir N. O'Conor Sir C. MaeDonald To Sir N. O'Conor To Sir C. MacDonald Sir C. MacDonald . . To Sir N. O'Conor Sir C. MacDonald .. Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Nov. 20, 1897 Dec. 1, Jan. 12, 1898 12, 17, 17, 18, 19. 19, 19. 21, 23, 24, 25, 26, 27, Ki.io-chau npjrotiations. Transmits extract from '• Imperial Gazette " giving result of .. Loan. Terms on which Her Majesty's Govern- ment offer to advance money for the payment of indenii'ity to Japan .. German action in China. Remarks of Prince llohenlohe respecting .. British ships at Port Arthur. M. de Staal states that their presence creating bad effect in Russia . . .. . j Relations of Germany and England in China. Conversation with German Ambassador Proposed loan. Remarks of M. Hanotaux as to English guarantee . . China Loan. Reports interview with Yamen as to concessions in return for. Discussion as to opening of Talienwan . . . . Mr. Kinder. Account of visit to the northern railway .. .. .. .. German occupation of Kiao-chau, Reviews the situation .. .. .. .. Russia and Port Arthur. Conversation with Count Mouravieff Shantung. Transmits precis of article from " Kolonial Zeitung " respecting . . Talienwan. He need not insist on its being made Treaty port Li Hung-chang hopes that demand for Talien- wan being Treaty port will be withdrawn . . China Loan. States security agreed to by Yamen . . . . , . . , China Loan. Russian Ambassador urges that Talienwan should not be made a Treaty port German attitude in regard to China Loan. Con- versation with Count Haizfeldt ., Visit of British ships to Port Arthur. Count Mouravieif has complained of Summary of concessions agreed to by China in return for loan of 16 millions ; latter sum insisted upon .. British ships at Port Arthur. Russian Ambas- sador informed that only "Iphigenia" is there ... .. .. China Loan. Her Majesty's Government can- not advance more than 12 millions China Loan. Russian Government have most strongly protested against British ships at Port Arthur. Extends tele- gram of January 23 ,. ,. British ships at Port Arthur. Announcement of their being ordered to leave having most injurious effect 15- Iff 1& 17 17 17 18 18 1& 2a 21 21 22 22 22 2S 23 2S 24 24 24 25 25 TABLE OE COKTENTS. No. Name, 68 To Sir C. MacDonald 69 Sir C. MacDonald .. 70 3) )J Telegraphic- Telegraphic 71 72 73 74 75 76 77 78 V » Sir N. O'Conor Sir F. Lascelles » J) Date. Sir C. MacDonald .. To Sir N. O'Conor . . Sir C. MacDonald To Sir C. MacDonald To Sir N. O'Conor . . 80 To Sir C. MacDonald 81 83 84 85 86 87 88 89 Sir F. Lascelles To Sir N. O'Conor . . M. de Staal Sir F. Lascelles Sir C. MacDonald . . To Sir C. MacDonald To M. de Stall Sir C. MacDonald . . Sir F. Lascelles .. Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Jan. 27, 1898 28, Dec. 1.5, 1897 16, Jan. 26, 1898 25, 28, 31, Feb. 2, Subject. 9, 10. 11, 14, 14, 15, 19, 14, Statement that Admiral has been directed to withdraw British ships is a pure invention . . Hears that Yamen will propose that England and Russia should divide the loan Occupation of Kian-chau. Account of German negotiations and interview with Yamen Kiao-chau. Transmits extract from "North China Daily News " and translation of German Admiral's proclamation .. Opening of Talienwan. Reasons of Russia for objecting to demand Occupation of Kiao-chau. Transmits state- ment by Herr von Biilow before the Budget Commission and extract from " Cologne Gazette " .. ., Herr von Billow anxious for a good under- standing with England in the Far East China Loan. Yamen decide to borrow neither from England nor Russia Russian intentions as to Port Arthur and Talienwan. Conversation with M. de Staal respecting Refusal of Loan. Decision of Yamen announced by Prince Kung Refusal of loan. Chinese Minister has announced Yamen's decision China Loan. Its refusal by China due to ■ nienacirig attitude of Russia China Loan. If obtained from European financiers, English banks must have a share . Area of territory leased to Germany at Kiao- chau. Transmits extract from " Knlonial Zeitung" Talienwan. M. de Staal's remarks as to use of the term " free port " Talienwan. Comments on distinction between " free port " and " Treaty port " . . Kiao-chau. Transmits precis of debate in Reichstag as to German intentions Chinese Concession?. Reports assurances received from Chinese Government Chinese Concessions. Congratulations upon . . Talienwan. Explanation of misunderstanding as to terms employed in regard to it Anglo-German Loan. Preliminary Agreement signed by Agent of Hong Kong and Shanghae Bank Grant to Germany of right to construct a rail way to Ichow in Shantung. Communique has appeared in the " North German Gazette " of February 13 Page * 28 29 VI TABLE OF CONTENTS, No7 Name. Date. Subject. SO Sir C. MacDonsid . . Felegrap .]■ Feb. 25,. 898 Wei-hai Wei. Chinese Government .stated to be willing to offer lease to Great Britain 91 To Sir C. MacDonald , Telegraphic 25, Wei-hai Wp!. Policy of Her Majesty's Govern- ment against any alienation of Chinese territory. Discussion respecting- proposed lease would be premature 92 China Association » • 28, Concessions to Great Britain. Expresses .oatis- faction at Mr. Curzon's statement. Inquires whether right to act as general carriers is extended to all waterways 93 To Sir C. MacDonald Telegraphic Mar. 1, Opening of internal navigation. Will British steam-ships have right to act iis general carriers on all internal waterways ? 94 Sir C. MacDonald . . Telegraphic 3, Opening of internal navigation. Regulations will be drawn up by Sir R. Hart . 95 To Sir C. MacDonald Telegraphic 7, Lease of Port Arthur and Talienwan. Desirable that Her Majesty's Government should make some counter-move. Refusal Of lea«e of Wei-hai Wei might be demanded on evacua- tion by Japanese 96 Sir C. MacDonald .. Telegraphic 7, Reported lease of Port Arthur and Talienwan by Russia 97 J) ?) Telegraphic 8, Kiao-chau and concessions in Shantung. Agree- ment signed March 5 98 toSirN.O'Oonor .. Telegraphic 8, Lease of Port Arthur and Talienwan by Rilssia. Ascertain if it is true . . 99 Sir C. MacDonald .. Telegraphic 9, Kiao-chau and concessions iii Shantunff.' Yaraen confirm report of signature of Asrreeraent. 100 55 J» • • Telegraphic », Lease of Port Arthur and I'alienvran. Informed by Yamgn of Russian demand. Yamen wish Her Majesty's Government to give Russia an assurance that they have no designs on Manchuria JOl SirN. O'Conor . .. I'elegranhic 9, Lease of Port Arthur and Talienwan. liiissian demands confirmed by Count Mouravieff . . 102 Sir C. MacDonald . . Telegraphic 9, 'Russian demands: no indication of an ulti- matum 103 To Sir N. O'Conor .. Telegraphic 10. 1 Russian demands. An assurance that Her Majesty's Government have no design on Manchuria can be given, if Chinese Minister appeals to him J 04 ii -J •> Telegraphic n. Russian demands. Her Maj ist.y's Government wish for assurance that it is not intended to interfere with the Treaty of Tientsin 105 Sir N. O'Conor Telegraphic 13, Russian demand*. Count Mouravieif renews assurances that sovereign rights of China will not be infringed 106 Sir F. Las cellos •• 7, Kiso-chau Regulations issued by Imperial Order for its administration i07 77 • • • • s, Kiao-chau. Notice respecting conclusion of negotiations and signature of Treaty pub- lished in " Reich sanzeiser" of 7th March ^ loe Sir 2S. O'Conor ^ Russian demands. Conversation with Count MouraviefF. Russian reasons for requirinff an ice-free port Page TABLE OP CONTENTS. VU No. Name. j Date. Subject. Page 109 Sir C. MacDonald . , Teli'graphic Mar. 13, 1S98 Russian demands- Negotiations are not to be transferred to St. Petersburgh. Li Hung- chang asks for declaration that Her Majesty's Government have no designs on Port Arthur or Talienwan 46 110 Sir X. O'Couor lelegraphic 16, Port Arthur and Talienviran will be open to foreign trade if leased to Russia . . 46 111 Sir C. MacDonald . . I'elegraphic 16, Mr. Kinder's removal being urged by Russian Charge d'AfFaires 47 112 To.=ir M. O'Conor .. __ 16, Russian demands. Approves language re- ported in >Jo. 120 47 113 •>» j; Telegrapliic 17. Mr. Kinder. He should make further repre- sentations on behalf of.. 47 114 Sir N. O'Conor 13. Port Arthur ami Talienwan. Interview with Count .Mour^vieff as to their being open to foreign trade . . 47 115 Sir C. MacDonald . . Telegraphic 18, Mr. Kinder. Russian Charg6 d'Affaires states that Russian Government do not intend to ask for his removal from line he has built and now superintends 48 116 To Sir C. MacDonald Telegraphic 19, Russian troops at Kirin. Can he obtain reliable information as to ? 48 117 Sir N. O'Conor Telegraphic 20. Mr. Kinder. Russian Government have sent instructions to Peking that no further objection is tJ be made to his employment on railways in China 49 118 Sir 0. MacDonald . . •• Feb. 4, Punishment of former Governor of Shantung and three other officials , 49 119 1> »» • • ■• 4, Sir R. Hart. Sends copy of note to Yamen lespecting importance attached by Her Majesty's Government to his successor being of British nationality 50 120 Sir N. O'Conor • " Mar. 16, Assurances as to Port Arthur and Talienwan. Count Monravieff authorizpd by the Emperor to state that both ports would be opened to fo'eign trade, and that Russia would respect rights under existing Treaties with China . . 51 121 5) '1 • ■• •• 16, Mr. Kinder. Further representations to Russian Government 51: 122 Sir C. MacDonald ,. Telegraphic 21, Russian troops in Manchuria. Military Attache reports rumours untrue . . 52. 123 To Sir N". O'Conor . . I'elegraphic 22, Assurances av to Port Arthur and Talienwan. Inform Russian Government that Her Majesty's Go> eminent take note of. Objec- tions to military occupation or fortification of Port Arthur or anv other harbour in the Gulf of Pechili 52 124 Sir C. MacDonald .. Telegraphic 22, Rumoured rebellion. Nothing known of at Peking 52 125 Sir N. O'Conor Telegraphic 23, Russian Government will not abandon their claim to Port .Arthur . . 53 126 Sir C. MacDorald .. Telegraphic 1 i 24, Port -Arthur and Talienwan. Chinese Go- vernment forced to yield to Russian demands lor . .. " .. 53 12;' To Sir C. MacDonald 24, Sir R. Hart. Approves note to Yaraun re- specting his successor . . .. 53 Vlll rABLE OP CONTENTS. No. Name. Date. Subject. Page 128 To Sii- N. O'Conor . . ■ • Mar. 24, 1898 Port Arthur and Talienwan. Interview with M. de Stial as to Kussian policy . . c3 129 To Sir C. MaeDonald Telegraphic 25, Wei-hai Wei. Surrender of I'ort Arthur alters balance or' power in Gulf of Fechili. It is necessary to obtain refusal of Wei-hai Wei. British fleet going north . . 54 130 To ijir C. Lascelles .. Telegraphic 26, Wei-hai W>'i. States intentions of Her Ma- jesty's Government. If German Govern- ment mention subject reasons for demand should be explained 54 131 Sir C. ?4acDonal(l . . • • Jan. 13, Shantung. Course of negotiations ending in concefsion of German demands . . 54 132 Sir N. O'Conor ■ • Mar. 23, Count Mouravieff promises written statement of assurances already given 56 133 To SirX. O'Conor .. ■ * 28, llussian demand.s. Her Majesty's Government have grave oLjectinns to occupation of Port Arthur by Russia, and reserve freedom of action necessary to protect, their own interests 56 134 M. de Staal • • 28, Port Arthur and Talienwan. Ceded to Russia in usufruf-t 58 135 To M. de Slaal • • 29, Port .Arthur and Talienwan. Accepts note, as not intended to derogate from previous assurances 59 136 Sir N. O'Conor Telegraphic 29, Port Arthur and 'lalienwan. Reports declaration in Official Messenger as to lease of .. 59 137 » I) Telegraphic £0, Port Arthur and Talienwan. Count Mouravieff adheres to assurances given respecting 59 138 To Sir X. O'Conor . . Telegraphic 30, Port Arthur and Talienwan. Despatch is on its way respectiii"-. Her Majesty's Govern- ment n^serve liberty of action 63 139 )i >i • . Telegraphic 50, Poit Arthur and Tahenwan. Substance of answer to .\'. de Staal's note 60 140 5) 1» • • Telegraphic 31, Port Arthur and Talienwan. Assurances given by Count Mouravieff should be obtained in writing £0 141 To Sir E. Satow Telegraphic 31, Japanese Government should be informed that Her Majeslv's Government propose to de- mand k-ase if Wei-hai Wei 60 142 Sir C. MaeDonald . . Telegraphic I, Three new Treaty ports are to be opened 61 143 Sir E. Satow Telegraphic 2, Proposed lease of Wei-hai Wei. Japanese Government concur in .. 61 144 Sir C. MaeDonald .. Telegraphic 3, Wei-hai Wei. Terms on which its lease to Great Britain is agreed to 61 3 45 j> » Telegraphic 3, Chinese navy. Yamen wish for special facilities for training at Wei-hai Wei 61 146 To Sir C. MaeDonald Telegraphic 4, Congratulations on success of negotiations 61 147 Sir C. MaeDonald .. Telegraphic 4, Lease of Wei-hai Wei. Terms of Kussian lease of Port Arthur not }et ascertained C2 118 To Sir C. MaeDonald 1 Te'egraphic 4, Chinese request for naval officers. Her Majesty's Government would be elad to assist .. ., _ 62 TABLE OP CONTENTS. IX No. Name. Date. Subject. Page 149 To Sir N. O'Conor Apr. 4, 1898 Port Arthur and Talienwan. M. de Staai states that they are leased for t-.ienty-five years, but slatus quo to be maintained as far as possible 62 150 To Sir E. l!?atow Telegraphic 6, Wei-hai Wei. Her Majesty's Government very sensible of friendly spirit shown by Japan. To inform them that promise of reversion has been obtained 63 151 Sir N. O'Conor 4, Port Arthur. Transmits correspondence with Count Mouravieff as to his assurances 63 1371] CHINA. No. 2 (1898). DESPATCH FROM HER MAJESTY'S MINISTER AT PEKING, FORWARDING COPIES OF THE NOTES EXCHANGED WITH THE CHINESE GOVERNMENT RESPBCriNG THE NOW -ALIENATION OF THE TANG-TSZE REGION. Presented to both Houses of Parliament by Command of Her Majesty. July 1898. LONDON: PRINTED FOR flER MAJESTY'S STATIONERY OFFIUl BY HARRISON AND SONS, ST. MARTIN'S LANE, PEINTBES IK ORDrNABT TO HEB MAJESTY. And to be purchased, either directly or through any Bookseller, from BYRE AND SPOTTISWOODB, East HAEDiNa Stbeet, Fibbt Street, E.G., ahb 32, Abingdon Stbbet, Westminsteb, S.W. ; oe JOHN MENZIES &, Co., 12, Hanotbb Stebbt, Bdinbubgh; and 90, West IJilb Stbbet, Gtlasoow ; ok HODGES, FIGGIS, &, Co., Limited, 104, Geafton Stbbet Dubmh. [C.— 8940.J Price id. Despatch from Her Majesty's Minister at Peking, forwarding Copies of the Notes exchanged with the Chinese Government respecting the N on- alienation of the Yang-tsze Region. Sir C. MacDonald to the Marquess of Salisbury. — {Received April 13.) (Extract.) Peking, February 20, 1898. AT my interview with the Ministers of the Tsung-li Yamen on the 9th instant, I produced a draft of the note I intended addressing to them with regard to non- alienation of the Yang-tsze region. This was accepted with little demur, with the insertion of the words " now entirely hers," which, as recording an undeniable fact, I agreed to put in. Copies of the notes subsequently exchanged are inclosed. Inclosure 1. Sir C. MacDonald to the Tsung-li YamSn. MM. les Ministres, Peking, February 9, 1898. YOUE) Highnesses and your Excellencies have more than once intimated to me that the Chiuese Government were aware of the great importance that has always been attached by Great Britain to the retention in Chinese possession of the Yang-tsze region, now entirely hers, as providing security for the free course and development of trade. I shall be glad to be in a position to communicate to Her Majesty's Government a definite assurance that China will never alienate any territory in the provinces adjoining the Yang-tsze to any other Power^ whether under lease, mortgage, or any other designation. Such an assurance is in full harmouv with the observations made to me by your Highnesses and your Excellencies. I avail, &c. (Signed) CLAUDE M. MacDONALD. Inclosure 2. The Tsung-li Yamen to Sir C. MacDonald. Kuang Hsu, 24ith year. 1st moon, 21st day (Translation.) (February 11, 1898). THE Yamen have the honour to acknowledge the receipt of the British Minister's despatch of the 9th February, stating that the Yamen had more than once intimated to him that the Chinese Government were aware of the great importance that has always been attached by Great Britain to the retention in Chinese possession of the Yang-tsze region, now entirely hers, as providing security for the free course and development of trade. The British Minister would be glad to be in a position to com- municate to Her Majesty's Government a definite assurance that China would never alienate (any territory) in the provinces adjoining the Yang-tsze to any other Power, whether under lease, mortgage, or any other designation. The Yamen have to observe that the Yang-tsze region is of the greatest im- portance as concerning the whole position (or interests) of China, and it is out of the question that territory (in it) should be mortgaged, leased, or ceded to another Power. Since Her Britannic Majesty's Government has expressed its interest (or anxiety), it is the duty of the Yamen to address this note to the British Minister for communi- cation to his Government. They avail themselves, &c. [757] 5= w M W M O O O a 1 § ^. ^ ^ a 1^ >8 5?" CD S. 00 O • 'Si 3 QQ E- £• o' ? 1 CD o S' -J • K) 01 m 2 £. 8J S s 3 s. !^ °? e+- n> o § N) (tP GO !3 o CD "3. •S fD B' QD o' 3 ST S s o (B Oq cr" ^ • D & Cfi? (D a. cd" !2< g. E" o 3' a f-r" crq Correspondence respecting the Affairs of China, No. 1. Sir C. MacDonald to the Marquess of Salisbury. — (Received November 17.) (Telegraphic.) Peking, November 17, 1897. I HAVE it on very good authority that in consequence of the murder last week of two German missionaries in Shantung Province, German men-of-war have visited Kiao-chau Bay, and ordered the Commandant to evacuate the place. The Tsung-li Yamen are in a state of great perturbation, and Li Hung-chang has I understand appealed to the Eussian Charge d' Affaires, but I am ignorant of the result of this step. No. 2, Sir C. MacDonald to the Marquess of Salisbury. — {Received November 18.) (Telegraphic.) Peking, November 18, 1897. THE Tamen received a telegram on Monday last from the Governor of Shantung reporting that the Commandant of the troops at Kiao-chau had got an ultimatum from the German Admiral requesting him to evacuate the place within forty-eight hours, and asking instructions as to whether he should oppose the landing of the German troops. The Yamen telegraphed on Tuesday to instruct the Commandant of Kiao-chau to make no resistance, but to evacuate the barracks ; there are no proper forts. The Germans, who are stated to have landed 600 men, are now in possession of the barracks, &c. The Yamen met yesterday to consider this seizure of territory by a friendly Power. The Yamen have not received any communication from the German Minister, or from the G^rman^Goyernment, and can only surmise that Kiao-chau has been seized on account of the murder of German missionaries. No. 3. The Marquess of Salisbury to Sir C. MacDonald. Sir, Foreign Office, November 19, 1897. THE Chinese Minister called at this Office to-day and said that he had received instructions to read to me a message from his Government to the following effect : — Two German missionaries have been killed by robbers in the district of Kii-ye-hien, in the Province of Shantung. A very stringent Edict was issued by the Emperor, directing the Governor of the province to appoint high officials to investigate the matter. On the 21st of the present Chinese month, the Governor reported by telegraph that four of the culprits had been arrested, and the German Minister at Peking was so informed. But, on the previous day, German ships of war entered Kiao-chau Bay and landed -men to occupy seyeral points on the hills. Notice was given to the [371] B Chinese troops that they must withdraw within forty-eight hours. No communica- tions or despatches had been received from the German Minister, notifying the intentions of his Government. It was, therefore, with great astonishment tha,t the Chinese Government learnt by telegraph from the Imperial Commissioner of the Northern Ports, on the evening of the 21st, that the Germans had effected a landing at Kiao-chau. The Chinese Government, taking into consideration the relations of China with foreign Powers, had directed their authorities in Shantung to give strict orders to the troops to do nothing without special instructions, and to withdraw to a sufficient distance. As distorted accounts of what had happened might be spread by the newspapers, the Chinese Minister was to communicate this official report of the facts. I am, &c. (Signed) SALISBUET. No. 4. Viscount Oough to the Marquess of Salisbury. — (Received November 22.) (Extract.) Berlin, November 19, 1897. ^ I HAVE the honour to inform your Lordship that the Japanese Charge d'Affaii^es called this morning, and informed me that he had received a telegram from his Govern- ment instructing him to go at once to the Minister for Foreign Affairs, and inquire whether it was true that a German force had landed at Kiao-chau, and, if so, what was its object. This telegram had crossed one from himself, in wbich he had given the sense of the comments of the German press on the subject. The official press continues silent except that it repeats news sent from lierlin to the " Cologne Gazette," or translates the telegrams published by the English Agencies. The " Cologne Gazette " has as yet made no statement as to the policy which the Government may take, but it has pointed out the nature of the comments in the English "Times" and the Erench "Temps," which, while sympathizing with the German Government in its desire to obtain redress, point but the objections to a permanent occupation of the place seized. This is in conformity with a communique published some time ago, in which the writer maintained that Germany should not attempt to do more than lease a coaling station and trading settlement from the Chinese Government, and that the military occupation of territory on the mainland would prove highly disadvantageous. On the other hand, the Conservative and national press are full of accounts of the advantageous situation, both from the commercial and military point of view, of the port seized, advocate a permanent occupation, and already discuss the construction of a railway to the neighbouring coal-fields, to Chifu and to Peking. Perhaps the only indication of the views of the high authorities is to be found in an article in the " Post." This organ remarks, in reference to the " Temps " article, that there could be no objection to Germany not only seizin<^ the port in order to exact reparation from the Chinese Government, but also holdin'^' it as security against possible future outrages. No. 5. Sir C, MacDonald to the Marquess of Salisbury. — [Received November 22.) (Telegraphic.) Peking, November 22, 1897. GERMAN occupation of Kiao-chau. Chinese Government have been officially informed by Baron von Heykino-- that evacuation of Kiao-chau will not take place until the following demands have been granted : — (1) The bunding of an Imperial tablet to the memory of the missionaries who were murdered. (2) The families of the murdered missionaries to be indemnified. (3) The Governor of Shantung to be degraded permanently. (4) The Chinese Government to defray the cost of the German occupation of Kiao-chau. (5) German engineers to have preference in the building of any railway which China may construct in the Province of Shantung, and also in the working of any mine which may exist along the track of such railway. ' To these demands the Yamen's reply is that they decline to commence negotiations until Kiao-chau is evacuated. ' I have the honour to ask for your Lordship's instructions in the possible event of the Chinese Government requesting all the Foreign Representatives to mediate in this matter. The demand that German engineers should have preference in railways and mines in Shantung, is, I think, a novel precedent, at variance with the most-favoured-nation clause. But with the exception of this, the Chinese Government should, in my opinion, grant all the German demands.^ No. 6. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, November 23, 1897. KIAO-CHAU Bay : Your telegram of the 22nd instant. You may advise Chinese Government, , if appealed to, to concede first four demands. As regards fifth demand, I understand that a British subject has already been granted a concession for a railway and mines. If this is so, you can inform the Chinese Government that under most-favoured-nation clause the demand is inadmissible, but that apart from this consideration the consent of Her Majesty's Government cannot be given to the abrogation of the rights of a British subject for the purpose of making a concession to others. No. 7. Sir G. MacDonald to the Marquess of Salisbury. — (Received November 25.) (Telegraphic.) " Pelting, Novem.ber 26, 1891 . GEE/MAN occupation of Kiao-chau : My telegram of the 22nd instant. Baron von Heyking has received instructions from his Government to answer the Chinese Government's refusal to commence negotiations until the Germans have evacuated- Kiao-chau, by informing the Yamen that the uselessness of putting any faith in the promises of the Chinese Government having been proved by experience, the evacuation of Kiao-chau will not take place until the Chinese Government have assented to the German demands. - No. 8.1 Sir E. Monson to the Marquess of Salisbury. — (Received November 29.) (Extract.)- Paris, November 21,1891. M. HANOTAUX did not say very much, when I saw him the day before yesterday, in regard to the occupation of Kiao-chau by the German naval forces in Chinese waters. He asked me if I had any official information about it and about the terms offered by the German to the Chinese Government; and on my replying in the negative said that the step taken by the Germans was Very serious, and might have important consequences. [371] . . B 2 No. 9. , i Sir C. MacDonald to the Marquess of Salisbury. — (Received November 30.) (Telegraphic.) Peking, November 30, 1897. IN reply to your Lordship's telegram of 23rcur hostility of Russia by dosmg so. I pointed out that Talienwan was the only port giviaig free acces& to uorth du.ring winter, and invited them to explain Russian opposition onless she had ulterior designs on the place. They fully admitted that its opening would protect it agaiawt annexation, and therefore be in China's own interests, but said they were afraid to embroii themselves with Russia. I said I was astonished to find that they were iK)t free to open a Treaty port in any portion of Chinese territory.. Yamen had previously seenaied to vselcome- idea of opening Talienwan, advantages of which' they see cleariiy, but they are- evidently greatly frightened by Rus«iaa threats. Time did not allow d^iscussiisn of securitv and audita which was postponed till to-morrow. I a-sked fmi a port in Hunani and Nanning to be opened as well as Talienwan. To two firmer demands they showed themselives iiiclined, to agree. No-. 52 air C. MacDonald to the Marquess; e/ ISalishu/ry. — {Received January IT, 1898.) My Lord, Peking, Novsmotr 20, 18OT- WITH reference to my despatches of the 17th and 1 i^th ultimo, relative to the attempt of the Russian Charge d'Affaires to procure the dismissal of Mr, Kinder from his post of Engineer-in-chief on the northern lines of railway, 1 have the honour to inform your Lordship that on the 28th October 1 returned fiom a short trip which I undertook for the purpose of inspecting the railway in question. It had long been my wish to see a railway of which 1 had so frequently heard, but I had not so far been able to spare the time. Hearing .that both Mr. Kinder and his Excellency Hu, Inspector-General of Northerri Railways, had started on a tour of inspection to the railhead, and beyond into Manchuria. I tboiigbt the opportunity a good one, and proceeded myself, via Shan hai kuan, to Shih-ho-, which is within a few miles of the railhead. Under the able guidance of Mr. Kinder, I was shown the working, lof the line, and inspected the workshops, engine-sheds, foundries, &c., at Tongshan, the head-quarters of ]9 ,. the,Engineer-in-^cbief, I saw enough durins my short visit to demonstrate how much is . due to the energy, skill, and determination, in the face of almost insurmountable obstacles, of Mr. Kinder and his, European staff, of whom more than three-quarters are British. I do not allude so much to engineering obstacles, though these are by no means insignificant, but, and more particularly in the earlier days, to the unreasoning opposition of the Chinese governing classes. I have, &c. (Signed) CLAUDE M. MacDONALD. No. 53. Sh- C. Mac Donald to the Marquess of Salisbury. — {Received January 17, 1898.) My Lord, Peking, December 1, 1897. THE telegrams I have dispatched during the past fortnight have placed your Lord- ship in possession of the facts connected with the German occupation of Kiao-chau as they have come to my Unowledge. Details are as yet wanting of the murder of German missionaries in Shantung which has led to this incident. The place where it occurred is the district of Chii-yeh, in the Prefecture of Ts'ao-chau, in the south-west corner of the province. The German Minister was at the time on a visit to the Yang-tsze ports, and he seems to have at once received authority from his Government to take drastic measures to secure full reparation, for within a few days' time three German men-of-war appeared at Kiao- chau, and compelled the Chinese Commandant to evacuate the place, which has since then remained in German possession, the latest steps taken, as reported from Chefoo and Shanghai, and transmitted to your Lordship in my telegrams of the 30th November arid 1st December, being the appointment of the Captain of the " Arcona " as Commandant of the place, and the departure thither of the German Consul-General from Shanghai. The only difficulty so far encountered has been the supplying of the force stationed there, owing to the reluctance of merchant-vessels to run the risk of confiscation for entering what is still nominally a Chinese port not open by Treaty. Meantime, the proceedings of the Chinese Government have been characterized by the utmost vacillation. The Governor of Shantung, an ignorant and bigoted anti-foreign official of the old-fashioned Chinese type, proposed to attack the Germans, and drive them out, but was ordered to make no such attempt. A small party in the Chinese Cabinet were in favour of practically inviting Russia's intervention on China's behalf, but they were overruled by their colleagues, who held that this would be equivalent to placing China under Russian protection. It was then resolved to make an appeal to all the foreign Powers through their Representatives here, but though [ learnt over a week ago on very good authority of this determination, nothing has yet been done to give effect to it — divided counsels having had their usual paralyzing effect. The demands of the German Minister have been fully reported in my telegram of the 22nd November, and are as follows : — 1. An Imperial tablet to be erected to the murdered missionaries. 2. An indemnity to their families. (I am not aware as yet of the aniount demanded under this head.) 3. The permanent degradation of the Governor of Shantung. 4. Puyiiicnt of the expenses of the occupation of Kiao-chau. ;.). Preference to ■ be given to Germans if a Chinese railway be constructed' in Shantung, and any mines on the line of the lailway to be exploited by Germans. Tlie first and second of these call for no observation^ They contain untjuestionably '.proper and reasonable requirements. The ' punishment of the Governor of Shantung demanded in the third is the same as that inflicted on the Viceroy of Szechuan in 1895 on the demand of Her Majesty's Government, and is richly merited. During this summer there were prevalent- in this province rumours of the kidnapping of children by foreigners,- which produced much excitement, and placed the missionaries in the interior in great danger. The. Governor, in spite of much pressure, did nothing to suppress these rumours, and even by his attitude gave them tacit encouragement After repeatedly calling the Yamen's attention to his conduct, I was at last obliged to desire them to warn him that if any serious incident occurred as the result of his anti-foreign spirit, he would find himself in jeopardy. This I did in a note dated so long ago as the 27th July, and the result was, according to a report from Her Majesty's Consul at Chefoo, [371] D 2 20 that active measures were at length taken to check the rumours, and the ferment there- upon subsided. It is not posstble to ascertain at present whether this agitation has indirectly led to the present outrage, hut the Governor's attitude has been such as to induce full approval of the German demand for his dismissal. He had just been promoted to be Viceroy of Szechuan, and if he had taken up that post it is more than probable that missionary troubles would have followed. The payment of the expenses of the occupation of Kiao-chau seems a not unreasonable requirement, but I understand that the Chinese are concerned at its vagueness. They have learnt, by telegrams from Europe, that Prince Henry of Prussia is on his way out to China in command of German reinforcements, and the Privy Council seem afraid that the expenses of a brother of the Emperor will be more than China can easily meet. As stated in my telegram before referred to, the last item on the list of demands is the only one to which I thought that exception could be taken. It has this blot upon it, that it makes the murder of Germ.an missionaries a counter for the purchase of commercial advantages. All the other demands can be properly described as being in the nature of penalties inflicted on China for the remissness of her officials in affording proper protec- tion ; this one is less in the nature of a penalty than a positive commercial compensation. Apart from this, it aflFords a novel precedeni, for if China concedes such preferential rights to Germany in one province, there is no reason why she should not concede similar exclusive privileges to other countries in the remaining provinces of the Empire. Meantime, however, the Yamen has taken no steps to come to an arrangement with Germany — all I hat has been done is to inform the German Minister that China refuses to negotiate until Kiao-chau is evacuated, a line which can only end in the indefinite prolongation of the occupation. The question is so delicate that I have refrained from offering any advice to the Yamen, pending an appeal from them. If the German occupation of Kiao-chau is only used as a leverage for obtaining satisfactory reparation, on the lines above laid down, for the murder of German missionaries, the effect on the security of our own people will be of the best. If, on the other hand, the German object is to secure Kiao-chau as a naval station, under cover of their deniands for reparation, it is by no means clear that their acquisition of it will pi'ejudice our interests. I have, &c. (Signed) CLAUDE M. MacDONALD. No .54. Sir N. O'Conor to the Marquess of Salisbury. — [Received January 17.) My Lord, St. Petersburgh, January 12, 1898. I ATTENDED Count Mouravieff's reception this afternoon on my return to my post, but as nearly all the Ambassadors and several Ministers were also waiting for interviews, and his Excellency had an engagement at .5 o'clock, I had not time for much conversation. His Excellency referred to the wintering of the Russian fleet at Port Arthur as a temporary measure, taken with the free consent of the Chinese Government, and occasioned by the difficulty of harbouring a large fleet in Japanese ports ; and he briefly alluded to the seizure of Kiao-chau by Germany, observing that when the Russian fleet had left the port after wintering there, the Chinese Government had given them a prior right of anchorage " le droit du premier mouillage." I alluded to the efforts of the Russian Charg6 d'Aff'aires at Pekin~ to "-et rid of Mr. Kinder, of whose integrity and great ability I was able to speak from personal know- ledge, but I was unable to do more than show that intrigues to oust him from his position as Railway Constructor in North China could only be founded on political motives alien to •Chinese as well as to European ti-ade interests. I have, &c. (Signed) if. R. 0'CO>fOR. 21 Xo. 55. Sir F. Lascelles to the Marquess of Salishunj. — {Received January 17.) My Lord, Berlin, January 12, 1898. I HAVE the honour to transmit to your Lordship herewith precis of an article whiclj has recently been published by Herr von Richthofen, who surveyed the Province and coal-fields of Shantung some years ago, on the subject of the German occupation of Kiao- chau. I have, &c. (Signed) FRAN'K 0. LASCELLES. Inclosure in No. 55. Extract from the " Kolonial Zeitung " of January 6, 1898. AN article has been pubhshed by Baron von Eichthofen, who surveyed the coal- fields of Shantung some years ago. He states that tlie coal of Shantung is of good quality, black and hard, burning with a clear flame, and making excellent coke; it has great heating power. But the beds lie low, and in consequence the pits are soon flooded, as the natives do not understand how to keep the water down. In the fields of Poshan Sien, however, the formation of the ground is more mountainous, and it is possible to work the beds with natural drainage. The objection' here is the want of wood for supports. It would be possible to work the other beds without considerable preliminary expenses for pumps, &c. In the winter months Kiao-chau is the natural outlet for the trade of North China ; in the summer months Tien-isin is the most convenient port of access. If, however, Kiao- chau is made the terminus of a line to Peking and North China, the advantage to the Province of Shantung will be immense. The chief reason why it is so littie develo[)ed is the difficulty'bf access. It is desirable to construct a line as soon as possible via Tainanfu to connect with the future Peking-Hankow Railwaj' — that would be a distance of about 500 kilom. The principal point is that the Power which possesses Kiao-chau will control the coal-supply in northern Chinese waters. It is quite out of the question that Shantung will form a German Colony in the proper sense of the word. The territory is already overcrowded, and immigrants from Shantung are the main element of the new population of Manchuria. Europeans cannot compete with Chinese labour. It is out of the question that Germany should acquire a large territory in Shantung, and thereby become involved in all sorts of complications. Our object should be to obtain a point d'appui for our trade,^so as to insure ourselves a share in the industrial develop- ment of China. No. 56. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, January 17, 1898, 4-50 p.m. YOU are not bound to insist on making Talienwan a Treaty port if you think it impracticable, though we should give it up with regret. Would it be possible to obtain a promise of such a concession if ever a railway was made to that port? You should maintain demand for opening of other ports. The India Office are being consulted as to a route for railway from Burmah. No. 57. The Marquess of Salisbury to Sir C. MacDonakl. (Telegraphic.) Foreign Office, January 17, 1898, 11 v.m. THE following communication from Li Hung-diang was made to-day b> the Chinese Minister. The terms on which English loan is ofFered are preferable to those proposed by Russia. Li Hung-chan.s; hopes, however, that the reijuest for Talienwan being a Treaty port will be withdrawn by Her Majesty's Government, as it is violently opposed by Russia, and the other commercial advantages to be secured to England are ample. I shall inform Chinese Minister that you are in communication with the Chinese Government, and that you have full instructions on all points. No. 58. Sir C. MacDonald to the Marquess of Salisbury. — [Received January 18, 7'45 P.M.) (Telegraphic.) Peking, January 18, 1898, 8-50 A.M. CHINA Loan. With reference to my telegram of the J6th January. Yamen aL;reed at interview yesterday to grant following securities for payment [of interest on loan : — 1. What remains of Maritime Customs. 2. Li-kin as defined in your Lordship's telegram of the 8th January. 3. Salt. 4. TsTative Customs. In case of default, these securities to be controlled by us. They agree to immediate appointment of the English inspectors appointed by Chinese Government, probably taken from Imperial Maritime Customs, to examine accounts, and prepare monthly reports or periodical statements of li-kin and salt tax. No. 59. The Marquess of Salisbury to Sir N.O' Conor. Sir, Foreign Office, January 19, 1898. THE Russian x\mbassador made some inquiries to-day with respect to the Chinese loan negotiations. I declined to give any precise information upon a question which was in a very uncertain state. Speaking from what his Excellency saw in the newspapers, he urged very strongly that if we insisted on making Talienwan an open port we should be encroaching on the Russian sphere of influence, and denying her in future that right to the use of Port Arthur to which the progress of events had given her a claim. I asked his Excellency what possible objection he could have to making Talienwan a free port if Russia had no designs on that territory. He replied that without any such designs it was generally admitted that Russia might claim a commercial de'bouche upon the open sea, and that in order to enjoy that advantage fully she ought to be at liberty to make such arrangements with China as she could obtain with respect to the commercial r^o-ime which was to prevail there. I replied that the most-favoured-nation clause forbade China to give Russia at Talienwan more favourable terms with regard to customs duties than she gave to other Treaty Powers. I am, &c. (Signed) SALISBURY. 23 jS\o. 60. The Marquess of Salisbury to Sir F. Lascelles. Sir, Foreign Office, January 19, 1898. I SA.W the German Ambassador to-day, and his Excellency, referring to the reported Chinese loan negotiations, said that in the opinion of his (lovernment there could be no objection whatever to the money being advanced, by Great Britain. Count Hatzfeldt assured me that during the whole of tlie negotiations in the matter of Kiao-chau -the German Government, in their efforts to secure the expansion of their 'own trade, had been careful to avoid doing anything that would be eml)arrassing to Great.Britain, and his Excellency thought that when we came to see the details of the Eegulations by which the occupation of that place was to be regulated we should find them fframed on so liberal a model that there would be nothing to which we could take exception. He added that the liberality of this provision was partially due to the fact that his Government were convinced that, at all events in Colonies, our system was the right one; but it was also due to their desire to take the course most acceptable to^Great Britain. I am, &c. (Signed) SALISBUKY. No. 61. Sir N. 0^ Conor to the Marquess of Salisbury. —{Received January 20.) •i (Telegraphic.) ■ St. Petersburgh, .January 19, 1898. IN the course of my interview with the Minister for Foreign Affiairs to-day on the occasion of his weekly reception, his Excellency complained of the action of the British gun-boats in entering Port Arthur. Their proceedings, he said, were looked upon here as so unfriendly as to set afloat rumours of war with Great Britain ; and the Eussian Ambassador had consequently received instructions from him to make representations in a friendly spirit to your Lordship on the matter. I observed that T was unable to pei'ceive how the exercise of a right secured to us by the Treaty of Tientsin (Article LII) could be construed as an unfriendly act ; the boats in question had probably gone to Port Arthur on a reconnaissance, such as is usual in those waters, and I added that T did not suppose your Lordship had given orders respecting their movements. Count Mouravieff next spoke to me of a rumour that had reached him to the effect that the opening of Talienwan as a Treaty port was to be one of the conditions of the loan. 'J'his, he said, he could not regard as a friendly action, if it were true. I replied that I had as yei heard nothing of this stipulation, but that his Excellency must be aware that the aims of our policy in China was to open up the country to foreign trade as much as possible. No. 62. Sir C. MacDonald to the Marquess of Salisbury. — {Received January 21, 10'40 p.m.) (Telegraphic.) Peking, January 21, 1898, 5 p.m. HAVING learnt that active steps to thwart loan were in progress, I demanded interview with Yamen on Wednesday, when I discussed with them the proposed terms as contained in a Memorandum which i showed them. They insisted on whole arrangement being contingent upon loan being for 16 paillirtns, this being amount offered by Russia. They .agreed to security: and .inspeotorate .provisions as described in my telegram of trhe! 18th. instant. They now «tand. as follows.: — ..-» .1. Nanning and Hsiaagtan^jto. be 'opened.-, ^rYamen to give assurance that Talien- wan will be opened if railway is constructed. 24 2. British subjects to be allowed to use steamers wherever they are by Treaty at present allowed to use native boats. 3. On the application of any British Consul, Provincial authorities are to supply details of all inlands tariffs on merchandize from Treaty Ports to any specified place in interior, and China to consider what other steps can bj taken to improve internal trade. 4. When railway reaches Burmah frontier China agrees to its extension by a British Company into Chinese territory to a point and under Regulations to be arranged by the two Governments. 5. Guarantee against any alienation of Yang-tsze Valley to any other Power. 6. China agrees to come to an arrangement with regard to extent of li-kin exemp- tion area beyond foreign concessions. Yamen were unable to give me a positive assurance that Hsiangtan would be opened as Treaty port pending telegraphic reference Hunan authorities. At meeting of 17th January I informed Yamen that, quite irrespective of loan. Her Majesty's Government were determined that the post of Inspector- General should always be held by an Englishman ; they gave me positive assurances to this effect. » No. 63. The Marquess of Salisbury to Sir N. O' Conor. (Telegraphic.) Foreign Office, January 23, 1898, 7 p.m. I HEOEIVED a visit from the Russian Ambassador on the 20th instant, at which his Excellency read a telegram stating that Her Majesty's ships " Immortalite " and " Redpole " were reported to have arrived at Port Arthur ; that Russian Govern- ment were anxious to maintain the most friendly relations with us in the Ear East, and hoped we would endeavour to avoid any friction in their sjahere of influence. I have informed Russian Ambassador, after inquiry by telegraph, that neither of the vessels mentioned are at Port Arthur ; that the " Iphigenia " is the enly British ship of war there ; that she Mill be leaving in a few days ; and that her visit was by orders from the Admiral, issued at his own discretion, and not under directions from Her Majesty's Government. T added, however, that British ships of war have a perfect right to visit Port Arthur and other Chinese ports in that neighbourhood, and that such visits afforded no ground for raising objections, or deserved that special importance should be attached to them. No. 64. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic ) Foreign Office, January 24, 1898, midnight. Wri'H regard to the atuount of the loan, it is impossible for us, for Parliarnentarv leason?, to advance 4,000,OOOZ. over and above the 12,000,000/. required to pav off the balance of the indemnity due to Japan, unless the object of such a step is shown to be legitimate, and is duly specified. It would be far preferable to confine the loan to 12,000,000/. No. 65. Sir C. MacDonald to the Marquess of Salisbury. — {Received January 25, 8 p.m.) (Telegraphic.) Peldng, January 25, 1898, 9 a.m. THE Tsung-li Yamen informed me at an interview yesterday afternoon, at which both Princes were present, that Russian Charg^ d'Affaiies had, in the name of his Government protested against loan in the strongest manner, on the ground that it would disturb the balance of influence in China. French Government had also protested against opening of Manning and the railway clause. " ° 25 I pointed out the very serious responsibility and danger they were incurring in listening to such protests. They had asked us to guarantee a loan, and "we had consented to do so. Our financial terms were most generous, and the concessions demanded were specially chosen so as not to offend susceptibiHty, or clash with the interests of other Powers, and were for the benefit of China as well as for all foreign nations. If, after all that had passed, China now renounced our offer of a loan, she must be prepared for the consequences. Tsung-li Yam^n said they must have time to consider their decision. No. 66. The Marquess of Salisbury to Sir N. 0' Conor. Sii"> Foreign Office, January 26, 1898. THE Russian Ambassador called at this Office on the 20th instant and said that he had just received a telegram from St. Petersburgh, stating that the " Immortality " and " Redpole " had now arrived at Port Arthur. The telegram went on to say that the Russian Governpaent attached great importance to the maintenance of the most friendly relations with Great Britain in the Far East, and they hoped that we should show our desire to avoid any friction in their sphere of influence in China. His Excellency was informed that, as far as the actual facts were concerned, it had been understood that the " Iphigenia " alone had remained at Port Arthur, and tliat she had now left. If any other vessels had called, as they might have done in the ordinary course of cruising, they were not likely to remain. Jn consequence of his Excellency's remarks, the Lords Commissioners of the Admiralty having, at my request, made inquiries by telegraph of the Commander-in- chief on the China Station as to the British vessels of war at Port Arthur, M. de Staal was informed that neither the " Immortalite " nor the "Redpole" were there, the only British ship at Port Arthur being the " Iphigenia," which would be leaving in a few days. Her visit to Port Arthur was made under instructions from the Admiral, issued in his own discretion, and not in consequence of any directions from Her Majesty's Government. I thought it right, however, to observe that British ships of war have a perfect right to visit Port Arthur and other Chinese ports in that neighbour- hood, and that there did not appear to be any ground for raising objections or attaching special significance to such visits. I am, &c. (Signed) SALISBURY, No. 67. Sir C. MacDonald to the Marquess of Salisbury. — (Received January 27, 11 A.M.) (Telegraphic.) Peking, January 27, 1898. IT is stated in a Reuters telegram published here that it is officially announced at St. Petersburgh that British men-of-war have received orders to quit Port Arthur imme- diately, in consequence of representations made by Russia. Above is having a most injurious effect here. No. 68. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, January 27, 1898. STATEMENT that Admiral has been directed to withdraw ships from Port Arthur is a pure invention. The " Immortality " was ordered to Chusan on the 1 Otb January. It was left to the Admiral whenever he thought convenient to send "Iphio'enia" elsewhere. [371] E 26 No. 69. Sir a MacDonald to the Marquess of S'llisburi/.— (Received January 28, 12 35 p.m.) (Telegraphic.) Peking, January 28, 1P98. CHINRSE Government is reported to be about to propose thac loan should be divided between Russia and England, and Chinese Minister at Berlin has b^en instructed to proceed to St. Petersburgh to make this proposal to Russian Government. No. 70. -Sir C. MacDonald to the Marquess of Salisbury. — {Received January 31, 1898.) (Extract.) Peking, December 15, 1897. IN my despatch of the Jst December I reported that the Yamen had declined to consider the German Minister's demands until Kiao-chau had been evacuated. This attitude they soon abandoned, having apparently realized that it must lead, as observed in my despatch, to the permanent occupation of the place. I do not know how. they explained their change of policy, but two members of ihe Yamen were intrusted by the Emperor with the task of coming to an agreement. The TamSn did not mention the Kiao-chau question when I next saw them, and at my interviev/ of the 13th instant, to which 1 shall presently recur, they told me that they were under strict injunctions not to discuss it. Previous to this I had received your Lordship's tele2;ram of the 8th December, instructing me to inform the Yamen, with regard to the German demand for special privileges in Shantung, that Her Majesty's Government would claim equal privileges for British subjects, and would demand compensation if existing rights had been infringed, and 1 had addressed to them on the 10th December the note of which a copy is inclosed. Its receipt caused some excitement, and a message was sent to the German Minister that I had strongly protested against his demands. He came yesterday to see me, and I explained to him the nature of my protest and its extent. On the 18th instant I had an interview with the Yam^n, and when other business had been concluded, 1 inquired what truth there was in the reports that ihe Kiao-chau question was settled, and that Germany had been given a coaling station. The Ministers, of whom six were present, said they would gladly have discussed this matter with me before, but that they were under a strict pledge of secrecy to the German Minister. I answered that they were, of course, at liberty to keep from me any matters not affecting British interests, such as pecuniary compensation for the murder of mis- sionaries, the erection of a chapel, and the like, but that they could not suppose that they could give special privileges in Shantung to a particular Power, or cede territorj?, without other Powers having a rii:ht to ask what was being done. I had heard some time ago from the German Minister himself of five demands, which I enumerated, and 1 had since heard that these had all been conceded except what 1 thought the very justifiable demand for the Governor's oegradation, in exchange for which it was now reported that China had ceded territorv elsewhere than at Kiao-chau. I had clearly a right to ask, for the infor"- mation of Her Majesty's ''iovernment, whether this were true. The Ministers received the statement of this report with what seemed genuine derision, all of them exclaiming that China certainly would not sacrifice territorv to save one Mandarin. Was then, 1 asked, the report of the cession of a coaling station false ? To this they answered, that there was sometiiing in it, but they would beg me to believe that they were not proposing to give this to Germany of their own free will, but under coercion. The object of this very needless assertion was apparently to forestall any charge of showin-' undue preference to Germany. ! answered that 1 was only trying to get information, and as they denied having bartered the punishment of the Governor for territory, 1 wag somewhat puzzled to know how they carhe to be giving up territory at all, for the demand for his punishment seemed the only one to which they had raised strong objections. To this they replied, by fresh emphatic declarations, that no such bargain as I had mentioned had been made." The cession nf a coahng station had nothing to do with the Governor's punishment. They would be very glad if I would speak to Baron von Heyking, and induce him to reduce his demands. 1 said that such a request seemed a strange one to make at a moment when they 2i were refusing to let we know how matters actually stood, and I again repeated what I had understood the original demands to be. One of the Ministers let fall a hint that my list was incomplete, and 1 said ,that I had heard of a sixth demand for a guarantee against future murders. It then became fairly plain, in spite of the extreme reserve shown by the Yamen, that this demand had more to do with the proposed cession than the others. From what the Ministers told me, which corresponds with information from other sources, what is asked is a guarantee that no murders of German subjects shall ever again occur. The Ministers very justly observed that they could not guarantee this; they could only do their utmost to prevent such incidents, and to give due protection. The German Minister lias not, so tar as I can learn, in anv way defined the nature of the guarantee required, and its very vagueness makes the Chinese reluctant to grant it, as exposing them to unknown risks. I avoided expressing an opinion with regard to this demand, knowing that it would give the Ministers an opening for urging me to remonstrate with Baron von Heyking for putting it forward. They did, indeed, more than once, and vvith some earnestness, appeal to me to use my influence with him to effect a settlement, and I had some difficulty in evading the request without directly refusing it or seeming unfriendly towards them in their trouble. The Yam^n sounded me very anxiously as to the probable attitude of Her Majesty's Government- if a coaling station were given to Germany, but on this question also I avoided expressing an opinion, being aware of the danger, on the one hand, of their representing to the German Minister that I had opposed it, and on the other, of their supposing that Her Majesty's Government would acquiesce without demur. As f have said, my information before going to the Yamen had been that negotiations had been concluded, but it was evident, as well from their explicit statement as from their general demeanour, that this was not the case, and I supposed at first that my informants had been mistaken. I have, however, since been assured, on wiiat I must recognize as good authority, that the arrangement come to was actually reported to the limperor for his sanction on the morning of the 1 2th instant, and that it included the concession of all the German demands except that of the permanent degradation of the Governor, and of the guarantee in lieu of which the Islands of >ankwan and Peikwan, on the Fukhien coast, were to be ceded. But between the morning of the 12th and the afternoon of the l^th, when 1 saw the Yamen, the German Minister had refused to receive the Chinese negotiators, and they believed that he intended to change his ground, and dechne to evacuate Kiao-chau. That some hitch has occurred seems beyond a doubt, and the most probable explanation that I can find is that the German Government ascertained that the annexation of a fresh port would lead to territorial demands from other Powers, and therefore instructed their Re])re- sentative to try and retain Kiao-chau instead. One point on which the Ministers showed great anxiety was whether Germany would really leave Kiao-chau. 1 he impression 1 received was that they were hesitating to perforin their part o( the condition until Germany had done hers, but if there has really been a change of attitude on the German Minister's part, this may explain their hesitation. I told them, in answer to repeated requests for my opinion, that I could not see how Germany could refuse to leave it that were part of the arrangement. With regard to Shantung, the Yamen were anxious to know the exact effect of your 'Lordship'b intimation. They described the German demand as being of the same character as the stipulation in the French Convention of lf95; but 1 reminded them that Her Majestv's Govetninent had declined to recognize the validity of that proviso, and had formally reserved their rights. The exact privilege asked in the present case was, they said, that if a railway was built in Shantung, German capital and engineers should have the preference if no better terms were ottered by others. 1 told them they had plainly before them your Lordship's intimation, and must give it full weight ; but I avoided lanswering their question whether it mcrint that Great Britain would approve a settlement of the Kiao- chau matter, ot which this \Vas one of the conditions. 1 had the honour of reporting the result of my interview, by telegraph, to your Lord- ship on the l4th December. [371 1 E 2 2S Inclosure in No. 70. Sir C. MacDonald to the Tmng-li Yamen. MM. les Ministres, Peking, December 10, 1897. I HAVE the honour to inform your Highnesses and your Excellencies that 1 have received telegraphic instructions from Her Majesty's Government to address the Yamgo with regard to the concession in Shantung which it is reported that the German Govern- ment ha-; asked from China. 1 am directed to state that Her Majesty's Government will demand equality of treatment for British subjects according to the Treaty rights possessed by Great Britain, and that Her Majesty's Government will require compensation on any points in respect to which those rights may be disregarded. I have no official information as to the exact nature of the concessions asked by the German Government; but it is my duty to lose no time in conveying to your Highnesses and your Excellencies the above intimation, and inviting thereto your serious attention. I avail, &c. (Signed) CLAUDE M. MacDONALD. No. 71. Sir C. MacDonald to the Marquess of Salisbury. — (Received January 31, 1898.) My Lord, Peking, December 16, 1897. THE leading Shanghai papers taken in at this Legation have only contained the most meagre reports of incidents connected with the German occupation of Kiao-chau, the inclosed extract being the only one worth sending. I have, &c. (Signed) CLAUDE M. MacDONALD. P.S. — [ have also the honour to inclose herewith to your Lordship translation of a Proclamation which was posted at Iviao-chau bv the German Admiral. C. M. MacD. Inclosure 1 in No. 71. Extract from the "North China Daily Neivs" of November 29, 1897. ON Sunday, the 14th instant, at 8 a.m., a landing party was sent ashore to take possession of the heights surrounding the bay. At the same time the order was given to the "Cormorant's" landing party, she being farthest inside the bay and commanding the passes to the interior, to take the powder magazine. Towards 9 o'clock these points having been secured, the Flag-Lieutenant was sent to the Chinese General with an ultimatum that within three hours he must clear out of the camp. The soldiers were permitted within the same time to depart with their weapons and possessions. The two ships "Kaiser" and " Prinzess Wilhelin " were so anchored outside of the port that they commanded the forts, the order having been given to fire on the same on a certain ,;:;iven signal. After delivery to him of the ultimatum the General withdrew, as resistance, especially as his ammunition had been seized, would have been futile; the same was done bv the soldiers, saving their goods and chattels as far as possible. Towards 2 p.m. the German flag was hoisted on the east fort ; the Admiral made a speech to the crews, those saluted and gave three cheers for the Kaiser. While the flag slowly ascended a salute of twenty-one guns was given by the men- of-war. The inhabitants behaved quite peaceably ; in reahty they were satisfied to be free of the native soldiers. I'he native soldiers withdrew behind the hills and erected a camp at a distance of 7 to 8 kilom. (about 5 miles). The forts were then all occupied and measures taken to guard the country a'J'ainst plundering. 29 Inclosure 2 in No. 71. Proclamation issued hy Admiral von Diedrichs, Commander-in-chief of the German Squadron in Eastern Waters. (TranslatioD.) THE Admiral lias, in obedience to the commands of the Emperor of Germany, landed at Kiao-chau and occupied the neighbourhood, together with all the islands near at hand. The boundaries of the ground occupied are as follows : (The topographical details cannot be followed on any available map, and give no clear idea of the extent of the occupation.) German missionaries having been murdered in Shantung, redress must be sought from China, and the territory indicated above is to be held as a guarantee according to (the terms of) the reparation sought by Germany. A Proclamation is therefore issued to inform the population of the districts concerned that they are to follow their avocations as before, and not to listen to rumours concocted by unprincipled persons. The relations between Germany and China are friendly. Lately when hostilities occurred between China and Japan, Germany came to the rescue with all her power, in order to show her good-will to China. The present landing of troops does not mean that their is emnity to China, and the poeple of the district are not to harbour suspicion. German officials will, of course, protect law-abiding persons. All they desire is that their ships may be unmolested, and no trouble arise. Offenders against the peace of the district will be punished with the utmost severity according to Chinese law. Any person daring to do injury (o a German will be tried and dealt with according to German military law. Wherefore the Admiral impresses these facts upon the people : " No opposition to Germany will be permitted. Deliberate opposition will not bring any advantage to those who offer it ; it will only invite misfortune." In the territory held by Germany it is expedient that all Chinese officials should continue to fulfil their duties conscientiously. Matters reported hereafter, and cases which the Chinese officials cannot well settle themselves, must be submitted to the German Military Governor resident at the Brigadier's Yamen, who will examine into and deal with them. No buying or selling of land can be transacted without the authorization of the German Governor. November 14, 1897. No. 72. Sir N. O'Conor to the Marquess of Salisbury. — [Received January 31.) My Lord, _ St. Peter sburgh, January 26, 1898^. AT an interview with Count MouraviefF this afternoon the conversation turned for a- moment to the report in the newspapers that Her Majesty's Government required, as one of the conditions of the Chinese loan, the opening of Talienwan. Count Mouravieff said he was unable to say whether the demand had been made or not, but that port was apparently one of the few places on the north coast of China free from ice during the winter. This being so, and Her Majesty's Government having in public speech recogrized the right of Eussia to have an open port, it was hardly to be expected that the Eussian Government should approve of the demand. They had thought of a port near the mouth of the Yalu Eiver, but it appears that the harbours in that neighbourhood are frozen in winter, and that the choice is very limited. I have, &c. (Signed) N. E. O'CONOE.. No. 73. Sir F. Lascelles to the Marquess of Salisbury. — (Received January 31.) My Lord, Berlin, January 25, 1898. I HAVE the honour to transmit to your Lordship herewith precis of a statement made by the Imperial Secretary of State for Foreign Affairs in yesterday's sittino- of the Budget Commission of the Eeichstag on the subject of the German occupation of Kiao-chau. 30 f have also the honour to inclose trnnslation of what appears to he a senii-offipial article ill the "Cologne Gazette," prompted by an .-irticle in the "Times,'" on the subject of the opening of Kiao-chan to the trade of all nations. I have, &c. (Signed) FRANK C. LASCELLBS. Inclosure 1 in No. 73. Extract from the ''National Zeltiivg" of January 24, 1898. IN the course of his statement before the Budget Committee, Herr von !?iilow made the following remarks on the subject of the negotiations with the Chinese Govern- inent on the subject of the satisfaction demanded for the outrages on GermaTi missionaries, and requested that they might be inserted in the Protocol : — " The negotiations with the Chinese Government with a view to obtain satisfaction for the murder of German missionaries in South Shantung have been concluded, and have led to the following results : — " 1. The former Governor of the Province of Shantung is removed from office, with disability ever to serve again in any high office. "2. The Chinese Government has promised to pay the Catholic missionaries damages to the amount of 3,000 taels. <';^. As satisfaction for the death of the missionaries, the Chinese Government has -.itidertaken to erect three churches, each with an Imperial tablet— one at Tsinnig (which is already begun by the Mission), one at Tsaot-chufii, and one at the place where the missionaries were murdered in the district of Chu-yeli-fien. The Chinese Govern- ment binds itself to pay 66,000 taels for each church, and to grant sites for the two kiter. Further, a grant of 24,000 taels is to be made for the construction of seven Mission buildings in the Province of Chu-yeh-fien. All these payments are to be made through the German Legation, in order to avoid friction between the missionaries and the Chinese authoritie.?. "4. A special Imperial Edict shall be issued for the protection of the missionaries. " The Chinese Government ha^ thus agreed to all the demands which we have made in this respect. Jn accordance with my instructions, the negotiations have been conducted by the German Minister at Peking, in understanding, with the representa- tive of Bishop Anzer. In the Bishop's dpinion, the grant of the three Imjierial tablets — a rare distinction — will greatly enhance the prestige of the missionaries in China. The Imperial Government has thus taken every step, without emp^loying , un- Christian severity, to secuie satisiaction for the outrages perpetrated on Christian missionaries, and, as regards the future, to prevent the recurrence of sucli acts of violence. The Imperial German Representative will do all in his power to provide for the carrying out of the stipulations made, ••-o far as that has not already been done. The best security, however, is the permanent presence of a German force at Kiao-chau Bay, which now rests on the firm ground of Treaty right. \ By this the Chinese authorities will have continually before their eyes the evidence of (German power, and I will reahze that wrongs committed against German national will not remain unavenged.'' i ' Herr von Billow was .subjected lo a number of questions as to the>agreement with China on the subject of the transfer of territory. He replied that he had, only telegraphic information, and could not answer in detail. An incident which occurred in Hainan received attention. The French authorities appeared to have shown discourtesy to the German Captain Ott. The German Government had no news as to the occLiiiation of Haman by the French. Herr von Blilow said in this connection that Germany had no intention of "allowing the butter to be taken 6tf' their bread." He a,dded some particulars as to Kiao-chau, which he declared offered great facilities as a trading centre, though it could not be expected to rival Shanghae and Hong Kono- at the first burst. The chmate was good, the population industrious, and the coal-fields would render the Germans independent of the Japanese supply. As to mining or railway concessions, information on the subject of the Treaties of Com,merce was gupplied by the Commercial iJireclor of the Foreign Office. A Memorandum on the wtiole subject was promised. Herr von Biilow said that the occupation had led to no cotnplications with foreign Powers, and that the spheres of interests of Russia and France 31 had been carefully avoided. The Chancellor was ready to take the responsibility for the Kiel speeches. He could not yet say whether Prince Henry would visit the Courts of Peking and T6ki6 A question was asked as to the probable cost. Herr von Biilow expressed his regret that the Finance Minister had just gone out, and that he was not himself in a position to give information. The " Cologne Gazette " publishes a report of the proceedings in the Budget Committee, which is to the above eflect, with the following important addition :— "The Secretary of State agreed that the harbour of Kiao-chau, in the same manner as other ports, would probably be opened in the most liberal manner to general trade." Inclosure 2 in No. 73. Newspaper Extract. THE "Cologne Gazette," in commenting on a "Times" article on the 25th January, remarks: — " The probability mentioned in the ' Times ' that in due course the port of Kiao-chiiu would be open to general trade has been since confirmed b\ Herr von Billow's remarks in the Budget Committee, in which !ie said that Germany's maxim would be ' Live and let live.' He added that he could not make positive statements as to the agreement which had been arrived at, as the reports before liim were telegraphic summaries only. Another reason for reserve was that at the moment negotiations were proceeding on the subject of coal-mines and railways, the result of which was still uncertain. A premature disclosure would only do mischief." As to further points raised in the Budget Committee, the "Cologne Gazette" reports : — '* Herr von Billow knew nothing bevond the 'Times ' telegram of the presence of two Enghsh ships in the Bay of Kiao-chau. As to the commercial policy to be followed in the new possession, there was, be said, as far as his knowledge went, no agreement made at the time of the conclusion of the Treaty of Shimonoseki which bound the hands of any Power concerned. There was no previous understanding with any Power as to the occupation of Kiao-chau. The German Government had shown in the whole ])roceedmg so much loyalty, love of peace, and moderation, that special declarations before or after sending out the squadron to Kiao chau were not necessary. German relations to other Powers were not affected by the occupation. Asked if other points on the Chinese coast would not have been more suitable, be observed that Germany could not take everything she desired, but had fixed on a point where her interests would not he in conflict with those of France, Russia, or England." No. 74. Sir F. Lasceiles to the Marquess of Salisbury.- — {Received January 31. (Extract.) _ Berlin, January 28, 1898. [ HAD a conversation this afternoon with Herr von Biilow, who renewed the assurances he had already given me of his earnest desire to come to a good understanding with Her Majesty's Government. He said that he had seen with pleasure that several of the leading newi^papers in England had taken a favourable view of the German action in China, and had written in a friendly spirit of the occupation ol Kiao-chau. He repealed what he had previously told me that the German Goveinment had carefully selected a port which was not in the direct sphere of English interests, and that we need feel no apprehension from a commercial' point of view, as he was convinced that Kiao-chau would be opened to the commerce uf the world., In fact, he said, the German Govern- ment fully shared the English view of colonization, and believed that our system of opening our ports to the commerce of the world was the. best in the interests of the Colonies themselves. He hoped, therefore, that the tbrmer good relations between the two countries would eventually be: re-established, and he believed that all that was required was a little patience. Herr von Biilow went on to say that be had heard with much pleasure from the German Ambassador at St. Petersburgh that the Russian Government was anxious to 32 avoid any complication with Eagland in regard to China, and were even disposed to come to a good understanding with her. 1 replied that I was very glad to hear it, and that during the time [ had the honour of being Her Majesty's Ambassador at St. Petersburgh I had found among many Russians a desire for a good understanding between the two countries, but that, to judge by the newspapers, it would seem that the Russian Representative at Peking was doing his utmost to induce the Cliinese Government to refuse our proposals, more especially with regard to the opening of Talienwan as a Treaty port. To this observation Herr von Billow did not offer any reply. No. 75. Sir C. MacBonald to the Marquess of Salisbury. — {Received January 31, 4"30 P.M.) (Telegraphic.) Peking, January 31, 1898, 2 f.m. YAM13N at a meeting yesterday informed lue that they greatly appreciated the generosity and good-will displayed by Her Majesty's Government in offering- to help them by guaranteeing a loan. They considered the financial terms very generous, and the concessions such as they could grant, because they Avere as much for the benefit of China as for foreign Powers, and they would gladly accept our offer if left to themselves, but Russia had used such threats that they saw no way out of the difficulty but coming to some arrangement with Japan, and borrowing neither from England nor Russia. I pointed out that if Russia were prepared for a hostile move she could easily find some other pretext, and that China had better make her stand in a matter where -she would have general sympathy. They said that a promise of protection against Russia was the only thing that would help them. They said that the French Charge d' Affaires had again been to see them, and had spoken very violently against the opening of Nanning Another meeting, at which the Princes are to be present, is arranged for "Wednesday, when I am to receive a definite answer. Xo. 76. The Marquess of Salisbury to Sir N. O' Conor. ^ir. Foreign Office, February 2, 1898. THE Russian Ambassador called at this Office on the 27th ultimo, and said that, in reply to a telegram which he had sent to Count MouraviefF reporting the conversation which I had with him on the 12th ultimo on the subject of Russian intentions as re"-ards Port Arthur and Talienwan, he had received a message from Count Mouravioff expressing great surprise at the agitation which appeared to prevail in England, both in the press and in official circles, on the subject of recent events in China, where English and Russian interests cannot be seriouly antagonistic. Count MouraviefF observed that various English statesmen of position had recognized as perfectly natural that Russia should wish to have an outlet for her commerce on the ■coasts of the North Pacific. Any such port would be open to the ships of all the Great Powers, like other ports -on the Chinese mainland. It would be open to the commerce of all the world and England, whose trade interests were so important in those regions, would share in the advantage. M. de Staal having a.sked for some expression of my views on this message which he could telegraph to Count MouraviefF, I made the following observations : 1 could not, of course, answer for the English press, which often advocated views difierent from those of the Government, but Her Majesty's Government had never entertained any objection to the existence of an outlet for Russian commerce upon the open waters of the China Seas, by agreement, of course, with China. The only circumstance which created apprehension in this country was the report that Russia intended to cause some port to be opened to her own imports which should not be opened, or should only be opened under a higher tariff, to the imports of other nations. This would be an infraction of the most-favoured-nation treatment assured to 33 us by Articles XXIV and LIV of the Treaty of Tientsin (26th June, 1858), and would be very deeply lelt in England. It would, moreover, even on protectionist grounds, be of no advantage to Russia, for the most important part of whatever trade might take this route would pass on across the Russian frontier, where, of course, Russia could impose what duties she pleased. I was very glad to infer from Count Mouravieff 's telegram that no such idea had received any sanction from him, and I heartily concurred with bis observation that British and Russian interests cannot be seriously antagonistic in China. I am, &c. (Signed) SALISBURY. No. 77. Sir C. MacDonald to the Marquess of Salisbury. — (Received February 3, 9"30 P.M.) (Telegraphic.) Peking, February 3, 1S9S, 9 a.m. PRINCE KUNG informed me, at an interview to-day. of decision of Chinese Government, which was to borrow from neither Power. He employed the same language used by the Ministers on Sunday. 1 took this opportunity again to impress on the Princes and Ministers that Her Majesty's Government would insist on Inspector-Generalship of Customs being held by an Enghshman, loan or no loan, and that I should require an assurance to this effect in writing. I am addressing them a note in this sense to-day. No. 78. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) . Foreign Office, February 4, 1898, 10 A.M. CHINESE Minister has communicated a message from the Grand Secretary Li that the Chinese Government has decided not to accept a loan from either Great Britain or Russia in consequence of threat of rupture by the latter Power. No. 79, The Marquess of Salisbury to Sir N. 0' Conor. (Telegraphic.) Foreign Office, February h, 1898, 4-45 P.M. THE following message from Ihe Grand Secretary Li was yesterday communicated to me by the Chinese Minister : — He is exceedingly grateful to Her Majesty's Government for their action in reference to the proposed guarantee, but regrets to say that it has been found impossible to carry out some of the conditions which we have attached to it. The Chinese Government has been warned by Eussia that their acceptance of a loan guaranteed by Great Britain will entail an interruption in the friendly relations existing between the two Empires. In consequence of the minatory attitude assumed by Russia, the Chinese have been obliged to come to a decision not to take a loan from either the Russian Government or that of Her Majesty, and the British Minister at Peking ha& been inform«d accordingly. No. 80. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, February 5, 1898, 11 p.m. IF the Chinese Government enter into negotiations for obtaining a loan from European financiers, Her Majesty's Government must insist on at least an adequate share being assigned to British banks, and if you consider such a step desirable, you are [871] J 34 authorized t(>^give the Tsiing4i Tamein a very serious warning to t^iis Weeti -afldHo s^te that the friendly reldtfdtis existing between the two countries will be sferiouSly itoperfflea if there should be any appearance of excluding this country. -> ; i w 1^0. 81. . : -Sir F. Lascelles to the Marquess of Salisbury. — {Received February 7.) My Lord, Berlin, February 5, 1898. I HAV^E the honour to transmit to your Lordship herewith an extract from the " Deutsche Kolonial Zeitung " of the 3rd instant, containing a map of the harbour of Kiao-chau, upon which the extent of territory leased to Germany, and the extent of territory within which China retains a limited jurisdiction, are respectively marked.* X ViflYPi &c (Signed) ' FEANK C. LASCELLES., Inclosure in ^o. 81. Extract from the " Kolonial Zeitung " of February .3, 1898. (Translation.) THE territory leased to Germany in the neighbourhood of Kiao-chau is restricted to the two promontories lying to the north and south of the entrance of the harbour, the islands inside the hay and to the small islands situated in the sea outside and opposite. The largest of the latter is To-lo-shan, The islands inside the bay are called Potato and Chiposan ; the rest of the shore of the bay is left to China. The zone within which -the Chinese Government may not issue Ordinances without the consent of Germany has a radius of 50 kilom. The length is measured from the shores af the bay. The northerly of the two promontories as leased to Germany consists of a triangle with its base towards the sea about 20 kilom. long. The boundary on the land side is about the same length, and the third side, that towards the bay, is about 15 kilom. long. The district leased on the south promontory is about a quarter of the size of the above. Two small rivers run into the bay, flowing from the north-west and north-east respectively, the Kiao-ho and the Nan-ta-ho. The Kiao-ho is the larger of the two, receiving as tributaries the Taku-ho, which runs in about 12 kilom. from the- mouth, and the Loshi-ho which runs in 15 kilom. further north. :So. 82. The Marquess of Salisbury to Sir N. 0' Conor. Sir, Foreign Office, February 9, 1898., M. DB STAAL called on me to-day and, in the course of conversation, referred to the observations which I had made yesterday in the House of Lords. He was generally content with what had been said, but he offered two corrections, one of substance and one of form, to that part of my speech which related to the Russian Government. The two expressions to which he demurred were that his Governnient had o-iven a " written " assurance, whereas, though perhaps in fact written, it was yet -technically verbal ; and that the port to be used by Russia as a commercial outlet was to be a free port, whereas he had only meant that it would be a Treaty port. I expressed my regret that in quoting him I should not have followed his meaning in a manner satisfactory to himself; but I could not admit that the word "verbal" was in reality, suitable to the circumstances of the case. He had brought down to the Eoreign OfB.ce the written translation of the telegram conveying the assurance of the Russian Government ; he had shown it to the Under-Secretary, read it to him allowed him to take a note of it, and he had approved the language of the despatch in which its purport was repeated to your Excellency. I said that it still appeared to me that "■] * Not printed. 35 tljjB word. " Wiritten " expressed the character of the communication much more closely tlian the word " verbal." ) With respect to the other correction^ I said that he had actually used the word " open," by which I had imagined he meant " free." I thought that if he had meant a Treaty port he would have used the word. 1 did not doubt, however, that I had given insufficient weight to the general context. As far as we were concerned, a Treaty port was not much inferior in value to a free port ; and the course of policy it implied was more agreeable to our own contentions in that it preserved for the port in question the Conventional Tariff, which could hardly be set aside without violence to existing Treaties. I am, &c. (Signed) SALISBURY. S'o. 83. M. de Staal to the Marquess of Salisbury. — (Received February 11.) M. le Marquis, Londres, Ze 10 Fevrier, 1898. EN exposant dans I'^loquent et beau discours de Mardi dernier a la Chambre des- Lords la situation politique actuelle, votre Seigneurie a touche necessairement aux affaires de I'Extreme Orient, si importantes aujourd'hui. Au cours de cet aper9u et a propos des rumeurs qu'avait fait naitre la question de Talien-Wan, vous avez ete dans le cas d'annoncer a la Chambre que vous aviez re^u spontanement de la part du Gouvernement Imperial I'assurance ecrite que tout port que la Russie obtiendrait conune debouch^ de son commerce dans ces parages serait un " free port " ouvert au commerce de I'Angleterre. Votre Seigneurie a ajoute qu'un "free port" valait mieux qu'un ''Treaty port" et qu'ayant ainsi la certitude que Talien-Wan serait un " free port," il vous importait peu de savoir s'ii allait 6tre un "Treaty port" ou non. , Comme j'ai eu I'honueur d'etre I'organe auprds du Gouvernement de Sa Majeste la Reine de I'assurance irentionnee, je vous demande la permission de forrauler ici quelques obsevations en vue d'^carter tout ambi^u'ite du sens de ma communication. Ces observations portent sur deux points : I'un de simple forme, I'autre ayant trait au fond de la question. Pour ce qui est du premier point, je crois devoir relever que ma communication n'a pas ^te ecrite mais verbale. Votre Seigneurie voudra bien se rappeler qu'elle lui est parvenue par 1 entremise du Sous-Secretaire Permanent au Foreign Office. Or, je n'ai pas laissd de communication ecrite entre les mains de Sir Thomas ^Sanderson. Je me suig borne a lui traduire la teneur des instructions que je venais de recevoir en le priant de vous en faire part. Pareillement, la r^ponse de votre Seigneurie, trausmise dans les mfemes voies, est consideree par moi comme une communication verbale. Quant au second point, il me parait qu'un leger malentendu s'est glisse dans la distinction a etablir entre le " free port " et le " Treaty port." 11 tient peut-etre a une diifdrence de terminologie. Le terme Anglais de " free port " repond, ce semble, au terme Frani^ais de "port franc" (porto franco), c'est-a-dire, un port ou les marchandises importees sont aiFranchies de tout droit d'entrde, tandis que le " Treaty ; port,". tout en 4tant egalement ouvert au commerce international, le soumet neanmoins a i'observation des Rfegiements de Douane et aux Tarifs en vigueur dans le pays ou le port est situ^. oSi^Cei nest que cette derniere categoric de ports qui a ^te vis^e dans ma communication. Je ne me suis pas servi du terme de " port franc." Du reste, je ne prejuge aucunement les decisions de mon Gouvernement qui, dans I'^ventualite de I'acquisition d'un debouchd sur les eaux de la Chine, reste necessairement libre d'y etablir un " porto franco " ou d'assimiler le port en question au " Treaty ports " du littora) Chinois. J'ai tenu uniqufement, en formulant ces quelques reserves, a d^finir exactement le sens et la portee de la communication dont j'ai 6te charge aupres de votre Seigneurie. Veuillez, &c. Sign6) STAAL. (Translation.) M. le Marquis, i! ; . ; London^ February \{),\^2^. . r IN the fine and eloquent speech, in which you dealt with the political, situation last Tuesday in the House of Lords, your Lordship necessarily touched on thq affairs of the •Far East, which are at this moment of so much importance, |37ll ' r 2 In the course of your remarks, and while alluding to the rumours to which the question of Talienwan had given rise, you had occasion to announce to the House that you had received from the Imperial Government spontaneously the written assurance that any port which Russia might obtain for the outlet of her trade in those regions would be a free port open to the trade of England. Your Lordship added that a free port was better than a Treaty port, and, therefore, being assured that Talienwan would be a free port, it mattered little to you to know whether it would be a Treaty port or not. As I had the honour of being the means of communicating the assurance in question to Her Majesty's Government, I would ask leave to make certain observations with a view to remove all ambiguity from the meaning of my communication. These observations refer to two points : one merely of form, the other relating to the substance of the question. As to the first, I think I should point out that my communication was not written but verbal. Your Lordship will remember that it was conveyed to you through the Permanent Under-Secretary at the Forei£:n Office. I left no written communication in Sir T. Sanderson's hands. I confined myself to translating to him the tenour of the instructions which I had just received, and asking him to inform you of them. Similarly, your Lordship's reply, which was transmitted through the same channel, is regarded by me as a verbal communication. As to the second point, it appears to me that a slight misunderstanding has crept into the distinction to be drawn between a free port and a Treaty port. It is perhaps due to a difference of terminologv. The English term " free port " appears to correspond to the French term " port frdnc" " (" porto franco ''), that is, a port where goods imported are exempt from all import dues, whereas a Treaty port, while being equally open to inter- national commerce, subjects it nevertheless to the observance of the Customs Regulations and Tariffs in force in the country where the port is situated. It is only the latter class of ports to which my communication had reference. I did not make use of the term " port franc." I cannot, moreover, in any way anticipate the decisions of my Government, which, in the event of acquiring an outlet in Chinese waters, naturally remains free either to establish a " porto franco " there, or to assimilate the port in question to the Treaty ports of the Chinese littoral. In making these reservations my sole object has been to define exactly the meaning and scope of the communication which I was charged to make to your Lordship, I have, &c. (Signed) STAAL. No, 84 Sir F. Lascelles to the Marquess of Salisbury. — {Received February 14.) My Lord, Berlin, February 11, 1898. J HAVE the honour to transmit to your Lordship herewith a precis of the debates in the Reichstag on the 8th instant during the discussion of the Foreign Office Vote, vi^hich contains statements by Herr von Biilow, Secretary of State for Foreign Affairs, on vthe subject of the intentions of Germany in regard to Kiao-chau. I have, &c. (Signed) FRANK C. LASCELLES. Inclosure in No, 84. Pre'cis of Debate in the Reichstag, February 8, 1898. Foreign Office Vote. Herr Richter (Liberal) : I do not deny that my friends look upon the acquisition of territory at Kiao-chau in a different and more favourable light than they •do the former colonial adventures of Germany. It is evidently necessary to have a point d'appui (or German commerce and trade in Chinese waters. But we regard the acquisi- tion as being properly confined to the establishment of a port and coaling station, and we 37 are opposed to the annexation of territor}^ It remains to be seen whether the Hinterland is worth opening up, or whether the mines will pay for working. It is certain that the port lies outside the lines of regular trade. The only interest of Germany in China is that of free trade. That is also the interest of England. Consequently we should go hand in hand with England. That is not the case with Russia. Russia shuts herself up, and the statute of the Mongolian Railway stipulates that the tax onjjOods imported by land should always be one-third lower than that on goods imported by sea. We should claim equal treatment under the most-favoured-nation clause. People in Germany seem to believe that in China we have found new territory to which we can export German colonists. They seem to forget that it is with great difficulty that America keeps out Chinese colonists. There is no country on earth where labour is so cheap. As for our relations to China and Japan, it is more important to keep friends with Japan, to which we export goods to the value of 1 mark per head of the population than with China, to which we export at the rate of one-tenth of that sum. The whole value of the trade with the Far East is only 2 per cent, of the trade of Germany, and we have no real interest there except our trade. It is far more important to keep Chinese ideas out of Germany than to import German goods into China. The speaker concluded by asking questions as to the foundation of settlements, the building of railways, the occupation of the zone of influence, &c. After deprecating any wish on the part of the House for premature information on the subject of dehcate negotiations with other Powers, while these were still pending, the satis- faction of which would bring a Foreign Minister into difficulties with Foreign Ministers of other States, Herr von Billow proceeded to review the grounds of commercial and political necessity which had induced Germany to follow the lead of other Powers in obtaming a foothold in Chinese territory. In so doing Germany had been careful to avoid offending the susceptibilities of other Governments. "We find ourselves in harmony with Russia, whose interests in Europe nowhere oppose our own, and in Eastern Asia often run. parallel with them, and the natural development of whose strength w^e witness with the disinterested sympathy of straight- forward friendship. We find it natural and conceivable that France should seek new channels for her trade with Tonquin. And, finally, we are far from desiring to run counter in any manner or in any place to legitimate British interests. If at times, on the part not of the British Government, but of certain organs of the English press, the contrary impression has been put forward, this will be found to be at variance with the actual facts of the situation. Happily no doubts are entertained in influential circles in London that we consider a harmonious co-operation also with Great Britain to be in the interests of both countries, of human progress, and of the peace of the world." Herr von Biilow then read to the House a telegraphic communication from Peking, supplementing the statement which was published in the " Reichsanzeiger " on the 5th January with regard to the cession of Kiao-chau : — " The Imperial Chinese Government, in fulfilment of the legitimate wish of the German Goverment to possess, in common with other Powers, a point in the matters of Eastern Asia, where German vessels may be fitted out and repaired, where the necessary materials can be deposited, and other arrangements made in connection with that object, cedes to the Ger- man Government in the form of a lease, to run, as at present fixed, for a period of ninety- nine years, the territory situated on both sides of the entrance to the Bay of Kiao-chau, in South Shantung, more accurately described below, in such a manner that the German Government will be at liberty to erect all necessary buildings, &c., within the territory, and take all the measures required for their defence. " According to the English chart of Kiao-chau Bay of 1863, the district leased to the German Government consists of the following : — " 1. The promontory north of the entrance to the bay, bounded on the north-east by a straight line drawn from the extreme north-eastern point of Potato Island to the sea-coast in the direction of Zoshan. " 2. The promontory south of the entrance to the bay, bounded on the south-west by a straight line drawn from the southernmost point of the inlet situated to the south- west of Tscbiposan, in the direction of the Tolosan Islands (Weber chart), to the sea- £oast. " 3. The Island of Tschiposan and Potato Island, as well as all the islands lying at the entrance to the bay, inclusive of Tolosan and Seslien. " Further, the Chinese Government undertake not to frame any Regulations within a aone of 50 kilom. round the bay without the consent of the German Government, and, in particular, to offer no resistance to any measures necessary for regulating the course of tne rivers. 38 " The Chinese Government also grant to German troops the right of passage across the zone above described. "With the object of avoiding every possibility of collision, the Chinese Government will exercise no rights of sovereignty within the leased territory during the period of the lease, but they cede these rights as well as those over the entire water-surface of the Bay of Kiao-chau to the German Government. The German Government will erect sea-marks on the islands and shallows at the entrance to the bay. "4. In the event of the territory leased not proving to be adapted to the requirements of the German Government, the Government of China will cede to Germany a more suitable disrrict, and will take back the Bay of Kiao-chau, paying compensation for any improvements or constructions the Germans may have made there. " 5. A more accurate delimitation of the boundaries of the district leased will take place in accordance with the local conditions, and will be carried out by Commissioners from both Governments " The Foreign Secretary added the following particulars respecting the area, &c., of the territory and the character of the lease : — The territory leased, the boundaries of which are not yet accurately determined, will cover an area of 30 to 50 square kilom. Consequently, it is materially larger than the British possession at and opposite Hong Kong. For military reasons, the northern boundary had been pushed a little further forward than is shown on the map presented to the Budget Commission. The number of inhabitants is calculated at a few thousand. As regards the size of the bay, accurate details are as yet wanting. It runs about 20 geographical miles into the mainland. At is narrowest point, the entrance to the bay is about 3,000 metres broad. Two-thirds of the bay afford harbour accommodation. The rent payable to China, the exact amount of which has not yet been determined, is an unimportant point, as it possesses a nominal character merely representing the con- tinuation in theory of the proprietorship of China over the territory ceded. The following stipulations have been secured respecting railway and mining con- cessions : — The Chinese Government have consented to hand over to a German-Chinese Railway Company, to be formed hereafter, the construction of a railway from Kiao-chau, which will run first in a northerly and then in. a westerly direction, to be subsequently connected with the projected great railway system of China. The railway will serve the coalfields of Weih-slen and Poshan, situated to the north of Kiao-chau, which will be exploited by German capital. The Chinese Government have further pledged themselves to accord to the Railway Company to be thus formed, conditions at least as favourable as those granted to any other European Chinese Railway Company in China. The Foreign Secretary concluded his speech with an exposition of the motives which had induced the German Government to occupy Kiao-chau in preference to other places. Its proximity to the scene of the massacre had been the first consideration. Secondlv, it was favourably situated from a political point of view, being removed from the French and British spheres in >Southern China and from the Russian base of operations in the north. Lastly, the spacious, ice-free harbour, the climate which is probably the best to be met with in China, and the existence of coalfields in the vicinity of the coast, offered sufficient grounds for the choice of Kiao-chau. " Baron von Richthofen (Under-Secretary of State in the Foreign Office) : With regard to certain questions that have been put, I am to state that no negotiations have taken place as to the grant of a loan between the German and the Chinese Governments, and that, therefore, the question of a guarantee has not been raised. As to the question of the status of the settlements a Memorandum has been prepared and will be laid before the House. Herr Keichardt (Director in the Foreign Office) : It has been asked whether the Foreign Office is aware that an agreement has been arrived at between the Chinese and Russian Governments whereby goods imported overland will be subjected to a duty one-third less than that to which the same goods would be subjected if imported by sea. ' We are aware of this agreement. We have not, however, taken any action in connection with it, as the question has not yet been presented in a practical form. Goods imported from Germany do not compete with the goods imported overland from Russia. There is, however, no breach of the most-favoured-nation clause, as the distinction made is not national but geographical. German goods, if imported overland, would enjov the same privileges as Russian. But we reserve our liberty of action, of which we should certainly avail ourselves if advantage should be taken of this clause to impair the validity of our Treaty rights, but the period will probably be a long one before the railway is in 39 eperationJ I may add, for Eierr Richter's information, that the principle is not ar^ unusual one, and is applied in Germany itself. We accord in certain cases a different treatment to goods imported by land to that which the same goods received if imported by sea. Herr Behel (Socialist) said that there was not the same objection to the occupation, of Kiao-chau as there was to the rest of the Colonial policy of the Government, although it had taken place in such a lawless way that foreign Governments would have been justified in sending a Kriiger telegram to the Emperor of China. But the occupation would no doubt be useful to the German capitalist. It was dilFerent if one considered the workman. The noise made about China was to cover the naval vote, and the workman would have to pay. Then there was the danger of the import of Chinese labour. The German manufacturer was already in fear of Chinese competition. Everything was done to make German goods dear at home while cheap German goods were forced on the outside world. A policy of favouring export trade and making the necessaries of life dearer at home was not a possible one. The leader of the Centre, Br. Lieher, called attention to the sacrilegious words used by Prince Henry in his parting speech. He expresses his deep sense of acknowledgment to the Government for the protection accorded to the German Catholic missionaries. Dr. Barth (the leader of the free trade section of the National Liberals) said that he trusted that the German sphere would be open to the trade of all nations in the same manner as China had hitherto been open, if open at all, to all alike, and that a condition would be insisted on that all other nations should act on similar principles in any sphere they might themselves acquire. He hoped that the Government would keep on good terms with England. German trade need fear no competition, even that of English goods, in the territories which would cow be open to trade. He concluded by asking whether some statement could not be made with regard to Crete. . Admiral Tirpitz, the Minister of Marine, said that the persons who had heard Prince Henry's speech at parting had no notion of the interpretation which the newspapers after- wards put upon it. Men leaving home could not be expected to weigh their parting words as if they were addressing the Reichstag. Herr von Bulow said: To the first question addressed to me by Dr. Barth I would reply that, in my opinion too, the best way to serve our commercial interests would be to put Kiao-chau on the footing of a free port. I should not like to pledge myself before- hand, especially to foreign nations, i believe it is better to hold ourselves free to do what we like as, I believe, the English have done and are doing in Hong Kong. ITo. 85. Sir C. MacDonald to the Marquess of Salisbury. — (Received February 14, 4 p.m.) (Telegraphic.) Peking, February 14, 1898, 1-40 p.m. CHINESE concessions. I have now received following assurances : — 1. Internal navigation will be opened before middle of June to British steamers. Sir R. Hart has been instructed to frame Regulations. Wording of my despatch, which Tamen accept, is as follows : — "Chinese Government consent that foreigners shall equally be permitted to employ steamers or steam-launcheSj whether Chinese or foreign owned, wherever use of native boats is now by Treaty permitted." 2. Form of assurance as regards Yang-tsze is as follows : — ^ In reply to my despatch reminding them of the great importance that has always been attached by Great Britain to the retention in Chinese possession of the Yang-tsze region, and demanding an assurance that China would never alienate any territories of the provinces adjoining the Yang-tsze to any other Power, Yamen quote my despatch in full, and say it is out of tfcie question that territory in the Yang-tsze region should be mortgaged, leased, or ceded to another Power. 3. Yamfin have written despatch stating that, owing to the great preponderance of British trade over that of other Powers, Chinese Government intend that the post of Inspector-General shall in the future, as in the past, be held by an Englishman. If at any time British trade with China at the ports should fall below fhat of any other nation, 40 Chinese Government will no longer be bound to appoint an Englishman Inspector- General. I was unable to induce them to pledge themselves to open port in Hunan in less than two years, though they promised to shorten the time if possible. What they fear is an outbreak in that province. No. 66. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, February 14, 1898, midnight. YOUR telegram of 14th February. You have obtained very valuable concessions, and are greatly to be congratulated on the skill and perseverance you have shown. No. 87. The Marquess of Salisbury to M. de Staal. Your ^Excellency, Foreign Office, February 15, 1898. I HAVE had the honour to receive your note of the 10th instant, calling attention to two phrases in a speech delivered by me in the House of Lords on the 8th instant regarding the communication which you made at this Office on the 27th ultimo respecting the port of Talienwan. I regret that I should have misunderstood, even in a small degree, the meaning which you wished to express on that occasion. With regard to the character of your communication, I spoke of it as a written assurance because the telegram was shown to the PermanentUnder-Secretary of State in a written form, and he was allowed to take a note of it in writing. Tour Excellency states that there appears to have been a slight misapprehension as to the distinction between a free port and a Treaty port, and that in the event of the Russian Government acquiring an outlet into Chinese waters, they will be free to decide whether to establish a " porto franco " there, or to assimilate the port in question to the Treaty ports of the Chinese littoral. The word used by your Excellency was, I understand, " ouvert," and it would have been better if I had said " an open port '' instead of using the word " free," which seemed to me to be the equivalent, but which is, of course, in some degree ambiguous. I beg leave to assure your Excellency that I will take note of the rectifications with which you have been good enough to favour me. I have, &c. (Signed) SALISBURY. No. 88. Sir C. MacDonald to the Marquess of Salisbury, — {Received February 19, 2-30 P.M.) (Telegraphic.) Peking, February 19, 1898, 2 pm. PRELIMINARY Agreement for Loan of 16,000,000/. has been, signed by ao-ent of Hong Kong and Shanghae Bank. Li-Mn revenues to be placed under Customs control. Bank has ten days for definite acceptance. 41 > " 'No. S9. Sir F. Lascelles to the Marquess of Salisbury. — (Received February 21.) My Lord, Berlin, February 14, 1898. I HAVE the honour to report to your Lordship that a communique appeared in yesterday's " North German Gazette," to the effect that news had been received from Peking of the grant to Germany of the right to construct a railway to Jchow. It is stated that Ichow is the chief town of a district in the Province of Shantung, and is situated to the south-west of Kiao-chau, T have, &c. (Signed) FRANK C. LASCELLES. No. 90. Sir C. MacDonald to the Marquess of Salisbury. — (Received February 26,) (Telegraphic.) PeMng, February 25, 1898. 1 HAVE heard from a Chinese Minister, who is probably well informed, that Chinese Government would offer lease of Wei-hai Wei to British Government if they thought their request would meet with a favourable response. No. 91. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, February 25, 1898. WITH reference to your telegram of the 2oth instant, the policy which is at present . being pursued by Her Majesty's Government aims at discouraging any alienation of Chinese territory. The discussion of any proposal for the lease of Wei-hai Wei would accordingly be premature, provided the existing position is not materially altered by the action of other Powers. No. 92. China Association to Foreign Office. — (Received March 1.) Sir, ^ 159, Cannon Street, London, February 28, 1898: THE statement made by Mr. Curzon in the House of Commons on Friday has been noted with high gratification by all concerned in the Eastern trade. The provision regarding the opening of inland waterways to steam is capable of far- reaching effect if it is largely interpreted and the Regulations are liberally conceived. The Committee are conscious that the text of the Agreement must be awaited before the precise scope can be perceived. They are anxious, however, to ask whether informa- tion can be conveniently afforded on one point which seems a little obscure. Some uncertainty is felt whether the full right of acting as general carriers, whicb foreigners enjoy under existing Treaties, on certain specified waterways is mads universal,. or whether the nevk' understanding must be read in any more restricted sense. I have, &c. (Signed) E. GUNDRY, Hon Sec, China Association, [371] G 42 No. 93. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, March 1, 1898. WILL British steam-ships have right to act as general carriers on all internal waterways ? China Association are inquiring. No. 94. ■Sir C. MacDonald to the Marquess of Salisbury. — (Received March 3, 1*25 p.m.) tTelegraphic.) Peking, March 3, 1898. WITH reference to your Lordship's telegram of the 1st instant : Regulations on basis of Agreement, reported ia my telegram of lith February, will be drawn up by Sir Robert Hart. Until they are settled, exact scope of Agreement cannot be defined. No. 95. The Marquess of Salisbwy to Sir C. MacDonald. (Telegraphic.) Foreign Office, March 7, 1898. THE influence of Russia over the Government of Peking will be so increased to the detriment of that of Her Majesty's Government, if, as the " Times " reports, the Russians are to have a lease of Port Arthur and Talienwan on the same terms as Germany of Kiao-chau, that it seems desirable for us to make some counter-move. The best plan would perhaps be, on the cession of Wei-hai Wei by the Japanese, to insist on the refusal of a lease of that port on terms similar to those granted to Germany^ No. 96. Sir C. MacDonald to the Marquess of Salisbury. — (Received March 7, 6 P.M.) (Telegraphic.) Peking, March 7, 1898, 1-30 p.m. RUSSIA is reported to have demanded lease of Talienwan and Port Arthur on the same terms as the German lease of Kiao-chau, also railway Concession from Petuna to Port Arthur. No. 97. Sir C. MacDonald to the Marquess of Salisbury. — (Received March 8, 3-40 ?.>!.) (Telegraphic.) Peking, March S, 1898, 2-43 p.m. I HEAPu to-day that the German Agreement respecting Kiao-chau and concessions in Shantung was signed on 5th instant. ' , No. 98. The Marquess of Salisbury to Sir N. 0' Conor. (Telegraphic.) Foreign Office, March 8, 1898, 4-lU p.m. PEKING correspondent "Times " telegraphs yesterday that Russia, in consequence of loan concluded Peking, demands sovereign rights over Port Arthur and Talienwan, on same terms as Germans at Kiao-chau, and right to construct railway from Petuna on 43 Trans-Manchurian Railway via Mukden l:o Port Arthur ; five days given for reply ; in event of non-compliance Russian troops will advance into Manchuria. •Similar report comes trom MacDonald. Ascertain from Minister for Foreign Affairs whether this statement is correct. No. 99. Sir C. MacDonald to the Marquess of Salishur/j. — {Received March 10, 7"30 A.M.) (Telegraphic.) Peking, March 9, 1898, 7 p.m. WITH reference to ray telegram of the 8th March, Yam^n yesterday con- firmed the report of the signature of the German Agreement. No. 100. Sir C. MacDonald to the Marquess of Salisbury. — (Received March 9, 4'30 p.m.) (Telegraphic.) Peking, March 9, 1898, 11'45 a.m. I WAS informed yesterday by TamSn that Russian Charge d'Affaires had demanded' lease of Talienwan and Port Arthur, and railway to Port Arthur. No conditions named. Only reason given for this demand was to " assist in protecting Manchuria against' the aggression of other Powers." Though England and Japan were evidently meant,. Charge d'Affaires declined to say which Power was intended. The absurdity of this pretext is fully recognized by the Chinese Government. They have transferred the negotiations to St. Petersburgh, and have ordered Hssu to proceed to St. Petersburgh from Beriin as Special Ambassador to endeavour to obtain withdrawal of demand. It remains to be seen whether Russia will agree to this arrangement. Yamen are aware that they must yield to Russian demands unless they receive help. They earnestly beg that your Lordship will assist them by giving an assurance to the Russian Government that Her Majesty's Government have no designs on. Manchuria. I pointed out to them that recent assurances given in the House of Commons showed clearly that Her Majesty's Government had no designs on any part of China, unless driven thereto by aggression of other Powers. For these assurances they evinced great gratitude, but begged me to telegraph their request. No. 101. Sir N. O'Conor to the Marquess of Salisbury. — {Received March 9.) (Telegraphic.) St. Petersburgh, March 9, 1898. I HAD an interview with Count Mouravieff to-day on the subject of your Lordship's telegj-am of jesterday'sdate, His Excellency stated that the Russian Representative at Peking was in treaty with the Tsung-li Yamen for the right to make a railway, on conditions similar to those laid down for the Manchurian line, to Talienwan or Port Arthur, and for the cession of those two ports, for a certain number of years. No- demand for sovereign rights over these two places, however, had been made, nor had the menace of sending tfoopsinto Manchuria been used.; On concluding this official statement, the Minister observed that the possession of a porji OH. an ice-free coast was a matter of A'ital importance to Russia, land that it was the intention of his Government to insist on getting Port Arthur and Talienwan, although the latter would be open to foreign trade like the other ports in China. [371] G 2 44 No. 102. Sh- C. MacDonald to the Marquess of Salisbury. — {Received March 10, 9 A.M.) (Telegraphic.) Peking, March 9, 189S, 8 30 a.m. RUSSIAN demands. There is no indication here of anything in the shape of an ultimatum ; neither has, so far as I can learn, any time limit heen given. No. 103. The Marquess of Salisbury to Sir N. 0' Conor. "'(Telegraphic.) Foreign Office, March 10, 1898. WITH reference to Sir C. MacDonald's telegram of the 9th instant, which has just been repeated to you, you have already informed the Russian Government of our policy in China, and they must know that we have no designs on Manchuria, but you can, of course, give an assurance to tliat effect if the Chinese Minister appeals to you. Our only desire, as you are aware, is that it should remain open to British trade like other parts of China, in common with that of other nations, and that no strategical position which would threaten the independence of the Chinese Governioaent shall be established by a foreign country. No. 101.. The Marquess of Salisbury to Sir N. €f Conor. (Telegraphic!) Foreign Office^ March 11, 1898, HER Majesty's Government would be glad to be assured, with reference to Russian Ambassador's statements made on the 10th [February, as to any port which Russia might acquire on the Chinese coast (thus covering eqnaliy both Port Arthur andl Talienwan), and to yoiir telegram of the 9th March, that it is not intended to interfere with the stipulations of the Treaty of Tientsin, especially Articles 21., 52, and 54, at any port in the Liaotung Peninsula or in any territory leased by China to Russia. In vour telegram of the 9th instant there seems to b© a distinction between Port Arthur and Talienwan. No. 105. Sir N. 0^ Conor to the Marquess of Salisbury. — {Received March 13.) (Telegraphic.) St. Petersburgh, March 13, 1898. AT an interview witii the Foreign Minister to-day, his Excellency renewed his assurances that the sovereign rights of the Chinese Government over Port Arthur and Talienwan would be in no way infringed or abrogated by their cession on lease to Russia, but it was the fir.n resolve of the Russian Government to obtain the lease for a period of twenty- five years. I proceeded to point out that assurances had been given to your Lordship by M. de Staal, and had been repeated more than once to me during the negotiations which have been going on here during the last two months, to the effect that British trade would enjoy the free use of any port opened to Russia. 45 No. 106. Sir F. Lascelles to the Marquess of Salisbury. — {Received March 14.) My Lord, Berlh, March 7, 1898. I HAVE the honour to state that the following Regulations have been issued by Imperial Order for the administration of Kiao-chau : — At the head of the Military and Civil Departments Avill stand a naval officer with the title of Governor, all military and civil oflQ.cers being under his orders. The Governor will hold the supreme judicial and disciplinary authority of chief of a naval station, with rights of granting leave. Within his district he will have a flag like that of the Governor of East Africa, the flag and the Governor, personally, being entitled to a salute of thirteen guns. The Secretary of State for the Imperial Navy is to have authority over the military detachments occupying Kiao-chau, and over all military officers there. I have, &c. (Signed) EKANK 0. LASCELLES. No. 107. Sir F. Lascelles to the Marquess of tSalisbury. — (Received March 14.) My Lord, Berlin, March 8, 1898. I HAVE the honour to report that the official " Reichsanzeiger," of yesterday's date, publishes a notice to the effect that the negotiations between the German Minister at Peking and the Chinese Government have been brought to a conclusion, and that the Treaty, which includes also the economic concessions accorded to Germany in the Province of Shantung, was signed by both Parties on the 6th instant. I have, &c. (Signed) PRANK C. LASCELLES. No. 108. Sir N. 0' Conor to the Marquess of Salisbury. — {Received March 14.) My Lord, _ St. Petersburgh, March 8, [^8. IN obedience to your Lordship's instructions, I inquired this afternoon of Count MouravieflF what truth there was in the report given by the " Times " correspondent in Peking respecting Russian demands upon China, a copy of which I read to him. I have already reported by telegraph his Excellency's reply, which, with his permission, I took down in writing at the time, in order that there might be no misunderstanding on the subject. When he had given me his official reply, he began to enlarge upon the vital necessity to Russia of a port on the ice-free coast of China. The uncertainty attending the development of affairs in the Far East, as well as other reasons, made it incumbent upon the Russian Government to seek for some place where it would be possible to coal and repair their ships in safety. They could no longer count upon being able to do so in Japanese portS; and while England, Germany, and France had now naval stations open all the year, Russia was ice-bound in Vladivostock. Under these circumstances, they had no alternative but to demand a cession both of Talien-.van and Port Arthur from the Chinese Government, as one without the other was of no use to them. They did not demand sovereign rights or a perpetual cession of these places. Talienwan would, his Excellency said, be open to foreign trade like other .ports in China. I said that I would report to your Lordship his reply to my inquiries, but that, as his remarks left no doubt in my mind that the Russian Government intended not only to acquire Talienwan as a commercial outlet for their Siberian railway, but also to take 46 possession of a very strong military position like Port Arthur, I considered that it altered in a most important degree the position of things in China, and to an extent which I did not think could be overlooked' by a Power having such preponderating commercial interests in that country. Whatever assurances he might give me, and I had, as he was no doubt aware, been told by Count LamsdorfF that, as far as he knew, there was no intention that Port Arthur should be reconverted into a military fortress, I was much afraid that once Russia entered into actual possession the fortifications would necessarily be repaired, and the port rendered impregnable to atta.ck. To have the Gulf of Pechili studded witli fortresses in the possession of foreign Powers, however friendly they might be, was not, in my opinion, advantageous to British commercial interests, or a matter which Her Majesty's Government could regard without the deepest concern. Count MouraviefF replied that British interests were principally represented in the neighbourhood of the Tang-tsze, but 1 reminded him that our Treaty rights and privileges extended, and must extend, equally over the whole . Empire of China, and that there could be no question of circumscribing the area of foreign trade within limited spheres. His Excellency then referred to the valuable concessions which Her Majesty's Government had lately obtained from the Chinese Government, to which 1 replied that they were of such a kind as to benefit foreign trade in general, and that the only clause apart from the post of Inspectorate-General being held by a British subject, and this appeared to be conditional upon the maintenance of our superiority in trade — that contained what might be considered an excessive advantage for British commerce had not been obtained. I alluded, as no doubt his Excellency was aware, to the junction of the Burmah and Chinese railway systems. This demand became at once still more necessary and reasonable if greater privileges of tlie same kind were accorded to Eussia in the Liao- tung Peninsula, as they had apparently already been accorded in Manchuria. Count MouraviefF did not, however, respond to tV.ese remarks beyond saying that he supposed the Burmah-Chinese line would, in this case, descend to the Valley of the Yang-tsze. (Signed) ' N. R. O' CONOR. No. 109„ Sir C. MacDonald io the Marquess of Salisbury. — {Received March 14.) (Telegraphic.) Peking, March 13, 1898. LI HUNG-CHANG informed me to-day that Russians had refused to allow negotiations to be transferred to St. Petersburgh. He is convinced that assurance from Her Majesty's Government to the Russian Government that England has no designs on Port Arthur or Talienwan would have a great effect on the Emperor of Russiaj who has, he believes, been persuaded of the contrary. He earnestly begged me to ascertain whether Her Majesty's Government had given or would give such an assurance. On the 15th March I have another interview with the Yamen. No. 110. Sir N. O'Conor to the Marquess of Salisbury, — (Received March 16.) (Telegraphic.) St^Petersburyh, March 16, 189S AT his weekly reception of the foreign Representatives at the Ministry this after* noon. Count Moura\iefF authorized me to inform Her Majesty's Government that if the Yamen grant a lease of Port Arthur and Talienwan to the Russian Government, foreign trade shall ha\e free access to both these ports similarly to the other ports in the' Chinese Empire. 47 ' He further authorized me to transmit the assurance of the Russian Government that •they have no intention of infringing the rights and privileges enjo3fed by foreign countries, in virtue of Treaties between them and China. No. 111. Sir C MacDonald to the Marquess of Salisbury. — (Received March ]6, 5 p.m.) (Telegraphic.) Peking, March 16, 1898, 4 p.m. THK removal of Kinder (rom the piece of line now worked by him is being- urged by Russian Charge d'Affaires. No. 112 The Marquess of ISalisbury to Sir N. 0' Conor. Sir, Foreign Office, March 16, 1898. I HAVE j-eceived yonr Excellency's despatch of the Sth instant, reporting your convei'sation with Count Mouravieff on the subject of Russia's demands upon China, and 1 approve the language which you employed on that occasion. I am, &c. , (Signed on behalf of the Marquess of Salisbury). No. 113. T/ie Marquess of Salisbury to Sir N. O'Conor. (Telegraphic.) P. Foreign Office, March 17, 1898. WITH reference to Sir C. MacDonald's telegram of the 16th instant, which I have repeated to you, the action of the Russian Charge d'Affaires is at variance with the assurances reported by Mr. Goschen in his despatch of 28th December, and you should make a further representation to the Russian Government to this eflf.jct. No. lU. Sir N. O'Conor to the Marquess of Salisbury. — [Received March 18.) My Lord, St. Petersburgh, March 13, 1898. .,_,AS I hoped Count ..Mouravieff would give me the assurance that Port Arthur, equally with Talienwan, would, in the event of a lease of these ports to Russia, be open to foreign commerce, 1 called upon his Excellency this afternoon. I told him that the Leader of the Opposition in the House of Commons had given notification of a question on Monday in respect to affairs in the Far East, and that I would be glad to be in a position to inform your Lordship, before the debate came on, of any further assurance his Excellency was willing to give me in regard to this matter. ..! I pointed out that the assurance given by M. de Staal on behalf of his Government, and frequently repeated to me either by himself or Count Lamsdorff", was positive as to the fact, namely, that any port (" tout port ") leased by China to Russia would be open to foreign trade. 48 His Excellency said that this applied only to Talienwan, and that he was sure I would admit that he had never given me any assurances that Port Arthur would also be open to trade. I said I would not denv this, but that I begged to remmd him that when the question was first mentioned the Russian Government only alluded to a lease ot a port as an outlet for Russian commerce. . Count Mouravieff then sent for M. de Staal's report of his conversation with your Lordship, which contained a copy of his note to you, in which he took exception to your Lordship's statement in the House of Lords that he had given a " written assur- ance," and had said that it would be a " free " port. He read me the despatch, a copy of which was already in my possession through the courtesy of your Lordship, and he found that it coincided with my statement, and that the expression used was clearly " tout port." , i n +1, i. His Excellency said that he had received the Emperor's orders to tell me tnat Talienwan would be open to foreign trade, but that His Imperial Majesty had told him, at the same time, that Port Artiiur would be regarded strictly as a mihtary port. He could not, therefore, take upon himself to promise that both Port Arthur and Talienwan would be open, but that he would be able to give me a definite answer on Wednesday. In the meantime I could report to your Lordship that the question was under discussion here. Referring to his remark that he had never given me any assurance m respect ta the opening of Port Arthur, I reminded his Excellency that the mention of this port as comprised in the Russian demands was of comparatively recent date, and^ that, as 1 pointed out at the time, it altered in a most important degree the whole situation of affairs. Count Mouravieff then went on to say that the Russian Government did not m any way ("d'aucune maniere ") desire to abrogate the sovereignty of the Chinese Government over these ports, but that they only required a lease of them for twenty- five years, for which they would pay an annual rent. The Russian Government considered that China owed them this for the services they had rendered her in her war with Japan, and these services must be properly requited. He spoke of the uncertainty still existing as to the points where the Manchurian Railway would terminate, and seemed to indicate that it was by no means settled that Talienwan would be the terminal station. 1 did not enter into any discussion as to the policy of Her Majesty's Government in face of recent developments in the Far East, but confined myself, as far as possible, to finding out whether he was able to give me an assurance to-day that both Port Arthur and 'i'alienwan, in the event of their being leased to Russia, would be open to British and foreign commerce. 1 have, &c. (Signed) N. R. O' CONOR. No. 115. Sir C. MacDonald to the Marquess of Salishury. — {Received March 18, 3'45 P.M.) (Telegraphic.) Peking, March 18, 1898, 3-10 p.m. I WAS informed by Russian Charge d' Affaires this morning that it is not the intention of his Government to ask for the removal of Kinder from portion of the- line which he has built, and which is now under his superintendence. No. 116, The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, March 19, 1898, CAN yon obtain any reliable information as to the statements which are persistently made in the newspapers that there are large numbers of Russian troops in Manchuria, especially in Kirin ? 49 No. 117. Sir N. 0' Conor to the MarqiHess of Salisbury. — {Received March 20.) (Telegraphic.) St. Pelersburgh, March 20, 1898. 1 HAV E the honour to report that Count Lamsdorff informs me that the Russian Government will raise no further objection to the employment of Mr. Kinder on the railways in China, and that instructions in this sense have been sent to M. Pavloff. No. 118. Sir C. MacDonald to the Marquess of Salisbury. — {Received March 21.) My Lord, Peking, February 4, 1898. IN an Imperial Decree of the 15th January Li Ping-heng, the former Governor of Shantung, and three other ofl&cials were handed over to the Board of Punish- ments for the determination of penalties. These penalties are announced in a Decree of the 1st Pehruary, translation of which is inclosed. They are all markedly inadequate. The German Minister informs me that he has had a private assurance that Li Ping-heng will not be re-employed, hut such an assurance has little or no value as a public deterrent, which is the main ohject of the Governor's punishment. Being condemned to lose two grades is not very far removed from the loss of good conduct stripes in the ranks of our army. The sentence of removal recorded against the Tao-t'ai, Hsi Liang, is curiously dis- counted by an Imperial Decree of the previous day, the 31st January (translation inclosed), which transferred him to an equally important and more lucrative circuit in Shansi. As for the two others, their punishments are almost minimum. I am given to understand that the German Minister is very dissatisfied with this Decree, and intends to protest against it. I have &c. (Signed) CLAUDE M. MacDONALD. Inclosure 1 in No. 118. Imperial Decree, dated January 31, 1898. (Translation.) TING SHIH PIN is transferred to the Tao-t'ai ship of Yen-chou, Yi-chou, T'sao-chou and Chi-ning in Shantung. Hsi Liang is transferred to the Chi-ning circuit in Shansi. N.B. — These two men have exchanged posts. The Chi-ning circuit is an impor- tant one, and Hsi Liang has, if anythitig, benefited by the exchange. Inclosure 2 in No. 118. Imperial Decree, dated February 1, 1898. (Translation.) THL former Governor of Shantung, Li Ping-h6ng, undoubtedly deserved punish- ment in that he was unable to prevent the recent occurrences in Cbii Yeh-hsien, and failed to report them until telegraphed to by the Tsung-li Yamen. Let him be degraded two steps and transferred. This penalty is not to be commuted. The transferred Tao-t'ai, Hsi Liang, is to be removed from his post. Let the Brigade-General Wan Pen-bun and Pa Ch'eng-chao, Prefect of Ts'ao-chou, bo deprived of rank, but retained at their posts. L371] , H The j)ropagation. of Western religions is provided for by Treaty, and the foreign missionaries, who ^ come from distant lands, should naturally be treated with more than ordinary consideration. Yet in the Chii-yeh district of Shantung there are ruffians who have murdered two missionaries. This is a cause ot great grief to us. In addition to the due punishment of the criminals as the law directs, it is ordered that three cfiapels and seven dweUing-houses be, built to make known our extreme compassion for the strangers from afar, henceforth, let Chan^ Ju-wei, the new Grovernor of Shantung, enjoin Upon his subordinates that missionaries are to be zealously protected. Should lawless vagabonds provoke a repetition of such troubles and create ill-blood (with foreign nations), the local officers concerned will be held fespoHsible. Tremblingly obey ! No. 119. Sir C. Mac Donald to the Marquess of Sctlisbwy. — (Received March 21.) My Lord, Peking, February 4, 1S98. I HAVE the honour to inclose herewith to your Lordship copy of a note which 1 addressed yesterday to the Ministers of the Tsung-li Yamen on the subject of the irispectorate-General of Customs, in which I informed them that Her Majesty's ■Government regarded it as vital to the commercial interests of Great 33ritain that the holder of the post should be of British nationality. I have, &c< (Signed) CLAtJDE M. MaoDONALD. Inclosure in No. 119. Sir C. MacJjonald to the Tsung-li Yamen. MM. les Miuistres, Peking, February 3, 1898. ON the 17th January, when calling at the Yamen,. I informed the Ministers present that I had received telegraphic instructions from Her Majesty's Government to the effect, that in view of the immense preponderance of British trade with China over that of all other foreign countries combined. Her Majesty's Government regarded it as vital to the commercial interests of Great Britain that the Inspector- General of Maritime Customs sliould, in the future, as in the past, be of British nationality. I was prepared, under the instructions I had received, to indicate certain measures which Her Majesty's Governtnent would feel bound to adopt for the protection of British interests, in case the Chinese Government refused to recognize the justice of this claim, but it proved unnecessary for mo to do so, for the Yamto gave me their promise that the Inspector- General should in future remain British. This I at once reported by telegram to Her Majesty's Government. Y^'esterday I returned to the subject and received the same assurances. In order that there may be no room for doubt or misunderstanding, I now have the honour of addressing to your Highnesses and yoiu- Excellencies this note, to which I shall be glad to receive an early reply for the information of my Government, I avail, &c. (Signed) CLAUDE M, M.scDONALD. 51 No. 120. Sir N. O'Con07- to the ^[arqllcs^i of Salisbury. — {Received March 21.) My Lord, St. Petersburyh, March 16, 1898. I HAVE the honour to report, in continuation of my despatch of the ]3th instant, that Count MouraviefF informed me last night that he had seen the Emperor in the nsorriing, and that His Imperial Majesty had authorized him to give me the assurance that both Port Arthur and Talienwan would be opened to foreign trade, li-ke other Chinese ports, in the event of the Russian Government obtaining a lease of thoss places from the Chinese Government. His Excellency further said that he had also repeated to His Imperial Majesty the remarks I had made to him in regard to the supreme importance attached by Her Majesty's Government to the maintenance of all rights and privileges secured to Great Britain by their existing Treaties withi China, and that His Imperial Majesty had told hjra to assure me that Russia would respect those rights, and that there was no intention to infringe them or to impair the sovereignty of China. I took advantage of. the opportunity to again iuenjind his , jExcellepey that J had raised the question of Port Arthur without instructions from your Lordship or without being aware of the view that would be taken by JJf.i" Majesty's Government in regard to the present demands of the Russian Government, vfhich were totally diflerent from the original proposal, in which there was only a question of a commercial outlet for Russian trade to the open sea. My object in asking for an assurance that Port Arthur as well as Talienwan would be open to foreign trade in the event of their being leased to Russia, was to endeavour to remove, as fa-r as lay in my power, a point which I was sure would be the cause of serious difference between our respective Governments, and whicli I considered would he a direct infringement of Articles XXIV, LII, and LIY of the Treaty of Tientsin. I received this morning a message from Count Mouravieff requesting mei to attend his official reception at the Foreign Office in the afternoon. Upon calling upon his Excellency, he repeated the assurances he had given me last night and said that his reason for wishing to see me was that it had occurred to him that, if the assurances he had given to me were mentioned at the present moment in the House of Commons, it might be considered as a want of courtesy towards' the 'Chinese Government, who had not yet formally agreed to give the Russian Government a lease of the ports in question. I told his Excellency that I quite admitted -the force of his observation^ and that T would mention it to your Lordship. I then produced the draft of a telegram, which I proposed- to send to -your Lordship, reporting the assurances he had given me, and, after submitting it to his perasal, I inqiairfgd whether I had accurately reported his language. Bis Excellency suggested that instead of my original words,- Which were that the Russian Government agreed to respect the rights and privileges of the Treaty of Tientsin, the assurances should be made applicable to the Treaties between China and other foreign Powers. On this alteration being made, his Exceilency said that my report of his statements was accurate, and that I might regatd them as aformal assurance on the part of the Russian Government. 1 have, &c. (Signed) N. R. O'CONOR. ¥o. 12L Sir N. 0^ Conor to the Marquess of Satishufy. — (Uetieived March 2L) My Lord, St. Pefersbmgh, March 16, 1898. AS your Lordsliip is aware, I had already spoken on more than one occasion to Count Mouravieff strongly deprecating the efforts of the Russian Representative in China to induce the Chinese Government to dismiss Mr. 'Kinder from their employment as Engineer on the Tientsin-Shanhaikuan and Northern Extension Railway. [371] ' H 2 b2 An occasion presenting itself to revert to the subject this afternoon, I did so with apparently more efi'ect. Count Mcuravieff said that he would consult with the Minister of Finance to-morrow with a view to seeing what could be done in the matter, and would let me know the result next Wednesday. I have, &c. (Signed) N. R. O'CONOE. No. 122. Sir C. MacDonatd to the Marquess of Salisbury. — {Received March 21,7 P.M.) (Telegraphic.) Peking, March 21, 1898, S'lO p.m. YOUR Lordship's telegram of the 19th instant. In answer to my inquiry, Colonel Browne, our Military Attach^, now in Manchuria, telegraphed, 5th March, from Kirin that rumours were untrue. No. 123. The Marquess of Salisbury to Sir N. 0' Conor. (Telegraphic.) Foreign Office, March 22, 1898, 5-30 P.M. INFORM Count MouravieiF that Her Majesty's Government have satisfaction in noting the assurances given to you, to the effect that the Russian Government "have no intention of infringing the rights and privileges guaranteed by existing Treaties between China and foreign countries," and that no interference with Chinese sovereignty IS proposed. Her Majesty's Government on their part would not regard with any dissatisfaction the lease by Russia of an ice-free commercial harbour, connected by rail with the trans-Siberian Railway which is now under construction. Questions of an entirely different kind are opened if Russia obtains control of a military port in the neighbourhood of Peking. Port Arthur is useless for commercial purposes, its whole imj>ortance being derived solely from its military strength and strategic position, and its occupation would inevitably be considered in the East as a standing menace to Peking and the commencement of the partition of China. The military occupation or fortification of any other harbour on the same coast or in the Gulf of Pechili would be open to the same objections with almost equal force. From some observations made by Count Larasdorff, and reported by you in your despatch of the 8th instant, Her Majesty's Government gather that this is not a policy favoured by Russia, while it is one to which Her Majesty's Government entertain grave objections. Her Majesty's Government, on the other hand, are prepared to give assurances that beyond the maintenance of existing Treaty rights they have no interests in Manchuria, and to pledge themselves not to occupy any port in the Gulf of Pechili so long as other Powers pursue the same policy. No. 124 Sir C. MacDondld to the Marquess of Salisbury. -^{Received March 23, 8 a.m.) (Telegraphic.) ^ Peking, March 22, 1898j 5-30 p.m. 1 HEAR that extensive rebellion is stated by Shanghai telegram to London to be imminent. Nothing is known here of above. 53 No. 125. Sir N. 0' Conor to the Mar(ptess of Salishuri/.— {Received March 23.) (Telegraphic.) St. Petersburgh, March 23, 1898: IN conformity with your Lordship's telegram of the 22nd March, 1 saw Count Mouravieff" to-day and communicated to him the substance of the telegram, and urged as strongly as I could that the Russian Government should abandon their claim to Port Arthur. T cannot say that my efforts were successful. The Minister reiterated the statement that it was the wish of the Russian Government to respect the integrity of the Chinese Empire, but he refused absolutely to admit that this principle was violated by the proposed lease of Port Arthur, which could not be regarded as constituting a dismemberment of the Chinese Empire. He asserted that the possession of that harbour was a question of vital necessity to Russia; that Russia could not be denied what had been granted to Japan and Germany ; and that the only Government that raised objections was that of Her Majesty. T was unable to induce his Excellency to modify his views. No. 126. Sir C. MacDonald to the Marquess of Salisbury. — {Received March 24, 5*50 t.M.) (Telegraphic.) Peking, March 24>, 1898. 1 SAW Yamen this afternoon. They said that Russian Government has informed them that they cannot consider question of Port Arthur and TaHenwan apart, and insist on lease of both places being granted to Russia before the 27th March, failing which Russia will take hostile measures. Chinese Government are therefore forced, against their will, to give way. No. 127. The Marquess of Salisbury to Sir C. MacDonald. Sir, Foreign Office, March 24, 1898. I HAVE received your despatch of the 4th Pehruary, inclosing a copy of the note which yoa addressed to the Ministers of the Tsung-li Yamen, informing them that Her Majesty's Government would insist on the post of Inspector-General of Chinese Imperial Maritime Customs remaining in British hands. The terms of your note are approved by Her Majesty's Government. I am, &c. (Signed on hehalf of the Marquess of Salisbury.) No. 128. The Marquess of Salisbury to Sir N. 0' Conor. Sir, Foreign Office, March 24, 1898. THE Russian Ambassador called upon Mr. Balfour this afternoon, and asked h6w things stood between Russia and England in the Ear East. Mr. Balfour said that the news he had received appeared to him of the most unsatisfactory character. We had always looked with favour upon the idea of Russia obtaining an ice- free port on the Pacific, and he himself had given expression to this view two years ago in a public speech. But the Russian Government had now given a most unfortunate extension to this policy. 54 If they succeeded in carrying out their proposal of occupying Port Arthur, which Avas wholly useless as a commercial port, and had no significance or importance except as a military stronghold, they would in effect he commencing the dismemberment of China and "inviting the other Powers to follow their example. The possession of Port Arthur was not desired by us; but, on the other hand, its occupation by another nation would have an effect upon the balance of power at Peking, which Her Majesty's Government could not but regard with grave objection. Mr. Balfour added that it was much to be regretted that a, policy which,_so far as he could judge, would not further the aims or interests of Eussia, should in any way menace the friendship of the two countries. M. de Staal replied that Talienwan was the point offering the most favourable conditions as an outlet for Russian commerce on the Pacific, and that this outlet must necessarily be protected. Talienwan was, however, entirely dominated by Port Arthur, and Eussia could not leave this stronghold in the hands of another Power, I am, &c. * (Signed on behalf of the Marquess of Salisbujy,) No. 129. The Marquess of Satisburi/ to Sir C. MacDonald. (Tele^d-phic.) Foreign Office, March 25, 1S98. BALANCE of power in Gulf of Pechili is materially altered by surrender of Port Arthuj' by Taman to Russia. Tt is therefore necessary to obtain, in the manner you think most efficacious and speedy, the refusal of Wei-hai Wei on the departure of the Japanese. The terms should be sinnilar to those granted to Eussia for Port Arthur. British fleet is on its way from Hong Kong to Gulf of Pechili. No. 130. The Marquess of Salisbury to Sir F. Lascelles. (Telegraphic.) Foreign Office, March 26, 1898. MY telegram of the 25th instant to Her Majesty's Minister in Peking, repeated to you. Her Majesty's Government have demanded a reversionary lease of Wei-hai Wei, and it is possible that the German Government will address you with regard to our occupying territory which forms part of the Province of Shantung. Should this be the case, you are authorized to explain that Wei-hai Wei is not at present, and cannot, we believe, be made a commercial port by which access can be obtained to any part of the province. We do not wish to interfere with the interests of Germany in that region. The action, in our opinion very regrettable, of Russia with respect to Port Arthur, has compelled us to take the course we are now pursuing. No. 131. Bit C. MacboMld to the Marquess of Salisbury,'— {Mamived Match 28.) Hy Lojrd, Peking, January IS, 1898. IN continuation of my despatch of the 15th December, I have the lionour to i^^tate tihat the negotiations therein mentioned between the German Minister, Baron ■W)n Hiking, and the two members of the Tsung-li Yamen, who have been specially intEust^ by the Emperor with the conduct of them, came to an end on the Sth instant. No Agreement has yet been signed, but the main points have been agreed hpon. Brieliyj the results of the negotiations arc, that the (German Government has 55 obtained ample reparation for the massacre of the two missionaries in Shantune;, and has also obtained a ninetj'-nine years' lease, with transfer of sovereign riglits over certain territory in tbe Province of Shantung in the vicinity, and iftolnding the greater part, of the harbour of Kiao-chau. • It wotild be tedious to state in detail the various phases, more or less acute, through which these negotiations have passed. Prom all I have been able to gather, it is evident that the Chinese negotiators have, without in the least intending to do so, assisted the German cause very materially. The original five demands which I stated in my telegrams of the 22nd November, 1897, and of the 2nd January last, wove granted without very much demur. The clause stating that the Governor of Shantung should be dismissed and never again employed in a public capacity was modified to removal frord his post ; a despatch to be written in addition to the German Minister, stating that the Governor would not again be employed in an important post. The clause granting Germany special railway and mining privileges in Shantung was contested by the negotiators, but was eventually acceded to, Baron von Heyking pointing out that by Treaty similar rights had been granted to the Prenoh in the two southern Provinces of Kwangsi and Yunnan. The negotiations respecting the cession of Kiao-chau Bay were more protracted. They were mostly conducted at the German Legation by tlie two Ministers I have mer.tioned. The German authorities had occupied the villages and barracks — forts there at^ none — on the promontory to the north of the entrance ; and, .in addition, the town of Kiao-chau, which lies some 25 miles as the crow flies from the entrance of the harbour and generally the country within this radius. They had from the first no intention of permanently holding so extended a line, but the promised retirement therefrom to smaller, more compact, and more useful quarters (for themselves) served as a valuable concession to place before the Chinese negotiators. The German Minister was considerably assisted in his negotiations by two incidents which occurred while they were proceeding. A German picket opened fire on some Chinese soldiers who were alleged to be in the act of robbing a pawnshop, killed four, and wounded some others. The Tsung-li Yam^n were exceedingly alarmed, and expressed their regret to the German Minister, who did not fail to make use of the somewhat unexpected and unusual view which the Chinese Government had taken of the incident. The second occurrence was of a graver natiire. On the 28th December the German Minister received from the Head of the German Roman Catholic Mission in Shantung a telegram to the eifect that, notwithstanding the presence of the German squadron in Kiao-chau, and notwithstanding the promises of the Chinese Government, the murderers of the two priests were not being brought to justice ; also, that within the previous few days a Chinaman had been severely punished by the authorities for selling land to the missionaries, and, further, that the Tartar General of the district of Yen-chow Pu, the one in which the murders had been committed, had stated in open Yamen that many more Europeans would shortly go the road which the two murdered misSiona,ries had gone. Baron von Heyking immediately informed the Tsung-li Yamen that if before 9 o'clock that evening he did not receive an intimation from them informing him that telegraphic orders had been issued by the Governor of Shantung for the immediate removal of the Tartar General, he would cease diplomatic relations with them, and leave next day for Tien-tsin. The necessary intimation was forth- comingj and a few days after that the negotiations came to an end, the Germans obtaining their demands in full. The exact extent of territory ceded to the Germans is as follows : The line has, for its southern border, a line running east and west, south of the Islands Tolosan and Niu-tao ; for its northern boundary, a line running east and west in a latitude to the north of the city of Kiao-chau. On the west, the frontier is a line joining the others, running north and south to the east of High Double Peak ; and, on the east, a north and south line running from a point to the east of Niu^tfio Island. I have, &c. (Signed) CLAUDE M, MacDONALP. 56 No. 132. Sir N. 0' Conor to the Marquess of Salisbury. — (Received March 28.) My Lord, St. Petersburgh, March 23, 1898. I HAVE the honour to report that I spoke to Count Mouravieff this afternoon in the sense of your Lordship's telegram of yesterday's date, and before I left I read to him a paraphrase of its contents, after formally expressing the satisfaction of Her Majesty's Government at the assurances given by the Russian Government to engage to respect the rights and privileges guaranteed by existing Treaties between China and foreign Powers and the sovereignty of China. I repeated to his Excellency the arguments set forth by your Lordship and those I had previously used, as your Lordship is aware, with a view to induce his Excellency to reconsider the advisability of pressing demands upon China, which were tantamount to the commencement of the dismemberment of the Chinese Empire. I laid stress upon the great advantage to Russia of the pledge which your Lordship was willing to give, not to occupy any port in the Gulf of Pechili so long as other Powers likewise abstain from doing so, and tried to convince his Excellency that this would give Russia all she could legitimately demand without opening the way to possible complications, and that an understanding between Her Majesty's Government and Russia would in almost any possible eventuality secure the safety of the Russian fleet eitlier at Talienwan or else- where. His Excellency would not, however, admit that the occupation of Port Arthur was an attack upon the integrity of China, or a menace to Peking, or that it injured other Powers in any way. In fact, he said that it was England alone that made difficulties, and stood in the way of Russia. No other Government had questioned him officially on the subject, or seemed to resent in any degree the proposed action of Russia. His remarks on this subject showed some heat, but I found it easy to justify our interference on the score of the immensely superior importance of our commercial interests. His Excellency then went on to say that Talienwan was useless without Port Arthur, as they must have a safe harbour for their fleet, which could not be at the meixy of the elements at Vladivostock, or dependent upon the goodwill of the Japanese. Every other great Maritime Power had a naval station in the China Seas, and why should not Russia, whose fleet was now very considerable, and whose territory was conterminous 1 In fact, it was a matter of vital importance to Russia, and they must insist upon obtaining a lease of the ports. When I had presented the situation in as serious a manner as I could, I told his Excellency that as a diplomatist I was, of course, anxious to report everything to your Lordship that might help in any way to an understanding, and with this idea I would like to ask his Excellency if he would be willing to give me a written statement of the assurances he had authorized me to communicate to your Lordship in respect to the sovereignty of China and the validity of existing Treaties. Count Mouravieff said that he would give me a written assurance, but that he did not see how it could take a definite and, so to say, concrete form until China agreed to grant the Russian demands. J said that I would report to your Lordship what he had said. I had the honour to do so in my telegram of this date. I have, &c. (Signed) N. R. O'CONOR. No. 133. The Marquess of Salisbury to Sir N. 0' Conor. '^"'' -L.^or^nT T. 1. ' . 1 ., . ^"o'-^m Office, March 28, 1898. . EROM your Excellency s telegrams, and from those whicli have reached Her Majesty's Government from Peking, it appears that the Russian Govern menthave requested or required from that of China three concessions in Manchuria and the Liaotung Peninsula. They have demanded a lease of Talienwan a lease of Port Arthur, and the right to construct under specified conditions a railway connectino- these two ports with the general railway system of Siberia. " 57 It is evident that these concessions, whether temporary in form or not, will permanently and profoundly affect the future condition of Manchuria. For good or for evil, the social, political, and economic state of this region must inevitably be revolutionized when it is traversed by a railway under Russian management, con- necting ports on the Pacific under Russian control with the commercial and military system of the Russian Empire. It becomes necessary, therefore, to examine how these changes are likely to affect British interests, and what attitude Her Majesty's Government should adopt with regard to them. The interests of this country in China are not, indeed, in the opinion of Her Majesty's Government, different in kind from those of other countries, but they are greater in extent, and have a greater relative importance, in proportion as the volume of British trade exceeds that in the hands of other nationals. Speaking generally, it may be said that the policy of this country is effectively to open China to the commerce of the world, and that our estimate of the action of other Powers in the Par East depends on the degree to which it promotes or hinders the attainment of this object. It follows from this that the occupation of territory by foreign Powers is to be judged by the results, direct and indirect, immediate and remote, which it is likely to have upon the commercial interests of the world, and the right of all nations to trade within the limits of the Chinese Empire upon equal terms. The construction of railways, so long as the natural flow of trade along them is not obstructed or diverted by fiscal or administrative regulations, must always be one of the most powerful means by which the ends desired by Her Majesty's Government may be attained. It is with no dissatisfaction therefore that they view the scheme of railway extension which is to traverse Manchuria from north to south, and ultimately to connect Talienwan with the general system of Russian railways. An ice-free port in the Par East has always seemed, to Her Majesty's Government to be a legitimate object of Russian ambition, and they have no objection to offer to its acquisition. Her Majesty's Government have further noted with satisfaction that the condi- tions to which the opening of new railways and ports in China should, in their opinion, be subject, viz., the continuance of the rights and privileges secured to foreign nations by existing Treaties, have been guaranteed by the explicit declarations of the Russian Government, which have been conveyed through you to Her Majesty's Government in your telegram of the 16th March and despatch of that date. These declarations are to the effect that Port Arthur, as well as Talienwan, shall be open to foreign trade like other Chinese ports ; that Russia has no intention of impairing the sovereignty of China ; and that she will respect all the rights and privileges secured by existing Treaties between China and other foreign Powers — a pledge which not only includes equality of commercial treatment, but also the right of foreign ships of war to visit ports which, though leased to Russia, are still to remain integral portions of the Chinese Empire. The commercial side, therefore, of the Russian policy in Manchuria, considered in the light of the engagements entered into by the Russian Government, is in accord with the general views of Her Majesty's Government. Unfortunately, this cannot be said of the policy considered as a whole. The Russian Government have exacted from the Yamen not merely railway concessions through Manchuria and the lease of a commercial harbour at Talienwan ; they have required also that the control of Port Arthur should be ceded to them for a like term of years under similar conditions. Now, Port Arthur is not a commercial harbour. It is doubtful whether it could be converted into one. It is certain that, even if such a project were possible, it could never be worth while for the owners or lessees of Talienwan to embark upon it. But though not a commercial harbour. Port Arthur supplies a naval base, limited indeed in extent, but possessing great natural and artificial strength. And this, taken in connection with its strategic position, gives it an importance in the Gulf of Pechili and therefore at Peking, upon which, in their representations to Japan at the close of the war with China, the Russian Government laid the greatest emphasis. It is from this last point of view that the occupation of Port Arthur chiefly concerns Her Majesty's Government. It is not because a position which can easily be made a naval arsenal of great strength has been acquired by Russia that they regret its occupation by that Power. It is because the possession, even if temporary, of this particular position, is likely to have political consequences at Peking of great international importance, and because the acquisition of a Chinese harbour [371] I 5S notoriously useless for commercial purposes by a foreign Power will be universallj interpreted in the Par East as indicating that the partition of China has begun. As regards the second of these reasons nothing further need be said, inasmuch as Her Majesty's Government understand from Count MouraviefE's communication to you that this result is as little desired by the Russian Government as it is by that of Her Majesty. As regards the first, it may perhaps be proper to observe that a great military Power which is coterminous for over 4,000 miles with the land frontier of China, including the portion lying nearest to its capital, is never likely to be without its due share of influence on the councils of that country. Her Majesty's Government regard it as most unfortunate that it has been thought necessary in addition to obtain control of a port which, if the rest of the Gulf of Pechili remains in hands so helpless as those of the Sovereign Power, will command the maritime approaches to its capital, and give to Russia the same strategic advantage by sea which she already possesses in so ample a measure by land. Her Majesty's Government have thought it their duty thus to put on record their grave objections to the occupation of Port Arthur by Russia. They regret that the proposals contained in my telegram of the 22nd instant were not acceptable to the Cabinet of St. Petersburgh ; but as these were rejected, they must retain their entire liberty of action to take what steps they think best to protect their own interests and to diminish the evil consequences which they anticipate. Your Excellency will read this despatch to the Russian Minister for Poreign AfPairs, and give him a copy of it. I am, &c. (On behalf of the Marquess of Salisbury), (Signed) A. J. BALFOUR. No. 134. M. de Sinai to the Marquess of Salisbury. — {deceived March 29.) M. le Marquis, Londres, le 28 Mars, 1898. D'ORDRE de mon Gouvernement, j'ai I'honneur de notifier a votre Excellence qu'en vertu d'une Convention sign^e le 15 (27) Mars k Pekin entre le Eepresentant de la Russie et les Mernbres du Tsung-li Yamen dutnent autorises a cet effet, les ports Arthur at Talienwan, ainsi que les territoires adjacents, ont ^te cedes ^ la Russia en usufruit par le Gouvernement Chinois. Les ports et les territoires susmentionnes seront imm^diatement occupes par les troupes de Sa Majeste I'Empereur, mon auguste JMaltre, et le pavilion Russa sera hisse h. c6te du pavilion Chinois. Je suis egalament charge d'informer votre Excellence que le port de Talienwan sera ouvert au commerce etranger et qua les batiments de toutes les nations amies y recevront la plus large hospitalite. J'ai, &c. (Signd) STAAJ.. (Translation.) M. le Marquis, London, March 28, 1898. BY order of my Government I have, the honour to notify to your Excellency that, in virtue of a Convention signed on the 15th (27th) March at Peking between the Russian Representative and the Members of the Tsung-li Yamen, duly authorized for that purpose. Ports Arthur and Talienwan, as well as the adjacent territories, have been ceded to Russia in usufruct by the Chinese Government. These ports and territories will be immediately occupied by the troops of His Majesty the Emperor, my august Master, and the Russian flag will be hoisted beside the Chinese flag. I am likewise charged to inform your Excellency that the port of Talienwan will be open to foreign commerce, and that the vessels of all friendly nations will receive the fullest hospitality there. I have, &c. (Signed) STAAL. ^-' ■ 59 No. 135. The Marquess of Salisbury to M. de iStaal. Your Excellency, Foreign Office, March 29, 1898. T HAYE the honour to acknowledge j-eceipt of your note of the 28th instant, stating that, by a Convention signed at Peking on the 27th instant. Ports Arthur and Talienwan, and the territories adjacent thereto,' have been leased (" c6des en usufruit") to Russia by the Chinese G-overnment, and that these ports will at once be occupied by the troops of His Majesty the Emperor, and that the Russian flag will be hoisted by the side of the Chinese flag. You add that the port of Talienwan will be open to foreign commerce, and that the ships of all friendly nations will receive in it the fullest measure of hospitality. Her Majesty's Government are communicating through Her Majesty's Ambassador at St. Petersburgh their views as to the effect of the measures you announce, and their bearing on British interests. They take note of the assurance that the port of Talienwan will be open to foreign commerce and navigation. They have, however, received assurances of a more comprehensive character as to the maintenance in the ports and territory leased to Russia of all rights secured to Great Britain by her Treaties with Uhina. These assurances have been given by the Russian Minister for Foreign Affairs to Her Majesty's Ambassador at St. Petersburgh, by order of His Imperial Majesty the Emperor; and Her Majesty's Government accept your Excellency's present note as not intended in any way to derogate from or restrict them. I have, &c. (Signed on behalf of the Marquess of Salisbury.) No. 136. Sir N. 0' Conor to the Marquess of Salisbury. — [Received March 29, 9 p.m.) (Telegraphic.) St. Petersburgh, March 29, 1898, 6-34 p.m. THE "Official Messenger" of to-day publishes a Circular telegram from the Minister for Foreign Affairs to the Russian Representatives abroad, announcing that Ports Arthur and Talienwan, as well the adjoining territory, have been ceded by the Chinese Government for the use of Russia. In communicating the above, the Russian Representatives are to inform the Government to which they are accredited that the above-mentioned ports and territory will be occupied without delay by the forces of His Imperial Majesty, and that the Russian flag, together with the Chinese, will be hoisted. They are also instructed to say that Talienwan will be opened to foreign commerce. No. 137. Sir N. 0' Conor to the Marquess of Salisbury. — {Received March 30.) (Telegraphic.) St. Petersburgh, March 30, 1898. I SAW Count Monvavieff this afternoon, but refrained from touching on the affairs of China except that I expressed surprise that in the telegram which he had sent on the 27th March to tbe Russian Representatives abroad, his Excellency had only said that Talienwan would be open to foreign commerce, and had made no mention of Port Arthur, and I called his attention to the formal assurances on this subject which I had been authorized by him to communicate to Her Majesty's Government on the 16th instant. The Minister informed me in reply that he adhered to the assurances he had "■iven me, but that the moment was inopportune for publicly announcing them. [371J K GO No. 138. The Marquess of Salisbury to Sir N. 0' Conor. (Telegraphic.) Foreign Office, March BO, 1898 I AM sending you by messenger to-night a deq)atoh for conamumoation fto the E-ussian Government. While stating that after assurances received from Russia as to maiivtenance ot Treaty rights we view without jealousy demand for railway and port of Talienvran, it repeats our objections to occupation by Russia of Port Arthur, and reserves our liberty of action to take such measures as we think necessary for averting the evils we anticipate and for the protection of British interests. No. 139. The Marquess of Salisbury to Sir N. 0' Conor. (Telegraphic.) Foreign Office, March 30, 1898, WITH reference to your telegram of the 29th instant, I have, in acknow- ledging the receipt of the note in which the Russian Ambassador informed me of the lease of Port Arthur and Talienwan, laken note of the assurance that the latter will be open to foreign trade and shipping. I have placed also on record that, by order of the Emperor, more comprehensive assurances have been given to you by the Minister for Foreign Affairs as regards the maintenance of our rights under the Treaties, and that Her Majesty's Government accept the note as not in any way intended to restrict or derogate from them. No. 140. The Marquess of Salishury to Hir N. 0' Conor. (Telegraphic.) Foreign Office, March 31, 1898, WITH reference to your telegram of the 30th instant, it is of importaace to us that the assurances which were given to you by Couut Mouraviefl: on the 16th of the present month by authority of the Emperor should be obtained in writing. Our present policy is based upon these assurances, and should any attempt be made to modify them it might be necessary for us to reconsider our attitude. A recapitulation of these assurances will be found in my despatch of the 2§th instant, and Mr. Ourzon will repeat them this afternoon in the House of Commons. A debate on foreign affairs will probably take place on Tuesday, the 5th proximo, in the course of which I shall refer to them. It would be desirable that a note should be sent to the Russian Qovernment, in which the precise language employed by the Minister for Poreign Affairs should be recapitulated, with a request that he should confirm its accuracy. No. 111. The Marquess of Salisbury to Sir Fj. Satow, (Telegraphic ) Foreign Office, March 31, 1698. INFORM Japanese Government that we are demanding a lease of Wei-hai Wei whenever evacuated by Japan, on same terms as lease of Port Arthur to Russia No. 142. Sir C. MacDonald to the Marquess of Salisbury. — (Received April I, 7 P.M.) (Telegrapliic.) _ Peking, April 1, 1898, noon. I Have been officially iuformed by the Yamen that three new ports are to be opened to trade as soon as Customs arrangements can be made, viz., Chin-wang-tao, on the coast near Shanhaikuan, >San-tuao, on the coast of Fukien, in the neigh- bourhood of Samsha Inlet, and Yochow in Hunan. Chin-A\-ang-tao is accessible in winter. The Yamen state that these ports will be opened with a view to commercial development. No. 143. ^r E. Satoiv to the Marquess of Salisbury. — (Received April 3.) (Telegraphic.) T6ki^, April 2, IS^S; WITH reference to your Lordship's telegram of the 31st ultimo, I have received regly from Japanese Grovernment expressing concurrence itl contemplated lease to Great Britain of Wei-hai Wei after evacuation by Japan. No. 144. Sir C. MacDonald to the Marquess of Salisbury.— (Received April 3, nOon.) (Telegraphic.) Peking, April 3, 1898, 8-30 a.m. YAMEN agreed yesterday to the following arrangement : — China will lease Wei-hai Wei to Great Britain on the same terms as Port Arthur has been leased to Russia, but Grreat Britain agrees not to t^ke possession of the place until it has been given up by Japan. ' The lease will continue until Russia ceases to occupy Lia'otung Peninsula, l)etails are left for subsequent adjustment. No. 145. Sir C. MacDonald to the Marquess of Salisbury, -^(Received April 3, 3'35 f.M.) (Telegraphic.) Peking, April 3, 1898, 12-50 p.it. YA^IfiN wish for special facilities at Wei-hai Wei for the organization and training of Chinese navy. Russia having sent specially seleicted officer of Imperial , Guard to drill and organize Chinese troops in the north, I think we should accede. A carefully selected officer on the active list, Captain Lang for choice, should be sent for th« purpose. Yamen earnestly hope that lease of Wei-hai Wei will not be followed by further territorial demands. I am sttongly of opinion it is to our interest to limit these as as far as possible, so as to prevent, if possible, dismeniberment of China. Railwa,y and mining concessions, and all measures tending to give greater facilities for trade, should be strongly pressed. iir ■■■" "• ■"^' No. 146* The Mda'qmss of. Salisbury. to Sir d Mdct}onald. (¥el6gra;phie.) ^ Foreign Office, April 4^^ l§£i%:l PiM^ YOUR iiegdtiations hat^ been most successful. Our hearty congratulations. [371] K 2 62 No. 147. Sir C. MacDonald to the Marquess of Salisbury.— {Received April 4, 3-30 P.M.) (Telegraphic.) Peking, April 4, 1898, 1-20 p.m. WEJ-HAE WEI: ^ ^ , I will proceed to arrange details of lease in amplification of verbal agreement with Yamen, as soon as I receive your Lordship's reply. I have not_ been able to obtain particulars as yet respecting the terms of the agreement with Russia. No. 148. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, April 4, 1898. AS regards the Chinese request for British naval officers, referred to m jour telegram of the 3rd instant, we sympathize entirely with the desire of the Chinese Government to reform their military and naval forces; and provided conditions were arranged which gave reasonable prospect of good results, we should be glad to assist them. We await further observations on the subject from you. Meanwhile, we are consulting Admiralty. No. 149. The Marquess of Salisbury to Sir N. 0' Conor. Sir, Foreign Office, April 4, 1898. THE Russian Ambassador called at the Eoreign Office this afternoon and stated that, in consequence of the inqniry which had been addressed to him as to the exact conditions of the arrangement by which Port Arthur and Talienwan had been ceded " en usufruit" to Russia, he had telegraphed to St. Petersburgh asking for information on the subject. He had been informed, in reply, that the details would be sent to him by messenger, but that the main features of the arrangement were, that Port Arthur and Talienwan had been leased to Russia for a period of twenty-five years, and that it was the intention of the Russian Government to maintain as far as possible the status quo existing under the Chinese jurisdiction, except as regards Talienwan, which would be open to international commerce. The situation would therefore be in no way modified except by the opening of a new port in the Yellow Sea. M. de Staal said that he had received a second telegram from Count MouravieflF on the subject of a note which had been addressed to him by your Excellency as to the opening of Port Arthur. Count Mouraviefi" stated that he had replied to you correcting certain misapprehensions. He had had a confidential and friendly exchange of views with you before the signatuie of the Convention with China, and had said that in acquiring the lease of Port Arthur and Talienwan Russia intended to maintain the sovereign rights of China and to respect the existing Treaties. The negotiations with China having been brought to a successful result, these intentions were entirely confirmed. The friendly agreement between the two Empires had in no way prejudiced the rights of other Powers ; on the contrary, it had resulted in the opening of Talienwan to the commerce of the whole world, and this under the most favourable conditions, in view of the concession tor a railway which would connect that port with the great Siberian line. In all other points due respect for the sovereign rights of China evidently implied the scrupulous maintenance of the status quo existing before the lease of the two ports, British ships of war and commerce would consequently be admitted to Port Arthur on the conditions prescribed by existing Regulations, but Russia could not abuse the right of use accorded to her by China for the purpose of arbitrarily transforming a closed military port into an ordinary commercial harbour. I am, &c. (Signed on behalf of the Marquess of Salisbury), 63 No. 150. The Marquess of Salisbury to Sir E. Satow. (Telegraphic; Foreign Office, April 6, 1898. WITH reference to your telegram of the 2nd instant, Her Majesty's Government are very sensible of the friendly spirit in which our communication respecting Wei-hai Wei has been received by Japan. Ton are authorized to inform the Japanese Government that we have obtained a promise of the reversion of Wei-hai Wei, which will be leased by us on the same terms under which the Prussians have been granted a lease of Port Arthur and Talienwan. Our lease will come into operation as soon as the Japanese forces now in occupation are withdrawn. No. 151. Sir N. 0' Conor to the Marquess of Salisbury. — {Received April 13.) (Extract.) St. Petersburgh, April 4i 1898, , 1 ATTENDED Count MouraviefF's weekly reception at the Ministry for Foreign Affairs on the 30th instant, but after recent events at Port Arthur I did not think there was any use in reviving a discussion which had been so frequently spoken of between us during the last few months. I drew his Excellency's serious attention, however, to the assurances he bad given me and to the difference between them and the Circular telegram which he had issued on the loth (27th) March to the Russian Representatives abroad, and, moreover, I reminded his Excellency of the promise made on the 23rd March to giv^e me these assurances in writing. His Excellency replied that the moment was not opportune (" le temps n'etait pas opportun ") for making these assurances public, but that he was ready to abide by them, and that if I addressed a note to him with this object he would at once reply. I have now the honour to inclose to your Lordship a copy of the note which with this object I wrote to Count MouraviefF on the 1st instant, and of his Excellency's reply received last night. Inclosure 1 in No. 151. Sir N. 0' Conor to Count Mouravieff. M. le Ministre, St. Petersburgh, March 20 (April 1), 1898. IT will be within your Excellency's recollection that on the 4th (16th) March you authorized me to inform Her Majesty's Government that in the event of the Russian Government obtaining from ths Chinese Government a lease of Talienwan and Port Arthur, both those ports would, like other ports in China, be open to trade and commerce, and that the rights and privileges guaranteed by existing Treaties between China and foreign countries would be duly respected by the Russian Govern- ment. On the 11th (23rd) March your Excellency repeated these assurances, and added that the Russian Government did not propose in any way to interfere with Chinese sovereignty, and in reply to a question from me your Excellency answered that foreign ships of ^^ar would have access to Port Arthur. At the same time, your Excellency expressed your willingness to give me in writing the above assurances, which you had already authorized me to transmit to Her Majesty's Government. In reading in the " OfEcial Messenger " of the 17th (29th) instant the Circular telegram addressed to the Russian Representatives abroad, I observed that neither in the telegram nor in the official communication that accompanied it was any mention made of the fact that Port Arthur would be open to trade. I also noted that generally the statements referring to the protection of the interests of foreign Powers were less comprehensive than those founded upon the assurances given to me by your Excellency. Upon my drawing your Excellency's attention on Wednesday last, the 18th (30th) instant, to the omission in respect to Port Arthur and reminding you of the assurances you had given to me in this respect, your Excellency informed me that the moment was not opportune for making them public, adding, however, that if I addressed a note to you on the subject you A^'^ould send me a reply. &4 In complying to-day with your suggestion in regard to Port Arthur, and also hearing in mind what your Excellency said to me on the 11th (23rd) March, I venture to express the hope that you will now see no objection to place on record m an official note the assurances which your Excellency formally authorized me to convey to Her Majesty's Government. i have, &c. (Signed) T^. R. O'OONOll. Inclosui'e 2 in No. 151. Count Mouravief to Sir N. 0' Conor. M. I'Ambassadeur, Saint-Pe'tersbourg, le 22 Mar^ (3 Avrii), 1898. LA note que votre Excellence a bien voulu m'adresser en date du 20 Mars (1« Avril) courant indique certains malentendus que je tiens a rectifier sans le moindre retard. Je commencerai parvous faire observer que les idees que j'ai pu trfes confiden- tiellement ^mettre en date du 4 (16) et du 11 (23) Mars courant relativemenfc aux conditions dans lesquelles il me semblait desirable de voir places Ports Arthur et Talienwau, si la Ghine consentait a en accorder le bail a la Russie, n'aviraient jamais du etre interpretees comme des " assurances " et ne pouvaient reellement en avoir la portee. U ne m'etait evidemment pas possible de prendre le moindre engagement a ce sujet avant la conclusion des arrangements qui n'ont ete signes a Pekin que le 15 (2.7) Mars courant. Un echange de vues aniical entre votre Excellence et moi pouvait bien avoir lieu, mais vous conviendrez certainement, M. TAmbassadeur, qu'aucun Gouvernement ne saurait j)retendre au privilege d'etre initie a des n^gocia- tions en cours entre deux Puisances parfaitement independantes et amies. Vous m'avez demande si, en prenant en bail les Ports Arthur et Talienwan, la Byussie comptait maintenir les droits de souverainet6 de la Chine et respecter les Traites existants entre cet Empire et les autres Btats. Je vous ai repondu affirma* tivement et j'ai ajoute que nous esperions de plus obtenir I'ouverture du Port de Talienwan, ce qui offrirait^ de grands avantages a toutes. les nations. Aujourd'hui que les negociations avec la Chine ont abouti au r^sultat souhaite, tout cela se trouve parfaitement confirm^. Le remplacement de la possession Chinoise par I'usufruit Eusse dans les Ports Arthur et Talienwan n'a port6 aucune atteinte aux interets des autres Puissances dans ces parages ; bien au contraire, gr&ce a I'accord amical ^tabli entre les deux Grands Empires voisins, un port nagu^re ferm6 est ouvert au commerce du monde entier et place dans des conditions exceptionnellement favorables, puisqu'il est destine h. etre relie a la grande ligne du chemin de fer de Siberie, Quant a tout le reste, le respect des droits souverains de la Chine implique le maintien scrupuleux du statu quo existant avant la prise en bail des ports concedes. Yotre Excellence m'ayant observe que les batiments de guerre et de commerce staient en certains cas prevus par las Traites admis meme dans les ports ferm^s- de la Chine, je lui ai repondu que d6s lors cette faculte leur serait assuree par les R^glements en vigueur. 11 en resulte que le Port Arthur sera ouvert aux batiments Anglais dans les niAnies conditions dans lesquelles il Pa toujours ete et non pas que la Russie fasse abus du bail que lui a ete accorde par une Puissance amie pour transformer arbitrairement un port ferme et principalement militaire en un port de commerce comme tous les autres. Voila les quelques observations que j'ai cru devoir fairc a votre Excellouco pour completer nos entretiens precedents sur le meme sujet. Veuillez, &c. (Sign^) Comte MOURAVIEEr. (Translation.) U. l*AtobassadeUr, St. Peter slur gh, March 22 (April 1) 1898 THE note which your Excellency was good enough to address to me on th& 20th March (1st April) mdicates certam misunderstandings which I am anxious to 'ectifv without the least delay; ' ^ 65 I will begin by pointing out that the ideas which I may have expressed very confidentially on the 4th (16th) and lllh (2Srd) March, relative to the conditions in which it seemed desirable to me that Port Arthur and Talienwan should be placed, if China consented to grant a lease of them to Eussia, ought never to have been inter- preted as "assurances," and could not in reality have such a signification. It was evidently impossible for me to make the slightest engagement on this subject before the conclusion of the arrangements which were only signed at Peking on the 16th (27tb) March. An amicable exchange of views between your Excellency and me might well take place, but you will certainly agree, M. I'Ambassadeur, that no Govern- ment could pretend to the privilege of being made acquainted with negotiations in progress between two perfectly independent and friendly Powers. You asked me whether, in taking Ports Arthur and Talienwan on lease, Russia intended to maintain the rights of sovereignty of China, and to respect the Treaties existing between that Empire and other States. I answered in the affirmative, and I added that we hoped, moreover, to obtain the opening of the port of Talienwan, which would offer great advantages to all nations. Jfow that the negotiations with China have brought about the desired result, all that is entiriely confirmed. The substitution of the Eussian usufruct for possession by China of Ports Arthur and Talienwan has not affected in any way the interests of the other Powers in those regions ; quite on the contrary, thanks to the friendly agreement arrived at between the two great neighbouring Empires, a port hitherto closed is open to the trade of the whole world, and placed under excep- tionally favourable conditions, as it is destined to be connected with the great line of the Siberian Railway. As regards all other points, the respect for the sovereign rights of China implies the scrapulous maintenance of the status quo existing before the lease of the ports which have bgen conceded. Your Excellency having observed to me thiat men-of-war and merchant- ships are, in certain cases provided for by the Treaties, admitted even into the closed ports of China, I answered that accordingly this facility would be assured to them by the Regula- tions ill force. It follows that Port Arthur will be open to English ships on the same conditions as it has always been, but not that Russia should abuse the lease which has been granted to her by a friendly Power to arbitiarily transform a closed and principally military port into a commercial port like any other. These are the few observations which I have thought it right to make to your Excellency to complete the conversations which we have had on the same subject. I have, &c, (Signed) Count MOURAVIEFF. n e B b o Si 3 cS* 1^ §5 o is e o ^ a: ■* a & g S g. 3 O o w a ►s o M n ss n 05 sr p. an •-i 00 cn v^ O » ^^ O cr 5' a> CHINA. No. 1 (1899). CORRESPONDENCE RESPECTING THE AEFAIES OF CHINA.. Presented to both Houses of Parliament by Command of Her Majesty. March 1899. LONDON: PRINTED yOR HER MAJESTY'S STATIONERY OFFICE BY HARRISON AND SONS, ST. MARTIN'S LANE, FRINTERS IN OBDINAKY TO HER MAJESTY. And to be purchased, either directly or through any Bookseller, from BYRE AND SPOTTISWOODE, East Harding Stbebt, Fleet Stebbt, E.G., »n[> 32, Abingdon Street, Westminster, S.W. , os JOHN MENZIES & Co., 12, Hanover Street, Edinburgh, and 90, West Nile Street, Glasgow; ob HODGES, FIGGIS, & Co., Limited, 104, Gilattoh Sibbet, Dublin. rC— 9131. 1 Price 3s. . TABLE OF CONTENTS. Name. 9 11 12 13 14 15 le 17 JS Sir N. O'Conor Mr. Balfour to] Sir F. Lascelles Mr. Ralfour to Sir C. MacDouald Sir F. Lascelles Hong Kong and Shanghae Banking Corporation Sir C. MacDonald ., Sir F. Lascelles Mr. Bdfour to Sir F. Lascelles Sir C. MjcDonald Sir F. Lascelles Mr. Balfour to Sir C. MacDonald Sir N. O'Conor Dale. Telegraphic Telf graph i Telegraphic Telegraphic Telegraphic ' Telegraphic j Telegraphic Telegraphic Telegraphic Sir C. MacDonald Telegraphic .^^ar. 29, 1898 Apr. 2, 2, Mar. 28, Apr. 4, 4, e, ' 7, S, 8, 6. 11, 5, 6, 7, 12, Feb. 15, 16, Subject. Port Arthur and Talienvvan. Extract from " Official Messenger ' respecting cession, and Circular telegram to Russian Represen- tatives Wei-hai Wei. To inform German Grovern- ment that Her Majesty's Government have asked for lease Peking Syndicate's Concession, Ratification said to be opposed by Censors. To report present position of matter . • German Settlements at Tien-tsin and Hankow. Transmits Memorandum submitted to Reich- stag Railway construction in China. Have sepa- rated from German Syndicate. Proposed Shanghae-Nanking line. Syndicate to be formej • • 22, Wei-hai Wei. Conversation with Herr von Billow and nublication of Declaration in " Reichs Anzei;^er " 30 40 Sir 0. MacDonald .. Telegraphic 25, British demands urged on Chinese Government 31 41 ;i )! Telegraphic 26, Japanese demand respecting Fukien province granted by Chinese Government , . £1 42 ?T J) ■• Telegraphic 26, Hong Kong extension. Question of Chinese jurisdiction in Kowloon.. 31 [253] iv TABLE OP CONTEIITS. No. 43 44 45 45 47 48 49 50 51 52 53 54 55 56 57 68 59 CO 61 62 63 ft Name. Mr. Balfour to Sir 0. MacDonald Sir C. MacDonald .. Sir E Satow Mr. Balfour to Sir C. MacDonald Sir C. MacDonald . Mr. Balfour to Sir C. MacDonald Mr. Balfour to Sir F. Lascelles Sir C. MacDonald .. Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic 'I 5> To Sir C. MacDonald Sir F. I,ascelles Date. Telegraphic Telegraphic Apr. 26, 1898 28, 28, 28, 29, 29, 30, 30, 30, 30, Mar. 17, 17, 17, 17, 18, 18, 18, May 1 , 1, Apr. 27, 28, 30, Subject. Hong Kong extension. Necessity of having Kowloon. Would lease meet Chinese objection ? . . Hong Kong extension. Chinese objections to cession of Kowloon . . . . Japanese demands. Press is urging request for port in Fukien Hong Kong extension. He may accept a lease .. •• Hong Kong extension. Negotiations vpith Yamen . . • • • • Wei-hai Wei. As to instructions to be given to Admiral . . Wei-hai Wei. Japanese evaluation to take ])lace within four vreeks of payment of indemnity .. .. •• •• Russo-Chinese " Treaty of Alliance." No reference to it in copy of Emperor's speech received from Yamen , . Hong Kong extension. Would accept lease for niufty-nine years. To try to obtain immediate opening of Nanning .. Wei-hai Wei. Approves language respecting publication of Declaration .. ,. Manchuria. Transmits notes by Colonel Browne . . . . . . Importance of Nanning as a commercial centre. Transmits extracts from Wuctiow Intelli- gence Report,, French preparations for mobilization and land- ing of party in Kwangchow Bay. Transmits despatclies from Kiungchow and Canton Right of foreigners to hold land and houses outside Treaty ports. Observations Illegal seizure of goods under transit pass in Canton Province. Yamfin has dissolved farming Syndicate Opening of port in Hunan. Transmits corre- spondence with Yamen.. .. ,. Anglo-German Loan. Conclusion of negotia- tions. Question of h-kin revenues Hong Kong extension. Question of landing- place for Chinese vessels . , Hong Kong extension. To telegraph exact limits . . . . Visit of Prince Henry of Prussia to Peking. Iransniits paragraph from " Reichsanzeiger " Kiao-chau. Transmits Memorandum on Ger- man Supplementary Estimates, with explana- tory statements Kiao-chau and Wei-hai Wei. Copy of state- ment in Rtichstag by Herr von Biilow Page 32 32 32 32 33 33 33 34 34 34 56 59 60 61 62 63 63 64 64 61 66 TABLE or CONTENTS. No Name. ' Date. Subject. 65 Sir F. Lascelles ■ • Apr. 30. 1898 Kiao-chau. Precis of proceedings in Budget Commission of Reichstag 66 >' )) . • • • 30, Treaty between Germany and China for lease of Kiao-chau . 67 Sir 0. MacDonald . . Telegraphic May 3. French missionary murdered in Province of Kuangsi 68 )5 ») • * Telegraphic 3, Hong Kong extension. Limits of area G9 )1 5» Telegraphic 3, British demands. Interview with Yamen, Proposals as to Hong Kong extension 70 China Association 4, German interests at Tien-tsin and Hankow . . 71 Sir E. Satow Telegraphic 4, Wei-hai Wei. Japanese Government will com- municate date of evacuation 72 To Sir C. MacDonald Telegraph ic 4, Hong Kong extension. Approves arrange- ments . . 7^> Sir E. Satow •• .Vlar. 31, Port Arthur and Talienwan. Official com- munication to Japan by Russian Govern- ment 74 To Sir C. MacDonald .- May 7, Opening of port in Hunan. Approves his action 75 »5 ?) •' 7, Seizure of goods under transit pass in Province of K wangtung. Approves his action 7& To China Association .. : 7, j Seizure of goods under transit pass in Kwang- tung. Farming Syndicate abolished 77 Sir F. Lascelles •• 4, Kiao-chau. Pr6cis of Imperial Orders laid before Reichstag 73 Sir C. MacDonald . . Telegraphic 9, French expedition up the Yang-tsze . 79 Sir E. Satow Telegraphic ' Wei-hai Wei to be evacuated at latest by 3rd June 60 To Sir C. MacDonald Telegraphic 10, Internal water communication in China. What progress has been made as to changes ? 81 Sir E. Satow > . April 9, Wei-hai Wei. Communication to Japanese Government .. 82 » >j . • • • 9. Wei-hai Wei. Attitude of Japanese press with ^ regard to British occupation S8 Sir C. MacDonald . . Telegraphic May 11, Riot at Shashih , . 84 To Admiralty 11, Wei-hai Wei to be evacuated by 3rd June, What arrangements will be made for taking over? 85 Mr. Kato . . 11, Wei-hai Wei will be evacuated within four weeks fiom 7ih May ., 86 Admiralty ., ■ • 11, Hong Kong extension. Observations as to boundaries .. 87 To Sir C. MacDonald Telegraphic 12, Peking Syndicate's Concession. How does matter stand ? 88 Sir C. MacDonald .. Telegraphic 3 2, Murder of French missionary. Demands of French Government 89 1 To Sir C. MacDonald Telegraphic 12, Port Arthur and Talienwan. Is it true that foreianers are forbidden to land without passports vise by Russian Consul at Tien- tsin ? Page 67 69 71 71 71 li 75 75. 75- 75 73 76 76 .77 77 77 77 7.8 78 7a 79 79 60 80 80 VI TABLE OP CONTENTS. No. 90 91 92 93 94 95 96 97 98 99 103 108 109. 110 Name. Admiralty . . Mr. Bax-Ironside Sir 0. MacDonald . . To Sir C, MacDonald To Sir F. Lasrelles Admiralty To Sir N. O'Co Sir C. MacDonald .. Pelegiaphic Telegraphic felegraphic felegraphic Date. 100 !1 !' 10] J' ') 102 To Sir E. Sato Sir C. MacDonald 104 JJ )7 J 05 JJ )» 106 J) 71 107 'lo Mr. Kato Sir C. MacDonald . . Sir K O'Conor Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic May 12, 1898 12, IS, 13, 13, 13, 13, 13, 14, 14, 14, 14, 14, 15, 15. 15, Mar. 30, May 16, SUBJECT. Wei-hai Wei. Xotes on harbour and defeuces Wei-Jiai Wei. Telegraphic instructions to Admiral as to taking over Shanijhae-Nanking Railway. Director in- stiucted to sign Preliminary Agreement at once Internal navigation. Regulations will be shown to him as soon as possible . Port Arthur and Talieawan. Circular issued as to foreigners' passports Lungchow-Nanning line. When was Con- cession made ? . . . . British and German railway schemes in China. Conversation with German Ambassador Wei-hai Wei. instructions to Commander-in- chief on China Station as to surveys Port Arthur and Talienwan. To protest against Itegulations as to foreigners' pass- ports German occupation of Kiao-chau. Reports establishment of Government. Arrangements as to salutes . . Her Majesty's ship '• Phoenix '' ordered to proceed to Hankow in consequence of riots. . Prince Henry's arrival. Recepiion by Prince Ching Wei-hai Wei. To consult Japanese Govern- ment as to sending British man-of-war in order that Commander may obtain advice as to governing the territory Anti-foveinn feeling at Hankow owing to transfer of collection of h-kin to Maritime Customs. Rioting at Sungpu Kuangchou Wan occupied by France Concession for railivay from Lungchow to Nanning. \\ ill make inquiries of Yamen Peking Syndicate's Concession. Will for settlement, , press Wei-hai Wei. Acknowledges receipt of No. 85. Appreciation of friendly action of Japanese Government .. •Memorial , f the Viceroy Chang and the Director- Geneial of Railways to the Throne, uroin- construction of trunk line from nortlf to south ■ " • • M. Luzzatti's mining Concession in Shansi. I amen a^k a few more days to study Reo^u- ktions belore obtaining the Emperor's ratifi- cation of the contract .. Port Arthur and Talienwan. Passport^ for foreigners. Count Mouravieff will examine question I age £0 81 82 ■ 82 82 32 82 83 84 85 85 85 85 85 86 86 80 86 86 89 90 TABLE OP CONTENTS. TU No. 11] 112 113 114 11;'. 116 117 lis 119 120 Name. 121 122 123 124 125 126 127 128 129 130 Sir C. MacDoDald .. Sir E. Salow Sir C. MacDonald Telegra|)liic Telegraphic Telegrapliic Telegraphic Telegraphic Telegraphic To Admiralty Sir E. Satow . . To Sir E. Salow To Admiralty Admiralty . . Sir C. MacDonald ,. To Sir C. MacDonald Sir N. O'Conor Sir C. MacDonald . . Sir N. O'Conor Telegraphic I'elegraphic Telegraphic Telegraphic Telegraphic Feiegraphic Telegraphic Telegraphic Telegraphic Date. May I'-', 1898 17, 17, 17, 17. 17, IS, 18, 18, 20, 20, 20, 20, 20, 21, 22, Telegraphic 22, 16, Subject. Page Rioting in Yang-tsze Valley. Report from Hankow .. ,, Evacuation of Wei-hai Wei will be finished on 23rd instant. JapFinese (jovernment sug- gest that iliitish officer should arrive before that date . . . . Wei-hai Wei. Particulars obtained from Japa- nese Government ,, .. J, Wei-hai Wei. Views of Yamen as to procedure at the taking over . . Murder of F'ench missionary in Kuang-si. French demands for compensation. Yauien have hitherto refused them .. Shanghae-Nanning Railway. Definite settle- ment of Concession .. .. Wei-hai Wei. What answer should be re- turned to Sir E. Satow as to sending British officer some days before evacuation Wei-hai Wei. Japanese Commanding Officer will be instructed to give British officer any advice he may desire Wei-hai Wei. The Admiral has instructions to send man-of-war at once Wei-hai Wei. Arrangements suggested by Chinese (lovernment for its handing over. Proposes to inform them that Convention cannot be concluded until completion of surveys Wei-hai Wei. Concur in above proposal Possible French demand for railway from Pakhoi to interior of Kuangsi. Expects final answer as to opening of Nanning Proposed Regulations for internal .naviga,tion of China. Chinese Government have asked for Sir R. Han's advice Wei-hai Wei. May' accept proposed arrange- ments for handing over. Convention cannot be concluded untij^ completion of surveys . . I Fort Arthur and Talienwan. Russian Consul at Tien-tsin instructed to withdraw Circular respecting Russian visas on passports Port Arthur and Talienwan. Asks instructions as to his action respecting Circular enforcing Russian fz'sas. . .. .. Murder of French missionary. French de- mands . . ... Peking Syndicate's Concession tigned 21st May Passports for Port Arthur and Talienwan., Russian Charg6 d'Affaires states in Circular that he is issuing Regulation under instruc- tions from his Government .. ..; Passports for Port Arthur and Talienwan. Has: called Count MouraVieff's attention to matter. TIU TABLE OF CONTENTS. No. 131 132 133 134 135 136 137 138 139 140 1 141 142 143 144 115 Name. Admiralty , . Sir C. MacDonald . . To Sir C. MacDonald Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Date. To Admiralty Sir C. MacDonald . , ») 5» •' To Sir C. MacDonald Admiralty .. Sir C. MacDonald .. To Colonial Office . . To Sir C. MacDonald 146 14/ Sir C. MacDonald Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic May 24, 1838 24, 24, 24, 24, 25, 25, 25, 26, 26, 26. 27, 27. 27, 27, 28, •Apr. 11, Subject. Pa ire Wei-hai Wei. Telegram from Commander-in- chief reporting hasting of British flag Wei-hai Wei. Acknowledges inRtructions as to amount of territory and terms of lease. Stipulations desired by Chinese Govern- ment ., .. .. Prince Henry will present the Emperor with the Order of the Black Eagle from the German Emperor Liu Kungtao and Wei-hai Wei occupied jointly by British and Chinese troops Report m " Times " th^Jt French and Belgian Ministers are negotiating for line from Peking to the Yang-tsze via Hankow. To report facts , . Wei-hai Wei. Instructions as to terms of lease. Chinese vessels will be given liberal hospi- tality Pakhoi-Nanning Railway. Observations. If the Concession is granted, the opportunitv seems favourable for insisting on opening of Nanning Wei-hai Wei. Asks views on assurances de- sireit by Chinese as to use of port by their men-of-war and drill-ground for their sailors Peking-Hankow Railway. Open support by Kussian and French a new factor in the case Hong Kong extension. Yamen have agreed to accept revised boundary. Details as to western and northern boundaries . . He should press for railway from Hankow or Kiukiang to Canton . . Wei-hai Wei. Observations on Chinese pro- posals Wei-hai Wei. Suggestions as to amount of territory to be included Hong Kcng extension. Inquires what as- surances can be given to Chinese Goven.- ment as to measures for prevention of smuo-- slinir . . ° .Mr. Litton's Report on journev in Northern Ssuchuan. As-ks observations on his su No. Name. Date. Subject. Page 148 Sir C. MacDonald . . •• Apr. 16, 1898 Note frora Yatnen announcing opening of Wu- sung as a Treaty port . . 101 149 >» n •• • ■ 15, Note from "Vanien desiring revision of Tariff . . 101 150 S> )) • • • • 15, Affairs in Hainan. Despatch from Her Ma- jesty's Consul at Kiungchow 102 151 !) » •• ■ • lo, French demands. Interviews with Yamen .. 102 152 » » 1 • •• 15, Peking Syndicate's Concession in Shansi. Negotiations with Yamen .. .. 104 153 )) )» • • « • 16. Inland navigation. Transmits draft Regula- tions. Proposes to consult Iler Majesty's Consuls as to amendments 105 154 ), >» •• 16, Wei-hai Wei. Negotiations resulting in agree- ment for lease .. 106 155 17 n Telegraphic May 30, Demand of Japanese Government for separate settlement at Foochow . . no 156 j; >» Telegraphic 31, Death of Prince Kung no 157 M 9) •• Telegraphic 31, Russian military proceedings in Manchuria .. 110 158 » >! • • Telegraphic June 1, Passports for Port Arthur and Talienwan are compulsory, but need not be vise at Russian Oonsulaie no 159 To Sir C. MacDonald Telegraphic 1, Wei-hai Wei. Instructions as to territorial limits and jurisdiction .. 110 160 J) jj •-• Telegraphic 2, Passports for Port Arthur and Talienwan. Should draw attention to the fact that, under the Treaty of Tiea-tsin, passports are only required for extended journeys in the interior . . . , ,. 111 161 » » •• 2, Peking Syndicate's Shansi Concession. Ap- proves his proceedings . . 111 162 ;i )! .. 2, French demands. Approves his proceedings , 111 163 )> »i •• 2, Wei-hai Wei. Approves his proceedings in regard to demand for lease 111 164 Sir E. Satow •• Apr. 28, Japanese demand for the non-alienation of Fukien. Conversation with Mr, Komura . . 112 165 Sir C. MacDonald .. Telegraphic June 2, Peking Syndicate's Shansi Agreement. Com- municates text 112 166 SirN. O'Conor •• May 26, Passports for Port Arthur and Talienwan. Note from Count Mouravieff. Visa not to be obligatory . . : . 114 167 Sir C. MacDonald . . Telegraphic June G, Inland navigation. Regulations have been pro- mulgated witiiout di.-icussion. Has protested 115 168 To Sir C, MacDonald Telegraphic 6, Hong Kong extension. Instructions will be sent to the Hong Kong authorities as to prevention of smuggling 115 169 )5 »' Telegraphic 6, Inland navigation. Approves his protest against Regulations 115 170 Sir C. MacDonald .. Telegraphic 8, Siiasliih riots. List of .Fapanese demands 116 171 jj )> •• Telegraphic 8, Wci-hiii Wei. Terms of Convention practically agreed to by Chinese! Government. Asks instructions as to pressing for right to erect forts cast of 121° 40' .. lie [253] TABLE or CONTENTS. No. 172 173 174 175 176 177 Name. 178 179 180 181 182 183 184 185 186 187 188 Tsung-li Yameii to Sir Loh Feng-Luli To Sir C. MacDonald Sir C. MacDonald . . To Sir C. MacDonald To Sir N. O'Coiior . Telegraphic Sir E. Monson To Sir C. MacDonald To Sir Loh Feng-Luh Sir C. MacDonald .. Telegraphic Telegraphic Telegraphic Telegraphic Date. Subject. June 8, 1898 9, Telegraphic Telegraphic To Sir C. MacDonald jTelegraphic 189 190 191 Sir C, MacDonald Telegraphic Telegraphic 8, 10, 11, 11, Apr. 25, 25, 28, 29, 29, 29, June 16, 17, Sir N. O'Conor 14, Wei-hai Wei. Question of erection of forts Wei-hai Wei. Right to erect forts. Repre- sentations made by Chinese Minister. British demands on China Page 116 116 Hong Kong extension. Convention signed ..I 117 117 Peking- Hankow Railway. Representations to j be made to Yamen . . . . . . I Passports for Port Arthurnnd Talienwan. Jn- strcctions to point out that terms of Treaty of Tien-tsin are contravened by requirement of passports for Chinese ports . . Ru&so-Chinese Agreement. He should point out to Russian Government that version pub- lished in the " Times " is inconsistent vpith assurances of Russian Government and vfith British Treaty rights , , French demands in consequence of assassina- tion of Father BerthoUet said to have been conceded. Pakhoi-^ianning Railway Hong Kong extension. Congratulations on his success Wei-hai Wei. Wording of Convention. Suggests alteration Wei-hai Wei. Wording of Convention. In- structions sent to Sir C. MacDonald Anti-missionary agitator Chou-han. Report from Her Majesty's Consul at Hankow Affairs at Canton, and the West River trade. Report from Her Majesty's Consul Seizure of oil at Fatshan. Distribution of compensation monev Control of li-kin revenue. Correspondence between Sir R. Hart and the Tsung-li Yamen Text of messages exchanged between Emperors of Russia and China Russo-Chiriese Agreement for the lease of Port Arthur and Talienwan. Translation of Chinese precis Railway Concessions granted or about to be. He should telegraph facts. Asks opinion as to the probable effect of .granting Railway Concessions to foreign Syndicates in the Yang-tsze provinces Peking-Hankow Railway. Yamen deny that negotiatmns are proceeding with Russo- Chinese Bank Account of Railway Concessions granted or bemg negotiated . . , _ Passports for Fort Arthur and Talienwan. Kepresentaiions made to Count Mouravieff, who will examine question 118 118 118 118 119 119 119 120 121 122 125 127 129 129 129 130 TABLE OP CONTENTS. XI jN"o. 192 19G 191 Xame. Sir X. O'Conor Sir C. Mac Donald 195 To Sir C. Mac-Donald 19B 197 198 199 206 201 202 203 204 205 206 207 208 209 1110 211 213 214 215 Sir (.'. .MacDonalil Sir E. S.itow Sir V. MacDoiiald .. To Sir C. MacDoiiald relea'i'jphic Telegraphic relo^rapliix; Date. June 14, 1898 20, 21, 21, To Sir iV. O'Conor . . .Sir C. MacDonal.i War Office.. .Mr. Ciosselin J) !) To Sir C. MacDonald Sir C. MacDonald . . Admiralty . . 'sir C, MacDonald .. China Association 'To Pir C. Mac-Donald Telegraphic Telegraphic Telegraphic Telegrapiiic lelegrapiiic Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic. Telegraphic telegraphic Mav CG, .]iwi 22. 23, 23. 23, 23. 2H. 25, 27, 27, 28, 29, July Subject. [253] Riisso-Ciiinese Agreement. Representations made to Count Monravieff as to Article 6. Assurances given by his Excellency Passports for Port Arthur and Talienwan. Count Mouravieff states that they cannot be dispensed with as to Port Arthur, hut will onlv be temporarily retiiiired at Tahenwan .. Accommodation for Chinese ships at Port Arthur. Language of M. Pavloff to Chinese Government Lighthouse-keepers at Lao-tie-shan, in Gulf of Pechili. Inquiry as to their reported replacement by Russians Pekinu-Hanko'A^ Railway. Yamen deny that the Rcsso-Chinese Bank is interested Wei-hai Wei. Questious in Japanese Lower House of Parliament as to Anglo-Japanese negotiations . . Lighthouse-keeper at Lao-tie-shan, States how matter stands . Port Arthur and Talienwan. Statement by M. Pavloff . . M. Pavloff has started for Talienwan to or- ganize the Administration Peking Syndicate's Honan Concession signed . . Concessions' to be obtained from Chinese Go- vernment. Observations as to the order in which they should be pressed . . Hong Kong extension. The Colonial Secretary is returning to arrange details Russo- Chinese Agreement. Approves his language .. .. .. .. Concessions to be obtained from the Chinese Government. Replies to No. 202 Wei-hai Wei. Instructions to military survey party about to be dispatched Peking-Hankow line. Contract granted to a Franco-Belgian Syndicate Peking-Hankow line. Official communique of signature of contract. . Colonel Lewis, with survey party, left for Wei- hai Wei . . . . Peking-Hankow line. Contract signed with Belgian Syndicate Wei-hai Wei Convention signed to-day State of affairs at Uankow and Shashih Internal navigation. Disturbances at Chin- kiang-pu and Yangchow Reviews state of affairs in China Inquires as to Concession Jrir Hankow-Canton w Page 131 131 102 132 132 132 13-. 13-5 1.34 135 13") 135 135 136 136 138 139 139 140 140 140 141 14o xu TABLE OP CONTENTS. No. 216 2L7 218 219 220 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 T'oame. Sir C. MacDonald Dale. May 16, 1898 23, 5J )) Sir E. Satov To Sir C. MacDonald Consul Searl Viscount Gough Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic 23, 24, 24, 27, 27, 27, 27, To Sir C. MacDonald fTelegraphic 238 To Sir E. Satow 239 Sir C. MacDonald . . 240 Telegraphic Telegraphic 2S, 28, Jnly il, 11, June 11, July 13, 16, 17, 12, 13, 18, 18, 20, 20, Subject. Visit to Chefoo to confer with Admiral Murder of French missionary in Kwangsi. Par- ticulars. French demands Probable increase of revenue of China by proper | managemenl of li-Jcin and salt taxation in SsHchuan Page 146 146 147 Decrease in transit-pass trade at Ch'nkiang. j New line of Japanese steamers on Yang-tsze I 147 Abolition of Kerosene Tax-farming Syndicate. Excellent effect on Canton officials Transit-pass trade. New Chinese rules. Despatch from Canton . . Kiao-chau. Precis of Convention for lease to Germany . . . . . . . . Shashih riots. Despatch from Hankow Peking Syndicate's Shansi mines. Regulations Hong Kong extension. Negotiations with Yamen, and draft Convention Murder of French missionary in Kwangsi. French demands practically granted. Ya- men promise opening of Nanning Passports for Port Arthur and Talienwan. Notes from M. Pavloff.. French occupation of Kwangchow Wan. Despatch from Kiungchou Hankow-Canton line. Preliminary Agreement concluded at Washington with an American Syndicate in May Insurrection in Kwangsi . , Wei-hai Wei. Has thanked Japanese Govern- ment for excellent state in which soldiers' quarters were left on transfer Observations on llailway Concessions Anxiety as to Peking-Hankow, Shanghae- JSanking, and Peking-Chingkiang lines. Un- conditional offer tcir latter Information in regard to Kwangsi rebellion I Shantung. Further commercial and industrial I Concessions secured by Germany. . j German press on development of Kiao-chau I Peking-Hankow line. Desires full information j from Chinese Government Wei-hai Wei. To express thanks tc Jananese Government . . , , * Present state of Sbanghae-Nanking. Peking- Chinkiang, Peking-Hankow Concessions .. Internal navigation. Protection promised bv Taotai. Disturbances at Chinkiang . . 148 149 150 152 153 156 159 160 161 163 163 163 164 164 165 165 166 167 167 168 168 TABLK OF CONTENTS. XIU Xo. 241 24-2 243 244 2-15 246 247 248 249 230 251 2o2 254 255 256 257 258 25 D 260 261 262 263 Name. To Sir C .VlacDonald Telegraphic Telegraphic Date. Julv 21, 1,-98 Sir C. MacDonalil ..Telegraphic I Telegraphic )» .» Viscount Gouch Sir C. MacDonald » j; )) >i Telegraphic Telegraphic Telegraphic Telegraphic ., |Telegraphic 'l"o Sir C. MacDonald Sir C. MacDonald .. To Sir C. MacDonald Sir C. MacDonald . . )» >> To Sir C. MacDonald Sir C. MacDonald , . » »» Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic •i3, 23, June 9, 10, 10, July 21, 25, Telegraphic Telegraphic 25, 27, 29, 30, 30, Aug. 1, June 11, Aug. a, 6, 6, Subject. Page Hong Kong extension. Approves his pro- ceedings Internal navigation. Kow dr)es question of Rej,'ulalions stand ? .. .. .. 168 Great Britain will support China against aiigression of any power on account of Con- cessions to British subjects .. .. 169 Peking-Chingkiang Railway. Will lay unson- ditional otl'er before Yanien. German offer for loan . . . . . . . . 160 Observations on Concessions obtained bv Great Britain. Replies to No. 232 .. ' ..169 Internal navigation. Chinese Government have agreed to amend Regulations. They will soon be promulgated .. .. ,.169 Kwangs! rebels defeated .. .. ., 170 Passports for Port Arthur and Talienwan. Note from Russian Charge d'Affaires .. 170 Hong Kong extension. Convention signed 9th June. .. .. .. .« 171 Report on affairs in Samshui .. .. 171 Kiao-chau to be a free port, but announcement to be dei'ci red .. ., ..172 Thanks of Chinese Government for promise of support ,. .. .. ..17c Peking-Hankow line. Chinese Government will communicate terras of Contract granted to Belgian Syndicate .. .. ..173 Hong Kong-Canton line. Messrs. Jardine, Matheson, and Oo.'s Syndicate have applied for Concession. Action of French Minister 173 Gpeninc; of Nanning. Can statement be made before Parliament rises? .. ..173 Opening of Nanning. Reply of Chinese Government . .. .. .. 173 Internal navigation. Is provisionally ac- cepting amended Regulations promulgated .. 174 Peking-Hankow line. Has Russo-Chinese Bank acquired rights from Belgian Syndi- cate ? .. .. .. ..174 Peking-Hankow line. No confirmation of above suggestion .. .. .. 174 Internal navigation. Regulations issued without alterations suggested by him. Memorandum of his proposed changes . . . . 174 Internal navigation. Approves his proceedings in regard to Regulations . ., -.178 Opening of Nanning. Chinese Government state it will take place when Kwangsi rebellion is crushed . . , , . , 178 Peking-Hankow line. Has protested against published Agreement, which Xamen state is unauthorized ,., . . . . . . 176 XIV TABLE OF CONTENTS. Xo. 264 265 2 (is •i67 268 2tl9 270 27". --'72 273 C 71 275 276 277 278 279 280 2S1 2t!2 283 iNu!i;e. Hir C. MacDoiiald TeleiTi'iiiillic ['elegraphic Mr. Balfoiii- to Sir C. MacDo;iiild Sir C. MacDoiuia ., Tclcgiaphic Telegrapliic 'TeliJ : 28'5 Sir E. Monson ■■ ! Telefiraphic 2S6 . Mr. Balfour to Sir C. I'elejrraphic C, , ^ MacDonald 2^1 Sii-C. ^h'-•DnLl ^M ' rflesraniilr Date. A.lL^ 6. 1898 June IS, IP, 20. 2:?, 24, 2), 2-1, 24, Aug 12, J.;!, 13, I"', i.:i, 15, 15, 17, SonjiXT. Fakhoi-Nanning litir. The Yameii deny that anv Agreement has been signed giving t.lie Concession to Franco Exploitation of Central China. Expeditions organized by civil Sytidicate in Tonquin Reforms in Chiii.i. lOjcrees (or improving biireaucrpcy, &c. . . lieforms in China. Decree for advancement of commerce and extension of intercourse with ibreign nations Dismissal of Weng T'ung-lio. Sends Decree, with observations Shasliih riot. Despatch from Hankow Siiashili rio; Steps taken by Ciiinese autho- rities. Despatcli from Shashih . . Peking-Hankow Railway, Iteply nf Chinese (iovernment to inquiries Hong Korg extension. Correspondence with Yamen in regard to assistance to be given t" Chinese Customs authorities Additional Russo-Chinese Agreement. Trans- mits text Internal navin-ation. Negotiations with Vamcn as to Regulations irrnch demands still under discussion. VV'arn- ing to Chinese Governiiien!. as to preferential {{eporls changes in higli Chinese posts Inquiry as to Kiangkan-Hairgchow Railway .. Peking-Hankow Railway. Ratification of Con- cession. Proposes alternative sets of Con- cessions to be demanded as compensation . . Occupation of K\vangcho.v forts by the French Hangchow-Kiangkan Railway. Has referred to Hangchow for information Hangchow-Kiangkan Railway. Reports facts known ,.; Regulations for internal navigation. Approves proposed procedure Hong Kong extension. Approves note to Yamen in regard to assistance to he given to Chinese Customs authorities . . French demands in conseqtience of murder of Father BerthoUet. Approves his action Occupation of Kwang-chow. Explanations bv !VF. Delcasse . . ■ • - • • , , Peking^Hankow Railway. Instructions as to ultimatum to Chinese "Government British demands,^ Will act as instrncted. Ob- servgtions as to Tifntsin-Chinkiang Rail- 1 at'c 17b 178 179 ISO 181 IS2 1S3 ISo 186 I 187 I'.S IS!) 189 i89' 181) 190 191 191 191 191 191 192 192 192 TABLE or CONTENTS. XV No. Name. Date. Subject, Pagf 288 ' J=ir C. MacDonald .. Teleprraphic Aug. 20, 1898 Purchase by British subjecis rf land neu- pro- iecled teiminus of Russian Railway at NeA-- chwang. Action taken by Chinese Govern- ment at instance of Russo-Chinese Bank. Will make representations to Yamen 192 289 ,. ., Telegraphic ... British demands. .Account of interview with Yamcn 193 I'SO : )) 5 lelegraphic 21, Land purchased by British subjects at JSTew- chwang. The Taotai will be ordered to seiil the deeds ■ 193 sni 11 » . • June 25, Peking Syndicate's Hunan Concessions. Regu- lations agreed on between Syndicate ;iiid Yilfeng Company 1 ' 193 292 .1 ■! •• .. 25, Wei-hai Wei. Proceedings at taking over .. 196 293 !> )) •• '• 25, Wei-hai Wei. Text of draft Convention. Cor- respondence with Yamen as to use of the harbour by Chinese ships 198 294 „ >. •• • • July 4, Hcng Kong extension. Letter from Sir R, Hart in regard to assistance to Chinese Customs authorities 201 295 )1 n •• « 1 8, Memorandum showing railway and mining con- cessions granted by Chinese Government or being negotiated. Scheme by Mr. Pritchard Morgan for Chinese mining administration, , 201 •196 ,- •> •• • • 9, French Railway enterprises on the Tonquin frontier. Extract from Memorandum by Her Majesty's Consul at Pakhoi . . 203 297 :' 5J •• « • 9, Reforms in China. Substance of Imperial Decrees ... ' . . 20C 298 Intelligence Division., • • Aug. 23, Rebellion in Kwangsi. Report by officer in command of Her Majesty's ship " Tweed " . . 207 299 Mr. Balfour to Sir C. MacDonald Telegi aphic 24, French at Shanghae. Ningpo Joss-house difficulty. French reported to be about to withdraw then- Ciaims in return for an ex- tension of their Concession at Si-ca Wei 20S 300 ;» n - ■ Telegraphic 24, If the British demands are not immediately "complied with, the concession of a further railway \Vill be required '20t 301 Sir C. MacDonald .. Telegraphic 25, Tien-tsiu-Chinkiang Railway. Contract for loan signed with Anglo- American Syndicate by Yung Wing SOS 302 Mr. Balfour to Sir C. MacDonald •• 26, Wei-hai Wei negotiations. Approves proceed- ings 20C 303 Sir C. MacDonald .. Telegraphic 28, Diieclor of Southern Railways ready to con- clude contracts with Jardine's Syndicate for all lines for which tliey were in treaty with him. His suggestions as to lines in Honan and Shansi . . 20£ 304 Mr. Balfour to Sir C. MacDonald Telegraphic 29, Inquires whether terms promised by Director of Southern Railways are the same as those aiven to concessionnaires of Peking-Hankow line 2G£ 305 1 Sir C. MacDonald .. Telegraphic ' 29, Tien - tsin - Chinkiang Railway. German Minister instructed to come to an under- standing with him. Asks instructions as to German rights in Shantung. Suggests arrangement . . 21C XVI TABLE OF CONTENTS. No. 306 307 308 309 310 311 312 313 814 315 316 317 318 319 320 321 322 Name 324 32 > Mr. Balfour to Sir C. MacDonaW Mr. Balfour to Sir F. Lascelies Consul Mansfield Acting Consul-General Brenan Mr, Balfour to Sir C, MacDonald Sir C. MicDonald .. Hong Kong and irihanghae Banking Corporation Sir C. MacDonald . . Telegraphic Date. SUUJECT. Auff. 80, 1898 3", Telegraphic Telegraphic July ■22, China Association ., To Sir C. MacDonald Sir C. MacDonald . . Sir F. Lascelies Telegraphic Telegraphic Sept. 2, a, 4, 323 8:r C. MacDonald . . »> » To Sir C. rilacDjnald Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic .July 20, 22, 23, 23, Sept. 5, 7, «, 14, 15, 17, Tien-tsin-Chinkiang Railway. Suggests joint construction by British and German Syndi- cates. No great objection to Shantung por- tion being constructed by Gennan capital .. British and German railway enterprise in China. Conversation with German Ambas- sador Insurrection in Kwangsi. Arrival of 5,000 troops. Rebellion not yet at an end Kiots in French Settlement at Shanghae. Copy of despatch to Her Majesty's Minister at I'eking Tien - t.sin - Chinkiang Railway. Agreement signed by German Banks and Jardine Syndicate. To apply for Concession jointly with German Minister, if not included in ultimatum Opening of Tsinlau, in German Kiao-chau Minutes of meetings between them and repre- sentative cf German Syndicate Instructions issued for opening of Yochow in March Ratification of Peking - Hankow Railway • Agreement. Yanien to apologize and consent to construction by British Syndicates of lines demanded Observations on insurrection in Kwangsi Wei-hai Wei. Corres)iondence with Vice- Admiral Seymour on provisional adminis- tration • • - . Report from Her Majesty's Acting Consul at Chinkiang respecting survey for Shanghae- Nanking Railway ana Companies formed for inland steam navigation . Page 210 211 211 212 Report on affairs at Canton \iews and correspondence respecting the exten- sion of the French Settlement at Shanghae British demands. Concessions promised to British Syndicates. Settlement satisfactory if Yamen keep their word . . . , Li Hung-chang relieved from his duties bv Imperial Decree ■■ * ■ • . • Kiao-chau declared a free port on the 2nd instant British demands. Note received from Yamen apologizing and consenting to Concessions demanded . . Bi-Rish demands. Despatch received 'from Yamen admitting right of Peking Svndicate to build line from Siang Yang . ' Extension of French Settlement at Shanohae Objections to inclusion of British prop"erty Preferable to give extension at Pootung io shanghae Municioal Council 213 213 214 215 215 216 216 218 218 220 240 240 f40 240 241 2-Jl TABLE OP CONTENTS. XVll No. Na 326 327 328 329 330 331 332 333 334 335 336 337 338 339 340 341 342 343 344 845 346 Sir C. MacDonald » )» '» s? » » !> '> » S> To Sir C. MacDonald Sir C. MacDouald Acting: Consul-Greneral Brenan Sir C. MacDonald . . To Sir C. MacDonald Sir C. MacDonald .. Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Date. July 30, 1898 31, Aug. 1, 3, 4, s> >> ?) J5 9) J) Telegraphic Telegraphic Telegraphic 7, 7, Sept. 19, 22, 23, 24, 28, 28, £0, 20, Oct. ], 1, Ang. 15, Subject. Newchwang trade. Representation by princi- pal residents as to its threatened position should the Imperial Chinese Railway not reach it . . . . . . Mr. Litton's Eeport on journey in North Ssuchuan. Observations on his suggestions in regard to river communications, &c. Internal navigation. Amended Rules sent by Yamen to Superintendents of Trade Disturbances in Kiangsu on opening of internal navigation. Has pressed Yamen to do iheir utmost to suppress opposition Anti-foreign propaganda in Central Ssuchuan. Note to Yamen drawing their attention to serious state of things . . Insurrection in Kwangsi. Despatches from Her Majesty's Consuls at Wuchow and Canton Transmits revised Regulations governing trade on the Yang-tsze Japanese Concession at Hankow. Despatch from Her Majesty's Consul Riot in French Concession at Shanghae. Despatches from Her Majesty's Acting Consul-General at Shanghae Railway Concessions obtained for British Syndicates. Congratulates him on result , . Imperial Edict issued rendering Emperor's control of Government subject to Dowager Empress's advice Palace revolution at Peking. Death of Emperor French Mission at Hochou sacked .. ,. I Coup d'JlStat at Peking. Decree issued can- celling recent measures and reform. Chang Yin-huan in prison Revised Regulations govering trade on Yang- tsze. Approves his action Anti-foreign propaganda in Central Ssuchuan. Approves his representation to Yamen Concessions to Peking Syndicate in Honan and Shansi. Bad impression caused by fact that operations have not yet been begun Covp d'lStat. Chang Yin-huan banished. Kang Yu-wei has fled to Hong Kong Assault on Europeans at Peking. Has asked Admiral to send vessel to Taku in case a guard should be required . . Foreign Representatives have decided to send for guard to protect Legations. Has asked for twenty-five mariues Shashih riot. Despatch from Her Majesty's Consul at Hankow reporting arrangements come to. Yamen promise that Yochcu will soon be opened fP.lf e 241 214 246 246 249 250 252 254 255 2o6- 256 256 257 257 257 257 258 258 258 2J8 259 [253] xvm TABLE OF CONTENTS. Ko. S47 348 349 350 351 352 353 354 355 356 357 358 353 360 361 362 363 364 365 366 . 367' ?6S Na Sir C.Mac Donald To Sir C. MacDonald Sir C. MacDonald .. To Sir C. MacDonald Sir E. Satow Sir C. MacDonald . . To Sir C. MacDonald Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Date. C. MacDonald .. Telegraph To Sir C. MacDonald Sir C. MacDonald ?1 )5 jj 3e To Sir C. MacDonald Sir C. Scott Viscount Gouifh Sir C MacDonald Telegraphic Telegraphic relegraphic Telegraphic Aug. 19, 1898 Oct. 5, 5, 6, 8, 9, n, 11, 12. 13, 15. 16, Aug. 22, 26. 26, Sept 2, Oct. 18, 21, 12, 21, Sept. 13, Subject. Peking-Hankow Railway. Interviews and correspondence with Yannen Legation guards. Foreign Representatives have decided to ask Chinese Government for facilities for their transport to Peking Legation guards. Chinese Minister asked that instructions might be given not to bring British sailors to Peking Legation guards. Responsibility rests with whole Diplomatic Corps Peking-Hankow Railway. Approves his pro- ceedings Chinese coup d'Etat. Japanese ships at Tien- isin •• ■• •• •• ■• Coup d'Etat. F'rogressive Edicts cancelled . . Is there any objection to War Office sending out an officer to recruit Chinese battalion at Wei-hai Wei ? , , Legation guards. Representations made by Chinese Minister .. .. Chinese battalion for Wei-hai Wei. Sees no objection to recruiting ., ,, Legation guards. Representations by Chinese Minister Health of Emperor. Reassuring statements by Prince Oiling. Has suggested examination by foreign doctor French Settlement at Shanghae. Transmits Memorandum on its legal status. Question of the registration of Mr. Hanbiiry's land . . Shashih riot. Decree issued as to punishment, compensation, &c. Proposed appearance of Emperor and Empress Dowager in public Abolition of certain official posts. Decree issued .. Emperor will be examined by the doctor of the Irench Legation Shashih riots. Satisfaction at the settlement of the matter Situation in China. Conversation with Count l^amsdorff Kiao - chau. Statement in the " Cologne Gazette " that no duties will be levied Attack on Europeans near Peking. Objections to presence of Kansu soldiers. Proposed action . . ! . . Tien - tsin - Chinkiang Railway. Copies of British and German notes to Yanien ap- plying for grant to the Anglo-German Syndicate Page 260 264 264 265 266 263 26,5 266 266 266 266 267 267 269 270 2^0 270 271 271 271 272 272 TABLE OP CONTJ]NrS. XIX No. 369 370 37] 372 373 374 375 376 377 378 379 350 381 38-2 383 384 385 386 387 388 389 Name, Date. Subject. i^a^o Sir C. MacDonald ,. 1 Sept. J 4, 1898, Land bought by British subjects at New- chwang. Reports from Her Majesty's Consul. ' Deeds have been stamped 973 j» » • ■ le, French Settlement at Shanghae. Reports from Her Majesty'.s Consul - General at Shanghae. Has protested against concession of British-owned land to France .. 275 SJ >» • • • « 17, Reforms in Chinese Administration. Effect ut Imperial Decrees 277 >» ?J •• Telegraphic Oct. 29, Kansu troops. Foreign Representatives biwe addressed a note to Yanicu demanding their withdrawal .. 278 55 )» • ■ Telegraphic '29. Result of examination of Emperor by French physician 278 To Sir C. MacDonald •• Nov. 4, French Settlement at Shanghae. .Ipprovts language 279 S) 9 J •• 4, Purchase of land by British subjects at New- chwang. Approves his proceedings 279 Sir C. MacDonald .. Telegraphic 6, Kansu troops. Nothing done yet as to re- moval. Proposed further action by foreign Representatives 279 Sir E. Satow •• Oct. 4, Reported intention of Marquis Ito to make a voyage up the Yang-tsze 279 To Sir C. MacDonald Telegraphic Nov. 9, Tien-tsin-Chinkiang Railway. He should concert witii his German colleague with a view to supporting English and German Banks 279 Colonial Office • t 1 n, Escape of Kang Yu-wei. Despatch from Hong Kong Government giving particulars 28a Liverpool Chamber of Commei'ce .. 11, Resolutions passed in icgard to China 280 London Chamber of Commerce • * 11, Hong Kons extension. Objections to pro- posed arrangements .. ,, 282 Sir C. MacDonald . . • • Sept. 21, Hong Kong extension. Proposal of Governor- General of Canton to make Regulations. Note to Yam en .. '.. 283 n n •• •- 21, Peking-Hankow Railway Agreement. Com- munications with Yamen 285 » J) • • 1 • 26, Exteiision of French Settlement at Shanghae. Transmits correspondence with French Minister 289 J) >7 • • • • 28, Reports changes in personnel of Yamen 290 >J ?J • • — • • 28, Coup d'lStat. Edict inviting Empress Dovvagei- to advise in government. Flight of Kan^- Yu-wei. Anti-reform character of pro- ceedings. Further Edicts . . . . . 291 »> )! -• 30, Conp cPEtat. Execution of six reformers. BanishniEnt of Chang Yin-hnan . . 294 ^> , 79 Telegraphic Nov. 14, Li Hung-chang ordered to Shantung to report on means for controlling Yellow River. Hsu and Hu Yu fen appointed Members of Yamen . . . . 294 China Association • ■ 14, Hong Kong extension Discusses question of retention of Chinese jurisdiction in Kowloou and demands of Customs authorities 293 [253] c 2 ix TABLE OP CONTENTS. No. Name. Date. Subject. Page 390 To Sir C. MacDonald •• Nov. 16, 1898 Floods in Yellow River Valley. Chinese Minister's request for assistance in obtaining services of English engineers 299 S91 »? )> " • •• 16, Chinese Minister inquired if report that 10,000 troops were to be sent to Wei-hai- Wei was true. Iteply given 299 392 Sir C. MacDonald . . Telegraphic 20, Kansu troops ordered to northern frontier of Chihli 300 393 n 55 •• Telegraphic 20, Reported murder of Fleming, British mis- sionary 300 394 A Jmiralty . . • • 18, Coup d'lStat. Letter from Commander-in- chief respecting movements of Her Majesty's ships 300 895 To Sir C. MacDonald •• 23, Extension of French Settlement at Shanghae. Approves his note to French Minister 301 396 " » -• •• 23, Coup d-J&tat. Approves representation to Li Hung-chang respecting Chang Yin-huan . . 302 397 " 7) •• •• 23, Peking - Hankow Railway. Approves pro- ceedings respecting compensation to be obtained from Yamen , . 302 398 To China Association •• 23, Hong Kong extension. Their suggestions will be borne in mind 302 899 Sir C. MacDonald ,. •• Oct. 11, Attack on Europeans at Peking. Action of foreign Representatives respecting summon- ing of guards for Legations . ^ 302 400 ?) j; •• • " 12, Legation guards. Statement of Yamen that he instigated step. Note from doyen stating that it was unanimous wish of Diplomatic Body 304 401 )> )j ' " • • 13, Reports progress of anti-reform jnovement. Precarious position of Emperor . . 306 402 Sir P. Currie .. Telegraphic Nov. 28, Legation guards. Chinese Minister urges their withdrawal before closing of naviga- tion.. 310 403 To India Office • • 28, Floods in Yellow River Valley. Inquires whether there would be any objection to asking Indian Government for loan of engineers .. 310 404 Sir C. MacDonald . . Telegraphic Dec. 2, Preliminary Agreement for working mines of Ssuchuan signed with Mr. Pritchard Morgan 310 405 7) »' Telegraphic 2, Legation guards. Yamfen have never asked for their withdrawal 310 406 To Sir C. MacDonald Telegraphic 2, Legation guards. Question of withdrawal is one for foreign Representatives to decide . . 311 407 )i » Telefiraphic 3, E.'itension of French Settlement at Shanghae. Informs of protest of China Association. Asks for Report 311 40S Sir E. Satow Telegraphic 3, Arrangement between Chinese and Japanese Governments that if another foreign Settle- ment is established at Shashih it shall be lower down the river than the Japanese Settlement 311 409 Sir C. MacDonald .. Telegraphic 5, Extension of French Settlement at Shanghae. Apprehensions of Shanghae branch of China Association. French Minister states no Concession at Pootung has been demanded 311 TABLE OP CONTENTS. XXI Ns. 410 411 412 413 414 415 416 417 418 419 420 421 422 423 424 , 425 426 427 428 Name. Sir C. MacDonald .. To Sir C. MacDonald China Association . . To Sir C. MacDonald Telegraphic Telegraphic Date. Dec. 5, 1898 6, Sir C. MacDonald .. Telegraphic Telegraphic Telegraphic Telegraphic 6, 7, Mr. Cameron To Sir C. MacDonald Si- C. MacDonald To Sir C. MacDonald Sir C. MacDonald Telegraphic Telegraphic Telegraphic 9, IJ, 11, Oct. 18, 28, 28, 29, Dec. 13, 14, 14, 15, 15, IS. Subject. Page Extension of French Settlement at Shanghae. Instructions from French Minister to French Consul-General at Shanghae in regard to British property Chino-Japanese Agreement as to Settlement at Shashih. Objection to proposal. Shashih un- likely to succeed as centre of active trade . . Attack on foreigners at Peking. Approves his action Survey of Upper Yang-tsze. Memorandum on (luestion Transmits Legation guard. Approves action with regard to informing Yamen that step was due to unanimous wish of foreign Representatives.. Foreign Settlements at Shashi tions Observa- French Settlement at Shanghae. To urge refusal of extension, and ofrer of addition to International Settlement instead .. Foreign Settlements at Shashih. There is no British Concession. Settlement near canal would be of no value . . British Concession at l^Tewchwang. Extension granted . . . . , . Shashih riots. Payment of indemnity by Chinese authorities British Concession at Hankow. Provisional Agreement for lease of extension entered into by Her Majesty's Consul and the Taotai . . , , , , Assault on Europeans at Lukou-chiao by Kansu soldiers. Punishment of offenders and with- drawal of troops demanded Assault on Europeans at Lukou-chiao by Kansu soldiers. Action of foreign Representa- tives. Yamen state troops will be removed. . Railways in China : Agreement between British and Chinese Corporation and American China Development Company Control of Yellow River. Suggestion m.ade to Chinese Minister that Chinese Government might like to consult engineer of Peking Syndicate going to China Marines at Peking : Chinese Minister has renewed request for removal. Informed that decision is left to Her Majesty's Minister Reception of wives of foreign Representatives by Dowager- Empress .. ,, Wei-hai Wei battalion. Major Bower instructed to enlist men at Shanghae and Wei-hai Wei China railways. Officially informed no more proposals can be entertained by Chinese Government. Negotiations with Hong Kono- and Shanghae Bank and Deutsch-Asiatische Bank for construction of Tien-tsin-Chinkiang line,. 312 312 312 312 316 316 316 317 317 317 318 321 322 325 326 327 327 327 .•J27 U^ xxu TABLE OF CONTENTS. No. 429 430 v7431 432 43? Name. Sir C. MacDonald To Sir C. MacDonaid Telegraphic Telegraphic Telegraphic Date. Dec. 19, 1898, 19, 20, 434 435 436 43/ 438 439 To Sir Loh Feng-Luh To Sir C. MacDonald To Admiralty To Sir C. MacDonald Telegraphic 2C; Telegraphic 20, 20, 21. 21, 21, 23, Sir C. MacDonald .. Telegraphic 440 To Sir C. MacDonald Telegraphic 441 442 143 444 445 446 447 Sir C. .MacDonald 23, 24, Nov. 10, 12, Telegraphic , |Telegraphic Telegraphic Acting Consul-Geueral 15renan Dec. 26, 26, 26, Nor. 21, Subject. Opening of Nanning. , Ohiiiese Goverament gtate Province of Kwangsi still too'disturbed French extension at Shanghae. Has persuaded Chinese Government to delay agreeing to iFrench demands Murder of Mr. Fleming. Mr. Litton has gone to Kueiyang to inquire into case . . ^ China Railways. Replies to No. 428. Her Majesty's (Grovernment claim priority of ronsideration of British applications already maae if present decision of Chinese Govern- ment is revoked French extension at Shanghae. Her Majesty's Government cannot negotiate with France as to British-owned land. Could Chinese Government expropriat« Ningpo Guild and hand over cemetery to France ? . . Control of Yellow River. India Office wish for particulars of service before selecting engineers desired Assault on Europeans by Chinese soldiers at Lukou-chiao. Protest to Yamen approved.. British trade in Ssuchuan. Proposal that naval officer should survey Yang - tsze above Ichang French extension at Shanghae. Suggests another ship of war should be sent to Nanking to afford moral support to Vicerov Page 327 328 328 328 British trade in Ssuchuan. No. 436 Sends copy of French extension at Shanghae. Chinese Go- vernment decline to expropriate Guild. They offer alternative proposals, and inquire whether Her -Majesty's Government will give effective support French extension at Shanghae. Extension of International Settlement would five French all they require commercially. Her .Majesty's Governipent would support China materially in refusing to hand over British property to be administered by the French , . Chfinges in' personnel of Tsung-li Yamen Attack on JMr. Campbell at Lukou-chiao. Punishment of ringleaders. Has insisted on punishment of officer in command I Demand of Diplomatic Body for removal of Kansu troops from Province of Pechili. Correspondence with Yamen Extension of French Settlement at Shanghae. Views of Her Majesty's Acting Oonsul- General Extension of French Settlement at Shanghae. Instructions received repeated to Her Ma- ^stj's Acting Consul-General .. Anti-foreign riot at Ichou. . Copy of Hankow-Canton Railway Contract .. 328 329 329 329 330 330 331 331 33i 332 332 336 336 336 336 I'JiLBIiE or CONTENTS. xxm No. Name. 448 Tsung--]i Yamgii to Sir Loh Fens:-Luh To Sir C. M^cDonald 449 450 ; 451 1 Sir C. MacDonald .1 452 • Acting Consul-General Brenan 453 I Sir C. MacDonald .. '1 454 ' To Sir C. IVfacDonald I 4:5 J Sir C. MacDonald . . 456 I London Chamber of ! Commerce 457 458 459 460 461 462 China Association To Sir C. MacDonald Sir C. iVIacDonald to Lord 0. J5eresford Sir C. MacDonald . . J5 3» 463 To China Association 464 To London Chamber of Commerce 4G5 To Sir C. MacDonald 466 Telegfep'hiS Telegraphic Date. Dec. 25, 1898 291 29) TeTegraphlc Jan.' 2; 1899 Telfgraphic 3, Telegraphic j 3, Telegraphic 3, Telegraphic 5, • • 4, Telegraphic 7, Nov. 23, 1898 16, 26, 26, Jan. 12, 1899 12, 13, Sir C. MacDonald Telegraphic 14, SUBlTEOT. Extension' of French Settlement at Shanghae. Request that matter may be settled between Great Britain and France direct . . Extension of French Settlement at Shanghae. Reply to request of Tamen Assault on foreigners near Peking. Approves his action Extension of French Settlement at Shanghae. New proposal of Chinese Government. Asks for instructions ., Extension of French Settlement at Shanghae. Objections to merelj' excluding British-owned land . . . . . . . . Shashsih foreign , Settlement. Agreement between Ciiina and Japan. Proposed action Extension of French Settlement at Shanghae. Reasons for declining proposals of Chinese Government. Admiral should be asked to send another ship Extension of French Settlement at Shanghae. Protest of United States' Minister Situation in China. Views of the East India and China Trade Section Views in regard to extension of French Settle- ment at Shanghae Shashih foreign Settlements. Concurs in his views . , , Summary of British and non-British Con- cessions granted by China Li-kin at Foochow. Account of detention by Chinese authorities of Messrs. Odell's goods. Satisfactory settlement . . Appointment of Li Hung-chang as Inspector of Yellow River. Appointments of other officials Kansu troops. Further correspondence between the doyen of the Diplomatic Corps and the Yam^n. No i'urther action necessary Extension of French .Settlement at Shanghae. Warning has been addressed to Chinese G-overnment as to the inclusion of British- owned land . . British action in China. Matters referred to in No. 456 will receive the attention of Her Majesty's Government . . Hankow. Foreign-owned land on the extension of British Concession. Her Majesty's Government have no objection to the grant of a perpetual lease on certain conditions. Approves proceedings of Her Majesty's Consul Murder of Mr. Fleming. Neglect of local authorities to punish Headman of village. Will make representations , . . , SXIV TABLE OP CONTENTS. No. Name. Dale. Subject. Page 467 To Sir C. MacDonald Telegraphic Jan. 17, 1899 General Settlement of Chefoo. He sho'ild apply for a grant with his colleagues, and explain to German Minister 355 46% 55 :» • ■ •• 19, Detention of Messrs. Odell's goods at Foo- chow. Approves his action 355 469 Sir C. MacDonald .. . . Dec. 3, 1098 Newchwang. Resolutions passed by British residents 355 470 >» j» Telegraphic Jan. 30, 1899 Attempted capture of Mr. Parsons, a mis- sionary, near Chungking 359 471 ') j; Telegraphic Feb. 2, Murder of Mr. Fleming. Compensation to be given 360 472 )' )» • • Telegraphic 3, Nanning declared open 360 473 To Sir C. MacDonald Telegraphic 3, Congratulations on opening of Nanning 360 Correspondence respecting the Affairs of China. No. 1. Sir N. 0' Conor to the Marquess of Salisbury. — (Received April I.) My Lord, St. Petersburgh, March 29, 1898. WITH reference to my telegram of this day's date,* transmitting' to your Lordship the text of the paraphrase of a telegram from the Russian Minister for Foreign Affairs to the Russian Representatives abroad, instructing them to announce to the Governments to which they are accredited that Port Arthur and Talienwan, as well as the adjoining territory, have been ceded by the Chinese Government for the use of Russia, 1 have now the honour to inclose translation of the official communication that likewise appeared to-day in the " Official Messenger." The official communication says that the poits and the corresponding territory and waters have been ceded to the Imperial Russian Grovernment for a term of twenty-five years, which may be still further prolonged by mutual agreement, and it states that the Agreement allows of the construction of branches of railways to connect the ports with the main Great Siberian Railway. i have, &c. (Signed) N. R. O'CONOR. Inclosure in No. 1 . Extract from the " Official Messenger " of the Vjth {29lh) March, 1898. Official Communication. (Translation.) AT Peking on the 15th (27th) March a special Agreement was signed by the Plenipoteistiaries of Russia and China, by virtue of which Ports Arthur and Talienwan, with the corresponding territory and waters, have been ceded to the Imperial Government for twenty-five years — which period, by mutual agreement, may be still further prolonged — and the construction allowed of branches of railways in order to connect these ports with the main Great Siberian line. This Agreement is a direct and natural outcome of the friendly relations between great neighbouring Empires, all of whose endeavours should be directed towards the preservation of tranquillity along the vast extent of their neighbouring possessions for the common benefit of the people of both of them. The peaceful occupation, by the diplomatic Agreement of the 15th Marchj of the ports and territory of a friendly nation shows, in the best possible way, that the Government of China truly appreciates the meaning of the Agreement established between us. Securing the inviolability of the sovereign rights of China, and satisfying the daily requirements of Russia in her capacity of a great and neighbouring naval Power, this Agreement can in no vviay insure the interests of any other foreign * See " China No. 1 (1898)," p 59. [253] B Power; on the contrary, it gives to iiU nations of the world the possibility m the near fii'tnre of entering 'into communication with this hitherto closed-up country on the coast of the Yellow Sea. The opening to the commercial fleets of all foreign nations of the port of Talienwan creates in the Pacific Ocean a new and extended centre for the commercial and trading undertakings of those nations, espeeially by means of the Great Siberian line, henceforth to be taken into account, and which, thanks to the friendly Treaty between Russia and China, will unite the extreme ends of the Old World. • i • •« Thus, the Agreement signed at Peking has for Russia a deep historical significa- tion, and 'must be .joyfully welcomed by all to whom happy peace and successes, based on the mutual Utiderstilndings of nktidn^^ are dear-.' ' "' ' Paraphrase of a Circular Telegram addressed by the Minister of Foreign Affairs to the Representatives of Russia abroad. St. Petersburgh, March 15, 1898. Tn virtue of the Agreement signed on the 15th {27th>- March in Peking by the Representatives of Russia and the JMembers of the Tsung-li Yamen, as respective Plenipotentiaries, Port Arthur and Talienwan, as well as the adjoining territory, have been ceded by the Chinese Government fbr.the use of Russia. You are instructed to communicate the above to the Government to which you are accredited, and to add, that, the abQve-mentionec^ ports and territory will be occupied without delay by the forces of His Imperial Ma.jesty, our august IVfpnarcli, and that the Russian flag, together with the Chinese, will be hoisted in them. ; . Yon can at: the same time inform the Minister for Foreign Affairs that Port Talienwan will be opened to foreign commerce, and that the ships of all friendly nations will the»-e meet with the most wide hospitality. No. 2, Mr. Balfour to Sir F. Lascelles. (Telegraphic) , Foreign Office, April 2, 1898. MONDAY'S papers will probably contain statement that we have asked for lease of Wei-hai Wei ; in any case, the statement must be made by me on Tuesday in the House of Commons, You should inform the German Government, pointing out to them that the action of Russia forces this step on us. Its sole object is to maintain the balance of power in the Gulf of Pechili, which is menaced by Russia's occupation of Port Arthur. We do not anticipate that this policy will give any umbrage to German interest in Shantung, since it is not possible to make Wei-hai Wei a commercial port, and it would never be worth while to connect it with the peninsula by railway. If desired, a formal undertaking on this point would be given. Of course, we could not occupy till the Japanese have left the port. No. 3, ' Mr. Balfour to Sir C, MacDonald. (Telegraphic.) Foreign Office, April 2, 1898. 'IT 'is represented by the Peking Syndicate that the ratification of their Concession has been deferl'^d, and thkt allthe Censor's are strongly opposing it. I request you to report what is the present position of the matter^ and v/hat probability there is of the Concession being finally confirmed. No. 4. Sir F. Lascelles to the Marquess of Salisbury. — {Received April 4.) My Lord, ^ Berlin, March 28, 189S. 1 HAYE the hon&ur to transmit to your Lordship herewith a precis of a Memorandum which has been submitted to the Reichstag on the subject of the acquisition and establishment of German Settleitients at Tien-tsin and Hankow, and which contains some interesting particulars as to the attitude of the German Government towards non-German settlers, who are to be conditionally admitted to the privileges of the Settlement. It is desired that the constitution of the Settlement, which is now being framed, will be such as to give a privileged position to German settlers. Foreigners will, of course, retain their Treaty rights, but will at the same time be obliged, under the terhiS of their lease, to submit to the Settlement Government. . .= I have, &c. (Signed) " PRANK G, LAS0ELLE9. Inclosure in No. 4. Memorandum suhmilted to the Reichstag on the subject of the Estahlishmenl of German Settlements at Tien-tsin and Hankow. AFTER describing the character and history of the various foreign Settlements in China, the Memorandum states that in some Settlements, as, e.g., Shanghae, the Germans have been admitted to fair and equal participation in the rights acquired by the English or Americans, but that in the case of Hankow, for instance, the Elnglish only admitted the English flag to the privileges of the quays, thus excluding the Germans. It had been, therefore, decided to establish German Settlements at Tien-tsin and Hankow, where the interests of the Germans were most considerable, next to Shanghae. At the latter place, however, the internatipnal constitution of the Settle- * raent was satisfactory to German interescs. The Memorandum describes the position and trade of Tientsin, and states that the trade in the hands of the twenty-four German, firms there settled exceeds that of all [the other foreign firins put together. It proceeds then to-discuss the tirade position and prospects of Hankow, where there are seven German firms, in whose hands is a large proportion of the trade, as well as the military and industrial German employes of the Chinese Government. Under these [circumstances', negotiations were entered into with the Chinese Government for the concession of German Settlements in the two places narked. These negotiations were concluded in October 1895. Districts in these ports are ceded to Germany on condition of compensation to the Chinese owners and the payment of a small yearly sum, equivalent to the present land tax, to the Chinese Government. Nominally, the districts are ceded iii the form of a perpetual lease, but really in full ownership. The Tien-tsin Settlement is to be of an extent of 165 English acres, with a river frontage of 1,800 yards. The Hankow Settlement will be 113 acres in extent, with a river frontage of 1,190 yards. The sovereignty remains in the hands of China, btit the administration passes over to Germany. Considerable difficulty was experienced in finding the necessary pecuniary means. On the one hand, the German firms refused to come to the assistance of the Government, and, on the other, they had speculated on the rise of land, so that if the Government supplied the means, a few speculators would have reaped an unfair profit. Finally, it was arranged that the German Asiatic Bank should undertake the expenses of founding the Settlements at Tien-tsin and Hankow, draining, road- making, expropriating, the native owners, &c. In return, the bank is to administer the docks, sell land, &c., for its own profit, under certain Government supervision. Foreigners are to be admitted to the rights of the Settlements on condition that they conform to German law. One-third at least of the Settlement district is to be [253] B 2 reserved for Germans, from which it may be concluded that Germans will obtain land at a cheaper rate than foreigners. The Settlements are to be administered by Settlement Governments, with an elective head. Statutes for their government are to* be drawn up, in which every care will be taken to secure the predominance of the German element. It was not thought advisable to exclude foreigners altogether, firstly, because of the example of the other Settlements (that is, those where Germans are admitted to full participation of English rights) ; and, secondly, because without foreign settlers the Settlements would be half empty. The districts remain as before, under Chinese sovereignty; therefore, it is impossible to impose German law on foreigners resident there. They will continue to enjoy the rights secured to them by Treaty, subject to such reservations as may be made conditional on their admittance to the rights of leaseholders in the Settle- ments. It will thus be only in relation to their quality of leaseholders in a German Settlement that they will be subject to German law. The government of the Settlements will be on the model of the Settlements already existing, and will be administered by the members of the Settlement them- selves. The organs of the Communal Government will be elective, and will be left as free a hand as possible. Statutes are being prepared by the German Representatives in China. Land Companies have already been formed for the acquisition and partition of the districts assigned. No. 5. Hong Kong and Shanghae Banking Corporation to Foreign Office. — [Received April 4.) Sir, 31, Lombard Street, London, April 4, 1898. T HAVE the honour to acquaint you that the arrangements under which this bank has hitherto worked with the German Syndicate for the construction of railways in China has been terminated by mutual consent. It is now agreed that the German Syndicate and ourselves shall each work separately. I may here mention that the German Syndicate, always a powerful combination, has of late consolidated its position very much, and now includes all houses of any impor- tance in Germany. It also enjoys the confidence of, and receives the support of, the German Government. In order that British commercial interests may be fully represented, and that we shall be in a better position to cope with the powerful combination now opposed to us in China, the bank has decided to form a strong repres?ntative and influential Syndicate to deal with railway construction in China. The proposed line between Shanghae, Soochow, and Nanking will, in the first place, engage our special attention. The line wili run through one of the richest and most populous districts in China. It will help to open up the country, and, as the line is sure to prove remunerative, it will also stimulate similar enterprises in other directions greatly to the advantage of British trade. As it is of the utmost importance that the Shanghae-Nanking line should be secured by England, I at once arranged with the well-known house, Messrs. Jardine, Matheson, and Co., China, who had already been approached by the Chinese on the subject, to enter into negotiations on behalf of the proposed British Syndicate for the construction of the railway. The formation of our Syndicate will occupy a little time, but immediately after Easter I hope to have the honour of submitting to you the names of the members composing the Syndicate and all other details, which, I think, will satisfy you as to the representative nature of the combination. In the meantime, I trust the explanation I have given will warrant you in "iving the necessary instructions to Sir Claude MacDonald to give Messrs. Jardine Matheson and Co , and the bank such support as they may require. I have, &c. (Signed) *EWEN CAMERON. No. 6. Sir C. MacDonald to the Marquess of Salisbury. — {Received April 4.) (Telegraphic.) Peking, April 4, 1898. IN conjunction with the Italian Charge d' Affaires, I pressed the ratlHcation of the Concession mentioned in your Lordship's telegram of the 2nd April on the Yamen at two interviews last week, and we have another interview with them in a day or two. The first ratification will very probably be delayed on account of the unsettled state of the political situation at present. The ratification of the Concession is being opposed by two censors from the Province of Shansi. No. 7. Sir P. Lascelles to the Marquess of Salisbury, -^{Received April 4.) (Telegraphic.) Berlin, April 4, 189S. I COMiVJUNICATED this morning to Baron von Richthofen the substance of youi* telegram of the 2nd instant. This afternoon I had a long conversation with Herr von Biilow. His Excellency said that he sees that there is no desire on the part of Her Majesty's Government to injure German interests in Shantung, but that he would like to receive a declaration with regard to German interests and the nouH3onstruc- tion of railways in the sense indicated in your Lordship's above telegram, in order to prevent an unfavourable impression in the country. His Excellency suggests a declaration to the following effect : that England formally declares to Germany that she has no intention, in establishing herself at Wei-hai Wei, of creating difficulties for Germany in the Province of Shantung or of injuring or contesting her rights there, and more especially that in that province she will not establish railway communication. No. 8. Mr. Balfour to Sir P. Lascelles. (Telegraphic.) Foreign Office, April 6, 1898* WITH reference to your telegram of the 4th instant, there is no objection to the Declaration in the form suggested by Baron Richthofen, on condition that the words " in that province" are struck out, and the following substituted for them, " between Wei-hai Wei and any part of the Province of Shantung." This alteration is made because the question of Wei-hai Wei is thereby kept separate from the general question of the interests of Germany and Great Britain in Shantung, there being no connection between them. In my opinion, no difficulty should be expe- rienced in dealing with the second of these questions, but it should form the subject of a separate negotiation. This had been explained to Count Hatzfeldt, from whom I received a visit on the 5th instant. No. 9. Mr. Balfour to Sir F. Lascelles. (Telegtaphic.) Foreign Ofice, April 1, 1898. COUNT HATZFELDT has communicated to us the proposal of the German Government^ that the following should be the wording of the last sentence of the Declaration with respect to Wei-hai Wei : — " It is especially understood that England will not construct any railroad communi- cation either from Wei-hai Wei, or from any other point on the ooast into the interior of the Province of Shantung." I have replied that Her Majesty's Government will agree to a Declaration that we will not construct any railroad communication from Wei-hai Wei and the district leased with that place into the interior of the province. I have explained that the questions arising out of the British lease of Wei-hai "Wei, and the German claims with regard to the construction of railways in the Province of Shantung, are entirely separate. Her Majesty's Government are desirous of meeting the views of the German Government on both these questions, but they are of opinion that they ought to be kept distinct. As regards the first, the most ample assurances have already been offered by Her Majesty's Government, and if it is thought that the form of words proposed above does not meet the case, they would be disposed to modify them. The second question is more complicated, because any arrangement arrived at with respect to Shantung would clearly involve some reciprocal arrangement in regard to regions in which Her Majesty's (jovernment has special interests, and, further, because it would be most desirable to have some workable plan with regard to the construction and management of any through lines of railway which might, during part of their course, traverse some portion of the Shantung Province. No. 10. Sir C. MacDonald to the Marquess of Salisbury. — (Received April 8.) (Telegraphic.) Peking, April 8, 1898. THE fourth period of ten years — j;io?e Tien-tsin Treaty of 1858, Article, XXVH — ending this year, the Chinese Government wish the Customs Tariff to be revised, and I have received official notice from them to this effect, in accordance with the Article above mentioned. No. 11. Sir C. MacDonald to the Marquess of Salisbury. — {Received April 8.) (Telegraphic.) Peking, April 8, 1898. THE Chinese Government intend to place a Customs station at Wusung, near Shanghae, and to open it to trade as a Treaty port. This intention has been announced by the Tsung-li Yamln. No. 12. Sir F. Lascelles to the Marquess of Salisbury. — (Received April I ] .) My Lord. Berlin, April 6, 1S98. I HAVE the honour to transmit to your Lordship herewith copy and pr(5cis of an article reproduced in the "North German Gazette" from the "Cologne Gazette" relative to the lease of Wei-hai Wei by Great Britain. It is urged that Germany's interests are not affected by the step taken by England. The advantages secured are moral rather than material, as the place is of slight com- mercial or strategical value. On the other hand, it implies more embittered relations between England and Russia, and Germ.any would prefer two competitors (who are on bad terms') to one. The writer points out, further, that it is probable that Russia has an understanding with Japan, which has made it necessary for England to safeguard her interests in North China. The commercial solidarity of all nations, who are interested in the industrial develop- ment of China, is also alluded to, and this argument is urged with force by other sections of the press. I have, &c. (Signed) PRANK C. LASCELLES. Inclosure in No. 12. e Article published in the " Norddeutsche Zeitung " of April 6, 1898. THE " Daily Clironicle " expresses the fear that the occupation of Wei-hai Wei may endanger the relations of Germany and England. With regard to this point we should like to refer the writer to an article published in the " Cologne Gazette," which runs as follows : — ; . "Any careful observer of English politics would have come to the conclusion that England intended to secure a lease of Wei-hai Wei. The discontent against the inactivity of England had been growing greater every day. Lord Salisbury had left for the Eiviera, and Mr. Chamberlain's influence had gained the upper hand. Japan is bound to evacuate the forts and island in the neighbourhood of Wei-hai Wei (which are to be, it remarked, of slight strategical value) as soon as China has paid the war indemnity. "This would take place on the 8th May, and after that date England has the right to occupy the evacuated position. It is a matter of indifference to us which flag floats over Wei-hai Wei. It is separated from the German position by high mountains. "There is no likelihood of collision either from the commercial or military point of view. " On the other hand, the importance of this position from the English point of view is obvious; for if Russia were in possession of both ports guarding the • entrance of the gulf from, the north and the south, it is plain that the influence of England would have received a most severe and irremediable check. There is no comparison between the value of Port Arthur and Wei-hai Wei. The latter is surrounded by mountains which command it. It has no Hinterland, and it may be said positively that the value of the acquisition is purely a moral one. The principal value of the position is, as the 'Times' rightly points out, the facilities which it affords for exercising an influence on the Chinese Government. "The object of the occupation is clearly to restore the balance of power in the Gu!^ of Pechili, which had received a rude shock throiigh Russia's action. From the poin^ of view of Germany, there is absolutely no objection to be made. " On the one hand, it is far better for us to have two competitors in our neighbour- hood than one, especially when from the nature of things they are very unlikely ever to act together; and, secondly, all attempts to open China up in the spirit of modern civiliza- tion should be \^-elcomed by all those who are commercially interested in the country ; for in proportion as the population of any one part of China acquires practical knowledge of the beneflts of civilization, the neighbouring districts also will become infected with the spirit, and moved to emulation in the province of industry. " On the other hand, the step implies a change for the worse in the relations between Russia and England. " It is probably a consequence of the understanding between Russia and Japan, by which Russia surrenders Corea in return for a free hand in the Gulf; and England has consequently been obliged to take over herself the duty of securing her interests in North China." No. 13. Mr. Balfour to Sir C. MacDonald. i' (Telegraphic.) Foreign Office, April 11, 1898, 1"25 p.m. FRENCH demands. Can you inform us how matters stand with regard to these ? It is reported by the newspapers here that they have been conceded, with a reservation as regards Kowloon being made in our favour. No. 14 Sir N. 0' Conor to the Marquess of Salisbury. — {Received April 12.) My Lord, St. Petersburgh, April 5, 1898. I HAVE the honour to transmit herewith to your Lordship translations by Mr. Carnegie of three articles from the most important organs of the Russian press on the subject of recent events in the Far East. The key-notes of these articles are the isolation of Great Britain, the futility of any protests on her part against the recent concessions to Russia, and, more especially, threats that the reply of Russia to a naval demonstration by Great Britain in the Gulf of Pechili will be a counter-demonstration on the Indo-Afghan frontier. The "Novoe Vremya " :s the most widely-circulated newspaper in Russia, and, indeed, is the only source from which a very large number of people derive their knowledge of passing events. From this point of view, the article published in that journal on the 5th instant is not without interest. It states that the waters leading to the capital of China must be free from the presence of the English, that Wei-hai Wei must not fall into their hands, and that if the British squadron enters the Gulf of Pechili, the Chinese Government must be informed that its presence will entail no evil consequences to China if they refuse the demands of the British Representatives at Peking. J need hardly point out to your Lordship that these sentiments are hardly in accord with the assurances of the Russian Government, who have lost no opportunity of disclaiming any intention of securing an ascendency at Peking which might be injurious to other Powers, and have always stated that their object in obtaining a lease of Port Arthur was solely to have a harbour where they could collect their fleet, dock and repair their ships, and insure the safety of the terminus of their railway. It is also worthy of note that whereas the " Novoe Vremya " has hitherto taken the line that tHe concessions made to Russia were a fatal blow to British influence and commerce in the Far East, it now views that influence with alarm, and goes so far as to indicate the measures which should be taken by the Imperial Government to prevent its increase, T have, &c. (Signed) N. R. O'CONOR. Inclosure 1 in No. 14. Extracts from the '•' Novoe Vremya " and " Novosti " of March 21 (April 2), 1898. (Translation.) THE "Novosti" says that Russia's recent action in the Far East meets with the sympathy of all countries excepting England. This shows how thoroughly the majority of foreign Powers believes in the sincerity of Russia's desire for peace. England, who always opposed Russia's lawful aspirations, would obstruct her now were she not happily isolated. It does not follow that because Russia has taken Ports Arthur and Talienwan that British trade must suff'er. Russia is a Continental Power, and cannot compete with England, who has the largest commercial fleet in the world. Russia has taken Port Arthur in order to secure her lawful interests independently as to whether it is agreeable or not to other Powers. Russia does not want to fight with England ; on the contrary, what is necessary is that the respective spheres of rivalry should be defined in the Pacific Ocean without any military collision. At present England is helpless before Russia, because the latter is supported by France and Germany. There is no formal agreement between these three Powers, but there is a complete solidarity between them. If England, therefore, mobilizes her Pacific Ocean fleet, it must be that China is the object point and no other Power. The " Novoe Vremya " also states that of all the Powers England alone objects to Russia's occupation of the two Chinese ports. Some British " Chauvinists " console themselves by talking of a naval demonstration, and of the necessity for En"-land to take some port which can be converted into a second Hong Kon"-. ' ° That the naval demonstration in the Gulf of Pechili, which apparently is bein-' prepared, is not intended as an open protest against Russia's acquisitions from China we have no doubt. To protest against an accomplished fact in such a manner must lead either to an armed conflict or to a disgraceful failure. Russia can reply to the Pechili demonstration by one on the Afghan frontier, to say nothing of the fact that, we presume the Russian squaaron will hardly remain merely a distant spectator, but is takino- measures to be on the spot as soon as the British squadron. The London press, moreover says that the demonstration has another object, namely, the acquisition of some port from China which may he converted into a second Hong Kopg. Although the British Admiral may 9 have instructions to show no hostile intentions to Russia's new acquisitions, still Russia cannot remain indifferent if this demonstration is intended to put pressure on China. The interests of that country are now too much bound up with ours to allow of such a pre- ceeding, and there is an effective way, as mentioned above, in which to remind England that complete security on our Indian frontier is best arrived at by having good relations with Russia. We therefore hope the British squadron will not enter the Gulf of Pechili until the arrival of f'urther instructions. The newly-established Russo-Chinese Agreement compels us to safeguard the interests of China, and, thanks to it, Russia now occupies that place which has hitherto been held by England, a change which meets with the approval of all Continental Europe. . Enghshmen may grieve over their diplomacy, but the most sensible thing they can do is to realize the complete futility of such a " protest " as a " naval demonstration in the Gulf of Pechili." Inclosure 2 in No. 14. Extract from the " Novoe Vremya" of March 24 {April 5), 1898. (Translation.) NOW that the Russo-Chinese Agreement respecting Port Arthur and Talienwan is an accomplished fact, public feeling in England finds it difficult to reconcile itself to this new and undoubted diplomatic disaster of Lord Salisbury's Government. In order to allay this feeling, the glorious " naval demonstration," of which mention was made the other day, was organized, and now it is announced that the British Minister at Peking has concluded a new and important Treaty with China respecting considerable concessions granted to England as a " compensation " for concessions granted to other Powers, and in order to preserve the balance of power in the Far East. England considers that this balance is shattered the moment any other nation's acquisitions are in question. She considers that things are in a normal state only when she holds the predominant position, and this is why the British Representative in Peking is talking about new and important concessions. Ail this may be consoling to the self-love of the English for the time being, but it is necessary to consider what will be the result of the naval demonstration in the Gulf of Pechili. Of course, in London every attempt is being made to show that the demonstration is against China, and not Russia, but one cannot help thinking that the nature of these new conces- sions to England will occasion some interest in Berlin and Paris. Should there be a question of the cession to England of some port in the Gulf of Pechili, Russia will not regard such a demand with indifierence. The waters leading to the capital of China must be free from the presence of the English; and when the Japanese leave Wei-hai Wei this port must not fall into their hands. The Gulf of Pechili must be excluded from the list of England's new claims if she wishes to assure herself that she runs no risks on the Indo-Afghan frontier. The object of Russia's acquisition of the two ports was to have an unimpeded exit for ships from the Gulf of Pechili, and Russia will stand no interference with her policy on this point. English jingoes may talk about and threaten us with " la revanche" for our occupation of the two ports, but there will be no "revanche" on this occasion. If the British squadron sails into the Gulf of Pechih the Chinese will be informed that its presence will entail no evil consequences to China if the demands of the British Representative are refused. We hear, moreover, of the growing discontent of the Japanese against England ; they must now be convinced by the recent events in Corea who is their best friend, and with whom they have most interests in common, viz., Russia. No. 15. Sir N. 0' Conor to the Marquess of Salisbury -{Received April 12.) My Lord, St. Petersburgh, April 6, 1898. I HAVE the honour to transmit to your Lordship herewith an extract from the "Journal de Saint- P6tersbourg " of the 22nd March (.3rd April), giving the official account — as published in the " Invalide Russe'^' — of the occupation by Russian troops [2531 10 of the town and forts of Port Arthur and of the port of Talienwan on the 16th (28th) ultimo. I have, &c. (Signed) N. R. O'CONOR. Inclosure in No. 15. Extract from the "Journal de tiaint-Petershourg " of March 22 {April 3), 1898. PAR ordre de Sa Majeste TEmpereur et en execution des Articles de I'Arrangement intervenu avec le Gouvernement Chinois, M. le Lieutenant-General Grodekow, Com- mandant interimaire des troupes de la circonscription militaire de TAmour, a forme, et a fait embarquer le 5 Mars a Vladivostock un detachement de troupes de terre destine a rejoindre notre escadre du Pacifique. Le 9 Mars, ce detachement a rejoint I'escadre a Port-Arthur, et M. le Contre-Amiral Doubassow, Commandant de I'escadre, eu a pris le commancfement. Par tel^gramme dat^ du 16 Mars, M. le Contre-Amiral Doubassow, a annonce que I'evacuation de Port- Arthur par les troupes Chinoises avait commence la veille, \u Mars, et que leur derniere colonne est partie un peu apr^s minuit. Le 16 Mars, a 6 heures du matin, tout le detachement de troupes de terre Russes, et un detachement de descente fourni par I'escadre etaient deja debarques et Ton a procede sans retard h. I'occupation de la ville et des forts de Port^Arthur defendant cette ville du c6te de la terre terms et du c6t6 de la mer. A 8 heures, toutes les troupes sc trouvaient a leur poste, et en meme temps que les pavilions de I'escadre ont ete arbores sur le fort dit de la Montague d'Or les drapeaux Russe et Chinois accotes, que I'escadre a saiues de vingt et un coups de canon. Le fort dit de la Montagne Noire a salue, apr^s c;ela, le pavilion de I'Amiral Commandant de I'escadre, et i'escadre !ui a repondu par la salve reglementaire. Simultanement a eu lieu I'occupation du poi't de Talienwan, oil les drapeaux Russe et Chinois ont ete arbores. L'ordre n'a et6 trouble nulle part. Eu vertu de I'arrangeraent intervenu avec le Gouvernement Chinois, on procfede a I'heure presente aux mesures ayant pour but une occupation stable du territoire que la Chine nous a c(5de sur la Presqu'ile de Kwan-toung, sur laquelle se trocivent Port-Arthur et Talienwan. No. 16. Sir N. 0' Conor to the Marquess of Salishury. — {Received April 12.) ^7 Lord, St. Petersbiirgh, April 1, 1898. WITH reference to my despatch of the .5th instant, I have the honour to transmit herewith to your Lordship translations, by Mr. Carnegie, of two further articles from the " Novoe Vremya," to wbich I would call your Lordship's attention. The first of these articles advocates the desirability cf a railway to connect the Manchurian line with the capital of Corea, and expresses the conviction that the construc- tion of such a line would open the eyes of the Japanese to the advantages which would result to their commerce from an understanding with Russia. "Japan," it states "has now to choose between the risky game of endeavouring to secure political influence in Corea, or the sale in that country and Manchuria of Japanese products under the Russian iiag, and under the protection of Russian bayonets." The second article relates to the prospective occupation of Wei-hai Wei by Great Britain. •' It reiterates the opinion that, should that occupation take nlace, the " equilibrium of force ; can only be readjusted by counter-action in CentralAsia, and recommends that Russia should regain her freedom of action by the abrogation of the Pamir Convention of 1895, ^ I have, &c. (Signed) N. R. O'CONOR. 11 Iiiclosure 1 in No. 16. Extract from the " Novoe Vremya " of March 25 {April 6), 1898. (Translation.) THE "!N"ovoe Vremya" says that, besides the concessions already pubUshed, it is stated ill a document communicated by the Tsung-li Yamen to the " Official Messenger " of Peking, that Russia has the right to carry a line of railway from Talienwan to the western shore of the Liaotung peninsula to any point she may choose, which poini may be acquired by her on a lease under the same conditions as those under which she holds Port Arthur, &c. The construction of a line to the west is as necessary for us as the construcLion of one to the east, along the northern shore of the Corean Gulf to the town Fi-ju, on the River Yalu, whence a French Company has obtained the right to construct .i line to the south on to Seoul, the work on which has already begun. If the Russian Government do not find it necessary to acquire for 3,000,000 roubles the railway from Chemulpo to Seoul, constructed by the American Morse with means furnished by Japanese bankers, and passing now into Japanese hands, it only shows our conviction that we shall possess our own rail from Manchuria to the capital of Corea. Such a line would be most advan- tageous to Japanese commerce and interests, and the Japanese Government, who are doing all they can to promote their trade, must choose between a risky game of political influence in Corea, or the sale of their products in Corea and Manchuria under the Russian flag, and protected by Russian bayonets. The construction of a Russian railway in Manchuria must at last open the eyes of Japan to the advantage of an understanding with Russia, which might save her from a financial crash, and he advantageous to her southern population, which is compelled from poverty to emigrate. Let Japan play the commercial, while Russia plays the political, role. She will thus find a true ally, for by seeking England's help she will be betrayed for British needs, and cannot but find her trade interfered with the more that of England develops in the far East. Common action between Russia and Japan might further hold England back from her risky enterprises in the Gulf of Pechili which is in the natural sphere of Russian influence. England always wants some contribution to her own advantage on every political step forward which Russia makes. If England takes Wei-hai Wei, she will see Russia demand- ing extensions of territory in Central Asia ; the r61es will be changed, and Russia will demand a heavy percentage for every English acquisition. Such a step would undoubtedly check the appetites of English politicians. Inclosure 2 in No. 16. Extract from the " Novae Vremya'' of March 26 {April 7), 18S8. (Translation.) THE "Isovoe Vremya" has an article headed "Equilibrium of Force only with Mutual Freedom." The article begins by referring to events in 1878 when Lord Salisbury advocated forcing the Dardanelles, which Lord Derby declared would lead to war with Russia. British diplomacy has been preparing lately apparently some coup ; suddenly Lord Salisbury gets ill and goes off to France, and leaves the responsibility for the Government's action on other shoulders, for Lord Salisbury is no longer the fiery Lord Salisbury of 1878, and Mr, Balfour is responsible for the occupation of Wei-hai Wei. The article continues by pointing out the "Very gt'eat importance of Wei-hai Wei as a strategical position, which the English,' as' m'aster^ of the art of fortification, will well know how to improve. The political coilsequences of the occupation of Wei-hai Wei by England will be that she becomes our nearest neighbour in China, and that henceforth all our movements will be under 'her inspection, and every &tep we take will be the occasion for questions and demonstrations and the like. It is only in the centre of Asia where we can regain the equilibrium of force. The Treaty of 1895 ought to be regarded as being no longer in force, and we should regain our freedom of action in Afghanistan, v^here the English have lost all the influence they ever pretended to have had. The English oppose and attack us in the Far East, while we can do the same towards them in Central Asia, where by our Treaty of 1895 we ourselves closed the way leading to the attainment of such an end* ; i 1^— ^— M ill 1 III i----.»»ij»p»— —»^—i—»»«p»-.— i— »»«——— Pi^ U I Jill I III III I I H I I [263] C 2 12 No. 17. Sir a MacDonald to the Marquess of Salisbury.— (Received April 12.) (Telegraphic.) , . ,^1^"^' ^f'^ ^^' }^^^A , 1 HAD an interview with the Yam&n yesterday, at which they informed me that China had acceded to the following demands on the part of France: — 1. Kwangchow Wan to be leased as a coaling-station to France. 2 The right to construct a railway to Yiinnan-fu from the Tonquin frontier. 3. The promise not to ahenate any territory in the three provinces of Kwangtung, Kwangsi, and Yiinnan, which border on the French frontier. 4. The Chinese Government agree that if ever they constitute a Postal Department independent of the maritime customs, and if a European is to be appointed as Director thereof, France shall have an equal right with that of other Powers to nominate a candidate for the post of Director. The Chinese Government are willing — 1. To lease us as much additional territory on Kowloon promontory, exclusive of Kowloon city, as is required for military and naval purposes. 2. The Tam^n state that China is quite willing to allow the extension into Yiinnan of the Burmah Eailway. No. 18. Sit C. MacDonald to the Marquess of Salisbury. — (Received April 13.) Mv Lord, Peking, February 15, 1898. THE inclosed translation of an extract from a Chinese newspaper published at Tien-tsin on the subject of the loan negotiations may interest your Lordship. It is useful as indicating the attitude of the ablest and most influential of the Viceroys towards the loan, and particularly towards the scheme of a British railway from Burmah to the Yang-tsze. I have &c (Signed) ' CLAUDE M. MacDONALD. Inclosure in No. 18. Uxlract from the " Kuo Wen Pao" (Tien-tsin Newspaper) of February 3, 1898. (Translation.) THE three concessions demanded by England in return for the loan have been the subject of much discussion both in China and abroad. According to a letter received from a foreigner in Peking, Chang Chih-tung, Viceroy of the Hu-Kuang, is very much opposed to this loan from England, and has telegraphed repeatedly to the Tsung-li Yamfen, discussing the dangers of it in detail and remonstrating strenuously. Chang Chih-tung bases his objections on the English demand for a railway from Burmah to the Yang-tsze. This conceded, the steamer communication from Hong Kong to Shanghae and on the Yang-tsze to Ssu-chuan vrould, with the railway through Ssu-chuan and Yiinnan to Burmah, complete the connection with India. Such a railway would in times of peace place the whole commercial situation in the grasp of England, and give her a strong military position when peace was disturbed. It would practically mean the surrender of the whole of the twelve south and east provinces to England, and therefore should on no account be conceded. The pressing need of the Government for money was for the payment of the Japanese war indemnity. Why not deal with the Japanese then instead of with the English ? Why not, as the English loan .has to be repaid by instalments, pay the Japanese by instalments instead ? Why not, instead of pledging the li-kin and salt revenues to England for a great loan, borrow without pledging anything, sufficient to pay the yearly instalments to Japan ? The disadvantage to China of paying off Ja,pan at once and placing the twelve south and east provinces in the power of England is great compared with that of temporarily pledging Wei-hai Wei until the balance of the Japanese war indemnity is paid by instalments. This is the gist of the Viceroy's telegrams to the Tsung-li Yamen. 13 It appears then in these loan negotiations, that not only is there the opposition of B,ussia and Prance at Peking to he reckoned with, hut in the provinces there is the adverse criticism of a great statesman to be encountered, so ihat it is impossible to foresee how they will end. It is said that the efforts of the British Government to carry through this great loan for China in return for the opening of more ports, the Burmese railway, and a guarantee not to surrender territory in the Yang-tsze region, show that these three concessions are not demanded on the spur of the moment, but are dictated by a well- considered policy, which England will adhere to unswervingly. The news comes from, London that whether China borrows or not these three things must be exacted from her, and that should opposition come from other Powers England will not shrink from war to secure them. No. 19. Sir C MacDonatd to the Marquess of Sulishury. -—{Received April 13.) My Lord, Peking, February 16, 1898. I HAVE the honour to forward to your Lordship the accompanying extract from a Memorandum by Mr. Wilkinson, Her Majesty's Acting Consul at Pakhoi, in regard to Prench interests in the south of China. I have, &c. , I (Signed) CLAUDE M. MacDONALD. Inclosure in No. 19. Extracts from Mimoi'anduni by Acting Consul Wilkinson. EXTENSION of routes into China. Commandant Gosselin, and Captains Schmidt and Bella, of the Marine Artillery, will conduct, during the next two years, a mission of exploration in Yunnan, under the control of Colonel Pennequin. They will be accompanied by two civil engineers, sent respectively by the Poreign and the Colonial Offices. Their primary duty will be " to study the method of prolongation of the roads in the military districts, with a view to the commercial penetration of Yunnan, in particular between Laokay and Mengtzu." 2. Prench interests and the recent Anglo-Chinese Treaty. A leading article in the " Avenir " of the 6th aims to show that, through the recent Anglo-Chinese Treaty, " Tonquin is no longer bounded by unwarlike China, but by the English, who have secured a foothold in Kwangsi, and will niake of it an English Tonquin." By paying a duty of 7 per cent, nominally, but nearer 3 per cent, ad valorem actually, the English can now lay down their goods anywhere in Yunnan and Kwangsi. Not only does this threaten to annihilate the transit trade through Tonquin, but it exposes the Protectorate itself to a clandestine traflftc. Por, as Tonquin is under the " Tarif General," goods that have paid only 3 per cent, as duty can be profitably smuggled across the border from China. The new transit-pass Regulations (the writer is evidently referring to the Chinkiang Regulations as recently modified for Canton) permit the owner of the goods to accompany them, and the " English will avail themselves of this privilege either to smuggle, or to organize piracy, or to supply Kwangsi with weapons of war in view of a conflict between Prance and China." At the Hanoi Chamber of Commerce, on the 11th October, a letter from the Governor- General, dated Saigon, 16th September, was read on the subject of the trade of the West River from the commencement on the 4th June last to the beginning of August : — " Prom Nanning to Wuchow, junks of 500 piculs burden charge 35 cents per picul, and take twenty days in descending, or twenty-five in ascending, the stream. Prom Wuchow to Hong Kong, steamers are paid between 30 cents and 60 cents per picul, according to the nature of the cargo, and take three days. Prom Nanning to Pakhoi, coolies carrying a picul are paid 20 cents a-day, and take, generally, eight days — that is, the cost of transport comes to 1 dol. 60 c. the picul. Prom Pakhoi to 14 Hong Kong the freight by steamer is 12 cents per picul, and the duration of the voyage two days. These figures admit of modification. The new route, then, is cheaper than the old one by from 89 cents to 1 dol. 19 c. a picul, but, on the other hand, is longer by from thirteen to eighteen days^^^^^ ^ ^ WILKINSON. Pakhoi, December 18, 1897. No. 20. Sir C. MacDonald to the Marquess of Salishury.— (Received April 13.) My Lord, Peking, February 20, 1898. SINCE the 4th February, I have had four interviews with the Yamen for the purpose of extracting some concessions in return for the rejection of the offer ol a guaranteed loan from Great Britain after it had in principle been accepted. At the first of these, on the 5th February, the Yamea refused to recognize that we had any claim to compensation, declaring that the refusal of a Russian as well as a Britisli guarantee left no ground for complaint. I told them that this argument might have had some plausibiliiy if the two offers had been equally advantageous, or if the Chinese Government had not committed themselves to serious negotiations with us. The British Government had at China's own request reluctantly agreed to do her a very exceptional favour, and the Yamen could not suppose that we should accept with equanimity a brusque intimation that the Chinese Government had changed its mind. The Yamen abounded in protestations of their readiness at some future date to give proofs of theii- grathude to Great Britain in the shape of encouragement to commerce, but they insisted that the loan negotiations must first be dismissed, and all demands for compensation in connection with them dropped. I refused to telegraph such a snggestion to your Lordship, and as after long debate they still refused to bind themselves by any promises, I reminded them that at an earlier interview they had asked me whether the action threatened by Great Britain in the event of their accepting a Russian guarantee would equally be taken if they borrowed from neither Power. 1 could not at the time answer the question, but I could now tell them that Her Majesty's Government had a right to feel deeply affronted by what had occurred, and t would not be answerable for the consequences if they declined to make to Great Britain even such concessions as they had frequently admitted to be in China's own interests. The Yam^n begged me to smooth matters for them, to which I answered that their present attitude made it impossible for me to do so. Let them permit me to report- that) China was ready to open inland navigation to steamers ; to establish Treaty ports at Manning and Hsiang T'an; and to give reasonable security to trade b}' a pledge against alienation of the Yang-tsze region to another Power, and the rejec- tion of our loan might be forgiven. All these were matters within the Yamen's power. The Ministers did not deny the feasibihty of what I had asked (except as regarded the opening of Nauning), but objected to these measures being tacked on to tlie loan, for if that were done, Russia v\ould at once demand counter-concessions for the rejec- tion of her loan, and China \\ould be placed in a very difficult position. On this they laid much stress. I said I did not insist on the concessions being formally announced as made to England in coimection with the loan, and should be prepared to move Her Majesty's Government to treat them as steps taken spontaneously by China, but that I absolutely refused to treat the loan account as settled until I had some definite assurance that these measures would be carried out within a fixed time. The Yamen again attempted to persuade me to leave the carrying out of the measures indicated entirely to the Chinese Government, and it was only after the usual prolonged argument that they coiisented to open internal waters to steam naviga- tion within four months ; to let me know at an early date when they would open a port in Hunan, and to give me a written guarantee against the alienation of the Yang-tsze region to a foreign Power. 15 As to Nanning, 1 told them that we had tinder the Agreement of 1897* a right to ask for it to be opened, trade having largely increased, and tlie opening could not be long delayed. They promised to consider the question. I then reminded them of their promises with -regard to the Inspectorship-General of Customs, and referred to my despatch of the 3rd February. t They said that they had never contemplated any other arrangement than leaving it to Sir Robert Hart to recommend his own successor, who would, doubtless, be an Englishman. 1 replied that this did not go far enough, for what Her Majesty's Government insisted on, in view of the preponderance of British trade, was that future Inspector-Generals should always be British. After some discussion, which served to show that certain Ministers were not at all inclined to give this pledge, though not disposed to definitely refuse it, the Yam6n agreed to acknowledge my note and confirm their verbal assurance. On the evening of the 7th I received a despatch in which, after eulogies on Sir Robert Hart, the Yam^n declared their intention of inviting him, when he found himself forced to retire, tu recommend his own successor. The note contained no assurance even that this successor sliould be British, and was tlius a palpable evasion of tlie Yamen's pledge. 1 called on the 9th with this note in my hand, and taxed the Ministers with a breach of faith. I was prepared to use very strong language with regard to it, but was disarmed by the manner in wliich the Yam&n met my attack. They admitted that their note had left obscure the main point on which assurances were needed, that of the nationaUty of Sir Robert Hart's successor, and when I further pointed out that if Sir Robert Hai't died in harness before he had made any recommendation, or, if his successor died tiie day after his appointment, the Chinese Government would be in no way pledged to select an Englishman for the post, they said that they bad not taken such deplorable contingencies into account, though they now fully recognized the need of providing against them. They would take back their note and alter it to meet ray views. 1 then produced a draft of the note I intended addressing to them with regard to non-alienation of the Yang-tsze region. This was accepted with little demur, with the insertion of the words "now entirely in China's possession," which, as recording an undeniable fact, I agreed to put in. Copies of the notes subsequently exchanged are inclosed. I have not thought it necessary to narrate the arguments by which I supported the demand for this pledge at both these interviews. My chief ground was that we could not afford to find one morning that by reason of the murder of a foreign subject, or the refusal of some demand by a foreign Power, some place on the Yang-tsze had been seized_^and was to be retained on a ninety-nine years' lease. I then handed to the Ministers the despatch of which copy is inclosed, recording their assurance with regard to steam navigation of inland waterways. They read it with attention, and accepted it as satisfactory. With regard to a port in Hunan, a prolonged controversy took place. Nothing that I could say, and, I think, I exhausted every conceivable argument, would induce them to pledge themselves to open a port in that province in less than two years, or rather, they promised tliat the step should be taken within that time, and sooner if possible. It has become a traditional boast amongst the Hunanese (who supply the troops of be|t repute in the Chinese army) that their province is not open to the foreigner, and while, I believe, many of th(;m have grown wiser in the last few years, no doubt the anti-foreign feeling is still strong enough to cause alarm to the timid Rulers of China. At all events, I can conceive no reason why the Yamfen should have so stubbornly refused to promise to open a port in Hunan in less than the time named unless they were genuinely afraid of the consequences. I had originally asked for its immediate opening ; I offered at last to agree to a ye^ir's delay. I told the Ministers that if this were not conceded I doubted Her IVTajesty's Government allowing me to treat the loan question as settled ; but they * This Agreement is embodied in tlie following communication from the Tsung-li Yamen to Sir C. MacDonald ; — " Peldng, February 4, 1897. '• The neffotiations regarding the Agreement modifying the Burmah-China Frontier and Trade Convention of the 1st March, !894, and the Special Article opening tiie'West River to trade having now been concluded, it has been agreed that if hereafter trade develops, and it is mutually found that the interests gf trade justify it, Chiq4 will at once opeb Nonning Fu as a Treaty port and Consular station,'' t See "China No, 1 (1898)," p. §0. IG declared that they dare not pledge themselves to more than they had offered. In two years' time, under the rule of the present enlightened and progressive Governor, and tinder the inflnence of the schools of foreign learning now established, the local opposition would be overcome, but less than two years would not, they considered, suffice. I pointed out that they would have opened a port in Hunan had the guaranteed loan gone through, and this they admitted, but said that for no lesser consideration would they have risked it. The moment the Governor heard that the loan negotiations were abandoned, he had telegraphed to express his rehef and his hope that no more wo\ild be heard of the proposal to open Hsiang T'an. I should mention that the Yamen had previously suggested the substitution of Yo-chou, a place on the Tung-ting Lake, for Hsiang T'an. I agreed to consider this point, and as matters now stand 1 think it will be best to leave the question open, so that we may have the advantage of whatever information is later obtainable as to the comparative commercial value of these two or of other places. Even if Yo-chou be not the best port, its opening will be of great value in breaking down Hunan exclusiveness. I pass over the Yamen's anxiety as to the form in which the concessions made were to be announced, for I have placed their views fully before your Lordship by telegram, and the matter has no permanent interest. The Yam6n had promised to let me have their revised despatch about the Inspector- Generalship next day. After the very clear explanations of what was wanted and their profession of readiness to satisfy me, it was with some irritation that I received from them the note, of which translation is inclosed. It follows with but slight change the note I had returned, and contains no positive assurance except that Sir Robert Hart's immediate successor should be British, It is tolerably clear that these repeated evasions were intentional, and were due to the wish of certain Ministers not to give the required pledge if they could avoid it. I took back the Yamen's note on the 12th February, and with it a Memorandum of the answer which I wished to receive. I found that a proviso to the effect that if British trade at the Treaty ports fell below that of another Power, the appointment of an Enghsh Inspector-General would no longer be obligatory, would facilitate matters, and I accordingly agreed to its insertion. If that day ever comes, it will matter little to us whether the Inspector-General be British or not. The Ministers whom I suspected to be opposed to giving the promise happened not to bo present on this occasion, and though their colleagues made some demur, and declared the former note to be all that I could wish, I carried my point more easily than I might otherwise have done, though, in the face of the expressed determination of Her Majesty's Government to insist on a British Inspector-General, no Minister had ventured to directly refuse the demand. Next day, the 1 3th February, I received tlie note, of which translation is inclosed. I have already submitted its contents to your Lordship by telegram, and have had the honour of learning that your Lordship considers it satisfactory. T have not asked for an ^answer to my despatch about steam navigation in inland waters, because, as the Yamen accepted it without protest nearly a fortnight ao-o, it is an accurate record of our Agreement binding on the Ghinese Government. " Sir Robert Hart has been instructed to frame Eegulations which I hope will be satisfactory. Some Regulations there must be, but I anticipate thftt the Yamen will try, under their cover, to take from the concession most of its value, and it is very probable that strong pressure will be needed to prevent this. I feel confident that in resisting any such attempts I shall receive your Lordship's support. My last interview on the 18th instant was^taken up chiefly with current cases, which have necessarily fallen to some extent into arrear during the continuous negotia- tions of the last two months. ° I discussed the despatches with regard to the Inspector-Generalship and the question of the pubhc announcement of the commercial concessions, to which the Yamen now agreed. I have the honour, in concluding this account of my proceedings, to express to vour Lordship my deep gratitude for the terms in which your Lordship has coiiveved to me the expression ot tlie approval of Her Majesty's Government I would beg to place on record tlie great and invaluable assistance I have received from my staff during these negotiations, and my thanks are more especially due to Mr. Cockburn, Chinese Secretary, to whose perseverance, vigilance, and knowledge of 17 the Chinese character and language the successful outcome of these negotiations is in a great measure due. I have, &c. (Signed) CLAUDE M. MacDONALD. Inclosure 1 in No, 20. Sir C. MacDonald to the Tsunq-li Yamen. MM. les Ministres, Peking, February 9, 1898. IT has long been matter for surprise to all interested in Chinese affairs that the Chinese Government has not taken steps to remove all restrictions on the navigation of the waterways of the country, and especially that it has not seen its way to encourage the free introduction of steam communication, for the advantages of such a step are very great. As regards the merchant, it enables him to transport his goods from place to place without being subject to delay by wind or tide, and, consequently, as the expense to which he is put is less, it allows him to sell his goods more cheaply, and make more frequent consignments. The people at large are also gainers, for they are both able to purchase such things as they need more cheaply, and to find a market more easily for what they themselves procluce or have to sell. These advantages have of late years been recognized in one or two provinces, and the use of Chinese-owned steamers or steam-launches has been allowed. But this recognition has hitherto been only partial, and it was therefore with great pleasure that T learnt from your Highnesses and your Excellencies at a recent interview that the Chinese Government had determined that wherever the use of native boats is now by Treaty permitted to foreigners, they shall equally be permitted to employ steamers or steam-launches, whether Chinese or foreign-owned, or their own boats, and, further, that this arrangement would come into eflFect before the end of the 4th Chinese moon. I shall have great pleasure in communicating the Chinese Government's decision to my Government, for it is an indication that China is prepared to take every step open to her to increase the volume of trade, and so add to her resources and the wealth of the people. I avail, &c. (Signed) CLAUDE M. MacDONALD. Inclosure 2 in No. 20. Sir C. MacDonald to the Tsung-li Yamen. MM. les Ministres, Peking, February 9, 1898. ^OUR. Highnesses and your Excellencies have more than once intimated to me that the Chinese Government were aware of the great importance that has always been attached by Great Britain to the retention in Chinese possession of the Yang-tsze region, now entirely hers, as providing security for the free course and development of trade. I shall be glad to be in a position to communicate to Her Majesty's Government a definite assurance that China will never alienate any territory in the provinces adjoining the Yang-tsze to any other Power, whether under lease, mortgage, or any other designation. Such an assurance is in full harmony with the observations made to me by your Highnesses and your Excellencies. I avail, &c. (Signed) CLAUDE M. MacDONALD. [203] D IS Inclosure 3 in No. 20. The Tsung-li Ymnen to Sir C. MacDonald. Kuang Hsu, 24th year, \st moon, 2\.st day (Translation.) {February H* 1898): , THE Yam6n have the honour to acknowledge the receipt ot the British Ministers despatch of the 9th February, stating that the Yamen had more than once intimated to him that the Chinese Government were aware of the greai importance that lias alvays been attached by Great Britain to the retention in Chinese possession of the Yang-tsze region, now entirely hers, as providing security for the free course and development of trade. The British Minister would be glad to be in a position to communicate to Her Majesty's Government a definite assurance that China would never ahenate (any, territory) in the provinces adjoining the Yang-tsze to any other Power, whether under lease, mortgage, or any other designation. The Yamen have to observe tliat the Yang-tsze region is of the greatest importance as concerning the whole position (or interests) of China, and it is out of the question that territory (in it) should be mortgaged, leased, or ceded to another Power. Since Her Britannic Majesty's G-overnment has expressed its interest (or anxiety), it is the duty of the Yamen to address this note to the British Minister for communication to his Government. They avail themselves, &c. Inclosure 4 in No. 20. The Tsung-li YamSn to Sir C. MacDonald. Kuang Hsu, 'iAth year, \st moon, 20th day (Translation.) (February 10, 1898). THE Yamen have the honour to acknowledge the receipt on the 3rd February of a note from the British Minister, to the effect that on the 17th January, when calling at the Yamen, he had informed the Ministers present that he had received telegraphic instructions from Her Majesty's Government that in view of the immense preponderance of British trade with China over that of otlier countries, Her Majesty's Government regarded it as vital to the commercial interests of Great Britain that the Inspector- General of Maritime Customs should in tlie future, as in the past, be of British nationality. The Yamen had agreed to tliis, and iii order that there might be no room for misunderstanding, the Minister now addressed this note to the Yamen to place the matter formally on record. Tlie Yamen have to observe that ever since the opening of Chinese ports to foreign trade, commerce and revenue have been steadily increasing. The duties paid by British merchants are nearly 80 per cent, of the vvhole amount paid by foreign countries, and, therefore, a British subject (Sir Robert Hart) has been employed as Inspector-General of Maritime Customs. The said Inspector-General is versed in coauuercial matters, just in his dealings, experienced and upright, faithful and sincere, a man on whom reliance can be placed, and China has in the past leant nuich upon him. If he were to ask for leave China must (try to) detain him, but if some cause were to necessitate his returning home, China, thoroughly investigating the trade at the various ports, (and finding that) British merchants are in the majority, will certainly direct the said Inspector-General to recommend an Englishman of equal ability with himself to take charge, and the Yamen will, after inquiry, appoint him as successor to manage Chinese Customs matters. The object being the protection of commerce at the various ports, (the Yam^n) could not possibly regard this selection as a light matter, and so do injury to important public interests. The Yamen beg to make this reply to the British Minister for his information. They avail themselves, &c. (Seal of Yamen.) 19 Inclosure 5 in No. 20. The Tsung-li YamSn to Sir C. MacDonald. Kuang Hsii, 24th year, 1st moon, 2,3rd day (Translation.) ^ {February 13, 1898). THE Yameu have the honour to address the Britisli Minister with regard to the continued employment in the future of an Englishman in succession to the Inspector- General of Maritime Customs, on wliich silbject'they addressed a reply to his Excellency a few days ago. They have to observe that British trade with China exceeds that of all other countries, and, as the Yamen have frequently agreed and promised, it is intended tlu-il, as in the past, so in the future, an Englishman shall be employed as Inspector-General. But if at some future time the trade of some other country at the various Chinese ports should become greater than that of Great Britain, China will then of course not be bound to necessarily employ an Englishman as Inspector-General. The Yamen write this further despatch for the information of the British Minister, to be placed on record. They avail themselves, &c. (Seal of Yamen.) No. 21. Mr. Balfour to Sir C. MacDonald. (Telegraphic.) Foreign Office, April 13, 1898. FRENCH claims. Inform Yamen that, althoush they have not followed our advice, we are anxious to maintain, as far as possible, integrity of China, and will, therefore, not make new territorial demands upon them. It is, however, absolutely necessary, if we are to pursue this policy, that they, on tbeir side, should first immediately conclude negotia- tions — (a) for giving us all the land required for military defences of Hong Kong ; (&) to fulfil tlieir promise to make Nanning a Treaty port ; (c) to give some railway conces- sion ; (d) an agreement as to the non-alienation of Kuang'tung and Yiinnan. In connection with condition (d), it is in the interests of the integrity of China, and is justified by the proximity of Yiinnan to Burmah, and by our commercial preponderance in Kuang'tung. No. 22. Sir E. Monson to the Marquess of Salisbury. — (Received April 14<.) My Lord, Paris, April 13, 1898. IT is stated in to-night's papers that, at the Cabinet Council held this morning, M. Hanotaux was able to announce to his colleagues that the French demands on China had been satisfactorily met. They are stated in the semi-ofl&cial "Temps " to be : — 1. Concession of a lease of a bay on the south coast of China. 2. Concession of a railway connecting Tonquin with Yiinnan- fu by the Bed River. 3. Engagement on the part of China never to alienate the territories of the provinces contiguous to Tonquin. 4. Engagement never to cede to any other Power the Island of Hainan. 5. Arrangement in regard to the constitution of the postal service. I have, &c. (Signed) EDMU^N'D MONSON. [253 1 D 2 20 No. 23. Foreign Office to India Office. Sir, Foreign Office, April 14. 1898. THE "Times" of the 21st March stated that M. Hanotaux had, in conversation, referred to a Eranco- Chinese Convention of 1897. I am directed by the Secretary of State to acquaint you, for the information of Lord G. Hamilton, that inquiries have Been made of Her Majesty's Minister at Peking on this subject, and that it has been ascertained that an exchange of notes took place on the 12th June, 1897, between the Prench Minister and the Tsung-li Yamen. These notes were to the effect that in conformity with Article V of the Supple- mentary Convention between France and China of the 20th June, 1895, in the three provinces of Kwangtung, Kwangsi, and Yunnan, " le Gouvernement Chinois feraappel, pour les mines a exploiter, &c., a I'aide d'ingenieurs et industriels Prangais." Sir 0. MacDonald states that the Yamen have since informed him verbally that the above arrangement does not prevent their applying to English engineer? as well. He has, however, been instructed by telegraph to ask for explicit declarations from the Chinese Government that no preference is to be given to Erench concessionnaires, especially in the Provinces of Kwangtung and Yunnan, as nine-tenths of the foreign trade of Kwangtung is British, and the Province of Yunnan adjoins Burmah. I am, &c. (Signed) ERANCIS BEUTIE. 2^0. 24. Sir N. 0' Conor to the Marquess of Salisbury. — (Received April 15.) My Lord, St. Petersburgh, April 9, 1898. I HAVE the honour to transmit to your Lordship herewith, in translation, two telegrams which have been published in the " Official Messenger " of to-day's date. The first is addressed by the Imperial Minister for Eoreign Affairs to the Russian Charge d'Affaires at Peking, instructing him to deliver to the Emperor of China a message of greeting from the Emperor of Russia upon the occasion of the conclusion of the recently signed Agreement, by which China cedes to Russia Ports Arthur and Talienwan, together with other advantages, an Agreement which. His Imperial Majesty adds, will tend to strengthen the already existing friendship between the two Empires, and which will tend to the advantage of both nations. The second telegram contains the Emperor of China's reply, delivered to the Russian Charge d' Affaires in a solemn audience, in which the friendly sentiments of the Emperor of Russia are reciprocated in similar language. I have, &c. (Signed) N. R. O'CONOR. P.S. — The Erench translation given in the " Journal de Saint- P^tersbourg " is also inclosed. N. R. O'C. Inclosure 1 in No. 24. Extract from the " Official Messenger" of March 28 {April 9), 1898. Telegram from the Minister for Foreign Afairs to the Russian Charge d' Affaires in Pekina March 15 {April 22), 1S9S. (Translation.) BY Imperial command I instruct you to communicate to His Majesty the Emperor of China the following message from His Imperial Majesty : " We have received with sincere pleasure the information from our Plenipotentiary respecting the wise decision of your xVl'ajesty, by virtue of which the Ministers of the Tsung-li Tamen were authorized to sign the Agreement relative to the cession for the use of Russia of Ports Arthur and Talienwan with the adjoining territory and waters nnd to the permission for a connecting railway branch between Port Arthur and the main Siberian line. " To this Agreement we attach great historical interest, which will undoubtedly serve to strengthen the bonds of friendship existing for centuries past between our great neighbouring Empires, and which so clearly is in the interest of both nations. We greet your Majesty most heartily, and we wish you a prosperous reign." Telegram from the Russian Charge' d'Af aires at Peking to the Ministry of Foreign Affairs, March '24< {April 5), 1898. A solemn audience took place to-day. I was permitted to ascend the steps of the throne, as distinguished from all former audiences, in order to deliver, directly from hand to hand, to His Majesty, the telegram of the Emperor. In taking the telegram from my hands, the Emperor of China slightly raised himself from the throne. On my reading to the Emperor the text of the telegram, he answered in the following words : " I am exceedingly pleased with the deeply friendly telegram of His Majesty. The sincere friendship existing between our two Empires for more than 200 years, and lately newly assured by our mutual Treaty, will be henceforth still more strengthened. Sincere friendship and the community of interests will serve to the good of both nations. I beg you, M. le Plenipotentiaire, to convey these words by telegraph to His Imperial Majesty, together with my hearty greeting." Inclosure 2 in No. 24. Extract from the *' Journal de Saint- Petersbourg" of March 29 (April 10), 1898. Telegramme de son Excellence M. le Ministre des Affaires Etrangeres au Charge' d'Affaii es de Russie a Pekin [en date du 15 Mars, 1898). D'ORDRE de Sa Majeste I'Empereur, vous etes invite a transmettre a Sa Majeste I'Empereur de Chine le message suivant de notre auguste Maitre : — ' " C'est avec un reel plaisir que nous avons appris de notre Representant la sage resolution de votre Majeste, en vertu de laquelle il a ete ordonne aux Ministres du Tsung-li Yamen de signer la Convention cedant en usufruit a la Bussies les Ports Arthur et Talienwan avec le territoire y attenant et les eaux qui en dependent, et accordant la Concession pour la construction de I'embranchement de chemin de fer destin6 a relier Port- Arthur avec la grande ligne trans- Siberienne. Nous attribuons a cette Convention une haute portee historique, attendu qu'elle servira indubitablement a raffermir encore davantage les liens d'amitie qui existent depuis des si^cles entre nos deux vastes Empires voisins, et qui repondent si evidemment a leurs interets reciproques. En adressant a votre Majeste nos cordiales salutations, nous formons des voeux pour la drosp^rite de son r^gne. Tele'gramme du Charge d' Affaires de Ry,ssie a Pekin a son Excellence M. le Ministre des Affaires Etrangeres {en date du 24 Mars, 1898). Ayant ete regu aujourd'hui en audience solennelle, j'ai ete admis exceptionnelle- ment a monter les marches du tr6ne pour remettrede la main a la main a Sa Majeste I'Empereur de Chine le telegramme de notre auguste Maitre. En ref;evant ce telegramme, Sa Majeste s'est levee de son trdne, et apr^s que le texte de ce message a ete lu par moi a haute voix I'Empereur a prononce les paroles suivantes : — " Je suis extremement heureux du telegramme si profondement amical de Sa Majeste. L'amitie sincere qui subsiste entre nos deux Btats depuis plus de 200 ans, et qui dans ces derniers temps a 6t6 affermie par un Traite d'Alliance, se consolidera encore plus a I'avenir. Cette amiti^ sincere, ainsi que la communaute des interets r6ciproques, serviront au bien des deux peuples. Je vous prie, M. le Representant, de faire parvenir ces paroles, par tel^graphe a Sa Majeste Imperiale, avec mon salut cordial." 22 :N^o. 25. China Association to the Marquess of Salisbury. — {Received April 15.) My Lord, 159, Cannon Street, London, April 14, 1898. IN submitting, for your Lordship's consideration, certain reflections suggested by the present grave political crisis in the Par East, the Committee desire to record their full appreciation of certain concessions which Her Majesty's Representative has obtained recently from the Government of Peking. The opening of a port in the important province of Hunan ; the opening of the inland waterways of China to steam ; the assertion of British intei-ests in the Yang-tsze Valley ; and the recognition of England's preponderant interest in China's foreign trade, implied by the stipulation that an Englishman shall hold the Inspectorate-General of Customs so long as that preponderance is maintained, are concessions which would have been welcomed, under ordinary circumstances, as pregnant with unalloyed promise for the future of China, as well as of British trade. The political complications, by which the brightness of the prospect is dimmed, have been a source, naturally, of profound anxiety to every member of an Association which is so deeply interested, in various ways, in the future of the Ear East. These complications have not been unforseen. The Association has ventured,. indeed, to predict their imminence more than once since the collapse of China before the Japanese attack made it evident that ambitions, which had been held partially in itistraint, would now find freer scope. The expansion of Russian influence over Manchuria was indicated as inevitable, and the justice of her desire for an ice-free port was conceded ; though it was hoped that an anticipatory understanding might have been attamable by which English and Russian interests could be conciliated, the position of antagonism which has now arisen obviated, and the permanent menace implied in her occupation of Port Arthur warded off. The Association ventures to recall the apprehensions expressed to your Lordship respecting Port Arthur in November 1895, because a disposition has been shown in certain quarters to minimize the extent of British interests in North China ; and it is undesirable that any such misconception should be allowed to obscure the necessity of counteracting, as far as possible, the paramount influence which the acquisition of that important fortress confers. The declarations of Ministers in favour of maintaining the integrity of China and uj)holding the Treaty of Tien-tsin were noted by the Association with satisfaction. The stipulation in Article LIV of that Treaty, " that the British Government and its subjects shall be allowed free and equal participation in all privileges, immunities, and advantages that may have been or may be hereafter granted by the Emperor of China to the Govern- ment or subjects of any other nation " affords broad ground for maintaining that rights of trade, travel, and participation in industrial development would be prejudiced by the assertion of special interests, in any part of China, by foreign Powers. The contention is, in tact, so unassailable that Her Majesty's Government appear to have received general assurances of adhesion. The Association had the honour to address your Lordship recently with regard to German enterprise in Shantung, and feels it unnecessary to recur to that topic further than to express its assurance that Her Majesty's Government will endeavour to secure equality of opportunity for British industry and capital in any negotiations to which it may give rise. There appears ground for confidence that Germany will at least not impose protective or prohibitive duties at Kiao-chau. But that feeling is replaced by one of distrust in the case of the two Powers which appear to be bent on fixing China in a vice and whose principles of action are opposed to the freedom of trade which it is the declared policy of Great Briiain to claim and to afford. The Association feels no confidence that the door of Manchuria will be left open by the Great Power v/bich has obtained possession of lock, bolt, and bar. An ice-free port was a necessary concession to its commercial needs. The fact that that port has taken the form of a fortress, Avhich can be rendered practically irapreo-nable violentlr changes the situation. ° ' ^ Equality of opportunity is already denied by the exclusion of English engineers and capital from participation in railway enterprise north uf the Great Wall ft mav be the interest of Russia to keep an open door pending tne completion of the Siberian Railway, and a measurable development of the great region which she has practically annexed, bitt no reliance is felt that the maxim will be adhered to in the future when 23 Tier hold has been strengthened, and the time appears to her ripe for imposing- pre- ferential duties in favour of Eussian trade. The gross value of thft trade of Newchwang amounted, in 1896, to 22,829,000 H. taels, equalling at the present rate of exchange 3,424,000/. The trade is carried on chiefly by coasting steamers and sailing ships, which aggregated 664,000 tons. The British flag covered 364,600 tons ; the Russian, 3,6->8. The trade is a growing one. It comprises a large import on Man(;hester goods, and it is capable of great development by the improved communications and more settled government that Russia will gradually introduce. But it is considered certain that she will strive to direct this trade as much as possible upon her land routes, and will make use of her maritime position to place fiscal difficulties in the way of participation by Maritime Powers. These considerations have a wider range. If Newchwang is the port of Manchuria, Tien-tsin is the port not only of Pechili, but of the whole region north of the Great Plain. The gross value of its trade in 1896 was 9,000,000/., employing 1,241,645 tons of shipping, 583,000 tons of which were under the British and 508,000 tons under the Chinese flag. Russia was not even represented ; yet she has obtained a naval station that commands the approach to Tien-tsin, and a military position that dominates the region which Tien-tsin subserves. Russia advances by waves and opportunities. By the occupation of Manchuria she gains a portentous increase of military strength. She gains control over an irregular cavalry that may approach the Cossack in quality and strength, as well as over a hardy population that will furnish a great infantry force ; and now that these resources have been supplemented and given point by the acquisition of a first-class naval stronghold, she has attained a position which England might find difficult to challenge when Russia's time for closing the door arrives. The digestion of Manchuria may occupy her a longer or shorter time. She will be ' in a position then to descend upon Pechili, and no natural barriers exist between Pechili and the Yang-tsze. The Association has ventured on former occasions to indicate the Yang-tsze Valley as a region in which British interests must prevail. It welcomed with cordial satisfaction, therefore, the announcement that China had been led to promise that no portion of that area should be leased or ceded to a foreign Power. It welcomed with equal satisfacti6n the announcement that Her Majesty's Government understood tbat term to comprise laterally the provinces bordering on the Yang-tsze, and trusts that it is understood to extend, longitudinally, from the Chusan Archipelago to the borders of Burmah and Assam. The Yang-tsze Valley embraces Shanghae, which is the emporium for Northern and Central China, as Hong Kong is for the south. The gross value of the trade of Shanghae in 1896 was 32,400,000/., the share of the British Empire being 16,500,000/. The shipping aggregated nearly 8,000,000 tons, of which the British flag covered 4,500,000/., the French 231,000/., and the Russian 42,500/. The share of the British Empire in the import trade amounted to 13,933,000/. out of 18,585,000/. Even these great figures are capable of immense expansion with improved communications and an improved fiscal system. The Association trusts that the importance of these interests will justify it in asking for information as to the nature of the arrangements by which the integrity of this region is to be preserved. It has, doubtless, been communicated to foreign Powers in terms sufficiently explicit to indicate that it will be upheld ; but there is a conviction that such assertion must be followed by an endeavour to reanimate the Chinese Government if Russian pressure is to be withstood. The corruption of the Mandarins, the indiscipline of the troops, and general laxity of organization make it hopeless to expect that reforms can be accomplished without foreign aid. The provision that certain taxes which have been allotted to the service of the loan shall be intrusted to the control of the Inspector-General oP Customs implies a promise of reform that may have far-reaching effect. But fiscal reform alone will not ward off military aggression. A capacity for military resistance must be evoked. The direction of all such new forces will lie with the nation that controls their organization ; and it is suggested, therefore, that a measure of control corresponding to the pre- ponderance of British interests should be retained, at all hazards, in British hands. The Association welcomes the intimation that hospitality and help will be aff'orded the Chinese navy at Wei-hai Wei. It trusts that help and instruction will be afforded in the organization of military forces ashore. It is scarcely conceivable that China could, under any circumstances, bear up 24 alone against the avalanche which will always in future be impending ovev her in the north ; but it would be a mistake to assess her military capacity at the level ot" her exhibition against Japan. There are in China races that ofEer material more promising certainly than the fellaheen ; and it is conceivable that a force might be created under foreign guidance, which would oppose a formidable resistance even to Russia under foreign leadership and with foreign help. The Association is glad to infer from the occupatiou of Wei-hai Wei a probability that that help will be afforded ; and that although the outlying portions of the Empire be abandoned, an effort may yet be made to sustain the cohesion of the eighteen provinces within the old frontier marked out by the Great Wall. The area of this region is equal to that of British _ India— the population certainly not less — the natural resources probably greater. With a stronger Govern- ment, improved communications, and better fiscal conditions, here are opportunities for commerce not to be surpassed in any corresponding area of the world. But previous experience leads us to to apprehend that it is only by the maintenance of its autonomy that British enterprise can be assured equal opportunity in the prospect held out. We have seen a commencement of exclusion already in the north. Apprehension is felt that Germany contemplates a monopoly of mining and railway enterprise in Shantung. Russia purposes certainly to monopolize the construction of Manchurian railways and the development of Manchurian mines. _ There is an apprehension amounting to conviction that preference will be given, within a period not longer, probably, than it took to vary the conditions aflPecting Batoum, to Russian trade. The examples of Madagascar and of Tonquin might suflSce to indicate similar danger from the admission of French interest or influence in the south. it may be plausibly contended that a promise not to alienate any portion of N Yunnan, Kwangse, or Kwangtung is consistent with the policy of Chinese integrity that Great Britain has affirmed. But the pledge is, in that case, needless. The certainty that England would oppose alienation affords a sufficient guarantee. The demand of France is an assertion of special interest, and she can put forward no claim to assert such interest which England cannot match. Yunnan is contiguous with Burmah as well as with Tonquin. If the French contemplate a railway to Yiinnan-fu from the south, we are already constructing one from the west. If the Red River gives France a special interest in the south, the Yang-tsze gives England an equal interest in the north. If the trade of Tonquin with Yunnan amounted in 1896 to 353,715Z., the trans-frontier trade of Burmah amounted to 260,000Z., and is expanding at a more rapid rate. The case of Yunnan may be one for arrangement, and if external influence cannot be altogether excluded. Her Majesty's Government will doubtless consider how the interests of Tonquin and Burmah can be conciliated so that free ingress and fair play shall be preserved. The progress made with Tonquin railways has not been rapid, and the proposed extension to Yiinnan-fu may be long in completion. The principle at stake, however, claims attention, and the Association feels confident that, with the example of Manchuria in view, no arrangement will be admitted that can be held to imply exclusive rights of industry or trade, or anything short of equality of opportunity in commercial and industrial enterprise of all kinds. Kwangse also borders on Tonquin, whereas we have access to it only through the Chinese maritime port of Pakhoi and the Chinese riverain port of Wuchow. But the trade of Tonquin with Kwangse through the frontier station of Lungchow amounted in 1896 to only 111,328Z,, whereas the trade of Pakhoi amounted to 669,000Z. The chief objective of the trade of Pakhoi is Nanning, which can be reached also bv the West River from Hong Kong. But the- governing purpose of French, policy is to attract the trade of South-west China to Tonquin. No jealousy need be felt of efforts directed to that end which do not exclude equal endeavour on the part of Hong Kong, but it is conceived that the time has come when the opening of Nanning should be insisted on as a sine qud non. Equally with the competition on the West River, Tonquin fears competition by means of a railway from Pakhoi. It is suggested that permission be asked from the Chinese Government to construct that railway, on the same principle that France has required the construction of railways in Yiinnan. Experience leads to apprehension that the creation of a French naval station in the I^ienchow peninsula will be gradually translated into an assertion of influence in Kwangse. An analogy is not far to seek. Discussing the commercial future of ludo-China some years ago, M. de Lanessan 25 remarked that, if Siam proposed to make a railway from Korat to Ban2;kok, Prance must thM^art it by any means. The railway was commenced, the ixeans were taken, and Siam appears tn have abandoned the project lest its completion entail further aggression. Lienehow overshadows Pakhoi, and it would be little surprising if the methods adopted in Siam were repeated, upon occasion, in Kwangse. It is suggested also that steps should be taken promptly to insure the construction by British capital, if necessary even under British guarantee, of the long-talked-of line from Kowloon to Canton. The case of Kwangtung stands apart. Contiguity with Tonquin may give France a plausible excuse for alleging interests in Tiinnan and Kwangse, but the Province of Kwangtung, with its great riverine port of Canton, lies at the back of a British Colony. The statement that British rights in Kowloon will be respected may appear superfluous in the light of these considerations, as it is not conceivable that Great Britain should allow them to be violated. An expression of regret may perhaps be permitted that the representations which have been made to Her Majesty's Government during recent years did not command more immediate sympathy, as an arrangement which might have been obtained at one time with comparative ease is put forward now under an aspect of international concession.. The gross value of the trade of Canton amounted in 1896 to 6,669,000/., and of that entered at the Customs station of Kowloon to 7,197,000Z. It may be unhesi- tatingly affirmed that nearly the whole of this passes through Hong Kong. The trade of Swatow, amounting to nearly 4,000,000/., is also carried on largely with Hong Kong. If there is a province in China to which any foreign nation has a superior claim, that claim could be alleged on behalf of Great Britain to IvAvangtung, and the Association desires to emphasize the opinion expressed in a Besolution submitted to your Lord- ship a week ago, that a clear and decisive resistance should he opposed at all hazards to the recognition of any alien interest or influence in that great and important province. Peeling unable to believe that a declaration of special interest by Prance in these provinces is destined to retain a platonic character, the Association is led to suggest insurrection, with its concomitant, anarchy, as a contingency that might aiford excuse for intervention, to which it would not be easy to set a term. The reins of govern- ment in China are never too firmly held, liecent events have shattered its prestige. The population of the Kwang Viceroyalty is the most turbulent in the Empire, and the outbreak of disturbance that might grow into rebellion is a risk fchat no one familiar with China can dismiss as remote. The Association desires to express, in conclusion, an earnest hope that no further encroachment on the integrity of the Empire will be allowed. Especially it desires to emphasize the opinion expressed in a Resolution submitted to your Lordship last week, that no special or exclusive privileges should be recognized in any portion of the other maritime provinces, where British interests and British trade surpass those of the rest of the world. I have, &c. (Signed) B. S. GUNDRY, Hon. Secretary. No. 26. Sir N. 0' Conor to the Marquess of Salisbury. — (Received April 16.) Mv Lord, St. Petersburgh, April 11, 1898. I HAVE the honour to transmit herewitli to your Lordship an extract from the "Journal de Saint-Petersbourg " on the subject of" the lease of Woi-hni Wei to Her Majesty's Government. I have, &c. (Signed) N. R. O'CONOR. Inclosure in No. 26. Exlraclfrom the "Journal de Saint-Petersbourg" of March 29 {April 10), 1898. TOIJS les journaux de Berlin reproduisent un article de la " Kolnische Zeitung " exiwsant le point de vue Allemand au sujet de 1' Arrangement Anglo-Chinois relatif [253] E 26 a Wei-hai Wei. La feuille Ehenane constate qu'il est iudifterent pour rAllenaagne que tel ou tel pavilion flotte dans ce port, lequel est sep:ue dvi territoire de Kiao-Tcheou par de hautes rnontagnes, et ne saurait constitiier iin danger pour celui-ci. EUe ajoute que la valeur de Wei-hai Wei ne saurait etre comparee a celle de Port- Arthur et de Talienwan, ce que le " Times " et d'autres journaux Anglais avaient releve 4galement. Sous le rapport militaire, Wei-liai Wei n'a qu'iine impcrtance restreinte, juisque les hauteurs avoisinantes le dominent compl^tement ; et au point de vue commercial il est encore moins important, puisqu'il n'a pas derrifere lui de contrde ppuvant se preter au developpement de relations economiques, et que le port voisiii de Tchefou est bien mieux situe a cet egard. , Mais s'il en est ainsi, on se demande comment la " Kolnische Zeitung" peut supposer que I'occupation de Wei-hai Wei j)ar TAngleterre doive causer des appri^hen- sions a la E,ussie. La situation de la llussie en Extreme-Orient est determinee par la longue etendue de sa fronti^re de terre, les ressources qu'elle a a sa dispositionj- ses liens d'amitie avec le Gouvernement Chinois, qu'elle vieiit encore de cimenter, et le caractfere de sa politique do paix, inspiree du desir de faire servir au bien g^n^ral les resultats qu'elle a dernierement acquis. Ce n'est pas sur le terrain des rivalit^s- que la Russie s'est placee en concluant 1' Arrangement du 15 (27) Mars, et tant que ses int^rets legitimes ne sent pas en jeu. die ne saurait prendre ombrage des concessions obtenues par d'autres Puissances. Le langage tenu recemment par les hommes d'etat Britanniques laisse voir, d'ailleurs, que dans les spheres Gouverne- mentales Anglaises on tient en juste consideration les interets elev^s de pacification gen^rale. No. 27. Sir C. MacDonald to the Marquess of Salisbury. — (Received April 17.) (Telegraphic.) , Peking, April 17, 1898. YESTERDAY I had an interview with the Ministers of the Tsung-li Yamen, and am going to see them again in the course of the next few days, on the subject of your Lordship's telegram of the 13th April. :So. 28. Mr. Balfour to Sir C. MacDonald. (Telegraphic.) Foreign Office, April 18, 1898. TEXT of messages exchanged between Emperors of Russia and China respecting Port Arthur Agreement has been published by Russian Government. Do you know what is referred to in statement made in Chinese message, that the friendship between Russia and China has lately been strengthened by a Treaty of Alliance ? J : No. 29. Sir C. MacDonald to the Marquess of Salisbury.— {Received April 19.) (Telegraphic.) ' Pehinq April IQ 1898 1 AM informed by M Pavloff, the Russian Charge d' Affaires, 'that the preamble to the Convention which has recently been signed concerning the lease to Russia of Port Arthur is to the effect that the Convention is for the better protection of the mutual interests of Russia and China, and for the further estaWishin"- and consoli- dation of the existing good relations between them * The Chinese word for "Treaty '' is the same as that for " Convention," and it IS quite probable that the Chinese have ccmstrued the phrase given above about mutual interests as meaning an alliance between the two countries I think therefore, that this Convention is the Treaty of Alliance about which your Lordship inquires in your telegram of yesterday. No. 30. Sir E. Scitow to tlie Marquess of Salisbury. — (^Received April 19.) (Telegraphic.) Tokio, April 19, 1898.- '1 WAS informed to-day by the Prime Minister tiiat tlie Russian Government iiad expressed to Janan their desire that the possession of Wei-hai Wei after evacuatiori should be secured to China, and asked whether this Government would kgree with them to that end, as others would be willing- to join them in it. The reply of the Japanese Government was that they could give no under- taking of this kind. No. 31. Jtlr. Balfour to Sir F. Lascelles. (Telegraphic.) Foreign Office, April 19, 1898. DECLARATION respecting Wei-hai Wei. ■ Your 'telegram of the 4th April. German Ambassador states that the following form of Declaration is accepted by hi'^ Government: — "'Englarid'formally declares to Germany that in establishing herself at Wei-hai Wei she has no intention of injuring- or contesting the rights and interests of Germany in the Province of Shantung, or of creating; difficulties for her in that province. It is especially understood that England will not construct any railroad communication from Wei-hai Wei and the district leased therewith into the interior of the Province of Shantung." You are authorized to address a note, giving the assurance in that form, to the Minister for Foreign Affairs. No. 32. Sir C. MacDonald to the Marquess of Salisbury. — {Received April 20.) (Telegraphic.) Peking, April 20, 1898. RUSSIAN lease of Port Arthur Agreement. The term of lease, v/hich may be extended if mutually so agreed, is at present fixed at 25 years. Details, including extent of territory to be leased (in which no Chinese troops are to be stationed), are to be discussed "^and settled at St. Petersburgh. Extension of railway, under conditions similar to those agreed upon with regard to the Trans-Siberian line, to Talienwan. Opening of Talienwan to trade, and, except in one part of the bay, in which only Chinese and Russian ships will be allowed, merchant-vessels of all nations to have free access there. No vessels, war or merchant, of any nation but Russia and China, to be allowed access to Port Arthur. No. 33. Sir C. MacDonald to Ike Marquess of Saiikbury. — {Received April 20.) (Telegraphic.) Peking, April 20, 1898. IN continuation of . my telegram of to-day, I have the honour to inform your Lordship that I have requested the Tsung-li Yam^n to send me a copy of the message sent to the Emperor of Russia by the Emperor of China. [253] E 2 28 No. 34.. Mr. Balfour to Sir C. MacDonald. Sir, Foreign Of)ice, April 20, 1898. I HAVE received 3our despatch of the 20th February, and I entirely approve your proceedings in regard to the concessions which you obtained from the Chinese Government, as already reported by you by telegraph. I should wish you to inform Mr. Cockburn that I have received, with much satisfaction, your testimony to the value of his services. I am, &c. (Signed) A. J. BALFOUR. No. 35. S?r E. Satow to the Marquess of Salisbury. — {Received April 21.) My Lord, Tokio, March 23, ]898. UPON the receipt of a telegram from your Lordship on the 15th instant, informing me that the Chinese Government had intimated their willingness to lease "Wei-hai Wei to Great Britain after its evacuation hy Japan, and that Her Majesty's Government ■desired to learn whether it Avould be agreeable to that of Japan if Her Majesty's Govern- ment should think it advantageous on general grounds, I went to see Marquis Ito, and and his fears would not be unjustifiable, that with municipal police in charge of his premises it would merely be a matter of time when they were thoroughly looted without hope of redress. Highway Robbery.— -Oi highway robbery the Government takes a Vefy dififereiit view, because it regards brigands as a danger to itself and the State, and this they might easily become, if they weie organized, for they are well armed and mounted ; and as they are rightly persuaded that if captured their heads will inevitably adorn the approaches to the provincial capital or to their natal town, they are, when attacked, recklessly brave. They do not prey on the poor ; in fact, some go so faf as to say they are given to 46 good works, but they are merciless when they can. pounce on a rich convoy, or on any one who is in a position to pay a good ransom. Thev inhabit tlie recesses of reaiote mountains, and, generally speaking, the danger of being''attacked is greatest in the districts between the fully settled country and that which is uninhabited' or governed by independent guilds. This year the whole of the country about Hai-lung-ch'eng, in the Hwei-fa Valley, has been fermrized, the robbers descending from their retreats and extorting money from their victims. _ A few days ago a missionary travelling from Kirin met a party of twenty brigands within a short distance of Kwangcheng-tzu, a large (garrison) town of 60,000 inhabitants. The robbers were mounted and well armed. They stopped his cart, but when he told them who and what he was, and assured them that he had nothing of value with him, they said, " Let ns each take our own road," and rode away. Had he been a Chinaman, lie would have been stripped naked, and all his property and the mules stolen ; any opposi- tion would, of course, have resulted in the murder of the party. There are many bands in the wild country between I^finguta and San-chia-kou. The Russian engineer who explored this region told me that his Cossocks drove off a serious attack made bv some thirty brigands, one of his men being severely wounded ard several of tlie bandits killed. This attack was not, he thinks, made with a view of plunder, but to sliow that the robbers resented the bringing of a railway through their country; He said that the Chinese had never exercised any authority in this district, and this in a sense applies to all the remote mountain regions of this country. A party of soldiers is now and then sent off to follow the brigands to their fastnesses, but no attempt has been seriously made to grapple with, and stamp out, this evil. My informant further said that twice in remote districts, far from any road, he found largediouses replete with Chinese luxuries, and on questioning the owner as to the reason fora large establishment so far from other habitations, was told that the owner's father had a fancy for building a large house, though he had no doubt that they were kept up by brigands as tlieir head-quarters for supplies, or as retreats in which to enjoy their ill- earned leisure by dissipation, gambling, and fighting. ' It is said that the robbers have agents in the chief towns, wlio keep them well posted in the movement of bullion, stores, or well-to-do men. There is not a capitalist in this city (Kirin) who would dare to go north on business; in fact, the movement generally amongst the upper classes is extremely limited. During the four months I was on the road I never once met an official or a man travelling with any retinue. JVlany of the officials I visited expressed astonishment at the route I followed, and openly confessed that nothing would induce them to leave the main road. When they are forced (o travel on promotion, or when visiting the capital, they always have a very strong escort. Insurance Companies. — But though an official is afforded protection, none is given to the merchant ; so in all large towns " Piao-chu-tze," or Insurance Companies, have been formed, which supply an escort for a convoy of waggons for an ad valorem premium. Each veiucle then flies a small flag indicating the Company under the protection of which it is travelling. It is said that these Societies are in league with the brigands, or at least pay them blackmail, and the weakness of the escort, three or four men to ten or more carts, lends probability to this story; but on the other hand, the convoys are not nnfrequently attacked, but possibly the attacks may be made by a guild of robbers who do not belong to the district, or rather to whom the district does not belong, for at times, especially when the snow renders the mountain tracks passable for sledges, the robbers have been known to travel long distances. Executions, — Last year the Governor of Kirin was sending money to his home in Hunan. The robbers got wind of it, swooped down on the carts, and made off with the entire sum, which is said to have been considerable ; so now, if not before, the robbers get very short shrift, as a visit to the West Gate of the capital will testify, where from the trees, luing by the pig-tail in cages, may be seen plenty of heads, which one tries to liope all belonged to guilty men. The estimated number of executions in Kirin is about 1,000 a-year, and the same at Mukden, and it must be remembered that besides the above a considerable number of executions are carried out in the Prefectual cities, so that d',000 or 5,000 is not a high estimate for the whole of Manchuria. As I said before, I can only hope that all these men are guilty ; but when I compare the safeguards at home to prevent a miscarriage of justice with the le^al methods which obtain in this country, it is impossible to shut one's eyes to the fact that many an innocent man is executed in Manchuria, 47 ^ Condition of the People. — It is, however, a mistake to think that on this account the inhabitants of this country are unhappy — gross injusiice inflicted on others, or the misfortunes of his neighbour never give a Chinaman a moment's distress or anxiety. A large number of the inhabitants have come from congested and poor districts of China to a land where, if riches are not to be found, at anv rate the creature comforts of life are witliin the reach of all who choose to labour for them. ^ The Government grants land to settlers free of taxes for the first three years, at tlie expiration of which period a land tax, or rent to the State, of about 4d. an acre is collected. Disastrous floods excepted, which affects riveraine land only, tlie crops cannot; be an absolute failure. The failure of snow in winter, or a very light or lieavy monsoon, may injuriously affect the quantity and quality of the crops, hut when one considers the large quantity of grain distilled into spirit, both for local consumption and for export to other parts of China, and also that tlic grain itself is exported,* ii is clear that Manchuria is far less likely to suffer from the scourge of famine than other portions of the Empire. A snnall patch of millet supplies everything the settler requires — the grain for food, the stalks for fuel, and thatch to his mud hut. No traveller can fail to be struck with the extraordinary cheapness qf living in Manchuria. The charge for board and lodging in the best inns is a little less than od. a-day, while ]d. to the waiter is regarded as simply squandering money. Tn this charge is included two meat (pork) meals, and what is enphonistically described as wjne, a beverage in which the principal ingredients are alcohol and fusel-oil, and powerful though it is, I have never seen a man under its influence since I have been in this country, and it is not that they are stinted. Tlie landlord generally walks about at nieal times, pressing the " honourable " gentlemeuf to eat and drink as much as they can, and though they certainly succeed in the former, they limit themselves to drinking after each dish a tiny bowl, holding about as much as a liqueur glass, of hot spirit or wine. Inns. — The inn itself costs little to build — mud walls held up in a timber frame, with a thatched roof, paper windows, mud floor, baked mud "k'ang," on which ti-avellers who have bedding roll it out, and those who have not cover themselves with their wadded garments, both kept warm, with fifty others, at a cost of a pennyworth of fuel. Tlie only furniture are little tables, wliich can be put together for a few pence. Chop-, sticks cost nothing, china bowls very little more. Then there is a mud fire-place, a boiler, some wooden spoons, a small hay-fork for fishing out the meat, a gourd or two as a bale. These make up the stock-in-trade of an inn-keeper, and assuming he has pork, wine, fungi, cabbage, and rice at command, he posses:ses everything that any Chinaman requires to live in comfort bordering on luxury. 1 have omitted to merition that no inn is complete without a cock, which,, with a hen for company, is kept in the room to act as a clock. A landlord told me that some of these birds sound every watch, but I am thankful to say that the breed is not comnion, as I have not niet one yet. Generally, they "sound ofS " between 1 and 2 in the morning, when the slow traffic drawn by oxen, and even some of the heavy cart traffic, gets under weigh, but they do not seriously take in hand the business of "heralding the morn " until an hoar before tlie first streak of light, when, as these birds are specially selected for their powers of endurance and pitch, every one, even those only partially endowed with a nervous system, take to the road. The guests have only one topic of conversation, and that is money. How mucli they are being paid for their job, the cheapest inn to halt at the next day for breakfast, how much they ought to pay the landlord — witli much good-natured liaggiing when lie comes to collect the money, for the landlord wisely secures his dues before his guests have passed the night in his house. Then, if a foreigner is at the inn, they conjecture aloud what his income amounts to, how much his clothes cost, and discuss him generally, as though he were a wooden automaton. If they were not so dirty and so inquisitive, they are far from being unpleasant neiglibours; in fact, if the humble people were left alone, a stranger would be safe in their midst, for it is the so-called educated classes that excite their prejudices and inflame their passions against tlie foreigner, and so bring about the outrages which occur from time to time. * ]t does not appear from the Customs Returns that grain is exported, as it is conveyed in native boats, and recently by steamers, to Siberia. Export was forbidden in 1874 and 1889. t As' the carters form 99 per cent, of the travelling public they are treated with great deference by th? landlord, for their good.will or the contrary can make or mar an inn. 48 I have dwelt rather at length on these inns, as they are one of the great social features of the country, and form quite an important industry; besides, the innkeeper generally does a little farming on his own account, and thus sells his produce to the best advantage at his own door. The other day I went for a drive in a sledge for 65 miles up the River Sungari from Kirin, and in this distance there were about forty inns, nearly all temporarily constructed at the edge of the bank, the yard for the animals on the river itself, surrounded by a stockade frozen into the ice, and inclosing about a couple of acres. This gives some idea of the vast traffic, even in a comparatively poor wild country. The produce was chiefly, as might be expected, charcoal, with an occasional load of fungi gathered in the forests. The sledges were returning empty, for the scattered inhabitants are poor, and their wants small. Winter Traffic. — In the winter, when the whole country, its rivers and marshes, become ice-bound, the produce is brought down country, when every farmer with a team of horses takes to the road. From the fertile plain about A-shih-ho, and the splendid belt of country which stretches beyond Hulan and Payensusu to the north of Pei-tuan-lin-tzu, the traffic goes straight across country to Kuan-ch'eng-tzu, avoiding the official city of Kirin, or takes the "tsai " (grass) road across the Mongolian steppes to Cheng-chia-tun. Then, if bound for the Treaty port of Nevvchwang, it passes to the west of Mukden, crossing tlae River Hun at Chang-tan, but much of the produce is stored at Tung- chiang-tzu, the highest existing port on the River Liao, or at Tieh-ling, there to await the opening of the river in spring. These carts return northward with piece-goods and salt, which have been sent from the port of Newchwang to Tung-chiang-tzu and Tieh-ling during the preceding autumn. But, of course, return freights are very low, because, though the values of imports and exports are fairly balanced,* the latter in bulk must far exceed the imports. Some idea of how enormous this traffic is may be obtained from the annual Report of the Chinese Imperial Customs for 1896, which shows that in one year nearly 9,000,000 cwt. of beans, bean-cake, and bean oil was exported from I^ewchwang'. This means about 225,000 cart-loads. Allowing each cart an average of ten trips in the season — and many cannot make more than two or three — it shows that at least 22,000 carts and about 150,000 animals are engaged in the bean trade during the winter. Ponies and Mules, — There are no horses in Manchuria, but the Mongol pony is a hardy beast that can work every day and all day. The mules are still better, as they last longer and are consequently more expensive. The average price for a pony for a cart is 2Z., and a mule double that price, while really fine ones cost as much as 30Z. A first-rate pony costs about lOZ, Carts with merchandize are generally drawn by six to nine ponies or mides, carts for passengers by a team of three mules. Oxen are chiefly used for ploughing, or in drawing sledges on the rivers and roads when the snow makes this feasible. Donkeys are not much used. None of the animals are ever groomed ; when taken out of liarness they are allowed to roll and immediately racked up to prevent them lying down, for the Chinese hold that this gives them rheumatism. They stand in the open in all weathers in a blazing snn in summer, or in 50 de°"rees of frost in winter, for the Manchurian beast is insensible to changes of temperature. On good roads a cart, with three mules, will carry a passenger, the driver and a fair amount of baggage, 30 miles a-day for a week or a fortnight ; on very bad roads 5 miles is a very bad, and 10 miles is a fair journey. The carts with merchandize do about 20 miles a-day, carrying 30 to 40 cwt. in winter, and much less in summer. Food.— The animal's food is chopped straw of the Kauliang (Hsiao-mi) with a little Kauliang, beans and bran mixed with it. They get three feeds a-day, and when doing hard work an extra feed in the night, or very early in the mornino- ;' in fact it is difficult to say when these animals sleep, as they are either on the road or eating.' Blindness.— A very large proportion of the ponies and mules, fuUv 20 per cent are blind in one or both eyes. The dnst may have something to say to this but I think the carters' whips have still more. ' * In 1896: imports, 1,397,761^.; exports, 1,685,124?. 49 At bad bits in the road it is often just a question whetlier the cart is dragged through or hopelessly bogged, and then it is that the drivers excite the animals by shonting and flogging;, and far too often lash them on the liead, with the deplorable result that the animal's eyes are injured or destroyed. This does not militate against their utility in the centre or shafts of a team, but it renders them useless for pack work. There is, however, very little of this description of transport in the country. In the mountainous districts, the farmers are too busy to leave home during the summer, and in winter small sledges are used to cross the mountains, or more frequently tlie river is used^ as a road. There are many houses and hamlets in the Upper Sungari Valley practically cut off from all communication with the outer world till the river freezes. Monetary System. — The monetary system, or rather systems, of Manchuria are maddening; to the traveller. In the Treaty port and in all large transactions with foreigners the silver tael is used, 100 Manchurian taels being equal to 105 Shanghae taels, but in the retail trade and inland tJie tiao and cash are invariably employed. In the Province of Feng-tien 160 real cash equal 1 tiao, so that at the present rate of exchange 1 tael is equal to 8'37 tiaos, which makes the tiao equal to about 4 about 65 degrees. The first night frost occurred on the 23rcl Septem'ber, and by the end of the month it was rather too cold to ride in the early morning. On the 8th October there was a marked change in the weather. The leaves, wliich had turned a brigiit crimson a few days before, turned a russet brown, and- fell off the trees in showers. On the 9th rain and sleet fell, on the 13th, 14th, and 15th rather heavy snow, and then the spell of fine, crisp weather began, which lasts througli tlio winter. On the 26th October it was freezing all day, and by the end of the month tlio River Wu-kung, rather a sluggish stream near Sansing, was nearly frozen over. From this date onwards the weather was superb, the cold gradually becoming more intens?, but it was not until the end of November that carts were able to cross the Siingari at Kirin. Some time before that date my thermometer had liibernated, the quicksilver curling itself up in the bulb, for unfortunately it does not show more than 12 degrees T:)elow freezing. However, except for the scientific interest of noting the temperature, a thermometer is unnecessary. Moderately warm clothino-, with tlie ears covered, is all one requires for day exercise, but in driving furs are necessary, tspecially in t!ie early morning and after sunset. The missionaries tell me that tlie aiutumu in this country is unhealthy for young children, and this is the worst I have heard of the climate. Diseases. — The common diseases amongst the Chinese are a mild type of enteric fever, dysentery, and a sort of ophthalmia, brought on in the first instance by dust, and aggra- vated by dirt and neglect. It can be easily cured if taken in time, but if treated by a native doctor frequently results in blindness. Missionaries. Missionaries, Protestant. — The Protestant Missions of Manchuria are supported by the Scotch and Irish Presbyterian Churches, and though the finances are kept separate, the two Churches practically work as one Mission. They have about 6,000 members, with about an equal number of inquirers under instruction, and about 100 chapels. In Liao-yang, Newchwang, Kai-yuan, Shang-cheng-pu, Kwan-cheng-tzu, Kirin, Mukden, and Kin-chau are European migsionaries, and in the four latter towns hospitals have been established under mii?sionary doctors. These establishments do splendid work, and nothing can exceed the devotion with which the medical men, every day and all day, tend with their own hands the most repulsive sick, few of whom, on their cure being effected, give them the slightest thanks, or show in any manner their gratitude. Large numbers attend daily as out-patients, rr.any of them in a fair position of life ; yet, in the three years that the Kirin Hospital has been at work, only one man, who was successfully operated on for cataract, has given anything to the hospital. This man, the chief of the cash mint, and said to be one of the richest in the city, valued the restora- tion of his sight, for he was stone blind, at I5L As to the conversion of the people to Christianity, the missionaries themselves, in the face of much to discourage, are hopeful, and if numbers are any criterion, they are justified in being so. It is, perhaps, not strange in this country that though the foreignc.T is despised, the native who follows the creed ot the foreigner frequently obtains power and influence to which he could not otherwise attain. The reason for this is tlmt the mass of the upper classes regard the missionaries as political agents, and fear chem. The -poor know this, and therefore look, in many cases, to the missionary— -the honest for protection,, the dishonest to further their own ends. These ends may be the evasion or recovery of a debt, or some similar dispute, in which they know that their connection with the Church will influence the Magistrate. It ought not to do so, for the Presbyterian missionaries lose no opportunity of letting Magistrates and others know that they will use no influence when a Christian is before the Court, whether as a compkinant or defendant ; but, practically, it does influence them, for they attach the same value to these statements by the missionary as they wovdd to a declaration made by themselves in similar circumstances. A few months ago the missionary at Shang-cheng-pu welit home on furlough, leaving the native evangelist in charge. ^ By chance, a missionary in Mukden saw a cart passing through the city flying a flag with a Christian device on it, and, on questionin"- [253] H 2 52 the carter, he learnt that he had purchased the flag, and witli it a paper givmg- him the right to pass all barriers free of toll, from the evangelist of Shaug-cheng-pu, and, strange as it may seem, he and many other carters had actually been permitted to pass free of charge. When an inquiry was set on foot in Shwang-cheng-pu, it appeared that not only had the evangelist been doing Yam^u business on a very large scale, but that nearly all the members of the Church were more or less implicated. I should be very sorry to generalize from this particular case, and which is, more- over, an unusually flagrant one ; but minor cases crop up from time to time, and the missionaries themselves acknowledge that the greatest watchfulness is necessary to prevent the occurrence of scandals such as this. Roman Catholic Missions. —The Roman Cathohc Missions are chiefly in the Sungari Valley at Hulan, Payensusu, Pei-tuan-lintza, Ta-pa-chia-tzu, near Kwan-cheng-tzu, Mopan-shan, in the Hwei-fa Dish, with a Bishop at Mukden. _ These priests have adopted China as the country in which they are to labour until their time comes to l^ave this M'orld. They are simple-minded, hard-working men, with no ambition beyond the success of the work to which they have devoted their lives, but they are under a Bishop who directs their policy. The Bishop's passport is said to be technically worded, so that he appears to be appointed by the French Government ; he travels with a retinue, and flies the French flag in Mukden, and in any town in which he is temporarily residing. Every case in which a convert is concerned is taken up as a case against the Church ; it is not therefore a matter for surprise that their members are said to be more numerous than those that belong to the Presbyterian Church. Disputes between the tioo Sects. — For the difficulties which occur between the two sects, which are at times serious, causing even riots, the missionaries of both creeds must be held innocent. Originating probably in some trivial dispute, they are fermented by the native subordinates; but the Protestant missionaries complain that the French Bishop gives too ready credence to his followers, who cannot always be in the right. The Army of Manchuria. Chinese. Soldiers: Numbers and Equipment. — The army of Manchuria consists of a ^' foreign-drilled" force and the Manchu or Banner army. The foreign-drilled force is composed of Chinese soldiers recruited in the north of China and in the Province of Kiang-su. Its nominal strength is 25,000 men, of which 7,000 are in Hei-lung-chiang 10,000 in the Kirin Province, and 8,000 in Feng-tien Province. The battalions have a nominal strength of 500, but scarcely muster more than 400 each, so that the effective strength of the force does not exceed 20,000 men.* More than one-half this force is mounted on Manchurian ponies, but whether mounted or foot soldiers, the equipment is the same— a Mauser rifle, with 100 rounds of ammunition carried en banderole. The men are of fine physique, of medium height, and between 20 and 30 years of age. Their pay is 12s. 6d. a-month, with an extra 2s. 6d. as a forage allowance if tliey are mounted. They get an annual issue of a uniform coat, and this is the extent of their cost to the Government, for they have no doctors or commissariat and transport, and they construct and repair 'their own barracks. Drill.— Thay drill very seldom, and the movements which I have seen were dlementary, such as marching in fours and fronting in line. Musketry. —They are issued, once a-year, 100 rounds, and the practice consists in firmg at a sheet-iron target about 2 feet square, at a range varying between 100 and 150 yards, a hit being judged by sight and sound. A few weeks ago the Governor of Kn-ni held a musketry competition of the garrison, when he saw every soldier fire Ave rounds. He gave a prize of a Is. for every hit, and 12s. 6d. to any man who scored 53 five hits in succession. The range was 160 yards, and the tavget about 2 feet square, with a round bull's-eye, 6 inches in diameter, painted in red on it. Thinking; that in order to gain a prize it was necessary to hit the bull's-eye, I got the question put to a soldier, who repUed, "Who, indeed, could hit the red moon?" I examined the target after a good deal of firing, and the "red moon" had been struck once only, but the target was frequently hit, and most of the shots went very near, which was very necessary, as there was a crowded suburb within what we call the danger zone. Artillery. — Some of the men are trained as ganners, but none of the guns are horsed, A battery of 7-prs, and some smaller mountain-guns are kept in tlie camps at Kirin. Marching. — As regards the marching of the Chinese soldier, I scarcely think it is to be beaten by any soldier in any country. On several occasions my escort marched over 30 miles in a day, but, as the escorts were changed nearly every day, I had no opportunity of judging of the men's endurance until I. marched from Sansing to Ninguta. The track between these two towns is 185 miles long, following the right bank of the River Mutan. Last year the floods made a clean sweep of this narrow river gorge, washing away the few liouses that existed, so that for a distance o 109 miles south of the liamlet of Wei-tzu-ho there is only one cluster of a few farms. Leaving Sansing at 1-30 p.m. on the 31st October, we reached Wei-tzu-ho, 38 miles from Sansing, at midday on the 2nd November. Here the escort was changed, but as the relief had not completed its arrangements for the journey, our departure was deferred until the following day. On starting at sunrise on- the 3rd November we were 147 miles from Ninguta; that day we marched 19 miles, and 16 miles the following, halting early in the afternoon, so as to get the advantage of a cottage to pass the night in. From sunrise on the 5th to 3 A.m. on the 7th, that is, in forty-four hours, the men marched 67 miles; during the afternoon of the 7th, 10 miles; on the 8th, 16 miles; and on the 9th, 19 miles, arriving at Ninguta at about 2 p.m. on that day. The men were not at all done up, and could easily have marched another 10 miles. As it is, the average is a little over 21 miles a-day for seven days, but this very inadequately expresses the nature of the work they did. The road is execrable. The narrow gorge through which the river flows consists of a series of clifl"-like bluffs abutting into the river ; where practicable the road has been taken round the foot of these buttresses, where impracticable it turns up the nearest valley and mounts straight over the ridge of the bluff, with a sttpreme disregard for a ruling gradient. In the former case the river has washed away the road, exposing a debris of rocks, fallen from the overhanging cliffs ; in the latter case, nature has utilized the road as a convenient water-course. I do not think any vehicle but a light Chinese cart could possibly be taken over this cottntry, and this was only possible by the assistance of the escort. At times they had almost to carry the carts, at others to push them up hill, or hang on to them going down hill, clear away stones, dig ramps in the frozen banks of the streams, for bridges there were none ; in fact, they were almost constantly at work, added to which, for three nights in the six they had no' sleep. On the night of the 3rd we got into a ruined cottage, but as two of its sides were wanting, and the thatch was full of holes, we might, except for the idea of being under cover, have just as well have been in the open. None of tlie men attempted to sleep, but sat round the fire talking and singing all night. On the nights of the 6th and 6th we bivouacked, or rather 'halted to rest and feed, for though the men made huge fires, and they do understand* the art, the cold was so intense that sleep was out of the question. Fortunately, the moon was full, shining through an exquisitely clear atmosphere, so that it was as easy to march by night as by day. We had no officer with the party to raise objections or make difficnlties, and the men were cheerful and pleasant, working like Trojans without any pressing. Their food consisted of doughy, unleaven cakes, which they heated at the fire, and dried fish, boiled in a large caldron, with some salt and garlic ; their drink — the water the fish were boiled in. They are capital men, but as wild as hares. Sometimes they cut up a bullet into pellets for sporting purposes, but as a rule they fire at pheasants from the hip with ball cartridge. After having a Mauser bullet within a few yards of my head, I gave up going out of sight of the party to look for game, it was far too dangerous. Opium smoking by soldiers. — Of the twenty-five men in my party, two were opium smokers, and [ watched them closely. They never gave a hand's turn to any workj 54 but remained with the iiiiile that carried the provisions and tools, to which they added their rifles. When we were delayed by an unusually difficult obstacle, tliey would get into a sheltered spot, rig up an overhead covering with their coals to shelter the opium lamps, lie down and smoke. I cannot say that 1 have seen in China the wrecks, which overindulgence in this vice is said to produce ; possibly they disappear during the last stages hiio opium dens, but of this I am cerlair, that opium 'smokhig is incompatible with efficiency as a soldier, and still more so as an officer. Its calls are so imperious; they must be obeyed, or tlie man cohapses. To obey them the man must halt, and not only halt, but get under cover of some kind, to shelter the little lamp in which the drug is prepared for smoking. It is quite unnecessary to enlarge on the effect this must have on a force, of which (he Commanding Officer is an opium smoker. It is said that in the late war with Japan, the Manchu troops frequently halted to smoke, no matter how pressing tlie emergency might be, and I do not see how it can he otherwise, so long as opium smokers are allowed in the ranks. Of course, there is a rule forbidding it, but the officers, being almost exclusively Manchus, at aiiy rate in the higher grades, are the greatest offenders themselves, and this, quite apaft rom their general ignorance of ail military matters, reduces the fighting value of the force by 50 per cent. ^Difficulty of concentratmi.—Bvii even supposing the force was twice as efficient as it is at present Manchuria is a huge country, over which nearly one half of the foreign- drilled troops are scattered in detachments, guarding military posts, mines, or employed on escort duty, or hunting robbers. Even with the best possible arrangemelit and peffect communications, it would be difficult to concentrate a quarter of the force on any giveli point in a reasonable time, but under existing conditions it W^ould be impossible, as the following diagram giving the chief garrisons and the distances between them will show : — Commanders. Commanders. — A word as to the Commanders. As befoi'e mentioned the Governor of Mukden has supreme authority over the military forces in this country, but if lie is not more deeply versed in the art of strategy tlian he is in what constitutes military efficiency, he is scarcely a warrior that his country can confidently rely on in the hour of tieed, for in recommending the purchase of some arms, he suggests to the Emperor, " that owing to their great expense these arms need not be used by the troops in their daily drills, but when danger appears, these rifles should by all means be placed in their hands."* Then the ' •n a> P3 i/i I/) © b aj &: r/) CO r^ C5 cl CO ^ rH -1-2 M cr TO a S flJ H s ' J 0) ^ <11 ^ p s o n ■+J (M 05 pi -^ 6n o f= rJ=l <1 ^ a =2 6- d o 'Ci^ o o fl5 S ^ t> -^^ • -H r! ctf m ^ f— t =M ^ O m .S '3 S-l m O >^ nri c/J n ci •irt = i^ !>^(^ -^^ • t— 1 -1— en :3 O* +3 o 05 bO C o J3 o o . O CO o o o o ■ 00 O lO o o o o I bo a: M 5 o o . o • o Oh o o o O CD CO CO rt o o o . . CO t-i (M . o , CO o S5 i-OWCDOO OOOO (M O O lO O The garrison. There are at present at Kiao-chau one battalion of marines and a company of marine artillery blue-jackets. When a reduction of this garrison will become possible cannot as yet be foreseen. The men forming the garrison belong to the Imperial Navy, but are to receive a special rate of pay, to be provided for out of the sum claimed. 3. Eor a survey of the ceded territory. This will include a general survey (land and sea) and a special one for the determination of the ownership of land and for its registration (" Grundbuch "). 4. Navigation signals (lighthouses), buoying of channels, &c. 5. Quays and 'warehouses. '' It cannot at present be even approximately estimated what sums Avill be required during the financial year 1898 under each of these separate heads. The Governor and the technical experts have only just arrived at Kiao-chau. Negotiations have been entered into with several private firms as to their bearing a. part of the expense of the works to bo carried out for the benefit of commerce and navigation. Consequently, no serviceable estimate of expenditure can be made. The- only thing to be done at present is to have a lump sum ready which will be available for the purpose." (Annex IV to Supplementary Estimates.) The "Fost" of the 24th instant publishes an article explanatory of this part of the Supplementary Estimates, of Avhich the following is a precis : — The demands made in the Supplementary Estimates made for the administration of Kiao-chau are justified by the fact that the Colony [sic] has great possibilities of development. It is to be expected that the opening up of the Hinterland, the facilities for the construction of a railway, atid the favourable position of the place for navigation (especially as regards the coasting trade) will soon raise its importance. To initiate this development, the following works will be necessary : — A careful survey of the harbour will have to be made, the fairways buoyed, and indicated by lights and landmarks. Several piei'S and cranes are also to be erected. These works are to be carried out gradually, as the commercial development of the port requires it. In order to make systematic preparations for future urban development, the territory acquired will be surveyed, and a building plan drawn up. Land will bo purchased for the construction of the buildings required by the Civil and Militaiy Administrations. It will be necessary for this purpose to ascertain the ownershij) of the land within the limits of the future city, and to establish a register ("Grundbuch"). With regard to the Civil Administration, a Governor lias already gone out, and a judicial officer is to follow. The latter will investigate the question of land tenure above mentioned, and will take cognizance of all disputes with the Chinese and •between them, including criminal cases. A certain staff will be necessary for both these officials, but the whole establishment is to be kept within the narrowest limits practicable, and the principle of self-government is to be applied to the Colony as soon as possible. The small garrison at present at Kiao-chau is most necessary, as the territory is thickly populated, the number of inhabitants being estimated at about 60,000, and they have relapsed somewhat into barbarism in consequence of Chinese misrule. Until they have become accustomed to the new regime, and especially until the difficulties connected with the redistribution of land have been overcome, occasional disturbances [253] K 66 must be expected. The garrison will also be useful in case difficulties arise in the construction of railways into the interior. The Russians carry out all their under- takings of this kind under military protection. The garrison will require barracks, officers' quarters, hospitals, &c., as it is impossible that they should be permanently quartered in the old Chinese farts. These works, buildings, &c., cannot be constructed cheaply. The great distance involves considerable expense of transport; and as only one line of steam-ships has as yet arranged for regular communication with Kiao-chau, it will be able to charge what freights it likes. The climate requires solid buildings, and most of the material for them will at first have to come from abroad. All these considerations make an accurate estimate of expenditure impossible. The question of permanent fortifications has not even been thought of. Against revolts on the part of the Chinese, the light artillery at present on the spot, with earthworks and the existing forts, will probably suffice. Fortifications in the modern sensc^ will only be required when the place has developed so far that considerable values have come into existence there which require to be protected in case of war. It follows from the foregoing that, even with the cautious procedure contemplated, and with careful avoidance of all premature projects, a certain amount of capital will have to be sunk in Kiao-chau " a fonds perdu." The requirements of the place are, at present, so little known that it is impossible to form an estimate of the sum that will be necessary. The Governor has only just arrived ; his staff, especially the technical experts, are still on the way, and it will take some time after their arrival before the matter can be thoroughly studied and a detailed plan of expenditure drawn up. A further article in the " Post " of the 2lt\\ instant states that, as it was feared that speculation in land might arise in consequence of the German occupation, j)reveutive measures have promptly been taken by the German authorities. Although all the land in Kiao-chau is theoretically supposed to belong to the Emperor of China, the rights of land-owners who pay land tax have been respected. In order to place this question on a legal basis, the Germans have made contracts with the thirty-five villages which are within the acquired: territory, according to which no land may be sold in them except to the German Government. As compensation for this privilege a sum of about 150/. has been paid. The total extent of the acquired territory is about 1 1 7 square miles, of which about 12,058 acres is in private hands and liable to land tax. Berlin, April 2S, 189S. No. 64. Sir F. Lctscelles to the Marquess of Saliahui-y. — [Received May 2.) My Lord, Berlin, April SO, 1898. I HAVE the honour to transmit to your Lordship herewith copy and translation of a statement made in the Reichstag by Herr von Btilow on the subject of afPairs in the Ear East, and especially with regard to Wei-hai Wei. I have, &c. (Signed). ERANK C- LASCELLES-. • Inclosure in No. (Ji. Statement made in the Reichstag, April 27, 1898. (Translation.) THE Representative of the Centre, Dr. Lieber, asked how the 5,000,000 marks for Kiao-chau were to be met, and what ATould be the effect of th6 English occupation of Wei-hai Wei. ' ■ > . ^ f - The Einance Minister, Baron von Thielmann, remarked that, as regards ways and means, the surplus which would accrue to the Empire from the excess of revenue over the Estimates would be amply sufficient to cover the extra expenditure. Herr Richter, the leader of the Radicals, said that the step taken bv England should be welcomed as a counterpoise to Russia ; England inserting- herself as a buffet State between Germany and Russia. 67 The Socialist, Liebknecht, made a long speech (not reported in the " Keich- sanzeiger "), severely criticising the attitude of the Government in the Ear East. After some general remarks from the Secretary of State for the Interior, Herr von Biilow spoke as follows : — I will not enter at length into the whole question of our action in the Far East. I am perfectly ready to submit the Kiao-chau Agreement to the House when it reaches me, and to make a full explanation to the Budget Commission in connection there- with. As to Wei-hai Wei, I should like to make the following statement : We have no sort of Agreement with England, but I am glad to be able to state, as a proof of the friendly intentions of the British Government, that England volunteered to give the assurance, published in the " Beichsanzeiger," which gives us a guarantee that England will not use Wei-hai Wei as a point d'appui in order to interfere with our political and commercial sphere of interest. Mention has been made of tlie partition of China. Such a partition ^ill not be brought about by us, at any rate. All we have done is to provide that, come what may, we ourselves shall not go empty-handed. The traveller cannot decide when the train is to start, but he can make sure not to miss it when it does start. The devil takes the hindmost. But we do not desire, and I beg to impress this point on you — we do not desire a partition of China, and I do not believe that there is an immediate prospect of suck a division. But in any case (and here, I think, I can best resume the advantages secured to us by the occupation of the port as well as the reasons which induced it), in any case, I say, we have secured in Kiao-chau a strategical and political position which assures us a decisive influence on the future of the Ear East. Erom this strong position we can look on with complacency on the development of affairs. We have such a large sphere of action and such important tasks before us that we have no occasion to grudge other nations the concessions made them. German diplomacy will pursue its path in the East as everywhere else — calmly, firmly, and peacefully. We will never play the part of mischief-maker ; nor will we play that of Cinderella. No. 65. Sir F. Lascetles to the Marquess of Salisbury. — {Received May 2.) My Lord, Berlin, April 30, 1898. WITH reference to my despatch of the 28th instant relative to the grant of 250,OOOZ. asked for in connection with Kiao-chau, I have the honour to transmit herewith precis of the proceedings in the Budget Commission of the Eeichstag on the subject of the grant in question. It will be seen that, in the course of the discussion, Herr von Biilow said that the text of the Agreement with China had arrived and would be published, but not in its entirety. Of three parts into which the Agreement was divided, only the first — that relating to political concessions — would be made public. The parts relating to com- mercial concessions would be privately communicated to persons interested in, the development of the Protectorate. The Report of the proceedings in the Budget Commission contains some interesting statements by Herr von Biilow and Admiral Tirpitz. It is intended to leave' great liberty of action to the local Government, and subsequently to establish representative Government, on the model of Hong Kong. The garrison will consist of 1,400 men, mostly marines. The establishment of coal depots and docks will be left to private enterprise. I have &c. (Signed) ' FRANK C. LASCELLES. Inclosure in No. 65. Proceedings, before the Budijet Commission of the Reichstag, April 29, 1898. ■ -HERR -V6>N BiJLOVV communicated -t© the rCoramission the tex^t of the Agree- ment with China, which- had just arrived.- The first -part ol it, .which refers to political concessions, will be published ; the second and third, which refer to the concessions of a [253] K 2 68 commercial nature made by China in the Province of Shantung, were only communi- cated under the seal of secrecy, as France, Enjiland, and Russia had observed secrecy as to the concessions made to them. As to the action of England in securing the reversion of Wei-hai Wei, the recently pubHshed Blue Boole afforded full information. The German Government had received notification of the Agreement with China through Mr. Balfour's statement in the House of Commons, and had no previous official information of the said Agreement; at the same time, a communication was received from the English Government, to the efi'ect that it was not their intention to interfere with the pDlitical or commercial interests of Germany in the Province of Shantung. It was undeniable that the centre of English interests was moie in the Yang-tsze Valley. But as FJong Kong was in the neighbourhood of the French sphere, so Wei-hai Wei was _ in the neigh- bourhood of the Russian sphere. England had a window in Wei-hai Wei out of which she could look at the waters of the Yellov/ Sea as Russia could out of Port Arthur. Germany had no objection to these two Powers watching from these two windows the play of the billows. No one could say whether or no this position would lead to com- plications. The German Government hoped sincerely that this would not be the case. In the meanwhile, they did not feel in the least affected by the position of Russia in North China, which had always been recognized by Germany as the Russian sphere. He hoped that the period bf surprises was over for China. It was to be expected that all the Powers would now devote themselves to the peaceful development of what had been obtained. In answer to further inquiries, Herr von Biilow said : " We have had no differences -with Japan, which has never given us to understand that Japanese interests are affecte'd unfavourably by the German occupation of Kiao-cbau. China has made no condition as to fixing the rent in the Treaty, and it does not appear to be in the interests of Germany to raise the question." To a question from Herr Richter as to whether any information had been received as to a Russo-Japanese understanding in yegard to Corea, or an Anglo-American alliance which would exlcmd to Eastern affairs, Herr von Biilow replied : I know nothing either of a Russo-Japanese Agreement or of an alliance between England and America, whether of a general or a special nature. Dr. Lieber remarked that the occupation of Chinese ports by European Powers was a security against invasion on the part of other Eastern nations. As to the development of the port, he understood that the first and essential point was not military, but com- mercial development. He agreed in the Government proposal to vote a lump sum, and not to bind the local authorities beforehand. He asked for particulars as to the ison. Admiral Tirpitz replied that the speaker was right in saying that the principal object of the Government would be the commercial development of the port. But he could say that there was no port in East Asia which was so well fitted for development not only as a naval station, but as a commercial centre. The first thing to do was to establish landing places, to mark out the fairways, and to survey the territory ceded. Stores of coa and docks would probably best be left for private enterprise to arrange for. The Chinese forts would be repaired and strengthened, but no new forts would be constructed. By a Cabinet order of the 27th instant, the port was proclaimed a Protectorate of Germany, and Consular jurisdiction was extended to it. The Administration would be intrusted to a Governor, who would be interfered with as little as possible from home. It was intended subsequently to establish self-government, and not to imitate the French Colonies in the close connection of home and colonial Administration. Taxes should be raised from settlers, but details would be left to the Governor. Precautions had been taken against land speculation. A Report was read from the Admiral in charge, which dealt with the measures taken to secure peace and order, the prospects of the Protectorate, and the measures recommended. Its publication was promised. Herr von Benningsen said that it was essential that the example of the English, and iiot the French, in the matter of the development of the Colonies, should be followed. He asked for particulars as to the garrison. Admiral Tirpitz replied that there was no doubt that the marines were bound to serve their time, if required, out of Germany. There was no hardship in this, as the climate of Kiao-chau was good, and he was not atraid even of the hot season. The soldier cost on the spot, inclusive of the expense of reheving him, 59/, a-year, and a member of the West Africa Constabulary more than 95L per head. The present intention was to train the marines at home, and then send them out for two years, relieving them ■before their time had expired. The garrison would be used to reinforce the police°of the other Settlements, if necessary. o 60 la answer to a question from Herr Richter, Herr von Btilovv replied that the ■Government had received numerous proposals from individuals and from Syndicates as to the industrial development of bhantung, construction of railways, working mines, &c. A definite decision had not yet been taken. Serious tenders would be answered by the ■communication of the terms ot the Treaty now received, and concrete offers would be asked for. The participation of private enterprise in tlie new constructions which were necessary for the development of the port was a question which was receiving the serious ■consideration of the local authorities. The discussion was then closed. The Reporter said that it appeared that the Com- mission had no objection to the Governn^ent proposals. The interests of Germany in the Province of Shantung were to be left in the hands of the Foreign Office ; the 50-kilom. zone was to be jointly administered by the Foreign Office and the Marine Depart- ment. :No. 66. Sir F. Laacelles to the Marquess of Salisbury. — (Received May 2.) My Lord, Berlin, April 30, 1898. WITH reference to my despatcii of this day's date, I have the honour to inclose copies and translation of the Treaty concluded between Germany and China for the lease of Kiao-chau, as published in yesterday's " Reichsanzeiger." As pointed out in my despatch above referred to, the Treaty as here published does not include the commercial and industrial concessions secured by Germany in the Province of Shantung. I have, &c. (Signed) FRANK C. LASCELLES. Inclosure in No. 66. Extract from the " Reichsanzeiger " of April 29, 1898. (Translation.) THE following is the text of the Treaty between the German Empire and China respecting the lease of Kiao-chau, which was received in Berlin on the 28th April, 1898:— " The incidents connected with the Mission in the Prefecture of Tsao-chau-foo, in Shantung, being now closed, the Imperial Chinese Government consider it advisable to give a special proof of their grateful appreciation of the friendship shown to them by Germany. The Imperial German and the Imperial Chinese Governments, therefore, inspired by the equal and mutual wish to strengthen the bands of friendship which unite the two countries, and to develop the economic and commercial relations between the subjects of the two States, have concluded the following separate Convention : — "ARTICLE I. " His Majesty the Emperor of China, guided by the intention to strengthen the friendly relations between China and Germany, and at the same time to increase the military readiness of the Chinese Empire, engages, while reserving to himself all rights of sovereignty in a zone of 50 kilom. (100 Chinese li) surrounding the Bay of Kiao-chau at high-water, to permit the free passage of German troops within this zone at any time, as also to abstain from taking any measures, or issuing any Ordinances therein, without the previous consent of the German Government, and especially to place no obstacle in the way of any Regulation of the water-courses which may prove to be necessary. His Majesty the Emperor of China, at the same time, reserves to himself the right to station troops within that zone, in agreement with the German Government, and to take other military measures. "ARTICLE II. " With the intention of meeting the legitimate desire of His Majesty the German Emperor, that Germany, hke other Powers, should hold a place on the Chinese coast for the repair and equipment of her ships, for the storage of materials and provisions for the 70 same, and for other arrangements connected therewith, His Majesty the Emperor of China cedes to Germany on lease, provisionally for ninety-nine years, both sides of the entrance to the Bay of Kiao-chau. Germany engages to construct, at a suitable moment, on the territory thus ceded, fortifications for the protection of the buildings to be constructed there and of the entrance to the harbour. " ARTICLE HI. "In order to avoid the possibility of conflicts, the Imperial Chinese Government will abstain from exercising rights of sovereignty in the ceded territory during the term, of the lease, and leaves the exercise of the same to Germany, within the following jimits : — " (1.) On the northern side of the entrance to the bay : •'The peninsula bounded to the north-east by a line drawn from the north-eastern corner of Potato Island to Loshan Harbour. " ('^.) On the southern side of the entrance to the bay : " The peninsula bounded to the south-west by a line drawn from the south-western- most point of the bay lying to the south-soulh-west of Chiposan Island in the direction of Tolosan Island. " (3.) The Island of Chiposan and Potato Island. " (4.) The whole^ water area of the bay up to the highest water-mark at present known. " (5.) All islands lying seaward from Kiao-chau Bay, which may be of importance for its defence, such as Tolosan, Chalienchow, &c. " The High Contracting Parties reserve to themselves to delimitate more accurately, in accordance with local traditions, the boundaries of the territory leased to Germany and of the 50kiloni. zone round the bay, by means ot Commissioners to be appointed on both sides. "Chinese ships of war and merchant-vessels shall enjoy the same privileges in the Bay of Kiao-chau as the ships of other nations on friendly terms with Germany ; and the entrance, departure, and sojourn of Chinese ships in the bay shall not be subject to any restrictions other than those which the Imperial German Government, in virtue of the lights of sovereignty over the whole of the water area of the bay transferred to Germany, may at any time find it necessary to impose with regard to the ships of other ' nations, "ARTICLE IV- " Germany engages to construct the necessary navigation signals on the islands and shallows at the entrance of the bay. "No dues shall be demanded from Chinese ships of war and merchant-vessels in the Bay of Kiao-chau, except those which may be levied upon other vessels for the purpose;, of maintaining the necessary harbour arrangements and quays. "ARTICLE V. " Should Germany at some future time express the wish to return Kiao-chau Bay to China before the expiration of the lease, China engages to refund to Germany the expenditure she has incurred at Kiao-chau, and to cede to Germany a more suitable place. " Germany engages at no time to sublet the tenitory leased from China to another Power. "The Chinese population dwelling in the ceded territory shall at all times enjoy the protection of the German Government, provided that they behave in confoimity with law and order ; unless their land is required for other purposes they may remain there. " If land belonging to Chinese owners is required for any other purpose, the owner will receive compensation. " As regaros the re-establishment of Chinese customs stations which formerly existed outside the ceded territory, but within the 5U-kilom. zone, the Im.perial German Govern- ment intends to come to an agreement with the Chinese Government for the definitive regulation of the customs irontier:,.and>'the mode of collecting customs duties,, in- as mattner which will safeguard all the interests ©f China, and -proposes > to enter (into ibrfchev negotia*-' t'ons on the subject. 71 "The above Agreement shall be ratified by the Sovereigns of both tlie Contracting States, and the ratifications exchanged in such manner that, after the receipt in Berhn of the Treaty ratified by China, the copy ratified -hy Germany shall be handed to the Chinese Minister in Berlin. " The foregoing Treaty has been> drawn up in four copies, two in German and two in Chinese, and was signed Ijy the Representatives of the < two Contracting States on the 6th March, 1898, equal to the l4th day of the second month in the twenty-fourth year Kuang-hsii. " (Great Seal of the Tsung-li Yamen.) " The Imperial German Minister, ^ (Signed) " Baron von HEYKING. t ■ "LI HUNG-CHANG (in Chinese), Imperial Chinese Grand Secretary, Minister of the Tsung-li Yamen, "WEJNG TUNG-HO (in Chinese), Imperial Chinese Grand Secretary, Member of the Council of State, ' Minister of the Tsung-li Yamen, SjC, &c." ISo. 67. Sir C. MacDonald to the Marquess of Salisbury. — (Rec-jived May o.) (Telegraphic.) Peking, May 3, 1898, THE murder of a Ercncli missionary has taken place in the Jr'roviuce of Kuanghsi. I have above news by telegram from Her Majesty's Consul at Canton. No. 68. Sir C. MacDonald to the Marquess of Salisbury. — (Received Man ^■) (Telegraphic; Peking, May 3, 1898. • - ■ IN reply to the inquiries contained in your Lordship's telegram of the 1st instant, the exact limits of the area to be leased to us are the following : — On the north, a line running from Deep Bay to Staining Inlet at the points where these are nearest to each other. On the south, latitude 21° 48' N. The area from east to west is from meridian 113° 47' E. to meridian 114° 26' E.. .. The area contained within these limits includes an extent of land about eight times the size of the present Colony, and a sea area forty or fifty times as great as Hong Kong Harbour. The limits are the maximum ones laid dovvn on the chart iriarked B', which is inclosed in the despatch of the 9tli November, 1894, from the Governor of Hong Koh> to the Colonial Office, of w^hich I recently received a copy . No. 69. ' . ; ! Sir C. MacDonald to the Marquess of Salisbury. — [Received' May 3.) (Telegr3,phic.) ^ Peking, May 3, 1898. . AT an interview yesterday the Yamen met the demands which I made in accordance i-withthe instinictieas eAutained. in your Lordship's, telegram of the, 13th April by a strong ' resistance to thg opening, of Nanning, to , obtain, which "will .need very strong '. pressure; ;■ I. promised ifeh©m. a few days hefote again askingthem, in prder to. allqw them time for consideration. . , As regards your Lordship's third demand, the arrangements for a railvyay Concession are being ^lade at Shanghae. They promise . to . g»ant the fourth demand, a,nd, to give me an assurance that Erance has obta-inad no exclusive privileges from them in Kuangtung or Yiinnan. Your Lordship's demands, except. that concerning the extension of Hong Kong, 72 -will 1)0 embodied in separate notes ; these will include the question of the prevention of smuggling. ' With your Lordship's approval, the Agreement for the extension of Hong Kong- will lake the form of a Convention. They agreed yesterday to lease to Her Majesty's. Govoinment the territory mentioned in my telegram of to-day, with the following- conditions : — That a fair price will be paid for land which is needed and bought for public- purposes, and that no inhabitants in the leased territory will be expropriated. That unless the military arrangements for the defence of Hong Kong require otherwise, the Chinese Government's jurisdiction in Kowloon city shall remain in the hands of their officials. That for the convenience of the Kowloon officials and people, and for that of the- vessels themselves, Chinese men-of-war and merchant-vessels shall have the landing stage close to Kowloon, which they now use, still reserved for their use. I have already mentioned this landing stage in a previous telegram. We shall have no difficulty in controlling the free access of Chinese to the city — which must follow if we allow Chinese jurisdiction to remain — or we could, if the privilege were abused, do away with it altogether. The amount of rent which we are to pay has not yet been determined upon ;. neither did the Yamen mention the period of the lease, which leaves it to be determined by consent. Before the northern boundary of the proposed extension can be settled, it is agreed that a survey thereof will be held. No. 70. Memorandum regarding German Interests at Tien-isin and Hankow. — [Communicated by China Association, May 4, 1898.) A MEMORANDUM lately submitted to the Eeichstag, regarding the new German Settlements at Tien-tsin and Hankow, states — after describing the character and history of the various foreign Settlements in China — that "in some Settlements, as e.^., Shanghae, the Germans have beeu admitted to fair and equal participation in the rights acquired by the English and Americans ; but that in the case of Hankow, for instance, the English only admitted the English flag to the privileges of the quays, thus excluding the Germans. It has been, therefore, decided to establish German Settle- ments at Tien-tsin and Hankow, where the interests of the Germans were most considerable next to Shanghae." The Memorandum describes the position and trade of Tien-tsin, and states that " the trade in the hands of the twenty-four German firms there settled exceeds that of all the other foreign firms put together." It proceeds, then, to discuss the trade position and prospects of Hankow, "where there are seven German firms, in whose hands is a large proportion of the trade, as well as the military and industrial German employes of the Chinese Government.'' These statements are so much at variance with the impressions of the Committee, that it appears desirable to submit the following remarks. The facts regarding Hankow are simply these : — The quay frontage of the British Settlement has been created by reclamation carried out at the cost of the Municipality. It is regarded, therefore, as a legitimate source of municipal revenue, and is divided into sections which are let by tender. It may be noted, indeed, in illustration, that the very first lessees were an American firm, which had the agency lor a line of river steamers then plying tinder the American flag. Privilege of access has depended on the amount tendered, instead of the flag It was open to any German firm to tender, and such tender would presumablv have been accepted :f it had exceeded competing tenders by Englishmen or others As a matter of fact, there are no German shipping interests at present on the Yang-tsze. The number of steamers entered and cleared at Hankow was 1,418, aggregating 1 553,63S tons. Oftliem .. 962, aggregating 1,026,000 tons, -n-ere Britisli. 394, „ 415,533 „ „ (Jliinese. 'f^' » 35000 „ „ Norwegian. 1 4' „ 44,956 „ „ Russiim. ^"' " 11,0/4 „ „ German. It is submitted that shipping is a great " trade " interest, and that here is one considerable factor in determining the national share. The principal item of export at Hankow is tea: a largely preponderating share of this is bought now for Eussia. Of 4,917,000 Haikwan taels' worth exported from Hankow in 1896 to foreign countries, 3,782,000 taels went direct to Odessa. A large quantity is exported to Tien-tsin and Vladivostock, whence it finds its Avay into Mongolia and Siberia. Almost all of that trade is in Eussian hands. The bulk of the remainder is shipped to London, almost exclusively by British firms. The only other considerable item of foreign export is hides, and of this the German firms have, it is believed, a preponderating share. The very considerable import of cotton goods is entirely in the hands of Chinese, who supply themselves at Shanghai The goods themselves are chiefly of British and British Indian manufacture, though a portion are American or Japanese. The considerable import of sugar from Hong Kong is entirely, and that from Chinese ports largely, in British hands. German firms have undoubtedly a preponderating share of the trade in munitions of war, though a considerable propor- tion of the munitions themselves are of English make. It is probable, therefore, that a considerable proportion of the 177,534 taels' \\-orth that were imported in 1896 passed through German hands. It is submitted, however, that these facts scarcely justify the assertion that a large proportion of the trade of the port is in the hands of the seven German firms. There are German as well as English and other engineers in the Viceroy's factories ; and German Drill Instructors have been employed to organize troops. It is believed, however, that these are about to be supplanted by Japanese. The statement that the trade in the hands of the twenty -four German firms settled at Tien-tsin "exceeds that of all the other foreign firms put together" is equally at variance with the prevailing impression. The 1,'ross value of the trade of Tien-tsin amounted in 1896 to 8,561,840/. And the gross total of ships entered and cleared to 1,241,645 tons, distributed in the following proportions : — British .. .. .. 600 entries and clearances, aggregating 583,000 tons. Chinese . . . . . . 602 „ „ „ 508,000 „ German .. .. . . 16 „ „ „ 11,9.50 „ It is fair to add that the average during five years 1891-96 was — No. Tons, British .. .. .. ,. .. .. 643-66 .. 574,304 German .. .. .. .. .. . . 102 -06 . . 79,239 The German shipping in 1896 compares ill, therefore, with previous years. It" remains to be seen whether the decline was fitful or will be enduring, but it is under- stood that the figures for 1897 will not show much improvement on the preceding year. It is less easy to apportion the origin, destination, and mercantile ownership of imports and exports, because these several features are apt to intertwine. Even English firms in London sometimes export English goods to China in a German ship ; while German firms in China import English goods in English ships, just as English firms in China export to Erance a large quantity of the silk which is classified as French trade, and some firms bearing German names have an English domicile and- connection. The Customs Returns for 1896 show : — n. Taels. Gross imports, foreign goods . . , . . , . . . . 29,584,743 Exports, native produce . . .. .. .. .. .. 8,561,840 The import of native produce from other parts of the Chinese Empire aggregatin; 13,284,000 taels (practically in Chinese hands), and tea imported and re-exported (principally by Eussian firms) to the value of 8,315,336 taels, are excluded, as they have no bearing on the present question. There has arisen lately, in consequence of the great fall in the gold value of silver, a considerable business in pigs' bristles, camels' hair, coarse sheep's wool, straw- braid, &c. German firms do, undottbtedly, a considerable proportion of this ; but British merchants at Tien-tsin would not be found to admit that it is a preponderant share. Besides, the total value of the export trade in 1896 was only 1,223,120/., while the value [253] L 7i of foreign imports reached 4,226,363/. More than half of these consists of cotton goods, Avhich are principally of English origin, and are brought from Shanghae by Chinese traders in English ships. Of the sugar trade, which figures from 241,000/., half at least is imported from Hong Kong by British firms representing the British owners of the refineries in that island. Of 200,000Z. of railway materials, British firms imported the principal share, which was of British manufacture and carried in British ships. 142,000/. worth of munitions of war may be credited largely to G-erman firms — who have, indeed, a pi-eponderating share of this business in China — though a considerable proportion of the arms is of British origin. Perhaps a measure of light may be thrown on the matter by the following classifi- cation of origin : — There came direct from — H. Taels. Great Britain .. .. .. .. .. .. 1,663,788 HongKonjr .. .. .. .. .. .. 2,414,474 Other British Colonies .. .. .. .. .. 237,532 Continent of Europe (excluding Russia). . . . . . . . 838,944 Other countries .. .. .. .. .. .. 1,496,661 Chinese ports (principally British cotton goods from Shanghae) . . 22,933,524 There is no desire, in submitting these considerations, to belittle German enter- prise. It has seemed undesirable, simply, that any charge of discrimination should be allowed to pass unchallenged, at a moment when Great Britain is upholding the doctrine of equal opportunity for all. Eoreigners of other nationalities have, it is Itelieved, been given equal opportunities in every Settlement or Concession which England has obtained. The sole distinction is that at Tien-tsin, for example, and Hankow, the British Government holds a ground lease from the Chinese authorities, Te-letting to English or other foreign residents, and that Her Britannic Majesty's Consul takes the Chair as a matter of course at land-renters' meetings. But land-renters of any nationality may and do speak and vote, and are eligible for membership and chairmanship of the Municipal Council. M. Gustav Detring, for example, Avas Chairman of the Tien-tsin Municipal Council for several years, and earned the praise of all British residents by the manner in which he conducted the business. There has been, for years, a German member of the Council, who is re-elected, not because he is German, but in recognition of the esteem in which he is held. Negotia- tions with the Chinese authorities, however, are conducted through the British Consul, who also submits proposals regarding Municipal Loans for the approval of the British Minister in Peking. Neither, certainly, is there any jealousy of the new German Concessions. On the contrary, the British community would, it is believed, view with satisfaction an extension of the principle. By a series of incidents which the Committee of the Shanghae branch has lucidly described, the area originally marked off for a British Settlement at that port has come to be treated as cosmopolitan ; the doven of the Consular Body (instead of the British Consul) corresponding with the Chinese authorities respecting its affairs. British residents feel this to be somewhat of an anomaly, and would be glad, probably, to see a German Settlement marked off at Shanghae if it might aid them to recover the exclusively British status which they conceive to be their right. There is no desire to exclude residents of other than British nationality, and equal commercial advantages are available to all. The fact that "the German firms have refused to come to the assistance of their Government" in developing the Concession at Hankow and Tien-tsin tends, on the contrary, to prove a sense of contentment with their position that excludes any'thought of international friction. The feeling is akin rather to that of desire to be master in one's own house ; and is not dissimilar probably from that Avhich has impelled the German Governmcmt to acquire Concessions that will, it is admitted, be " half empty" xmless settlers of other nationalities come in. 75 No. 71. Sir E. Satow to the Marquess of Salisbury, — (Received May 4.) (Telesrapliic.) Tokio, May 4, 1898. WEI-HAI WEI. With referonce to Sir 0. MacDonald's telegram to your Lordship of the 30th April, the Japanese Government have informed rae that they will let us know beforehand the precise date of their evacuation. The buildings will probably be handed over to the Chinese without any compen- sation being required. I have telegraphed in this sense to Sir 0. MacDonald, No. 72. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, May 4, 1898. HONG KONG Extension. Your telegrams of the 3rd and 4th May. I entirely approve your arrangements. No. 73. Sir E. Salow to the Marquess of Salisbury. — [Received May 6.) (Extracf.) Tokio, March 31, 1898. I LEAENT to-day that the Russian Government has officially informed the Japanese Government that China has ceded the usufruct of Port Arthur and Talienwan Bay and adjacent territory, and has granted the right to construct a railway from Petuna, on the Sungari River, to Kinchow, Talienwan Bay, and Port Arthur. Talienwan Bay is to be opened to commerce, and Japanese trading vessels would be received with hospitality. The communication, which was made telegraphically, did not mention any term of years nor the extent of territory included under the word adjacent. Mr. Komura added that the Russian Charg^ d' Affaires had informed the Japanese Minister at Peking that part of Talienwan Bay would be used as a naval station in addition to Port Arthur. No. 74 The Marquess of Salisbury to Sir C. MacDonald. Sir, Foreign Office, May 7, 1898. I HAVE received your despatch of the 18th March, inclosing .. the corre- spondence with the Yamen respecting the opening of a port in Hunan, and reporting your conversation with the Ministers on that subject. I approve your action in the matter, and I concur in your view that it is best to accept the opening of Yochow, which has since been announced as stated in your tele- gram of the 1st April,* leaving for settlement later on the question of substituting another port or ports in Hunan. I am, &c. (Signed) SALISBURY. * See "China No. 1 (1898)," p. 6J. [253] L 2 76 Ko. 75. The Marquess of Salisbury to Sir C. MacDonald. Sir, Foreign Office, May 7, 1898. I HAVE received your despatch of the ISth March, and I approve the representation which you made to the Tsung-li Yamen respecting the seizure of goods under transit pass in the Province of Kwangtung ; and I am glad to learn that the farming Syndicate responsible for this and other recent cases of interference with transit-pass goods has, according to the statement of the Yam&u, been abolished. I am, &c. (Signed) SALISBURY. No. 76. foreign Office to China Aseocialion. Sir, Foreign Office, May 7, 1898. "WITH reference to the claim affainst the Chinese Government for the seizure of kerosene oil at Patsham, I am directed by the Marquess of Salisbury to inform you that, in consequence of Sir Claude MacDonald's representations in regard to a further case in which goods under transit pass were illegally seized in the Province of Kwangtung, the Yamgn have announced that the farming Syndicate which was responsible for the repeated interference with transit-pass goods has now been abolished. Her Majesty's Consul at Canton considered that the abolition of the Syndicate would have more satisfactory results than the infliction of a tine, and there is reason to hope that the action taken in this and previous cases, and the exaction of severe punishment in all future cases of a similar kind, will permit of the inland trade in the south of China being satisfactorily developed. I am, &c. (Signed) PRANCIS BEETIE. Xo. 77. Sir F. Lascdles to the Marquess of Salisbury. — {Received May 9.) My Lord, Berlin, May 4 1898. I HAVE the honour to inclose herewith precis of Imperial Orders relative to Kiao-chau which have been laid before the Reichstag. The district ceded {i.e., the bay and the promontories— not the 50-kilom. zone) is declared a German Protectorate, to be administered by a naval officer, with the title of Governor, under the Naval Department. The jurisdiction is to be that exercised in the other German Protectorates by special officers appointed for that purpose, appeal, however, lying not to Berlin b'utto the German Consular Court in Shanghae. ' All w;hite residents are declared subject to this jurisdiction, the Chinese how- ever, only in such cases as the local Government may specify. It will be seen that it is assumed that the transfer of China's soverei<^n rio-hts to Germany mvolves the abrogation in the district ceded of the juridical rights of loreigners under Treaty with China. ° I have, &c. (Signed) PRANK C. LASCELLES. Inclosure in No. 77. 'Precis of Imperial Orders respecting Kiao-chau laid before the Reichstag. January 21, 1898.— Imperial Order to the Chancellor to the efPect that as soon as the marines have arrived at Kiao-chau the landing party from the German Eleet is to return on board ship. The government of the ceded district is to be under the Imperial Ministry of Marine, which is to have control of the military force 77 March 1, 1898.— The Military and Civil Administrations are to bo in the hands of a marine officer, who has the title of Governor. In case of combined land and sea operations, the Governor or the Commander of the naval forces will take the supreme command, by seniority. The Imperial Navy Department has control over all affairs •connected with the garrison. March 1, 1898.— Courts of Honour are established in the Protectorate. April 27, 1898.~The territory named in the Treaty with China having been ■ceded to Germany, the Emperor takes the territory in question under his Imperial protection. April 27, 1898.— The jurisdiction specified in the Order respecting the German Protectorates (1888) is applied to the ceded district of Kiao-chau. According to the law in question, the jurisdiction exercised in the Protectorates is the same as that exercised under the Law of Consular Jurisdiction (1879), except that instead of the Consul and the Consular Court, the Chancellor is to appoint special officers. All persons resident in the Protectorate are subject to this jurisdiction, the Chinese, however, only so far as is specially provided. The Governor has the right to exclude from the jurisdiction all coloured residents. Appeal from the local Courts at Kiao- chau lies with the Imperial Consular Court at Shanghae. No. 78. Sir C. MacDonald to the Marquess of Salisbury. — {Received May 9.) (Telegraphic.) Peking, May 9, 1898. HER Majesty's Acting Consul at Chung-king has telegraphed to me that a Erench expedition, with an escort of fifteen Annamite soldiers, is going up the Yang- tsze, and that Yunnan and Thibet are reported to be the objective of the expedition. No. 79. Sir E. Satow to the Marquess of Salisbury. — (Received May 9.) {Telegraphic.) Tokio, May 9, 1898. THE Japanese Government has informed me officially that Wei-hai Wei will be evacuated probably by the end of May, or at the latest by the 3rd June, as the indemnity has been paid. A few days' notice are to be given to the Chinese Government to allow of Commissioners being sent to take delivery, and notice will also be given to Her Majesty's Government that they may, if they wish, have an officer there simultaneously, to whom the Chinese Commissioners may hand over the place. The Chinese Commissioners will also have the buildings erected by Japan handed over to thera, on condition that they be handed over to the British Government. No. 80. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, May 10, 1898. YOUR telegram of 3rd March :* What progress has been made as to changes in respect to internal water communication in the Chinese Empire ? No. 81. Sir E. Satow to the Marquess of Salisbury. — (deceived May 11.) My Lord, Tokio, April 9, 1898. WITH reference to your Lordship's telegram of the 6th April, f expressing the satisfaction of Her Majesty's Government with the friendly manner in which their • See " China No. 1 (1898)," p. 42. t See " China Xo. 1 (189S)," p. 63- 78 commixuieation about Wei-hai Wei had been received by Japan, and instructing me to inform the Japanese Government that China had agreed to give to Great Britain a lease of that place, to take effect after its evacuation by Japan, I have the honour to- report that E yesterday called at the Foreign Department, where, in the absence of Baron Nishi through indisposition, I saw the Vice-Minister. After stating to him the- instructions I had received, I left with him a copy of your Lordsbip's telegram, of which I have the honour to inclose a copy. I have, &c. (Signed) ERNEST SATOW.. Inclosure in No. 81, The Marquess of Salisbury to Sir E. Satow. (Telegraphic.) Foreign Office, Aprils, ]898. THE friendly manner in which the Japanese Government have received our communication about Wei-hai Wei has given us great satisfaction. Yon should take an opportunity of acquainting them that we have received from China a promise to give us a lease of that place, to take effect on the evacuation by the Japanese troops, on the same conditions as those of the lease of Port Arthur and Talienwan, which she has granted to liussia. No. 82. Sir E. Satow to the Marquess of Salisbury. — (Received May 11.) My Lord, Tokio, April 9, 1898. VARIOUS articles have appeared in the Japanese press of T6ki6, commenting on the proposal that Wei-hai Wei should be occupied by Great Britain after its evacuation by Japan. The general tone is one of acquiescence in what is regarded as a policy forced upon Great Britain by the action of Germany and Russia. While very strong language is used with respect to those Powers, and especially to the proceeding of Russia in acquiring for herself a territory from which she had caused Japan to be ejected, under the pretence of securing the peace of the Par East, Great Britain is held to be governed by the necessity of maintaining the balance of power in China. It is to be observed that the Opposition journals indulge in much stronger language than those that are affiliated to the Government. The former probably represent the general opinion among those Japanese outside official circles who take an interest in public affairs, as well as among officers of the army and navy. At the approaching Session of the Diet it is pretty certain that the Progressist party, led by Count Okuma, will maintain "strong" views of foreign policy, and it is expected that some members of the Liberal and National parties will make common cause with them in condemning what is called the "laissez aller" attitude of the Government. I have, &c. (Signed) ERNEST SATOW. No. 83. Sir C. MacDonald to the Marquess of Salisbury. — {Received May 1 1 .) (Telegraphic.) Peking May 11 1898 HER Majesty's ship "Esk " has left Hankow for Shashih, where a serious riot has taken place, myolvmg the destruction by fire of the Japanese Consulate the custom-house, and the buildmgs belonging to the firm of Messrs. Jardine Matheson and Co. ' - ' 79 ]!no. 84. . Foreign Office to Admiralty. Sir, _ Foreign Office, May 11, 1898. I AM directed by the Marquess of Salisbui-y to transmit to you, to be laid before the Lords Commissioners of the Admiralty, a copy of a telegram from Her Majesty's Minister at T6ki6 * stating that Wei-hai Wei will be evacuated by the Japanese forces by the 3rd June at latest, but probably during the last week in May, and that it will be handed over to the Chinese Commissioners to be sent there for the purpose of taking delivery. Lord Salisbury will be glad to be informed as to what arrangements will be made by the Admiral on the Chiiia Station for taking over the place from the Chinese aixthorities. I am, &c. (Signed) ERANCIS BEETIE. ^o. 85. Mr. Kato to the Marquess of Salisbury. — {Received May 11.) M. le Marquess, Japanese Legation, May 11, 1898. UNDEE, instructions, I have the honour to inform your Lordship the following : — That the Japanese troops will evacuate Wei-hai Wei within four weeks from the 7th May, and the Japanese Minister in Peking has been instructed to inform the Chinese Government that the barracks and other buildings erected there by the Japanese Government for the use of their troops since the occupation of the place will be handed over to the Chinese Government, on condition that they should be placed at the disposal of the British forces when they shall occupy the place. I have, &c. (Signed) KATO, No. 86. Admiralty to Foreign Office. — {Received May 12.) (Extract.) Admiralty, May 11, 1898. ■ MY Lords Commissioners of the Admiralty having had before them the recent telegraphic correspondence which has passed between the Foreign Office and Her Majesty's Minister at Peking on the question of the extension of the boundaries of Hong Kong, desire me to request you will state to the Marquess of Salisbury that the 'boundaries agreed to between Her Majesty and the Chinese Government will meet all Admiralty requirements if it may be taken that the eastern boundary as shown on the chaYt, referred to in Sir Clatide MacDonald's telegram of the 3rd May, is correctly marked as the meridian of 114° 30' E. My Lords are inclined to believe that the chart is correct, and that Sir Claude MacDonald's statement in the same telegram, that the meridian of 114° 26' E. rejaresents the eastern boundary, is a clerical error ; but if not, they would represent to Lord Salisbury that such an arrangement would leave part of Mirs Bay imder Cliinese authority with very serious strategical disadvantages, and that it is extremely important to include the whole of Mirs Bay in the area proposed to be leased by Great Britain, and the consequent extension of the eastern bouiidary to the meridian of 114° 30' E. It is observed that the southern and western boundaries of the proposed area differ from those recommended by the Colonial Defence Committee, who, in their Report of the 28th April last, specially proposed to fix the limits of the sphere of influence 'SO as to, exclude the navigable channels giving access to the Treaty Port of Canton, on the .grounds that their inclusion was not essential to the protection of Hong * No. 79. 80 Kong, and might give rise on the part of foreign Powers to similar action at other Treaty ports, which might prove prejudicial to British interests. As regards the right of access of Chinese vessels to Kdwloon city, this may prove inconvenient, but could hardly he refused in view of the concessions made by the Chinese Government, and probably the inconvenience can be minimized hereafter by the establishment of traffic Hegulations. No. 87. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, May 12, 1898. HOW does question of Peking Syndicate's Concession now stand ? No. 88. Sir C. MacDonald to the Marquess of Salisbury. — (Received May 12.) (Telegraphic.) Peking, May 12, 1898. I HEAP, that the demands made by the Prench Minister as compensation for the- murder, reported in my telegram of the 3rd May, are : — 1. The right to build a railway to join the Lungchow-Nanning line with the sea coast ; 2. 100,000 fr. to be paid as an indemnity; and 3. A Memorial Chapel to be built at Paklioi. No. 89. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) _ Foreign Office, May 12, 1898. IS it the case, as stated in a " Times " telegram from Peking, that E-ussian Consul at Tien-tsin has notified that foreigners cannot land at Port Arthur or Talienwan without passports vise by him ? No. 90. Admiralty to Foreign Office. — {Received May 13.) THE Secretary of the Admiralty presents his compliments to the Under-Secretary of State for Foreign Affairs, and, by direction of the Lords Commissioners of the Admiralty, incloses, for the information of the Marquess of Salisbury, a copy of notes on the harbour and defences of Wei-hai "VVei, which have been compiled in the Naval Intel- ligence Department. Admiralty, May 12, 1898. ' Inclosure in No. 90, Memorandum on the Harbour and Defences of Wei-hai Wei. WEI-HAI WEI Harbour is easy of access, and capable of affording shelter to a considerable number of vessels of moderate draught, but the anchorage is contracted for large vessels. It has two entrances, one on the west and the other on the east side of Leu Kung-lau Island, thus affording facility for access or departure with almost any wind. The town stands on the side of a hill at the bottom of the bay, and is inclosed by a wall. 81 The best anchorage is near the west point of Leu Kung-tau Island, in 5 to 7 fathoms, with excellent holding-ground of mud. Coal. — Two large iron tanks are in use for coaling. A stock of 2,000 tons of Kaiping coal used to be kept in store, and a long iron pier was constructed for coaling. Wet Dock. — A wet dock is believed to exist inside the causeway between Obser- vatory Island and Leu Kung-tau Island. Sheers. — Large floating sheers were used by the Chinese for landing guns, &c. Naval College. — A naval college for the instruction of cadets was started in the middle of 1890. Gunnery Establishment. — The gunnery establishment was on the south side of Leu Kung-tau. It comprised barracks, a large drill shed, and a parade ground, which was reclaimed from the harbour. A rifle range was established on the parade ground. Defences. — The defences consisted, on the sea-Jront, of twelve forts, eight of which were completely ruined in the war. The gnns have all been removed or destroyed. They numbered forty-three in all, and ranged from '^•5 inches up to those of large calibre. One of these forts was situated on Observatory Island, which was connected to Leu Kung-tau Island by a causeway, and mounted four 21-cm. Knipp guns " en barbette." Accommodation for troops had been provided for by casemates below the guns. This- fort had not been much damaged. Opposite this work on the extreme western point of Leu Kung-tau Island was- another fort, which mounted two 9*2 B.L. Armstrong guns on hydro-pneumatic mountings. Accommodation for troops had been provided for by casemates in rear of the emplacements. This fort also had not been much damaged. Another fort of similar type to the above existed on the extreme eastern corner of tbe island, and mounted two guns " en barbette," and had not been destroyed to any great extent. Another fort occupied the whole of the small island called Channel Island. It had mounted two 15-cm. B.L. guns and some 12-cm. Q.F. guns, and did not suffer greatly from the war. The forts on the mainland appeared to have suffered the most in the late war, and were for the most part completely wrecked. It is not known to what extent the Japanese have rebuilt or rearmed the works. Xo. 91. Admiralty to Foreign Office. — {Received May 13.) Sir, Admiralty, May 12, 1898. IIS reply to your letter of the 11th instant, forwarding copy of a telegram from Her Majesty's Minister at T6ki6, stating that Wei-hai Wei will be evacuated by the Japanese forces by the 3rd June at the latest, and asking \\hat arrangements will be made by the Admiral on the China Station for taking over the place from the Chinese authorities, I am commanded by my Lords Commissioners of the Admiralty to transmit, for the information of the Secretary of State for Foreign Affairs, copy of the telegraphic instructions sent to Vice-Admiral Sir Edward Seymour on the 9th May. I am, &c. (Signed) EVAN MAOGKEGOE. Inclosure in No. 91. Admiralty to Vice-Admiral Sir E. Seymour, (Telegraphic.) Admiralty, May 9, 1898. THE final instalment of the war indemnity having been paid by China to Japan, it is assumed that the Japanese will evacuate Wei-hai Wei about the end of the present month, after which you will proceed there with such ships as you may find it convenient to take with you for the purpose of being present at the taking over possession of the territory from the Chinese Representatives. In the meantime, you should arrange with Her Majesty's Minister at Peking the mode of procedure to be adopted, including the appointment of Commissioners to receive [25bl M 82 the, territory from China, their conveyance to Wei-hai Wei, and the formalities to be observed on the occasion. It is not proposed to take any action before the Japanese fleet lias embarked the troops now at Wei-hai Wei and sailed. The dealings will be with China direct, but Her Majesty's Minister will probably ascertain whether any communi- cation has to be made to the Japanese Government. Acknowledge- No. 92. Mr. Box-Ironside to Mr. Bertie --{Received May 13.) (Telegraphic.) Peking, May 13, 1898. SHAJS^GHAE-T^ANKING Railway. I called on Tamen to push conclusion of an arrangement with the British Syndicate. 1 was informed by Ministers yesterday that they had telegraphed on 11th May to lie railway Director, telling him to sign preliminary Agreement at once. No. 93. Sir C. MacDonald to the Marquess of Salisbury. — {Received May 13.) (Telegraphic.) ■ ' Peking, May 13, 1898. INTERNAL navigation. The Regulations Avill, the Yamen promise, be shown to me as soon as possible. They are now in the hands of the Superintendents of Trade, for their consideration, and were framed by the Inspector-General of Customs. See my telegram of the 3rd March.* No. 94. Sir C. MacDonald to the Marquess of Salisbury. — {Received May 13.) (Telegraphic.) Peking, May 13, 1898. ON my return to Peking to-day I found your Lordship's telegram of yesterday, and regret that the matter inquired about therein was not reported to your Lordship. A Circular as described in your Lordship's above-mentioned telegram has been issued. No. 95. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, May 13, 1898. IN your telegram of the ] 2th instant, you speak of an already conceded Lungchow to Nanning Railway. When was such a Concession made ? No. 96. The Marquess of Salisbury to Sir F. Lascelles. Sii'j Foreign Office, May 13, 1898. I HAVE to inform your Excellency that the German Ambassador called here on the 11th instant, and stated that his Government did not accept any of the alternatives which I had suggested m order to arrive at an arrangement with regard to British and German railwav schemes in China. V * See " China No. 1 (189S)," p. i2. 83 His Excellency maintained that Germany, by her occupation of Kiao-cbau, and ner Agreement with China respecting Shantung, has acquired a special position in that province which consequently is not unreservedly open to British enterprise, whereas Great Britain, not having occupied any place in the Yang-tsze region, that region, is still unreservedly open to German enterprise ; consequently, my suggestions did not contain any element of reciprocity. To this contention I was, of course, entirely unable to assent. "With regard to the Shanghae-Nanking Eailway, Count Hatzfeldt argued that the Hong Kong and Shanghae Bank had forfeited all claim to the Concession by with- drawing from their Agreement with the Deutsche- Asiatische Bank. I am, &c. (Signed) SALlSBUliY„ No. 97. Admiralty tq Foreign Office. — {Received May 14.) Sir, Admiralty, May 13, 1898. ' ^ I AM commanded by my Lords Commissioners of the Admiralty to transmit, for the information of the Secretary of State, copy of a letter addressed to the Commander-in-chief on the China Station, containing instructions to be given to Her Majesty's surveying ship " Waterwitch " for the survey of the harbour of Wei-hai Wei and its vicinity, and inclosing a copy of the instructions for the Ofl6.cer Commanding the military survey party about to be dispatched to that port. I am, &c. (Signed) EVAN MACGREGOR. luclosure 1 in No. 97. Admiralty to Commander-in-chief, China. Sir, Admiralty, May 13, 1898. I AM commanded by my Lords Commissioners of the Admiralty to transmit to you herewith, for your information and guidance, tlie following instructions in respect to the port of Wei-hai Wei, which, with certain adjacent territory ,and islands, has been leased by China to Her Majesty's Government : — My Lords desire that on the arrival of Her Majesty's ship " Waterwitch " on the station under your command, you will send her forthwith to Wei-hai Wei, for the purpose of making a survey of the harbour and its vicinity in accordance with the hydrographic instructions forwarded to you in Admiralty letter of the 26th April last, the capabilities of the bay and the possibilities of dredging or of other improvements to the port being made the subject of a fully detailed Report. The survey is to be carried out in conjunction and co-operation with the officers of the army, who have been directed by the War Office to undertake a survey and reconnaissance of the territory in question chiefly from a military point of view, and the Commanding Officer of the " Waterwitch " is to confer with tlie Commanding Officer of the military survey party, and in concert with him is to arrange for the execution of these surveys in such a manner as to subserve the requirements of both the War Office and the Admiralty. My Lords further desire that you will select such officers as you may deem necessary, in whose ability and intelligence you have confidence, to inquire into and report, for the information of their Lordships, upon the condition of the defence works on the mainland and islands, and also on the dock Avorkshops and coaling plant which remain of the former Chinese naval establishment at Liu Hung Tao. After giving the foregoing and any other details of naval interest, the Report should give an opinion as to the value of the port for use as a naval base in its existing condition ; what can immediately be done to improve it ; and what is its ultimate capacity, if time and money were spent upon it; also the character of the naval attack to which the place is most liable, and the nature of the defence which could best protect it. The naval survey of the bay will probably form a base for the exterision o?" tl'o, [253] M 2 84 survey contemplated in paragraph 1 of the Military Instructions attached, but it is not contemplated that the Naval Surveying Officer need carry his work inland or along the coast beyond the Hmits required for an ordinary hydrographical survey, unless he is urgently requested to do so by the Military Offcer in charge. Instructions as to the taking over possession of the port will form the subject of a separate communication. I am, &c. (Signed) EVAN MACGREGOE. [Inclosure 2 in No. 97. Instructions for the Officer Commanding'^the Military Survey Party about to be dispatched to Wei-hai Wei. THE port of Wei-hai Wei, with certain adjacent territory and islands, having been leased by China to Her Ma-jesty's Government, I am desired by tlie Secretary of State for War to acquaint you that you have been selected to proceed thither in command of a party, for the purpose of making a survey and reconnaissance of the territory in question, in conjunction and co-operation with the officers of the Jioyal Navy, who have been directed by the Admiralty to undertake a survey of the harbour and its vicinity from a naval point of view. You will confer with the Senior Naval Officer of the surveying ship, and, in concert with him, will arrange for the execution of these surveys in such a manner as to subserve the requirements of both the War Office and the Admiralty. Tou will undertake the measurement of a base and the observation for triangulation with such a degree of accuracy as you may jointly decide to be necessary and sufficient, communicating the results to your naval colleague, and affording him access to all information you may acquire. The objects of the survey are as follows : — (a.) To enable Her Majesty's Government to decide upon the boundaries of the territory, whether as a British sphere of interest, or for purposes of actual occupation. (&.) To enable the Admiralty to form an estimate of the extent of ground to be reserved for naval establishments. (c.) To enable the naval and military authorities to advise as to the defences which may be deemed requisite for the protection of the naval establishments. (d.) To furnish the Inspector-General of Eortiflcations with such large scale surveys and plans as may be needed for the design and execution of such military and public works as may be decided upon. Eurther details as to the scales to be employed for the maps, the extent of territory to be surveyed on each scale, and the particular points requiring special attention and report, will be subsequently communicated to you. No. 98. The Marquess of Salisbury to Sir N. 0' Conor. (Telegraphic.) Foreign Office, May 14, 189S. ACCORDING to a report from Her Majesty's Minister at Peking, Russian Consul at Tien-tsin has issued a Circular to the effect that foreigners will not be allowed to land at Port Arthur or Talienwan without passports vises by him. I request you to point out to Russian Government that such action would not be in accordance with existing Treaty rights, and that by Article IX of Tien-tsin Treaty it is only for extended journeys into the interior that passports are required. 85 No. 99. Sir C. MacDonald to the Marquess of Salisbury. — {Received May 14 ) (Telegraphic,) Peking, May 14, 1898, I HAVE received an official despatch from Baron von Heyking, informing me of the_ establishment of the Government of the German territory at Kiao-chau, and notifying that the Govex'nor of Kiao-chau is entitled to thirteen guns as a salute, and also that foreign men-of-Avar should salute the German flag at that place. I have informed Admiral Seymour of above. No. 100. Sir C. MacDonald to the Marquess of Salisbury. — {Received May 14.) (Telegraphic.) Peking, May 14, 1898. HER Majesty's ship " Phoenix " is under orders to proceed to Hankow, in consequence of the rioting reported in my telegram of the lltti May. No. 101. Sir C. MacDonald to the Marquess of Salisbury. — {Received May H.) (Telegraphic.) Peking, May 14, 1898. ON his arrival at the railvray station here yesterday afternoon, Prince Henry of Prussia was received by Prince Ching. He had been received at Tongku by Wang W6n-shao, the Viceroy of Ghihli Province. No. 102. The Marquess of Salisbury to Sir E. Satow. (Telegraphic.) Foreign Office, May 14, 1898. ASK Japanese Government whether it would be agreeable to them that a British man-of-war should be sent to Wei-hai Wei, the Commander receiving instructions to place himself in communication with the Japanese military and naval authorities with a view to obtaining any advice which they may be in a position to give from their experience in occupying and governing territory in question. If so, ask that Japanese authorities may receive necessary instructions. No. 103. Sir C. MacDonald to the Marquess of Salisbury. — '{Received May 15.) (Telegraphic.) Peking, May 15, 1898. I LEAE-N by telegram from Mr. Warren, Her Majesty's Consul at Hankow, that the transfer to the Maritime Customs of the collection of li-kin and salt taxes is causing great anti-foreign feeling in his district. He reports rioting at Sungpu (where the murder of two Swedish missionaries took place five years ago), and informs me that the members of the Swedish Mission have been expelled from that place. 86 No. 104. Sir C. MocDtnald to the Marquess of Salisbury. — (Received May In.) (Telegraphic.) Peking, May 15, 1898. KUANGCHOU WAN was occupied by the Prench on the 22nd ultimo. No. 105. Sir C. MacDonald to the Marquess of Salisbury. — [Received May 15.) (Telegraphic.) Peking, May 16, 1898. I WILL make inquiries at the Yamen to-morrow as to the question asked by your Lordship's telegram of the 13th instant. The Concession I have heard the Yamen mention is one for a railway from the "French frontier to Yiinnan city, and a Lungchow- Nanning Railway Concession is one of which I have never before heard. My telegram of the 12th instant was based on information given by a newspaper correspondent. No. 106. Sir C. MacDonald to the Marquess of Salisbury.— (Received May 15.) (Telegraphic.) Peking, May 15, 1898. I HAVE received your Lordship's telegram of the 12th May. The Syndicate's agent tells me that matters are progressing, though slowly. I will press for final settlement to-morrow, when I am to see the Yamen. No. 107. The Marquess of Salisbury to Mr. Kato. Sir, Foreign Office, May 15, 1898. I HAVE had the honour to receive your note of the 11th instant, announcing that the Japanese troops will evacuate Wei-hai Wei within four weeks from the 7th May, and that the barracks and other buildings erected by the Japanese Govern- ment will be handed over to the Chinese Government on condition that they shall be placed at the disposal of the British force sent to occupy the place. I beg leave to express my thanks for your communication, and to say that this friendly action on the part of the Japanese Government is much appreciated by Her Majesty's Government. I have, &c. (Signed) SALISBURY. No. 108. Sir C. MacDonald to the Marquess of Salisbury. — {Received May 16.) ^y ^«^4'a ■,7-n .T, 1 . . -. Peking, March 30, 1898. 1 HAVE the honour to transmit to your Lordship the accompanying translation of a document which has been forwarded to me by Her Majesty's Consul at Canton It is a Memorial to the Throne from the Viceroy Chang Chih-tung and Sheno- Hsiian- huai, Director-General of Railways, in which the necessity of constructino-" a trunk line from north to south without delay is urgently represented. The Memorial shows the opposition which may be expected from the provincial officials and <^entry to the Concession for a trunk line. ° I have, &c. (Signed) CLAUDE M. MacDONALD.. 87' Inclosure in No. 108. Joint Memorial of Chang Chih-tung and Sheng HsUan-huai with reference to the importance of the Construction of the Hankow-Kwangtung Railway, (Translation.) HAVING received a request from the gentry and merchants of the three provinces concerned, Hupeh, Hunan, and Kwangtung, that united efPorts should be made to carry througli this undertaking, and the advantages thereof be thus secured to China, we beg respectfully to call your Imperial Majesty's attention to the matter. When your servant Sheng visited Peking in October 1896 to discuss arrangements for the construction of the railroad between Lii Kou-chiao and Hankow, a Memorial was submitted on his behalf by the Tsung-li Yamin proposing the establishment of a ■General Company for railway control, which should first undertake the construction of the Lii Kou-chiao and Hankow road, and afterAvards be permitted to extend their operations by making lines between Suchow arid Shanghae and Hankow and Kwang- tung Province, whilst no Railway Company apart from this should be allowed to be formed. It was submitted that under these conditions shareholders from the south and east should be called upon to subscribe for the construction of the northern and western lines, and that thus the eager desire of foreign nations for railway Concessions would be frustrated, and endless complications be thereby avoided. Your servant was afterwards informed that these proposals had been graciously approved. At the present moment work has been started at both ends of the railway between Lii Kou-chiao and Hankow, but as the Imperial Treasury cannot contribute the whole sum needed, and there have been many interruptions in the negotiations for foreign loans, whilst the Belgian Chief Engineer arrives early next spring at Shanghae, it will be necessary to urge on him the necessity of finding ways and means, so that the work may be hurried forward in every direction. Your servant Sheng, in company with the said Chief Engineer, will make a survey of the route via the Hupeh and Hunan Provinces as far as the capital ; the line will be divided into sections, and it is hoped that thus the work may be completed within five years. The original idea was that the construction of the Hankow-Kwangtung Southern trunk line should be postponed for a time, but now, owing to the exigencies of the present situation, this work must not be delayed. The powerful foreign nations stand around watching for their opportunity, and, making use of trivial pretexts in the conduct of international affairs, swiftly dispatch their war-ships from one end of the Empire to the other. It is impossible to say when our communication by sea may be blocked, and the establishment of internal communication by railways has become a necessity. Kwangtung is a rich province, and the defence of the southern territory and waterways must not be neglected, so that the making of the Hankow-Kwangtung line should be proceeded with at the same time -as the- northern road. - The original intention was to construct a road from Kwarigtung to Hupeh vi&, Chiangsi, but this circuitous route is longer than the direct route through Hunan Province, and for many reasons it will be a source of greater prosperity and strength to the Empire if the latter route is adopted. There is, nioreover, no doubt that the officials and merchants of the three provinces are in favour of this scheme. The most direct route will be to proceed Vik Ch'en-chou, Yung-chou, Eeng-chou, and Ch'ang-sha to Wuch'ang, and so to Hankow. Should these proposals meet with approval, we would request that instructions should be sent to the Viceroy of the two Kwang provinces, the Governors of Hunan, Hupeh, and Kwangtung, to consult together, and come to a satisfactory arrangement with your memorialists. Subscriptions from Chinese shareholders should be invited, and measures taken for securing foreign loans. Representatives of the official and commercial classes in each province should also be selected, with a view of establishing branch offices to arrange for the purchase of ground and hiring of labour. In a word, the officials and merchants of each province should share in the privileges of the railway, so that the benefits thereof may be spread far and wide. '"'''. The conditions under which the capiial ' for the construction of the road is obtained, whether by direct loan or by one secured on the railway itself, as well as the general regulations, should be identical for the northern and southern lines. Money should be obtained by inviting advances of capital, by borrowing on the security of 88 the line itself, and by the issue of stock, these three methods mutually assisting each other. Should no unexpected danger occur, after five or six years' hard work, the northern and southern lines should be connected. Supplement to above Joint Memorial of Chang Chih-tung and Sheng HsUan-huai, by same Memorialists. Again, with reference to the original Memorial of the Tsung-li Yamen recom- mending the gradual construction of the Suchow and Shanghae and Hankow and Kwangtung lines, your memorialists would point out the making of the southern railroad is most necessary for the establishment of internal communication, and, by making use of the profits its construction should afford, the repayments of loans could be accomplished. But, under present conditions, it is extremely difficult to raise money by loan, or to obtain subscriptions for shares, and nothing has yet been accomplished. However, recently Germany has unreasonably stirred up trouble, and has seized the important positions of Kiao-chau and Ohi-mo ; she has also secured the privileges of railway construction in Shantung Province, thus reversing the former condition of affairs. Further, Russia is constructing a railway with the idea of connecting the Amoor and Kirin with Port Arthur via. M akden. Prance, too, has already commenced a line in Kwang-hsi, with the intention of cutting off the Province of Yiinnan. England alone has been standing by watching enviously for a long time past, but as yet slj.e has obtained nothing, and at present it is impossible that she should not, in imitation of other nations, seek to get hold of railway Concessions in China. In the spring of this year, British merchants repeatedly made proposals for the construction of the Canton line, but they were firmly refused. At present the Hong Kong " Daily Press " says that what is most necessary for England to obtain at the present moment is the right of constructing railways ; she should either make a line through the centre of China or through the Province of Kwangtung, if she is not to fall behind the other nations. The Japanese Privy Councillor (name in Chinese characters), also states confiden- tially, that what England wants at present is (1) the issue of a loan ; (2) the right of railway construction ; (3) the possession of Shen Shui-fou, opposite Hong Kong. England and Japan are just now in close alliance, and Japan cannot fail to be acquainted with England's recent designs. Further, from what the "Daily Press " says, there cannot be the slightest doubt that what England is looking for is the right of constructing the Hankow-Kwangtung line. At the present moment Germany has already obtained the cession of Kiao-chau, and Eussia retains Port Arthur. France has long been eagerly watching the Island of Hainan, and if England has the design of seizing the Yang-tsze and "Woosung E-ivers, all the ports of China will be in the possession of foreign Powers, communication by sea between the north and south is blocked, and the only way of passing to and fro is through the interior. ]^ow Hankow is the central point to which all the waterways of the eighteen provinces from north, south, east, and west converge. If England is allowed to build the Hankow and Kwangtung road, passing through this important point, after- wards when the Russian line advances southward, and the English line is continued to the north, although we shall be in possession of the Hankow Lii Kou-chiao line we shall be stifled and our profits curtailed, for, being between the other lines, we shall not be able to defend our own. It is also greatly to be feared that our own line would pass into either English or Russian hands. In this case not only is our throat stopped by the foreigners being in possession of our ports, but our vital parts are injuriously affected. Should we wish to raise and drill soldiers, make arms, or obtain funds for the necessities of the Empire, it will be impossible, and China not only will not make progress, but we fear she will barely be able to maintain her indepen- dence. lour memorialists are distressed when they consider the extreme danger of the situation, but they think that the best method of meeting it is to proceed ourselves at once with the construction of the Hankow-Kwangtung Railway. Should it be made by degrees, starting from Kwangtung through Hunan to Hankow, it will be seized forcibly before completion, and we fear sufficient funds cannot be raised for hurryino- forward its construction. 89 Your memorialist, Sheng, had the intention of employing American capital for the construction of the Lli Kou-chaio-Hankow line, but afterwards when the American, Washburn, came to China, his conditions were found to be too hard, and consequently negotiations were broken off. Your servant was thus constrained to approach Belgium. By acting thus our privileges would not be lost, nor would ill consequences follow. But Belgium is a small country, and her strength is inconsiderable, and often she has pointed out that an unfinished railroad is hardly a sufficient guarantee for the loan. Consequently she is very undecided, but we liave hopes that by the adoption of some compromise terms may be arrived at, though the question is extremely difficult. Thus another scheme must be adopted for raising the capital for the southern line. There are grave objections to allowing either England, l?rance, or Germany to under- take the work, and your memorialists suggest that Wu Ting-fang, the Minister at WasMngton, should be communicated Avith. He is a Cantonese, and will not fail to do his best to find a scheme. Later on, should any method of raising the money be discovered, we will telegraph to the Tsung-li Yamen and ask them to memorialize the Throne. At present the official and commercial classes of the three Provinces of Kwangtung, Hunaa, and Hupeh having decided on forming a joint Company, we place their request on record, and we would ask that your Imperial Majesty should sanction the publication of their desire far and wide, so as to hinder the designs of foreigners, and prevent them from injuring our vital parts. We further request that a General Railway Board should be instructed to take counsel at once with the officials and gentry of the three provinces concerned, wdth a view of raising the funds for the construction of the line, and also that the Tsung-li Yamen should be instructed to place this on record, so that if a foreign Power asks to be allowed to undertake the construction of this Hankow-Canton line, she may be informed clearly that the privilege has already been granted to a Cliinese Company consisting of the official and commercial classes of the province in question. These are your memorialists views on the best method of hindering foreign intrigues at the present crisis. JSo. 109. Sir C. MacDonald to the Marquess of Salisbury. — {Received May 16.) My Lord, Peking, March 22, 1898. I HAVE the honour to inform your Lordship that, in company with the Italian Charge d'Affaires, I had an interview with the Tsung-h Yamen on the 5th instant, with a view to obtaining the ratification of the mining Concession obtained by M. Luzzatti in the Shansi Province. In the course of this interview, the Yamen informed me that the intermediaries with whom M. Luzzatti had been dealing in this matter were not acceptable to them, and that they were not people in whom any confidence or reliance could be placed. I pointed out that this did not affect the fact that the Concession had been obtained from a Chinese official of high rank, namely, the Governor of Shansi, and that it ought, in due course, to receive the Emperor's ratification. On the 19th instant I had another interview with the Yamen, at whicl; Prince Ch'ing was present. On this occasion I found the members favourably disposed towards the ratification of the Contract, and it was ultimately agreed between the Marquis Salvage, Italian Charg^ d'Affaires, myself, and the Yamen that the latter should have a few days more to study the Regulations which were attached to the Contract, and if they were found suitable the Yamen intimated, though they did not actually promise, that the Emperor's ratification would be procured. I have, &c, (Signed) CLAUDE M. MacDOjS'ALD. f253j N 90 >Jo. 110. Sir N. 0' Conor to the Marquess of Salisbury. — (Received May 16.) (Telegraphic.) St. Petersburgh, May 16, 1898. YOUE Lordship's telegram of the 14th May. Count Mouravieff, to whom I made representations in the sense of yonr Lordship's telegram, has promised to examine the question. No. 111. Sir C. MacDonald to the Marquess of Salisbury. — [Received May 16.) (Telegraphic.) Peking, May 16, 1898. EIOTTNG in Yang-tsze Valley. My telegram of the 11th instant. Her Majesty's Consul at Hankow telegraphs yesterday that Chinese gun-boats are guarding the British Consular junk at Shashih, and that it is uninjured. The inhabi- tants of Shashih took no part in the rioting, which was plainly premeditated, and was carried out entirely by men from the Province of Hunan. The European residents from Sungpu and Shashih have all reached Hankow safely. Ko. 112. Sir E. Satow to the Marquess of Salisbury. — (Received May 17.) (Telegraphic.) Tokio, May 17, 1898. THE evacuation of Wei-hai Wei which commences to-day will finish on the 23rd of this month. It is suggested by the Japanese Government that a British officer should be on the spot some days before this date in order to take it over. 1 should be glad if 3 our Lordship would inform me what steps Her Majesty's Government propose to take in this respect. There is no objection to the officer being conveyed in a man-of-war. No. 1] 3. Sir E. Satow to the Marquess of Salisbury.— (^Received May 17.) (Telegraphic^) _ mid, May 17, 1898. l^OLLOW ING are particulars regardmg Wei-hai Wei which I have obtained from the Japanese Government. There are no cart-roads in Shantung peninsula; infantry can only march two abreast, and that with difficulty. _ In the rainy season the streams are irubiect to freshets, and there are scarcely any bridges. •' -^ The garrison consists of 126 officers, 316 non-commissioned officers, and 2 985 rank and file. '' The cost is ] 16,616/. per annum. The Japanese Governn>ent possess no information as to minerals in the peninsula The character of tlie population is mild, and its relations with the garrison are e.vcellent. ° 1 arii to see the Chief of the Staff in a day or two as regards the military naval and strategical capacities. jj^iavai, 91 :n"o. 114. Sir C. MacDonald to the Marquess of Salisbury. — (Received May 17.) (Telegraphic.) PeJdng, May 17, 1898. AT an interview yesterday afternoon I discussed with the Yaraen tlie procedure to be observed at the takinsj over of Wei-hai Wei. No mention was made of the amount of territory to be leased. I think we should demand the same zone of land which the Japanese occupy and Island of Liu Kung-tao, and that we should have the same regulations as the Japanese regarding onr zone (see those in the Shimonoseki Treaty, Separate Article, Article No. 11). As regards the procedure at the taking over, the Yamen were very anxious that the Chinese Government should retain possession of Wei-hai Wei after the lowering of the Japanese flag until the buildings, &c., have been inventoried. I would not agree to this, and they then modified their suggestion as follows : That the Chinese flag shall be hoisted and saluted by all vessels present as soon as the Japanese flag is liauled down ; after the salute, the British flag shall be run up and similarly saluted, and the British and Chinese flags shall remain flying side by side until the inventories are completed and the ceremony of handing over the port carried out, when the Chinese flag shall be hauled down. Meanwhile, whilst the two flags are flying together, the British and Chinese Com- missioners shall post joint sentries of each nationality at the buildings, &c., which we are to take over. The Chinese Commissioners are already appointed. The Chinese Government seem to wish to avoid ceremony as far as possible, and do not seem inclined to send an official of very high rank as Commissioner. They have appointed a post-captain who served under Captain Lang, Lin by name ; and also a civil official, of the same degree of rank as Captain Lin. I have another interview with the Yamen on the 19th May. They strongly desire that Wei-hai Wei should not be handed over to us until the Convention with regard thereto is completed. No. 115. Sir C. MacDonald to the Marquess of Salisbury. — {Received May 17.) (Telegraphic.) Peking, May 17, 1S98. MURDER of missionary in Kuang-si. French demands for compensation. Yamen yesterday denied having granted any Concession for a railway between Lung-chow and Nanning. See my telegram of the iSth May. The Yam&n also said they were not certain that the murdered missionary was not a Chinaman, and that the demands made by the French for compensation comprise a Concession for a railway to some point on the sea-coast not specified, a chapel to be built, and a pecuniary indemnity of 100,000 fr. to be paid. Up to the present they had refused all these demands. No. 116. Sir C. MacDonald to the Marquess of Salisbury. — (Received May 17.) (Telegraphic.) Peking, May 17, 1898. definil details .^ — — "— — -- --- o ., - ^ receipt of the Memorial and its presentation to the Emperor the Imperial Edict could not be issued . [253] N 2 92 No. 117. Foreign Office to Admiralty. Sir, Foreign Office, May 17, 1898, WITH reference to your letter of tlie 12th instant, I am directed by th Marquess of Salisbury to transmit to you a copy of a telegram* which was sent to Her Majesty's Minister at Tokio respecting the proposal that a British man-of-war should proceed to Wei-hai Wei to communicate with the Japanese autiiorities. No reply has been received from Sir E. Salow, but T inclose a telegram from him,t conveying a suggestion from the Japanese Government that a Britisli officer should be at "Wei-hai Wei "some days before the final evacuation, and stating that there would be no objection to his going there in a man-of-war. Lord Salisbury would be glad to be informed of the answer which the Lords Commissioners of the Admiralty would wish to be returned to Sir E. Satow. I am, &c. (Signed) PEANCIS BERTIE. No. 118. Sir E. S,atoiv to the Marquess of Salisbury. — {Received May 18.) (Telegraphic.) Tokio, May 18, 1898. GENERAL MIYOSHJ, the Commanding Officer at Wei-hai Wei, will be telegraphically instructed to cordially furnish the British officer, sent for that purpose, with any advice he may desire or require regarding the territory, its occupation, and government. No. 119. The Marquess of Salisbury to Sir E. Satow. (Telegraphic.) Foreign Office, May 18, 1898. WITH reference to your telegram of the 17th instant, the Admiral has received instructions to send a man-of-war at once to Wei-hai Wei. You should thank the Japanese Government. No. 120. Foreign Office to Admiralty. Sir, Foreign Office, May 18, 1898. WITH reference to your letter of the 12th instant, I am directed by the Marquess of Sahsbury to transmit to you a telegram from Her Majesty's Minister at PekingI respecting the arrangements suggested by the Cliinese Government for handing over Wei-hai Wei after the Japanese evacuation. I am to state that Lord Salisbury proposes to approve the suggestion in this telegram, unless the Lords Commissioners see any ground of objection to it With regard to the amount of territory to be leased, Lord Salisbury proposes, with their Lordships' concurrence, to inform the Chinese Government that it is impossible to conclude a Convention until the surveys, for which preparations have already been made, have been completed, and that, in the meantime, the port should be handed over to the British authorities as proposed in the accompanying teleoram. I am, &c. (Signed) ERANCIS BERTIE. No. 102. t No. 112. No. 114. 93 No. 121. Admiralty to Foreign Office. — (Received May 20.) Sir, Admiralty, May 20, 1898. WITH reference to your letter of the 18th instant, inclosing the copy of a telegram, dated the l7th instant, from Her Majesty's Minister at JPeking respecting the arrangements suggested by the Chinese Government for handing over "Wei-hai Wei after the Japanese evacuation, I am commanded by my Lords Commissioners of the Admiralty to request you will inform the Secretary of State that they concur in the proposal to approve the suggestion contained in Sir Claude MacDonald's telegram, and to inform the Chinese Grovernment that it is impossible to conclude a Convention until the surveys, for which preparations have already been made, have been completed ; and that, in the meantime, the port should be handed over to the British authorities, as proposed in the telegram above referred to. I am, &c. (Signed) EVAN MAOGREGOR. No. 122. Sir C. MacDonald to the Marquess of Salisbury. — [Received May 20.) (Telegraphic.) Peking, May 20, 1898. I SHOULD like to learn your Lordship's views on a possible Erench railway from Pakhoi to the interior of the Province of Kuangsi. Such concession may very likely he demanded by the Ereuch as compensation for the murder of their missionary. I myself think that, in the event of its being constructed, it would not tend to harm oui' tradr;, but rather to increase it. I obtained from the Yamen a half promise to open Nanning, having consented to allow them a few days more for their final answer. No. 123. Sir C. MacDonald to the Marquess of Salisbury. — (Received May 20.) (Telegraphic.) Peking, May 20, 1898. PROPOSED Regulations for internal navigation of China. (See my telegram of the 13th May.) Sir Robert Hart tells me that any disorganization or embarrassment of the pro- vincial revenues must be avoided, and that, therefore, the whole matter of internal navigation will have to be treated with great care. His consideration and advice have been asked by the Central Government on the alterations in the Regulations suggested by, and already received by, the Central Government from the provincial authorities. No. 124. The Marquess of Salisbury to Sir C. MacDonalu. (Telegraphic.) Foreign Office, May 20, 1898. WITH reference to your telegram of the 17th instant, you may accept the suggested compromise as regards arrangements for handing over Wei-hai Wei. We cannot conclude Convention as to limits until completion of surveys, for which preparations have been made. 94 No. 125. Sir N. 0' Conor to the Marquess of Salisbury.— {Received May 21.) (Telegraphic.) St. Petersbnrgh, May 20, 1898. IN continuation of my telegram of the 16th May, I have the honour to report that a note from Count Mouravieff has just reached me in which his Excellency states that the Russian Charge d'AfFaires at Peking; has been invited to instruct the Russian Consul at Tien-tsin to withdraw the Circular respecting Russian visas on the passports of people going to Talienwan and Port Arthur, which was issued by liim and the Russian Admiral without the cognizance of the Imperial Government. No. 126. Sir C. MacDonald to the Marquess of Salisbury. — {Received May 21.) (Telegraphic.) Peking, May 21, 1898. PORT Arthur and Talienwan. With reference to my telegram of the 13th May, 1 have the honour to beg your Lordship's instructions regarding my recognition of, and action upon, a Circular which the Russian Charge d'Affaires issued to all the foreign Ministers yesterday, announcing that passports vise' at a Russian Consulate must be carried by all foreigners who travel to the ports above mentioned, or to any portion of the territory in the Liaotung, Peninsula, recently granted to Russia by China. Travellers to Treaty ports or their environs, or crews of ships visiting Treaty ports,, need no passports by Article IX of the Treaty of Tien-tsin. No. 127. Sir C. MacDonald to the Marquess of Salisbury. — {Received May 21.) (Telegraphic.) Peking May 21, 1898. 1 HEAR from a very trustworthy source, and in continuation of my telegram^ of the 20th May, that at an interview yesterday with the Yaraen M. Pichon, the French Minister, demanded a concession for a railway from Paixhoi to Nanning, the erection of a chapel at Pakhoi, a pecuniary indemnity, and the punishment of the officials concerned. No. 128. Sir C. MacDonald to the Marquess of Salisbury. — {Received May 22.) (Telegraphic.) Peking, May 22, 1898. WITH reference to my telegran:: of the loth : Yesterday the Peking Syndicate Concession was signed. No. 129. Sir C. MacDonald to the Marquess of Salisbury. — {Received May 22.) (Telegraphic.) Peking, May 22, 1898. WITH reference to your Lordslvp's telegram,* I have the honour to report that the opening sentence of the Russian Charge d'Affaires' communication, mentioned in my telegram of the 21st May, is to the effect that lie is issuing the' Reo-ulation regarding passports for Port Arthur and Talienwan in accordance\vith insLTUctious- which he has just received from the Russian Foreign Office. Repeating No 126. 95 No. 130. Sir N. 0' Conor to the Marquess of Salisbury. — {Received May 23.) 'My Lord, _ St. Petersburgh, May 16, 1898. IN obedience to the instructions contained in your Lordship's telegram of the 14th instant, I called Count Mouravieff's attention this morning to the Circular lately issued by tlie Russian Consul at Tien-tsin requiring- that foreigners shall have their passports vise' by liim in order to enter Port Arthur or Talienvvan, and at the same time I addressed to his Excellency a note on the subject, a copy of which I have the honour to inclose to your Lordship herewith. It was not very clear whether Count Mouravieff was aware of the Circular, but in any case he did not appear to have any knowledge of the IXth Article of the Treaty •of Tien-tsin, with which the action of the Russian Consul was clearly not in accordance. His Excellency said that he would examine the matter, and send me a reply. I have, &c. (Signed) N. R. O 'CONOR. Inclosure in No. 130. Sir N. 0' Conor to Count Mouravieff. M. le Ministre, _ St. Petersburgh, May 16, 1898. IN compHance witli instructions which 1 have received from the Marquess of Sahs- bury, I have the honour to call your Excellency's attention to a Circular reported to have been lately issued by the Russian Consul at Tien-tsin requiring that foreigners shall have their passports vise' at the Russian Consulate in order to be allowed to enter Port Arthur or Talienwan, and at the same time to point out to your Excellency that this .action is not in accordance with existing Treaty rights. As a rule, passports are not necessary in China except for extended journeys in the interior ; but in cases where they are required provision is made by Article IX of the Treaty of Tien-tsin of 1858, wheteby they shall be issued by the respective Consuls and countersigned by the local authorities. I avail, &c. (Signed) N. R. O'CONOR. No. 131. Admiralty to Foreign Office. — {Received May 24.) :Sir, Admiralty, May 24, 1898. I AM commanded by my Lords Commissioners of the Admiralty to transmit, for the information of the Secretary of State for Eoreign Affairs, a copy of a telegram, ■dated this day, from the Commander-in-chief on the China Station. I am, &c. (Signed) EVAN MACGREGOR. Inclosure in No. 131. Commander-in-chief, China Station, to Admiralty. (Telegraphic.) Chefoo, May 2% 1898. JAPANESE evacuation having been completed, British flag hoisted at Wei-hai IVei to-day. 96 No. 132. -Sir C. MacDonald tc the Marquess of Salisbury. — {Received May 24.) (Telegraphic.) Peking, May 24, 1898. i HAVE the honour to request that your Lordship will favour me with your instructions with regard to the amount of territory to be leased at Wei-hai Wei, and also with regard to the term of the lease. There are two stipulations which the Chinese Government wish particularly to introduce : — That there be accommodation and drill- ground facilities on shore for Chinese sailors ; and That Chinese men-of-war may use the port of Wei-hai Wei. No. 133. Sir C. MacDonald to the Marquess of Salisbury. — (Received May 24.) (Telegraphic.) Peking, May 24, 1898. AN Imperial audience is arranged for to-morrow for Prince Henry of Prussia to communicate to the Emperor the presentation of the Order of the Black Eagle from the German Emperor. No. 134. Sir C. MacDonald to the Marquess of Salisbury. — (Received May 24.) (Telegraphic.)^^ Peking, May 24, 1898. LIU KUNGTAO and Wei-hai Wei were yesterday occupied jointly by British and Chinese troops, the Japanese having evacuated. I have above news by telegram from Her Majesty's Consul at Chefoo, who is for the time being at Wei-hai Wei. No. 135. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic) Foreign Office, May 24, 1898. IT is stated in a " Times " telegram from Peking of the 22nd May that Erench and Belgian Ministers are negotiating, in conjunction with Director of Eusso-Chinese Bank, for line from Peking to the Tang-tsze, vi^ Chenting and Hankow, foreign control being assured. Please report facts, and also state what rights the promoters are seeking to obtain as regards control. No. 136. The Marquess of Salisbury to Sir 0. MacDonald. (Telegraphic.) Foreign Office, May 25 1898 WEI-HAI WEI : your telegram of the 24th May. IP > -^ y ^^, -Lay». As regards duration of lease, I think the term should be dependent on the Eussian occupation of Port Arthur. As regards amount of territory, the Japanese rayon is inordinately lone and inconvenient tor delimitation. Ask for line across neck of promontory following- mountams or rivers not exceeding meridian 121° 40'. You should explain that we do not desire Japanese conditions which excluded Chinese troops, but that we must have control over coast to east and south. 97 You might give a temporary assurance of most liberal hospitality to Chinese vessels, holding out a prospect of some definite position in the harbour Avhen we have improved it. I will reply further after consulting Admiralty, but, generally speaking, the Chinese Government will be afforded all possible facilities. No. 137. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, May 25, 1898. PAKHOI-NAN^ING Eailway : Your telegram of the 20th May. The more railways the better, from a commercial point of view ; bu^ differential rates against British trade are feared. If this concession is made to the French, the opportunity appears favourable for insisting upon the opening of Nanning. No. 138. Foreign Office to Admiralty. Su', Foreign Office, May 25, 1898. I AM directed by the Marquess of Salisbury to transmit to you, to be laid before the Lords Commissioners of the Admiralty, a copy of a telegram from Her Majesty's Minister at Peking respecting the draft Agreement for the lease of Wei-hai "Wei.* The Chinese Government are anxious that the Agreement should include stipulations — 1. Por the use of the port by Chinese men-of-war ; and 2. Por accommodation and a drill ground for Chinese sailors on shore. Lord Salisbury would be glad to learn what assurances can, in the opinion of their Lordships, be given to the Chinese Government on these points. As regards the first, I am to state that the Chinese might perhaps be informed that their vessels will be accorded the utmost hospitality at Wei-hai Wei, and hopes might be held out to them that they would be accorded a permanent position in the harbour after it has been enlarged and improved. "With reference to the remarks contained iu Sir. C. MacDonald's telegram, I am to observe that Lord Salisbury is of opinion that every possible facility consistent with the safety of our position at "V\''ei-hai Wei should be accorded to the Chinese. I am, &c. (Signed) T'RANCIS BEETIE. No. 139. Sir C. MacDonald to the Marquess of Salisbury. — [Received May 26.) (Telegraphic.) Peking, May 26, 1898. PEKING-HANKOW Railway. The Russians and Prench were known to be supporting the scheme. Their open support is, however, a new factor in the case. It is explained by the Yamen that the Russians and French are anxious to arrange a modification of the Agreement, as the Belgian Syndicate are unable to carry out the original one, but they declare that the Chinese Director of Railways still maintains the control in his hands. * No 132. [2581 98 No. 140. Sir C. MacDonald to the Marquess of Salisbury. — {Received May 26.) (Telegraphic.) Peking, May 26, 1898. HONG KONG Extension. The Tsung-li Yam6n have promised to memoralize the Emperor on the 29th instant, and have agreed to accept the revised boundary. An additional clause has %een added to the effect that Chinese men-of-M'ar, whether neutral or otherwise, shall retain the right to use the waters of Deep Bay and Mirs Bay, although they are leased to Great Britain. In order to obtain their consent to the revised boundary, this concession was necessary; in case, however, we subsequently find that it inconveniences us, we may have either to extend the same privileges to other belligerents, or' to restrict the concession. • The western boundary I have drawn up to the meridian 113° 15' east, until that ineridian meets the land. ■ , The northern land frontier is the line across the neck from Deep ^ Bay to. Mirs Bay. Before the > Convention is signed, I am strongly of opinion that the Government of Hong Kong should bind itself to tal^e all necessary measures to prevent smuggling, and to police the newly-leased Avaters. . Although the above was not mentioned in the Convention, it was understood. No. 141. The Marquess of Salisbury to Sir .C. MacDonald^ (Telegraphic.) Foreign Office, May 26, .1898. WITH reference to your telegram of the 25th instant, you should press for the railway from Hankow or Kiukiang to Canton. No. 142. Admiralty io Foreign Office. — {Received May 27.) Siri _ _ Admiralty, May 27, 1898.' MY Lords Commissioners of the Admiralty have had before them your letter of the 25th instant, inclosing copy of a telegram from Her Majesty's Minister at Peking respecting the draft Agreement for the lease of Wei-liai Wei. With reference to the request of the Marquess of Salisbury to be informed what assurances can, in their Lordship's opinion, be given in respect of the stipulations which the Chinese Government are anxious should be included in the Agreement, viz. : 1. For the use of the port by Chinese men-of-war. 2. For accommodation, and a drill ground for Chinese sailors on shore. I am commanded by their Lordships to acquaint you that they concur in Lord Salisbury's proposed answer to the first stipulation, and, with regard to the second, they are of opinion that every facility compatible with British interests should be afforded the Chinese for training at Wei-hai Wei, I am to add that my Lords also concur generally in the view of Lord Salisbury as expressed in your letter under reply. I am, &c. {Pro Secretary), (Signed) C. L THOMAS. 99 No. 143. Sir C. MacDonald to the Marquess of Salisbury. — {Received May 27.) (Telegraphic.) , Peking, May 27, 1898. WITH reference to your Lordship's telegram of the 25th May respecting the Wei- hai ,"W"ei boundary : On account of precedent, to which the Chinese strongly hold, I ventured to suggest the Japanese zone. There are. many villages and two district cities within the portion of the promontory to east of meridian 121° 40' {vide Waeher's Map), and as we should not find it easy to govern so large a territory without an elaborate civil Administration, I would therefore suggest, for your Lordship's consideration, the following territory clause : — A belt of land 10 English miles wide along the entire coast-line of the Bay of Wei-hai Wei and the Island of Liukung should comprise the amount of territory to be leased. Her Majesty's Government should, however, have the right to station troops, erect fortifications, or take any other measures necessary for military purposes at any points on the coast or in the interior of the promontory of Shantunsr east of meridian 121° 40'. i' J The area within which we have sole jurisdiction should be defined. This is essential. No. IM. Foreign Office to Colonial Office. Sir, ■ , Foreign Office, May 27, 1898. WITH reference to the extension of the boundaries of Hong Kong, I am directed by the Marquess of Salisbury to transmit to you, to be laid loefore Mr. Secretary Ghapiberlain, a copy of a telegram from Her Majesty's Minister at Peldng,* from which it will be seen that the Chinese Government have agreed to accept the limits proposed. Sir C. MacDonald expresses a strong opinion that, before the Convention is signed, the Hong Kong Government should undertake to adopt adequate measures for policing the newly-leased waters and for the prevention of smuggling. Lord Salisbury would be glad to know what assurances can, in Mr. Chamberlain's opinion, be given to the Chinese Government on the subject. I am, &c. (Signed) FRANCIS BERTIE. No. 14.5. The Marquess of Salisbury to Sir C. MacDonald. Sir, Foreign Office, May 27, 1898. MR. LITTON, in a Report on a recent journey through Northern Szechuan, states \f ith regard to the Min and Fou districts and the neighbourhood of Chungking along the Yang-tsze, that these portions of the province " inclose the most promising undeveloped pommercial area in China, perhaps in the world." He adds that the people are prosperous, and only requiire foreign goods to be brought to their notice to purchase largely. I observe that he Jays great stress on the importance of establishing communica- tion by means of steamers and chartered junks on the various rivers ; and also on the great advantage which would result to foreign trade from the opening of Chengtu. The question of the opening of Chengtu should be home in mind in any future negotiations with the Chinese Government for increased trade facilities. * No. 140.- [253] O 2 100 I should be glad to receive from you any observations which you may have to offer in regard to these suggestions, and as to the possibility of giving effect to them. The telegrams recently received from you with regard to the serious riot which has occurred at Shashih, seem to show that measures are necessary to protect the newly opened ports from the classes of natives who consider that their vested interests are threatened by the admission of foreign traders. In your telegram of the 15th instant, you state that Her Majesty's Consul at Hankow reports the existence of much anti-foreign feeling on account of the transfer of the salt and li-kin revenues to the Imperial Maritime Customs, and it will be advisable to impress upon the Chinese Grovernment the absolute necessity of taking proper pre- cautions for the preservation of order, and that Her Majesty's Government will hold them reponsible for the carrying out of the engagements made by the Tsung-li Yamen in the matter. I am, &c. (Signed) SALISBURY. No. 146. The Marquess of 'Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign , May 28, 1898. MY telegram of the 25th instant. The Admiralty will give to Chinese every facility for training at Wei-hai Wei, compatible with British interests. No. 147. Sir C. MacDonald to the Marquess of Salisbury. — {Received May 30.) % Lord, Peking, April 11, 1898. WITH regard to the condition of the recent Anglo-German loan that the li-kin revenue collection in certain of the central provinces of China should be under foreign superintendence, I have the honour to inform your Lordship that Sir Robert Hart has appointed six Deputy Commissioners, of various nationalities, for this duty. The inclosed extract from a Ningpo IntelKgence Report shows the probable beneficial effect which this step will entail to the revenue of China. I have, &c. (Signed) CLAUDE M. MacDONALD. Inclosure in No. 147. Extract from Ningpo Intelligence Report for March Quarter, 1898. Transfer of " Li-kin " Collection to Customs. THE Imperial Maritime Customs has recently been instructed to take charge of the collection of li-km m Chehtung, that is to say, in the eastern part of this province I understand the hght which will in consequence be thrown on the Li-kin Administra- tion IS likely to result in some unexpected revelations, among others, that li-kin has long been surreptitiously levied on foreign goods nominallv under transit-pass protection the holders of the goods (always Chinese) being dete/red by timidity from resisting these illegal exactions. '' I do not doubt that this transfer of collection from the irresponsible native to the icsponsible foreigner will entail a sensible increase in revenue, and a notable decrease 111 peculation. V . -,1 ioQ« (Signed) G. M. H. PLAYPAIR, Co.^mZ. Nmgpo, April 1, 1898. 101 No. 148. Sir C. MacDonald to the Marquess of Salisbury. — (Received May 30.) My Lord, PeJdng, April 15, 189S. I HAVE the honour to inclose herewith translation of a despatch from the Tsung-li Yam^n announcing the intention of the Chinese Government to open Wuf5ung- as a Treaty port. I had the honour to inform your Lordship of this bv my telegram of the Sth instant. I have, &c. (Signed) CLAUDE M. MaoDONALD. Inclosure in No. MS. The Tsung-li YamSn to Sir C. MacDonald. Kuang Hsii, 24th year, 3rd moon, 17 th day (Translation.) (April 7, 1898). THOUGH Shanghae has been a Treaty port for years past, the Wusung bar continues to offer many difficulties to the free passage of merchant-vessels. To obviate tliese, the Yam^n are now adding Wusung to the list of open ports. When the Shanghae-Wusung Railway comes to be completed, tlie transport of merchandize will be more convenient and expeditious. Wusung will form a branch station of ttie Shanghae Customs, with an examination shed, which, it is hoped, will to some extent facilitate trade matters. Sir C. MacDonald will be informed as soon as a date is fixed for opening the station, and, in the meantime, the Princes and Ministers avail themselves, &c. No, 149. Sir C. MacDonald to the Marquess of Salisbury .—(Received May 30.) My Lord, Peking, April 15, 1898. I HAVE the honour to inclose herewith translation of a despatch from the Tsun:^-li Yamen, announcing the desire of the Chinese Government for a revision of Tariffj in accordance with Article XXVII of the Commercial Treaty of 1858. T had the honour to acquaint your Lordship with this in my telegram of the 8th nstaut. At my personal interviews with the Yam^n the Ministers have never made any mention of the desired revision. I have, &c. (Signed) CLAUDE M. MacDONALD Inclosure in No. 149. The Tsung-li Yamen to Sir C. MacDonald. Kuang Hsii, 24ith year, Brd tnoon, Vlth day (Translation.) (April 7, 1898). IN the XXVIIth Article of the Commercial Treaty concluded between China and Great Britain on the 26th June, 1858, it is provided that "either of the Higli Contracting Parties to this Treaty may demand a further revision of the Tariff and of the Commercial Articles of this Treaty at the end often years," &c. From the date of tlie conclusion of this Treaty up to the oth moon of the present year, four terms of ten years will have elapsed. This being a considerable period of time, trade conditions iiave altered, and a revision of the Commercial Articles of the Treaty should be considered, witli a view to meeting the requirements of the times, and placing them on a completely satisfactory footing. On the 24th March the Yam^n memorialized the Emperor requesting the necessary authorization, which has been granted by an Imperial Decree. 102 The Princes and Ministers accordingly inform Sir Claude MacDonald that the notice hereby given may be transmitted to the British Foreign Office and placed on record. Later the Yam^n and Sir Claude MacDonald will consult together on the revisions (to be made) in the Articles of the original Treaty. The Princes and Ministers avail themselves, &c. No. 160. Sir C. MacDonald to the Marquess of Salisbury.— (Meceived May 30.) My Lord, ' Peking, AprillQ, 1898. WITH reference to my despatch of the 17th ultimo, I have the honour to inclose copy of an extract frqtn a despatch which I have received from Her Majesty's Consul at Kinngchow, showing the present state of affairs in the Island of Hainan. I have, &c. ' -^ (Signed) CLAUDE M. MacDONALD. luclosure in No. 150. Acting Consul O'Brien- Butler to Sir C. MacDonald. (Extract.) Kiungchow, March 9, 1898. THE people of this island, are in a state of great apprehension as to what the French are going to do. Nothing unusual is to be noticed at Hoihow or Kinngchow, but in the interior the people are on the point of rising against the officials. In many places the rougher elements of the population proclaim that they will work no longer, but will take the opportunity which the change of Governments will afford them to enrich themselves by looting. At Nodoa, about 70 or 80 miles to the south-west of Hoihow, a number of persons, estimated at 1,000 or so, are reported to have formed a society for looting purposes. - . ;: The scarcity of rice that now prevails almost everywhere in Hainan has a great deal to do with the general unrest, and the rich have been warned in severalplaces to sell their rice at a more reasonable rate, and not to starve the people. :■,: ; Colonel Chen, who went to Yaichow at the end of last year, has not yet returned, and I hear he can make no headway at all against the rebels. . The: whole aboriginal population, including the wbiAen and even the children, is fighting against him. Her Majesty's ship " Archer "arrived here on the_4th instant, and will remain here for some time to come. No, 151. Sir C. MacDonald to the Marquess of Salisbury. —{Received May 30.) (Extract.) Peking, April 15, 1898. GREAT pressure of work at the time of fonvarding the last mail to 'England prev^ted my reporting by despatch on the subject of the French demands on China. TV/1 1 if^^ i ^^^' mentioned certain rumours on the subject at the Yam6n on the 8th March, the Mmisters told me that the French Charge d' Affaires had made inquiries with regard to the concessions to Great Britain, but had made no demands. On the 16th they row me that a coahng station had been asked for, together with a railway concession in iunnau,_and a promise of non-alienation of territory in Kuangtung, Kuangsi, Yiinnan, and Kueichou, similar to that given to- Great Britain as regards the Yang-tsze region. 103 Tlie demand had been refused, but I foresaw that under pressure tlie Chinese Govern- ment would eventually give way. At my next interview, on the 19th March, I ascertained that certain other demands had been made. The Yamgn said, that the French argued that as China had given a pledge to Great Britain not to alienate any territory in the Yang-tsze region, she should not refuse a similar pledge to Erance with regard to the southern and south-western provinces. I said the cases were totally different. Our object in asking for a pledge as regarded the Yang'-tsze was to safeguard the commerce on that river. I warned them that the lease of a coaling station Would inevitably be followed by similar demands from other Powers, including Great Britain. We had so far refrained from asking even for an extension of territory at Kowloon, which was urgently required, for fear of giving a pretext to otlier Powers, but if Cliina showed that only the Powers which showed no regard for her integrity obtained concessions, and that those wln'ch exhibited forbearance were left out in the cold, we should have to protect ourselves and demand our share. I had a long interview with them on the 24th March with regard to the Russian lease of Port Arthur and Talienwan, but only brief reference was made to the French demands, and they told me that nothing had been done. . My next three interviews, on tlie 2Sth March, the 31st March, and the 2nd April, were fully occupied by the question of the lease of Wei-hai Wei, which I shall have the honour of describing in a subsequent despatcli. The French question was introduced by the Yamen in the endeavour to obtain a promise that Great Britain wovdd not make the lease of a coaling station to France a groimd for further territorial demands on her own part, t told them I would report their appeal to your Lordship, but warned them that we should at the very least require an extension of Hong Kong, and that any other concession to France would necessarily involve counter-concessions such as I had previously indicated. On the 5th April I told them that the instructions I had received from Her Majesty's Government did not authorize me to indicate any limits to the demands to which concessions to France might lead. 1 thought it possible that Her Majesty's Government in their extreme anxiety to preserve the integrity of China would refrain from making any territorial demands beyond such an extension of the Hong Kong- boundaries as was required for the defence of the Colony, but whether they would be able to confine their demands within those limits depended on the nature of the con- cessi(nis to France. Apart from territorial acquisitions, the Chinese Government had had full warning, which I now repeated, as to the consequences of concessions of other kinds. The Ministers said that China had no objection to an extension of Hong- Kong- territory, provided it were only a small one, and asked me for a map to show what we proposed to ask. I said I expected shortly to receive such a map from Hong Kong-. I told them that the question had been long ago mooted at Canton, and that it coidd in no sense be regarded as an equivalent for the lease of a coahng station to France, and I repeated that I was not authorized to state that no other territorial demand would be made. I then asked what were the terms and effect of the arrangement between France and China of last year, to which M. Hanotaux had recently referred. The Yamen said it in no way affected mining concessions to British subjects. I 'put to them a concrete case, referred to me by the Governor of Hong Kong, of an English Syndicate desirous of working certain coal mines in Kuaiagsi. The Ministers gave me the most explicit assurances tliat they were under no engagement to France which would in any way interfere with such a project. I then returned to the other demands made by France, and told the Ministers that British interests in Kuangsi being admittedly not so great as in Kuangtung and Yunnan, we might be content with a pledge against aUenation of territory to any other Power in Kuangtraig and Yunnan, but that the opening of Nanning was essential. This led to a discussion, in the course of which the Ministers reproached me with making a fresh set of demands in addition to asking for Wei-hai Wei, to which I answered that 1 was only warning them of what would be the minimum we should ask, and that they might consider themselves indebted to our forbearance if we asked no more than I had indicated at this and previous interviews. I heard' reports during the next few days that the French demands had been granted. The Yamen, when I next saw them, .on the lUh April, began by denying that 104 any definite arrangement liad been come to ; but on being closely cross-questioned with regard to each item of the rumoured concessions, tliey at last gave me to underitand that tlie following had been granted : — 1 . Lease of a coaling station at Kuangchou-Wan. 2. A pledge that no territory in the border provinces of Yunnan, Kuangtung, and Kuangsi would be alienated to any Power. They said that tliis included France nerself. 3. A promise that if a separate Postal Department were at some future time established with a European Director at its head, Prance equally with other Powers should have the right to recommend a candidate for the post. The Yamen gave me explicit assm-ances that this gave France no preferential claim to the appointment, and added that they had no intention of establishing a separate Department. 4. The right to extend the railway to Yiinnan-fu at some future dale. With regard to this point, the Yamen declared that England had, under the Burmali Agreement of last year, a similar right of extension of the Burmah Railway as soon as it reaches the frontier. With regard to the non-alienation of the provinces mentioned, the Yamen said they had no great objection to giving England the same pledge, but that France would ask for a similar pledge as regards the Yang-tsze. I said that this would be unreasonable, the cases being by no means parallel. If France could prove that her interests in the Yang-tsze Valley equalled ours in Kuangtung and Yiinnan, she might make such a claim, but not otherwise. The Yamen declared in the course of the discussion that no exclusive mining or railway privileges of any sort or kind had been granted to France. No. 152. Sir C, MacDonald to the Marquess of Salisbury. — (Received May 30.) My Lord, PeMng, April 15, 1898. IN continuation of my despatch) of the 22nd ultimo, I have the honour to report that, on the 7th instant, 1 received a note from the Tsung-li Yamen stating that the Censors and the ofBcials of the Province of Sliansi, who had memorialised the Throne in opposition to the concessions granted to the " Peking Syndicate " througli Mr. Luzzalti, were pressing them to delay the ratification of the Agreement. They stated that the Censors were again about to memorialise the Throne in order that the Agreement should be reconsidered and modified ; and they begged me, in view of wliat they described as very serious difficulties, to inform your Lordship, in reply to the" telegram which I had told them that 1 had received from Her Majesty's Government inquiring as to the present state of the negotiations, that they had been obliged to ask for time to reconsider the whole matter. In reply, 1 addressed to the Yamen on the 8th instant a note, in which 1 pointed out that this note amounted to a breach of the verbal assurances given by them to the Itahan Charg6 d' Affaires and myself, and repeated to me in an interview of the 2nd instant, and stated that I was very unwilling to report to Her Majesty's Govern- ment that the Tsung-li Yamen, after having agreed to frame Regulations in accordance with the Contract which the Syndicate had entered into with the high provincial authorities of Shansi, and which had been sealed and sanctioned by those authorities, should abandon a project which would be of great benefit to China; and I staled that if it were indeed their decision, that 1 should report to Her Majesty's Government in this sense, I must insist on having the declaration from their own lips, and milst also ask that an interview be granted me within the next day or two. A similar note was addressed to the Tsung-h Yamen by the Italian Charoe d'Affiiires. '' Having received no reply to this communication, I decided in concert with' ]\rarquis Salvago to address an identic note, of wliich I have the honour to inclose the accompanying copy, informing the Yamen that unless we received a reply within two days of the dale (12th April) on which it was sent, 1 should consider that the Yamen approved our reporting to our Governments that they had no intention of with- drawing from tlie verbal assurances given to us. No reply having been received to these notes, I addressed to youj^ Lordship to-day 105 my telegram reporting that the Yamen had officially recognized the validity of tlio Contract. The Contract will require considerable modification, and Mr. LuzzaLti, agent to tlie Syndicate, has arrived in Peking with a view to arranging these modi Hcations with the Chinese Government. 1 have, &c. (Signed) CLAUDE M. MacDONALD, Inclosure in No, 152. Sir C. MacDonald to the Tsung-li Yamen. MM. les Ministres, Peking, April 12, 1898. I HAD the hononr on the 8th instant of addressing to your Highnesses and your Excellencies a note witli regard to the Shanshi Mining Concession, in which I explained in what sense 1 was prepared to answer the telegram of inquiry I had received from Her Majesty's Government, and showed the advantages to China of the Concession granted to the Syndicate. Having received no reply to this note,. and being convinced thai the Yamen have no intention of withdrawing the verbal assurances given to me and to the Charge d'Affaires for Italy, I shall, unless I receive a reply before Thursday next (14r,li), con- sider that the Yamen approve my reporting in the above sense to Her Majesty's Government, and informing the Syndicate concerned. If, on the other hand, the Yamen have any observations to make, I have to request that they will appoint an hour on Thursday at which they will receive me with the Italian -Charge d'Afiaires, and that the Princes may be present. It is absolutely necessary that, if further discussion is needed, I should be received not later than that day. I avail, &c. (Signed) CLAUDE M. MacDONALD, , No. 153. Sir C. MacDonald to the Marquess of Salisbury. — (Received May 30.) My Lord, Peking, April 16, 189S. WITH reference to my telegram of the 3rd March,* I have the honour to inclose a copy of the Regulations drawn up by order of the Tsung-li Yamen for the control of the new privilege of the navigation of internal waters by steamers. The necessity for Regulations of some kind to govern the new facilities from tlie very beginning cannot te denied, for there is no certainty that the individuals who may at once avail themselves of them will do so legally or wisely. The inclosed Regulations contain some rules which cannot be allowed to stand unaltered, notably No. 1, restricting the privilege to Treaty port provinces, and as the date (18th June) before which internal waters must be opened lo steamers, is too close at hand to permit a previous reference to your Lordship, I propose to consult witli Her Majesty's Consuls at the ports principally concerned, and, when, the Regulations are sent to me officially, arrange the alterations wliidi appear necessary. Whatever is decided upon will, in any case, be tentative and subject to sucli changes as experience may show to be necessary. I have, &c. (Signed) CLAUDE M. MacDONALD, » See " China No. 1 (1898)," p. 42. [263] 106 Inclosure in iiTo, 153. ' ' '''l,i^.V^ Steam Navigation Inland : Draft Regulations, (A,)— Registration. THE inland waters of the Treaty port provinces are liereby opened to small steamers, native or foreign, plying- from Treaty ports, 2. Small steamers at Treaty ports, whether plying only in tlie waters of the port or going thence inland, are to be registered at the Customs and take out papers at the Customs containing owner's name and residence, name and type of steamer, number of crew, &c., in addition to whatever national papers they are allowed or required by law to carry ; such Customs passages are to be renewed annually and are to be surrendered on change of ownership or when the vessel ceases to ply. ^ , . The fee for the first issue of Customs papers will be 10 taels, and for each r(fijewa], 2 taels. ' '/- 3. Small steamers thus registered at tlie Customs may ply freely in- the waters of the port, without reporting their movements at the Customs, but if they go inland they must report both departure and return. No unregistered steamer willbe allowfed to proceed inland. ' . ' •■' 4. As regards exhibitions of lights, prevention of collisions, shipping of crews,, and inspection of machinery, &c,, all such steamers a;re to observe the rules in force at the port they belong to. ' . . (B.) — Revenue. 5. Cargo shipped at Treaty ports is to be reported to the Customs, and is to pay such duties as the Customs decide to be leviable. Cargo brought to a Treaty pOrt from inland is to be similarly dealt with. • ^ v ■ . , 6. Cargo landed or shipped inland is to pay at the place of landing or shipmefft whatever dues or duties the local Regulations call for. 7. If such steamers have vessels in tow, they must bring-to at whatsoever stations the vessels towed are required to stop at for their cargo to be dealt with as local Rules prescribe. ■ (C.) — Judicialm 8. Offences inland, whether against revenue laws or affecting persons or property, are to be dealt with by the local authorities of the district in the same way as if there committed by their own people, but if vessel concerned is foreign-owned or the; person implicated is a Chinese employed on board such foreign-owned vessels, the local authorities are to communicate with the nearest Commissioner of GustOins and; the Commissioner in turn, with the Consul, who may send a deputy to watch the proceedings. If the offender is a foreigner he is to be sent to the Consul at the nearest Treaty port in the' manner prescribed by Treaties where foreigners without passports are arrested. ; , ; i; 9. If any such steamer passes inland stations that ought to be stopped at vvithout stopping, or if the crew, &c., create trouble inland, the Customs may withdraw the Customs papers and refuse the vessel permission to proceed inland again. ; The above Rules are for the inauguration of steam traffic on inland waters and a?e subject to such charges as may from time to time be found necessary. No. 154. Sir C. MacDonald to the Marquess of Salisbury .-—{Received May 30.) My Lord, Peking, April 16, 1898. ON the 28th March, in obedience to the instructions contained' in your Lordship's telegram of the 25th March* (which I did not receive till the 27th), I informed the Tamen that, in the view of Her Majesty's Governme»t, the balance of power in the Gulf of Pechili had been so seriously disturbed by the lease to Russia of Port * See " China No. 1 (1808)," p. 54. 107 Aptlmr as a naval station that it must be redressed by a lease of Wei-hai Wei to Great Britain op similar terms. , r prefaced tHs demand by a suinmary of our negotiations with Russia, showing tliafe Her Majesty's, Government had spared no effort to induce that Power to abstain from a policy in no. way dictated by her conimercial interests and menacing both to China and England. ^ No opposition had been raised to such Russian requirements as the-extension of the Siberian Railway to an ice-free port and the lease of the latter fyom China, but the acquisition of a fortified naval base was on a totally different footing. Great Britain had given a proof of her sincerity in declaring the acquisition of Wei-hai Wei. to be forced on her by offering a pledge that she would ask for no port in the Gulf if Russia. would abstain from her demand for Port Arthur. The Ministers first made inquiries as to the strategical value to Great Britain of Wei-hai Wei,' and I endeavoured to explain the disadvantage under which a fleet was placed in operating from a distant base. They discussed this subject for some time, preferring apparently hot to make any direct reply to the demand I had made, and ^hen I inquired what answer they had to give to it, they said they considered that ^e,,. matter nad better wait till the Japanese had actually evacuated Wei-hai Wei, They had heard reports that Japan meditated remaining there even if the indemnity were duly paid, and they thought it would bo awkward for China if she promised a lease and could not give possessipn under it. I said that was a matter for Great Britain. We only asked for a lease to date from the Japanese evacuation, whenever it took place. The Ministers then asked whether we had come to an understanding with Japa,n on the point, to which I answered that the declarations made some_ little time ago by Japan to China of her intention to evacuate the place in accordance with the Treaty of $him6n,bseki seemed sufficient indication of her intentions, and' there was, therefore, ffo heed for any arrangement with her on our part. ^ The Ministers- then remarked that China would now have no naval base of her 6:wn in thp north. I said I had no doiibt that Chinese men-of-war would be given free access- to -Wei-hai Wei, but they replied that that was not the same thing, and they thought, that England's oliject would equally be gained if she took an island on the^Corean coast. "I' declined to discuss any alternative of the kind, saying that Her Majesty's government had been guided in their selection by the best naval opinion. The Yamen then returned to their plea that China must have a naval station of her Town., I said she might have two if she could persuade Russia to give up Port Xrttur, for she could then retain Wei-hai Wei as well. *"' They then asked whether the opening of Wei-hai Wei as a Trieaty port, with special facilities for British ships, would not be sufficient. I answered that we did not ■vyant the place as a commercial port, but as a naval base as a counterpoise to Port Arthur. The Chinese Government must itself recognize that such a counterpoise was ' required in their interests not less than in our own. They could not, after the recent revelation of Russian policy, profess not to feel misgivings as to her next step, nor could' they suppose' predominance of Prussian influence in' the whole of the north to be safe for China. They had had many proofs during the long term of our relations with them that we were not desirous of annexing Chinese territory, and the self rdenying proposal just rejected by Russia should also convince them of our sincerity in affirming that we were driven to ask for Wei-hai Wei by plain necessity. The frank avowal of our object as the restoration of the balance of power in the Gulf of Pechili would show them that we were determined not to allow the predominance of any one Power in the north, and in that determination lay China's own best hope of safety and protection. The Ministers seemed to appreciate the force of my arguments, and some of them showed a "disposition to welcome the declaration of a policy of resistance to the Riussian advance, but they, were, as usual, unwilling to commit themselves to any ^efiMte pledges, and kept repeating the arguments they had already put forward, and wfen pressed to" supply me with a distinct reply for the information of Her Majesty's, Government, they ag^in declared that they could promise nothing but careful consideration of the subject until Wei-hai Wei had been evacuated by the J^ipanese. - I refused to telegraph this to your Lordship, and said I must know ykether China nieant to grant or refuse our demand. They said they did not wish to do "either at: the moment; they wished to postpone the question. I said that it was ii^pQSsible to do so for more than a few days' tihie ; on which they pointed ' out that Princ'e'Eung was ill, and Pfirice Oh'ing engaged at the Summer Palace, and that no [253J •- - . - ..■ ■ .- ' . ... ..p 2 •;-'-- 108 answer could be given immediately. I had better telegraph to suggest that the question be dropped until Wei-hai Wei had been given up. I again refused to do this, and said I would return in three days' time to hear what decision they had come to. At my next interview, on the 31st March, the Ministers present, of whom one or two had not assisted at the previous interview, proceeded to repeat all the arguments then put forward. I met them with the same replies, which had to be repeated over and over again, there being nothing in the rules of debate as conducted at the Yamen to prevent each one of half-a-dozen Ministers presenting the same arguments in almost the same words an indefinite number of times. The only point on which more stress was laid than on the previous occasion was the danger of exposing China to fresh demands from other Powers, which I answered by showing that our demand was consequential on what had been given to Russia. After some two hours or more of discussion, I said that I regretted to find that my explanations of the reasons for our demand had met with so little apparent appreciation. I had hoped that the Yamen would grasp at once the bearing of it on the political situation, and grant it without demur, as conceived in China's own interests ; but they seemed bent on forcing me to support my request by a warning of the consequences of refusal, which I was very reluctant to give. The Ministers said they were not refusing the lease : they were only asking for a temporary postponement. I said that the situation and the strongly-stirred feeling of the English people did not permit delay, and I must insist on a definite answer either that afternoon or within two days' time. On this the Ministers broke out into angry remonstrances, declaring that it was intolerable to expect so serious a question to be decided in a few days' consideration. They would let me know in due course of time what they proposed to do, but they could not listen to any suggestion that their answer must be given within a limited time. I said that if the matter were one on whicli any compromise were possible, it would be unreasonable to close the negotiations abruptly, but that the time they had already had for consideration was ample to enable them to come to a decision. Yes or No, on such a definite issue as this. If I were to tell them they could have more time for reflection, I should only be giving them the erroneous impression that withdrawal or modification of our demand was possible. In spite of all I could say, the Ministers refused to regard the allowing them so short a time for this as anything but unfriendly, and reproached me with demon- strating by my insistence that Great Britain was no more considerate than Russia. Such pressure as I was using would have a serious effect on China's friendly feelings towards us. I said I had shown my reluctance to use threats by the patience with which I had tried to make them see the question in its true light, but that I could not let them suppose that a refusal would not expose them to great danger. I personally believed that China was sincerely desirous of Great Britain's friendship, but to the people of England the grant of a lease of Port Arthur and Talienwan to Russia, followed by a refusal to give us a similar lease of Wei-hai Wei, would seem proof of a contrary feeling, which would be bitterly resented. I could wait for their answer till the next day but one, but no longer. The Ministers said they would not be able to give me a reply one way or another, to which I answered that that answer would be equivalent to a refusal. What would happen then? they asked, and I said that I could not tell. I should telegraph the fact of the refusal to your Lordship and to the Admiral, who would soon be at Chusan, and the matter would then be out of my hands. After loud protestations against such language, the Ministers said that the Emperor was going out to the Summer Palace next day, and that many of them must attend him there. I said I would recommend them for their own sakes to inform His Majesty that questions of even greater importance than Palace ceremonies required their and his attention in town. _ I then took my leave, repeating that I would call again in two days' time to learn their final decision. I was received at my next visit by Prince Ch'iug, and almost the whole body of Mmisters. No reference was made throughout the long discussion to the threat I had used, though it was, of course, present to the minds of all the Ministers. • I had agam to recapitulate the reasons for our demand for Wei-hai Wei, and to meet, though in somewhat less detail, the same arguments against it. - o. 109 Prince Oh'ing then blandly summed up the conversation by saying that now Great Britain had made her demand, of which China took cognizance, and that there the matter must ,rest till Japan had evacuated the place, when the details could be arranged. I said that the details could wait, but that the lease in general terms must be granted now. After more discussion, Prince Ch'ing said there were three matters which must be settled together ; — 1. The lease of Wei-hai Wei to Great Britain must be on the same terms as the Russian lease of Port Arthur, and if the latter were given up the former must be given up to. To this I answered that the term of our lease would be for such time as Russia remained in occupation of Liaotung. 2. China must be allowed to use Wei-hai Wei for her men-of-war. The Chinese Government hoped, he said, to be able to obtain the assistance of British naval officers for the reorganization of the Chinese navy, but there would be no place for the ships to go to. I said I would commend this to the consideration of Her Majesty's Government, and I thought I could predict a favourable reply. 3. Great Britain should declare herself satisfied with Wei-hai Wei and not base any further demands on whatever concessions China might grant to Prance or other Powers. On this point the Prince enlarged at great length, and with some eloquence and force, inviting the assistance of England in breaking the endless chain of demands now made on China. I said I would lay His Highness' views before your Lordship, but that I had not yet received the promise of the lease of Wei-hai Wei. The Prince said he had already intimated their readiness to give it, but that England must ask for nothing more. If we preferred some other place we could have it, but we must make our choice and pledge ourselves not to make further demands. I said I frankly recognized that China's desire to see a stop put io the demands upon her was very natural, but that they could not expect England, with vast interests in the south as well as in the north, to abandon' the former because she was taking steps to protect the latter. On the contrary, M^e must do whatever was j udged .neces- sary for the purpose in both quarters, but I could assure them that we should do no more than was necessary. The Prince then said he hoped I would telegraph what had been said to Her Majesty's Government, and let the Yamen know the result. I said I would do so, but that I was waiting for their promise about Wei-hai Wei. He expressed surprise, and said they had given the promise, but that what had been said about refraining from farther demands must also be reported. It would be wearisome to narrate in detail the further course of the discussion. The Yamen's object evidently was to attach conditions to the concession of Wei-hai Wei, and every time I asked for a definite pledge they declared that they had given it, but added that their request should be simultaneously laid before your Lordship. I told them, at last, that they had not given me the reply I had come to receive. I was willing to lay before your Lordship all their representations, for sympathetic consideration, but only on the distinct understanding that the reply to them in no way affected the lease of Wei-hai Wei to Great Britain, and to make this perfectly clear, I showed the Ministers a Memorandum of what had been accepted. This is the Agree- ment already reported to your Lordship in full by telegraph. After they had all read it, I asked them whether I could report that this had been absolutely and finally agreed to by the Chinese Government. I must telegraph either that the Memorandum before them represented an unconditional Agreement between us, or that they refused to agree to it. All other matters were subjects for future consideration, but an unconditional reply I must have. On this the Prince and Ministers said that I could telegraph that the Memo- randum correctly represented the Agreement that had been come to with regard to Wei-hai Wei. Lest there should be any mistake I repeated what I had said, and they again accepted it, adopting my words and makhig no further attempt to attach conditions to their acceptance. 110 They Spoke much of their desire for closer relations with Oreat Britain, but time ^'ill not allow' me to give an account of their remarks,- ' ' .. ■ _ I haye, &c. (Signed) CLAUDE M. MACDONALD. No. 155.- , . Sir C. MacDonald to the Marquess of Salisbury. — (Received May 30.) (Telegraphic.) ■ , . Peking, May SO,. 1898. "A SEPARATE settlement at 'Toochow' has been demanded by the Japanese Government. ^ II ■ I ■ , ^ '■ ; No. 156. Sir C. MacDonald to the Marquess of Salisbury.- — (Received May 31.) (Telegraphic.) ' , Peking, May 31, 189S. THE day before yesterday, in the evening, Prince Kuiig, nncle of the Emperor, died. : .. : . . No. 157. Sir C. MQcDonald to the Marquess of Salisbury.— (Received May 31.) (Telegraphic.) ' ■ Peking, May 31, 189S. TWO hundred Russian soldiers have arrived at Kirin, and when horses can be procured, 500 more are to follow. The liorses are being boiiglit at Petune. No. 158. Sir C. MacDonald to the Marquess of Salisbury. — (Ittceived .fune 1.) (Telegraphic.) Peking, .Tune 1, 1898. PASSPORTS from Port Arthur and Talienwan : Your Lordship's telegram of the 21st May.* , '"'-- The latest instrnctioiis to the Russian Legation from the Russian Minister for Foreign Affairs are, according to a Circular issued by M. PavlotF to all the foreign Ministers ro-day, that while passports for the f)art of the Liaotung Peninsula recently granted to Russia by China are compulsory, it is left to the choice of the bearer to get Ms passport vise' at a Russian Consulate or not. 7 No, 159. - ' The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) . Foreign Ofice, June 1, 1898. THE suggestion ni^ your telegram of the 27ih May as to the territorial arrangement of Wei-hai Wei is satisfactory. The belt to be leased should- have a width^ of 10 miles, and Itao Island be included. Chinese administration will not be interfered with outside the belt, but no troops should be allowed east of 121° 40' other than Chinese or British troops.. ■ F'epeating No. 125. Ill Ko. 160. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) - Foreign Office, June 2, 1B98.' WITH reference to your, telegram of the 1st Juiiie respecting passports fof Port Arthur and Talienwaa, yon; should, in acknowledging receipt , of the Oirculaf from the Russian Charge d'Affaires, call attention to' the fact that, under Article IX of Treaty of Tien-tsin, passports are required for, extended journeys info the interior only. . ■ ,. , . No. 161. The Marquess of Salisbury to Sir C. MacDonald. % ^"■j , Foreign O^ce, J«rae 2,1898. j , I HAVE received, your despatch of the 15th April reporting the ^teps you had taken, in concert with your Italian colleague, to obtain, the ratification qf the Agreement between, the Peking Syndicate and the authorities Of the' Province of Shansi. I approve your proceedings in the matter and the note which you addressed to he Tsung-li Yaraen on the 12th April." - - • •-- - I am, &c. (Signed) SALISBURY. ., ,Nd. 162. ,,,..,/ : '[■':'. ■ , The Marquess of Salisbury to Sir C- MacDonald. •'.,.■ -Sir, .,:,;, : : : Foreign Office, June 2,1^98: I HA YE received your despatch of the loth April,, giving- an account of your ,cqmmqnications,vvith the . Tsiihg-li Yamen fi'om the 8th March onwards in" reg;ard "to the concessipns demanded from, China by the French Gover'nnient. ;: ', ' ., I entirely approve ypmvproceedings as summarized in that d^^^ .\ ' ' "" ' ' " ' ' ■' ' ■ I am, &c. ,; , (Signed). , SALISBUEY. ' ; No. 163. ' ' ' ■ ■ ' ' ' ■ ■ ' ■ , , , ■ ^ The Marquess of Salisbury to Sir C. MacDonald. . , Sir, Foreign Office, Jurie 2, 1898. ,. , I HAVE received your desp.atch of the 16th April, reporting the lengthy discus- sions which you . had with the ; Ministers of .the Tsung-li Yamen with regai-d to the dematid of Her JMajesty's Government for a lease of Wei-hai Wei.: : I /entirely approve your proceedings tlirdughout these diflEicult and , trying /negotiations. ; . . ' it is greatly 5ue to the judgment and abilitjr which you have displayed in dealing with, the.quegtion, that, the unconditional assent of China to the British bccupatipn of this important naval bfliSe on the G:ulf of Pechili has been obtained. ','.■'.,, ... I' ' . '/. I'am,'&c. ■ ' T _, ■i-;'.,,':-.' '.■ v,',",' ', .: (Sighed) ;•, SAIilSBUEY./" i-f' i..; lu 112 No. 164. Sir E. Satow to the Marquess of Salisbury. -(Received June 3.) My Lord, ^o^^«> -^P"^ 28, 1898. • THE Japanese journal " Jiji Shimpo " issued an extra on the 26th instant, containing a telegram from Peking which stated that China had given an assurance that slie would not alienate any portion of the Province of Fukien to any other Power. • Statements having appeared in the newspapers to the effect that China had at the same time undertaken to* accord to Japanese subjects most-favoured- nation treatment with reference to mining enterprises undertaken in conjunction with Chinese subjects, and in the event of a deficient harvest in Japan to allow the export of rice. I took an opportunity to-day of asking the Vice-Minister for Foreign Affairs whether this was correct. Mr. Komura replied that the stipulation regarding the Province of Fukien was all that Japan had asked for for the present. It may be of interest to your Lordship to know that some of the Oppositionjournals have been urging en tlie Government the propriety of going further, and asking Trom China the lease of a port on the coast of Fukien from which it would be possilale to prevent the constant smuggling of arms and ammunition into Formosa which is said to go on from Amoy and Foo-chow. I have, &c. (Signed) EENEST SATOW. No. 165. Sir C. MacDonald to the Marquess of Salisbury, — (Received June 4.) (Telegraphic.) Peking, June 2, ]898. FOLLOWING is text of Peking Syndicate's Agreement: — Regulations agi-eed upon by the Shansi Bureau of Trade and the Peking Syndicate for mining purposes, ironworks, and transporting mine products of all kinds in the Province of Shansi. 1. The Governor of Shansi having sanctioned the request of the Shansi Bureau of Trade for the sole right to open and work coal and iron mines throughout the districts of Yu-hsieu and Ping-ting- chou, and the Prefectures of Luan-fu, Tsechow-fu and Ping-wang-fu and also petroleum wherever found, the several concessions granted are now transferred for operation to the Peking Syndicitc for the period of sixty years. Mining engineers shall first be sent to find in what township and hills the mines are situated and what they produce, and make maps thereof with explanations inserted which shall be submitted to the Governor of Shansi, that he may see that the proposed works are not injurious to the place; and he shall report thereon to the Tsung-li Yamen for record, and at the same time issue a permit for the mines to be opened without the least delay. If mining lands belong to the people, lease or purchase shall be made by arrangement with the owners for a reasonable price; if it be Government land, the tax to be paid on it shall be double the ordinary land tax for that locality. 2. The Governor of Shansi has authorized the Bureau of Trade to negotiate a foreign loan not to exceed 10,000,000 taels. Should the mining engineers employed find this sum insufficient, the Bureau may borrow more only of the Peking Syndicate. 3. All matters of administration, exploitation, employes, and finances shall be controlled by the Board of Directors of the Peking Syndicate, and the Chief of the Shansi Bureau of Trade shall co-operate. 4. Each line must have one foreign and one Chinese manager, the foreigner to control the works,, tlie Chinese to attend to all matters between natives and foreigners. Accounts will be kept by the foreign system ; receipts and payments of money to be controlled by the foreign manager and audited by the Chinese manager. At all mines Chinese should be employed as much as possible. All salaries to be paid by the Syndicate. 5. When prospectiug for mines, if there be any boring or sinking of pits to examine mineral deposits, an arrangement should first be made with the land-owner to compensate him for any crops injured. If any mine be opened on private land, an 113 arrangement must be made with co-uperar.ion of the local officials to lease or buy the land for a price^ fair to both parties as a measure of justice. Whenever land leased or boug;ht for mines contains cemeteries or mortuary shrines, some plan must be devised to avoid tlieni ; there must be no excavation. After mines are opened, should there be damage to life or buildings from subsidence in the mines, the Syndicate shall make charitable compensation. 6. Wherever mines are worked there shall be paid yearly to the Chinese (lovern- ment.as producers tax (" lo-ti-shui") 5 per cent, on the cost of extracting the output of the mines. From the profits shown by the yearly accounts there shall first be paid 6 per cent, on the capital employed, and next 10 per cent, shall be set aside as a sinking fund for yearly repayment of capital and consequent reduction of interest, payments to sinking fund ceasing when the invested capital is wholly repaid ; and from the remaining net profit 25 per cent, shall be paid to the Cliinese Government, and the remainder shall go to the Syndicate for its own disposition. In future, wherever capital is used to work coal or iron mines in China this rule for a 5 per cent. Government tax on the output shall be enforced, so that all may be treated alike. Tiiis capital being money lent by merchants for mining purposes, the Chinese Government will not in any way be responsible for losses incurred in the business. 7. The area of the mineral districts of Yu-hsien, Ping- ting- chou, Tsechou-fu, Luan-fu is very extensive, and many mines may be worked therein. But the accounts and profits of each mine must be kept distinct from the others; the gains of one mine should not be made to offset the losses of another, and so cause the Government income to suffer reduction. 8. All machinery, materials, and supplies needed for the mines shall on importation be subject to the rules in force with the Kaifung and other mining Companies, and pay one custom duty and a half to the maritime customs, and shall be exempt from all inland li-kin taxes. The products of the mines when exported from a seaport shall pay export dxity according to the Customs Tariff. 9. The Syndicate is to control the mines for sixty years, on expiration of which term all the mines of the Syndicate, whether new or old, profitable or not, shall, with all plant, materials, buildings, land, railways, bridges, and all property acquired by the capital of the mines, be handed over gratis to tlie Chinese Government, and in due time the Bureau shall request the Governor of Shansi to send Deputies to take delivery. 10. It is important that at each mine measures should be taken to prevent discord between officials and people. For this purpose the Bureau should request the Governor to appoint a Deputy, and the Syndicate should nominate one of tlie gentry, the salaries of both to be paid by the Syndicate. 11. On first opening of the mines foreigners must, of course, be employed as mining engineers and foremen, but later on the Bureau and the Syndicate should arrange to select for such positions any Chinese who may be proficient in mining, engineering, or managing work. For subordinate positions of little responsibility Chinese sliould be entirely employed, and Shansi natives as much as possible, so as to encourage improvement. 12. The miners employed should be cliiefly Shansi men, and should be paid faiv .wages. After the mines are opened the Bureau and the Syndicate should select from European and American Mining Regulations suitable ones to apply to questions of com- pensation to miners for injuries while at work, to pensions for the aged after long service, the limit of daily working hours, &c., and obtain for such Regulations the approval of .the Governor. 13. In opening the mines the Syndicate shall establish a school of engineering on mining in some locality convenient to the mines, and there shall be selected twenty or thirty promising youths by the local officials and gentry to study in this school under foreign instructors, and thus prepare for future employment on railways and in mines. The expenses for this school to be met by the Syndicate. 14. The 10,000,000 of silver taels to be loaned to the Bureau of Trade by the Peking Syndicate is an estimated sum. After the capital necessary for opening each mine has been supplied by the Syndicate, the Syndicate will be authorized to print shares, certificates, and conditions for the capital furnished, and fix the time of sale. Chinese merchants who apply for shares within the fixed time shall be allowed to buy of shares for sale any number they wish. 15. Chinese merchants who wish to buy shares may get them from the Bureau, who will procure them at current market rates; or they may themselves buy or sell the shares at pleasure. If any Chinese gentrv or merchants shall, within the term of sixty [253] ' Q 114 years, acquire three-fourths of all the slmres of any one mine, that mine may riien be redeemed from the Syndicate, and the Bureau shall report upon same, and direct that shareholder to take charo;e of the mine. 16. If within the area authorized for opening mines there be mines alread}'- worked by the people, such private mines shall not be appropriated, but if a proprietor be willing to lease or sell his mine the Bureau and the Syndicate shall offer a reasonable price for it, but no compulsion shall be used. 17. Whenever it may be necessary for any mine to make roads, build bridges, open or deepen rivers or canals, or construct branch railways to connect with main lines or with water navigation to facilitate transport of Shansi coal, iron, and all other mineral products from the province, the Syndicate on reporting to the Governor of Shansi is authorized to proceed with the works, using its own capital, without asking for Govern- ment funds. Regulations for branch railways are to be made in due time. With reference to the Chengiing to Taiyuan Railway, for the construction of which the Bureau has borrowed capital from others, the Peking Syndicate, to avoid disputes, shall not construct any railway within 100 li on each side of it. Private land required for the works authorized as above shall be leased or bought according to the Rules already in force with other pubhc Companies. No encroachment of private property shall be allowed, and the local authorities must be applied to for pro- tection. 18. At the end of every year a printed account of profit and loss shall be- ren- dered by each mine to the Bureau, and each mine shall appoint one Chinese and one foreign auditor to examine tlie accounts and certify that they are correct ; and a general account; of profit and loss for all the mines shall be jointly prepared and sub- mitted to the Governor, who will send copies to the Tsung-li Yamen and Board of Revenue for audit. Payments due to the Government shall be reported at same time. 19. These mines being under the sovereignty of China, should China ever be at war with another country, the Syndicate will obey tlie orders of the Chinese Govern- ment prohibiting any aid to thi; enemy. 20. These Regulations shall be made out both in Chinese and foreign text; each party to have a copy for reference. Signed in Peking on this 21st day of May, 1898, being the second day of the fourth month of the twenty-fourth year of the Emperor Kuang Hsu. Seals of Mr. A. Lutzatti, General Agent of the Peking Syndicate (Limited), and of the Shansi Bureau of Trade. ■ ■ No. 166. Sir N. O'Conor to the Marquess of Salisbury. — {Received June 6.) ^y I^oi'd, St. Petersburgh, May 26, 1898. WIT PI reference to my despatch of the 16 th instant, and to my telegram of the 20th instant, I have the honour to transmit herewith to your Lordship a copy pf a note from Count MouraviefF, replying to my note to his Excellency of the 16th instant, and stating that the Regulation requiring foreigners to have their passports ■vise by the Russian Consul before landing at Port Arthur or Talienwan was issued by the Consul and Admiral vvithouc consulting the Imperial Government, and that the Russian Charge d'Affaires at Peking has been requested, inasmuch as it does not corre- spond with the necessities of the situation, to withdraw it. I have, &c. (Signed) N. R. Q'CONGR. Inclosure in No. 166. Count Mouraviefto Sir N. 0' Conor. ^linistere des Affaires Etrangeres, Saint-P^tersbourq, M. 1 Ambassadeur, u s Mai, 1898 ' „.^T^^'^ ""^^^ ?"" "P^^ ''"^ ''°^''^ Excellence a bien voulu m'adresser en date du 4 (16) Mai courant, je m empresse de vous informer que la mesiire concernaut robli-^a- tion du visa par les Consnlats Russes en Chine des passeports des ^tranc^ers se rendan't ^ 115 Port-Aithur et Talieuwan, avait ete prise sur les lieux a la suite d'une entente entre la Legation de Russie a Pekin et I'Amiral Doubassow. D^s qiie le Goiivernement Imperial en a eu connaissance [sic] consideration que cette mesure ne repondait pas aux necesait^s de la situation, il a invito par tel^graphe M. Pavloff a la faire r^voquer. Notre Charge d'Affaires a P4kin, a du en consequence avoir de]k donue des instructions dans ce sens aux Consulats comp6tents, Veuillez, Sic. (Signp) . Comte MOURAYIEPP. (Translation.): Ministry of Foreign Affairs, St. Petersburgh, M. rAmbassadeur, May 8, 1898, HAVING received your Excellency's note of the 4.th (16th) May, I lose no time in informing you that the Regulation making it obligatory for the passports of foreigners proceeding to Port Arthur and Talienwan to have the visa of the Russian Consulates in China was aaopted on the spot, alter consultation between the Russian Legation at Peking and Admiral Doubassow. As soon as the Imperial Government heard of it, seeing that this Regulation did not meet the requirements of the case, they sent instructions to M. Pavloff to withdraw it. Our Charge d'Affaires at Peking has consequently no doubt already given orders in this sense to the Consulates concerned. I avail, &c. (Signed) Count MOURAVIEFF. No. 167. Sir C. MacDonald to the Marquess of Salisbury. — {Heceived June 6.) (Telegraphic.) Peking, June 6, 1898. THE Yamen have promulgated Regulations for inland navigation, referred to in my telegram of the 20th May to your Lordship, without discussion, notwitlistanding the assurances given to me that they should be discussed with me. As they now stand, I consider these Regulations unsatisfactory, and I have protested against them. No. 168. The Marquess of Salisbury to Sir C. MacDonald, (Telegraphic.) Foreign Office, June 6, 1898. ' WITH reference to your telegram of the 26th May respecting- the extension of the boundaries of Hong Kong, you may assure the Chinese Government that the Hong Kong Government will, on the territory it is proposed to lease being handed over, take all possible precautions to prevent the leased area being used to facilitate smuggling into China, or in any other way to ilje deti-iment of the interests of China. It will be recognized by the Yam6n that it maybe diflficult at once to organise adequate police measures, but definite instructions to use their best endeavours will be sent to the Colonial authorities. No. 169. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, June 6, 1898. WITH reference to your telegram of the 6t]i June, your action respecting- internal navigation is approved. You should make it clearly understood that Her Majesty's Government will insist on satisfactory Regulations being made, and that the concession, which was freely granted, shall not have its value impaired by the impositfon of restrictions inconsistent therewith. [253] Q 2 116 No. 170. Sir C. MacDonald to the Marquess of Salisbury. — [Received June 8.) (Telegraphic.) Peking, June 8, 1898. WITH reference to my telegram of the 16th May, in consequence of the Shashih riot the following demands have been made by the Japanese Government : — 1. A separate Japanese concession at Shashih. 2. Similar concessions at Yochow, Samsha, and Foochow. 3. An indemnity of 105,000 taels. 4. The punishment of the ringleaders. 5. The issue of an Imperial Edict against a recurrence of the riot. No. 171. Sir C. MacDonald to the Marquess of Salislury. — [Received June 8.) (Telegraphic.) Peking, June 8, 1898. WITH reference to my telegrams of the 2^1 th and 27th May, the terms of the Convention respecting Wei-hai Wei have practically been agreed to by the Tsung-li Yamen. Tliey are, however, reluctant about granting tlie right to station troops and erect fortifications on the mainland to the east of 121° 40'. The building of forts in the interior will, they contend, cause trouble by unsettling the inhabitants, altliough they do not object to it on the coast. I venture to ask for your Lordship's instructions on this point. I am inclined to the opinion that the right to erect forts at necessary strategic points should be insisted upon. No. 172. The Tsung-li Yamen to Sir Loh Feng Luh. — [Communicated June 8.) (Translation.) (Telegraphic.) Peking, June 8, 1898. DEMARCATION of the leased land of Wei-hai Wei is, at present, being negotiated. Sir Claude MacDonald proposes the line 10 miles along the coast to be the boundary, and also asks for the right of building fortifications and stationing garrisons at any point along the coast, and in the interior eastward of the hne of longitude 122 degrees east of Greenwich. We propose to omit the words "in the interior," fearing that to build fortifications and station garrisons in the interior will cause alarm and disturbance to the inhabitants, but assure him that we consent to give, in time of war, the right of selecting, any strategical point for builcing temporary fortifications, or field works for the self-defence of Wei-hai Wei. Sir Claude MacDonald informs us that British Government does not agree to this proposition. Wei-hai Wei was.leased in the most friendly spirit to Great Britain, in order to perpetuate the cordial relations of our two countries ; if, in time of peace, fortifi- cations are to be built and garrisons stationed in the interior beyond the leased boundary, it would seem that it is self-delence in name, but occupation in reality, and is, therefore, entirely different from the friendly spirit in which the intention of the friendly arrano-ements between China and Great Britain was originated. Please earnestly explain to Lord Salisbury that forts may, as a matter of course, be built within the boundary beyond which it is the interior or inland ; that, if fortifications are built at selected strategical points along the coast, and, in time of war, temporary fortifications or field works are, in addition, to be built, they are quite sufficient for the purpose of self-defence ; and that it is most earnestly requested that the words " in the interior " should be left out. Please reply by wire. 117 No. 173. The Marquess of Salisbury to Sir C. MacDonald. Sir, ^ ^ ^ Foreign Office, June 8, 1898. THE Chinese Minister came to-day to ask me to consent to the omission from the lease of Wei-hai Wei of the word " inland " as an adjective preceding the word " forts." He mentioned this he said, by direction of his Government, who wished to avoid misconstruction among- their own people, but he added that they would give an assurance that they would never object to Great Britain constructing forts inland if it was required by mihtary exigency. I told him that the distinction was difficult for me to appreciate, and requested him to put his proposal into writing, promising him an answer when I had considered it. At the same time I recommended three things to the consideration of his (aovernment very earnestly. The fir'fet was to finish the lease of Kowloon, the second was to lose no time in opening Nanning on the West River, now that the concession of a railway reaching to Nanning had been granted to the French, and tne third was to make a rule that, other things being equal, railways in the Yang-tsze Kiang region should be conceded to English Companies, and in the province of Shantung should be conceded to German Companies. He promised me that he "would send these recommendations to his Government as soon as he had received my answer to his request. I am, &c. (Signed) SALISBURY. No. 174. ^ Sir C. MacDonald to the Marquess of Salisbury. — {Received June 9.) (Telegraphic.) Peking, June 9, 1898. HONG KONG boundary. A Convention for the extension of Hong Kong was signed to-day, and is to come into force on the 1st July. I am taking steps to forward copies of the Convention to the Commander-in-chief of the China squadron and to the Governor of Hong Kong. No. 175. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, June 9, 1898. WITH reference to your telegram of the 26th May, Her Majesty's Government entertained objection to the Hankow-Peking line when they originally heard of its being granted to Belgian Syndicate. When there is likelihood of Russo-Chinese Bank, which is tantamount to Russian Government, financing southern section of that railway, that objection is greatly increased. ^ A concession of this nature is no longer a commercial or industrial enterprise, and becomes a political movement against British interests in the region of the Yang-tsze. You should inform the Tsung-h Yamen that Her Majesty's Government cannot possibly continue to co-operate in a friendly manner in matters of interest to China if, while preferential advantages are conceded to Russia in Manchuria and to Germanv in Shantung, these or other foreign Powers should also be offered special openings oV privileges in the region of the Yang-tsze. Satisfactory proposals will be forthcoming if the Chinese Government will invite the employment of British capital in the development of those provinces. We should like to receive as soon as possible a Report on all the various railway, mining, and industrial concessions which have been recently conceded by the Chinese Gbvernment, or are now being solicited from them. 118 No. 176. The Marquess of Salisbury to Sir N. 0' Conor. (Telegraphic.) Foreign Office, June 9, 1898. WITH ' reference to your Excellency's * telegram of the 20th ultimo, a telegram was received on the 1st instant from Sir C. MacDonald, stating that the Russian Charge d' Affaires had sent a Circular to all his foreigh colleagues to the effect that, in accordance with the latest instructions from Count MouraviefF, passports are obhgatory for Port Arthur and Talienwan, but that their visa at Russian Consulates is optional. You should point out to Russian Government that our Treaty rights are contravened (see Article IX of Treaty ofTienftsin) by the requirement of passports for Chinese ports. No. 177. The Marquess of Salisbury to Sir N. 0' Conor. (Telegraphic.) Foreign Office, June 9, 1898. ' ALLEGED text of Eusso-Chinese Agreement is published in " Times " of the 3rd June. Inquire of Minister for Foreign Affairs whether this is correct version of Agreement ; and, if so, point out to him that Article VI is quite inconsistent with the specific assurances of the Russian Government contained in concluding paragraphs of his note to you of the 22nd March (3rd April) last, and with our Treaty rights in Chinese ports. . i No. 178. Sir E. Monson to the Marquess of Salisbury. — (Received June 10.) My Lord, Paris, June 8, 1898. TO-DAY'S "Journal des Debats," in publishing the usual semi-official summary of the proceedings of yesterday's Cabinet Council, at which M. Faure presided, states that M. Hanotaux informed his colleagues that the Chinese Government had granted to France all the demands made by the French Minister at Peking in consequence of the assassination of Father Berthollet in the Province of Kuang-si, comprising sentence of condemnation on the offenders, punishment of the local authorities, an indemnity of 4,000Z., and the construction of a commemorative chapel at the place where the murder was committed. Jn addition to the above, and by a separate document, the Chinese Government have granted to France the Concession of a railway between Pakhoi, on the Gulf of Tonquin, and Nanning-Fu, in the Si-Kiang Valley. " This Concession," says the communique, " completes the network of commercial roads penetrating South China from Tonquin and the neighbouring regions." I have, &c. (Signed) EDMUND MONSON. No. 179. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, June 10, 1898. WITH reference to your telegram of the 9th June, respecting the extension of Hong Kong boundaries, I congratulate you on your success. Her Majesty's Government dc not propose to enter into formal possession on the 1 st July, as some time will necessarilv be taken up by the preliminary arrangements. 119 Xo. 180, The Marquess of Salishury to Sir C. MacDonald. (Telegraphic.) Foreign Office, June 11, 1898. WEI-HAI WEI : Your telegram of the 8th June. Yamen have telegraphed to Chinese Minister, and appear to consider the omission of the words " in the interior " of great importance. As given in your telegram of the 27th May, the clause might be amended so as to satisfy our req^airements, whilst omitting the words to which objection is taken. The following wording, " at any points on or near the coast of the Shantung promotory, east of meridian 121° 40', and to acquire ap equitable compensation within that territory such sites as may be necessary for water supply, communications, sanitaria hospitals, and other purposes," is suggested for consideration. No. 181. The Marquess of Salisbury to Sir Chih Chien Loh Feng Luh. Sir, Foreign Office, June 11, 1898. I HAVE had under my consideration the telegram from the Tsung-li Yamen, which you were good enough to communicate on the 9th instant, respecting the Agreement now in course of negotiation at Peking in regard to the lease of Wei-hai Wei to Her Majesty's Government. In reply, I have the honour to say that if the Chinese Government are willing to accept some other words which are not open to their objections, Her Majesty's Govern- ment will consent not to press for the right to build fortifications and station garrisons " in the interior." I am communicating by telegraph with Sir 0. MacDonald on the subject. I have, &c. (Signed) SALISBUEY. No. 182. Sir C. MacDonald to the Marquess of Salisbury. — (Received June 13.) My Lord, Peking, April 25, 189>^. I HAVE the honour to inclose herewith copy of an extract from an Intelligence Report, which I haye received from Her Majesty's Consul at Hankow, respecting the anti-missionary, Chou-han. I have, &c. (Signed) CLAUDE M. Ma-cDONALD. Inclosure in No. 182. Extract from Hankow Intelligence Report for the March Quarter, 1898. PoiiiTiCAL Summary. Chou-han again. CHOU-HAN, the notorious author of the '' Complete Picture Gal,lery," the free circulation of which was the prime cause of the riots in the Yang-tsze Valley, has ao-ain appeared on the scene, and has been posting placards in several districts, inciting the .people against us, and advising the wholesale slaughter of native converts. I requested the Viceroy to have Chou-han arrested and imprisoned, and am informed by 120 his Excellency that, it having been clearly shown that Chou-han is a raving lunatic, he has, in accordance with Chinese law, been placed in confinenaent. (Signed) PELHAM WAB,REN. Hankow, April 16, 1898. No. 183. Sir C. MacDonald to the Marquess of Salisbury.— (Received June 16.) My Lord, Peking, April 25, 1898. I HAVE the honour to inclose herewith copy of extracts from an Intelligence Report which I have received from Her Majesty's Consul at Canton, with regard to (1) Erench movements in South China, (2) the disturbed state of Canton Province and City, (3) prevalence of piracy, (4) missionary affairs, (5) temporary immunity of transit- pass goods, and (6) the West E,iver trade. I have, &c. ^Signed) CLAUDE M. MacLONALD. Inclosure in 'No. 183. Extracts from Canton Intelligence Report. I. — Political. Disturbed Stai>e of Province and Capital. — During the last few months Canton city and the province generally appear to have been in their normal state of disquietude, with which, as usual, the officials seem utterly unable to cope. In the capital il;self cases of incendiarism, robberies with violence, &c., occur with deplorable frequency, and in the country districts large bands of robbers appear to roam unchecked. Eor instance, items such as the following may be found almost daily in the local news- papers : — " On the 19th instant a gang of about eighty robbers made an attack on a village in the Punu district. Seven houses w^ere looted, and the value of the booty amounted to 10,000 dollars." It is rumoured that in the Sa-wan district the robbers are attempting to raise a rebellion on a largo scale, the origin of the rumour being due to the seizure of 200 rifles and 200 revolvers by a cruiser near Liu Ea-shan. Prevalence of Piracy. — The Canton waters have from time immemorial been found as a hot-bed of piracy, and the opening of the West River and the Canton Delta generally to steam-launches offered additional facilities to pirates, of which they were not slow to take advantage. The evil has continued undimished during the last quarter. There has been one new case of a Hong Kong launch being used for the purpose. A Chinaman chartered a launch in the Colony to convey him to a place on the mainland. On arrival there several pirates, who were in collusion with the charterer, boarded the launch, drove the crew below, and proceeded to cruise round in search of defenceless vessels. Two or three acts of piracy were committed, the launch Avas then run on shore, the pirates making off with the booty ; ultimately the crew forced their way on deck, and returned to Hong Kong. jS'either in this nor in the two other similar cases have the local authorities met with any success in tracing out the robbers. The Viceroy issues instructions to the local officials concerned, and there the case seems to rest. His Excellency seems to be of opinion that the Hong Kong Government on their side might take greater precautions, as he has again alluded to his previous suggestion to urge the Hong Kong authorities to issue instructions that launches should not be chartered except to persons giving substantial security. This probably, however, is only put forward as a pretext to excuse the negligence of the local authorities. Missionary Affairs. — Towards the close of last year a German missionary was attacked by robbers in the Shih Hsing district, plundered of anything of value he had about him, and severely beaten. On the German Consul laying his complaint before the Viceroy, the latter issued stringent instructions to the officials concerned to take all proper steps towards the arrest and punishment of the offenders under pain of 121 dismissal. Later on the German Consul made further demands, under instructions from Peking, the chief of which was the exaction of a penalty of 50,000 dollars. This the Viceroy protested against most strongly, hut ultimately he was instructed hy the Tsung-li Yamen to agree to the Consul's conditions, and the case was at last settled ou the following terms : — 1. A fine of 10,000 dollars to he paid. 2. The officials at Shih Hsing and Yen Hua to he instructed to assist missionaries in acquiring land at ordinary rates. 3. Punishment of the rohbers. 4. Punishment of the murderer of a convert at Yang Kung-ling. 5. Dismissal of the Shih Hsing Magistrate. 0. Case of disputed land at Liu Ch'en Ting purchased hy a missionary, boundary stakes to be reset in their original position. The Viceroy also agreed to issue a Proclamation urging officials to protect missionaries under pain of heavy penalties. II. — Commercial. Temporary Immunity of Transit-pans Goods. — During the past quarter no cases of interference with goods sent up-country under transit pass have been reported at this Consulate, nor have I heard of any cases at other foreign Consulates, and it would seem as if the Cantonese officials have at length recognized the danger of openly tampering with certificated goods. West River Trade. — It is reported that the Hong Kong, Canton, and Macao Steam- boat Company intend running one of their steamers, the steam-ship " White Cloud," of 500 odd tons burden, to Samshui and Wuchovv as soon as the river rises. Hitherto there have only been two small foreign steamers of 150 tons running on this line, and the intended action of the above-mentioned Company may be taken as a sign that the volume of the West River trade is increasing. It is, however, impossible that the trade of the river will be carried on permanently by large steamers. The Companies chiefly interested in the trade are about to build a quantity of flat-bottomed cargo boats, which will be towed by launches of light draught, as they consider that this form of transport is more specially suited to the requirements of the West River traffic. Canton, April 1, 1898. No. 184. Sir C. MacDonald to the Marquess- of Salisbury. — {Received June 13.) My Lord, Peling, April 28, 1898. I HAVE the honour to inform your Lordship that the 10,000 dollars fine paid by the Kerosene Tax-farming Syndicate for their illegal seizure of oil at Patshan has been distributed as follows : — Dol. c. Compensation to the nifcrchant, Mr. John Andrew ,. .. .. 7,587 91 Compensation to the Chinese dealer at Fatshan ,. ,. .. .. 1,198 80 Compensation to the Chinese dealer at Kowkong. , .. .. .. 1,009 00 Refund to Consular chest at Canton lor cost of telegrams in. connection with case .. .« •• •• •• .• .. .. 204 29 Total .. .. .. .. .. 10,000 00 The Kowkong case was similar to that at Patshan, and I agreed that the fine of 10,000 dollars should cover both cases if the oil seized at Kowkong were promptly returned. The sums paid in compensation to the Chinese dealers represent the value of the oil seized from them, and afterwards returned to them, in addition to the money compensation. I have, &c. (Signed) CLAUDE M. MacDONALD. » i - . ^ - ' I I . . i ■ - -- ' ■ " I I II. ! .M l I I . .- [253] _ ^, ^ ' "" ' 122 No. 185. Sir C MacDonald to the Marquess of Salisbury. — (Received June 13.) My Lord, Peking, April 29, 1898. REFERRING to my despatch to youi* Lordship of tho 11th April, I have the honour to inclose a precis of correspondence whicli has passed between tho Tsung-li Yamen and Sir Robert Hart on the subject of the control of the li-kin and salt revenues hypothecated for the service of the last Anglo-German Loan. The precis is made from a Chinese version of the correspondence which was lately sent by Sir Robert Hart to the Hong Kong and Shanghae Banking Corporation in reply to inquiries made in the interests of the bondholders. The gist of the correspondence is that the Imperial Edict which confirmed the Contract pledging the revenues was communicated to Sir Robert Hart by the Yamen, with instructions to act accordingly. Sir Robert Hart then made inquiries into the details of the li-kin system, and was informed by the Board of Revenue that the total collection pledged amounted to 5,000,000 taels at least. The Board could give few of the details required, but said that all necessary information would be furnished by the li-kin officials at each station ■ to the Customs officers appointed by Sir Robert Hart. As the Loan Contract specifies collection as at Kowloon and Lappa and not simply control, Sir R. Hart then told the Yamen that his staff was inadequate to undertake this work in addition to customs duties, and that until he Avas acquainted with the details of area, stations, &c., it was impossible for him to fix a day for taking over charge of the revenues pledged. All that he could do was to appoint the officers who were eventually to have charge of each coUectorate, and direct them to make the necessary inquiries. These officers Avould commence duty on the 1st May. He thought that the preliminary inquiry in three of the districts — Tchang, Kiukiang, and An-hui (Ta T'ung)— would only occupy a month or two ; at the other four — Hupeh (Hankow), Soochow, and Sung-liu and East Chekiang— it would last longer ; but that all haste consistent with efficiency and responsibility would be made. In the meantime, however, the old li-kin staff should remain at their posts until relieved, and the responsibility of providing the li-kin money, some 500,000 taels a-month, for the service of the loan would have to rest temporarily with them and not with Sir Robert Hart. I have, &c. (Signed) CLAUDE M. MacDONALH. Inclosure in No, 185. Precis of Correspondence between the Tsung-li Yamen and Sir R. Hart, Inspector-General of Customs, The Tsung-li Yam'm to Inspector-General of Customs. (Translation.) March 3, 1898. ON the 2nd March an Imperial Decree was issued authorizing the Yamen and the Board of Revenue to carry out the loan contract made Avith the banks. The Yamen now instruct the Inspector- General to submit regulations based on those in use at the Liu Ch'ang, in Kuangtung, for the approval of the Ministers. Inspector-General of Customs to the Tsung-li Yamen. ,, ^r ^ , March 4>, 1898. Acknowledges the Yamen s note, and mentions that he has not been furnished with a copy of the original Memorial addressed by the Board and the Yamen to the Emperor, and tl>at no clear indication has been given to him of the sort of reo-ulations required. He gathers, however, that the Yamen's instructions refer to the'' require- ments of Article 6 of the Loan Agreement, which he quotes. With regard to this matter, the Inspector-General" observes that from the foundation of the Foreign Customs Administration up to the present, Customs Commis- 123 Sioners have had nothing to do with li-kin, and he finds it difficult to hecome thoroughly- acquainted all at once with the procedure at the different places mentioned. In order to enable him to draw up regulations and undertake the collection of the li-kin he must have answers to the following questions : — • 1. Where are the head li-kin offices established? 2. What officials are in charge of them ; by whom are they appointed ; and what surbordinates have they ? 3. What are the regulations in force at the varioiTs head stations ? 4. Where are the branch stations situated ? 5. Who are the officials in charge of the branch stations ; and by whom arc they appointed ; and what sort of subordinates have they ? 6. What are the regulations in force at the branch stations ? 7. What are the li-kin tariffs in the seven districts ? 8. What Avas the amount of li-kin collected at each of the seven places in the 22nd year of Kuang ITsll (1896) ? 9. Maps of the seven li-kin districts are required for inspection. The Board of Revenue probal.dy have archives from Avhich the information required can be obtained at once, but if the Board does not possess the information, the Yamen are requested to secure it from the local officials without delay. The Inspector-General fears that the banks may not be willing to hand over the loan money to the Chinese Government until he has entered upon the collection of the li-kin, and, for that reason, h^ begs the Yamen to lose no time in giving him an answer. The Tsung-li Yamen to Inspector'' General of Customs. March 6, 1898] In reply to the preceding, the Yamen state that they are applying to the Board of Eevenne for the information required, and, in the meantime, send a copy of the original Memorial as requested. Copy of Memorial appended. The Tsung-li Yamen to Inspector- General of Customs. March 13, 1896. The Board of Revenue state that they have no detailed information as to the amounts of li-kin collected at the different places, or as to the regulations. Prom the available records it is gathered that the head li-kin offices are established in the provincial capitals and prefectural cities, and the branch stations in market towns, or at important points on water-ways ; that the officials in charge of head offices are high officials, Taotais and Prefects : of branch offices, Magistrates of different ranks ; and that the subordinates are managers, constables, &c. The li-kin tariff" is sometimes 5 per cent, ad valorem, sometimes 2 per cent. : it may be so much a permit (yin) or so much a catty. It may be that four-tenths of it are collected at first, and the remaining six-tenths at the place of destination, or it may be levied at the upper station and a pass given which free it from further levies at lower stations. With reference to the question of the amount collected at the seven places in 1896, the total figures for Ohekiang alone are given to the Board, and from these it is difficult to extract those relating to East Chekiang. But the total collection at all the places must be fully 5 millions (of taels) . Deficiencies will, of course, be met by the Board ; surpluses will be surrendered to the districts concerned. 1. The Soochow district comprises the Soochow, Ch'ang-Chotij and Chin-kiang prefectures, 2. The Sung-Hu district comprises the prefecture of Sun-chiang and the Depart- ment of T'ai-chou. 3. The East Chekiang district comprises the five pi'efectitrds of Ning-po, Shao-; hsing^' T'ai-chou, Wen-chou, and Ch'ii-chou, 4i. The Kiukiang district is the prefecture of that namei [253] £2 "^ 124 5. Ichang-wan Hu T'o in Upper Hupeh is an important route for salt from Szechuan to Hupeh. 6. E-au (Hupeli) " specially (or exclusively) indicates Hankow." 7. Wan-an (Anhui) " specially (or exclusively) indicates Ta-t'ung in Anuhi." Instructions having already been sent by flying courier to the High Provincial authorities concerned, in accordance with the original Memorial to the Throne, the Inspector-General of Customs is free to appoint officers and make all the necessary inquiries as to regulations, stations, and districts, and to fix dates for taking over the collection. _ • The Board are informing the provincial authorities that they are to give all the necessary information to the officers so appointed. The Yamen direct the Inspector-General to take action accordingly. InspectoT'General of Customs to the Tsung4i Yamen. March 15, 1898. Acknowledges the above and enters at length into the difficulties attending the new departure, but hopes, with the hearty co-operation of the local authorities, to accomplish the task without detriment to officials or people or State. Each district will be supervised by a Commissioner of Customs, and managed by a Deputy-Commissioner attached to his staff for that special purpose. The establishment of branch offices, the regulations to be enforced, and the retention or dismissal of the present incumbents can be dealt with gradually. As regards the fixing of a date for taking over the collection of li-kin, not only is the Inspector-General unacquainted with the details of the services required, but he cannot all at once find the necessary number of men to fulfil them. However, the collection of the li-kin which is security for the loan cannot be stopped, and for that reason the present li-ldn officials must not leave their posts, but must wait until the Inspector-General decides whether or not they are to be relieved. Surpluses after payment of expenses of administration will be returned to the provinces concerned. Inspector- General of Customs to the Tsung-li Yamen. April 6, 1898. Gives the names of the officers appointed as Deputy-Commissioners in charge of the seven districts. Inspector-General of Customs to the Tsung-li Yamen. April 9, 1898. The Commissioners to supervise the li-ldn collection and the Deputy- Commissioners specially charged with the management of it have been appointed. But the dates for handing over the collection in all the districts are of extreme importance. When information was asked as to the position of the li-kin stations, both head and [branch, the Regulations and TarifPs in force at them, and the officers in charge, &c., the Board of Revenue unfortunately could give no particulars of the Regulations and Tariffs. The Board said the provincial Governments would be informed that they were to furnish all the detailed information required to the officers appointed by the Inspector-General. Thus the only course open to the Inspector- General is to make inquiries on the spot through the special li-kin officers. But until they have reported the result of their inquiries, it is impossible to fix dates for taking over the collection. Further, the terms of the Decree show that it is not the management but the collection of the li-kin that is to be undertaken, and before the Inspector- General can do this he must have a sufficient staff at each station. Again, the conditions in the different districts being unknown to him, he cannot possibly determine the personnel now. The number of Customs officers capable of undertaking the work is limited, and the places of those detached must be filled. The 125 Customs staff must also be increased to provide for tlie future requirements of the Li-kin Offices, These reasons make it all the more difficult to fix the dates for taking over the li-kin collection. Under the circumstances, and in view of the terms of the Loan Agreement (which require 400,000 or 500,000 taels a month from the li-kin collection, the Inspector-General cannot without circumspection undertake this extremely difficult matter. Not only is it apparent that tlie dates for taking over the collection caHUot be fixed, but they ought not to be fixed. All that can be done now is to send officers to make preliminary inquiries. The officers have been appointed, and -will proceed at once to perform this duty. The Ichang and An-hui salt li-kin and the Kiukiang goods (" huo ") li-kin districts are apparently of no great extent, and the preliminary inspection will probably be completed in a month or two. But the Hupeh salt li-kin appears to be a much more intricate matter, and will require more time, and as the other three " goods " li-kin districts occupy almost half of the two Provinces of Kiang-su and Chekiang, a close inspection of them will take up a still longer time. JFor the present, then, it has been arranged to begin the inspection on the 1st May. As the reports come in from the districts, the dates of taking over tbe various QoUections will be fixed. Until they are handed over, the existing officials and personnel of the li-kin stations will remain at their posts and perform their duties as before, and the responsibility for tbe due payment of the sums required monthly for the service of the loan will rest with them, and not with the Inspector-General. Of course, the collection must, sooner or later, in accordance with the terms of the Loan Agreement, be undertaken by the Inspector-General, but he cannot accept the responsibility (for the loan payments) until his preparations in the dift'erent districts are on a suitable footing. The collection of the li-kin by the Inspector- General on behalf of the Chinese Government being a measure necessitated by the conditions of the loan, and being authorized by Imperial Decree, Chinese officials and people will, of course, obey the Decree, and lend every assistance. The Inspector-General and those under him, though Westerns, are Chinese officers administering Chinese affairs, and the officers engaged in the li-kin collection, whether under the orders of Commissioners of Customs or of local authorities, will be colleagues, and whether Chinese or Westerns, should work together harmoniously for the good of the State. Such of the rules, procedure, tariffs, &c., of the li-kin stations as can be used will be continued without alteration. The merchants' wishes will be consulted, with a due regard to revenue considerations. A uniform tariff will be levied at all the stations. Whatever is collected will be accounted for. Whatever the merchant pays he will get a receipt for ; and, although the Inspector-General is not acquainted with the present li-kin officials, his intention is to retain their services as far as possible. But he cannot decide whether procedure will or will not be altered, or whether officials will be retained or not, until he has received detailed reports from the Deputy Commissioners. No. 186. &'r C. Mact)onald to the Marquess of Salisbury .-^{Received June 13.) My Lord, Peking, April 29^ 1898. IN extension of my telegrams in reply to your Lordsh^'s telegram of the 18th April, acquainting me with the publication at St. Petersburgh of a message from the Emperor of China to the Emperor of B,ussia, containing a reference to a recently concluded Treaty of Alliance between the two countries, I have the honour to inclose a copy of a note of inquiry I addressed to the Tamen, and translation of their reply denying the correctness of the message as published. The communication from the Emperor of China which they inclose is evidently not that published at St. Petersburgh, but is interesting as showing the feeling with which a Eussian demand for a lease of Port Arthur and Talienwan was received here, and also the nature of the ultimatum addressed to the Yamen by the Eussian Charg^ d' Affaires. The " Times " correspondent was, it will be seen, correct in announcing that an ultimatum had been sent, and it is not easy to see why the Yamen should have denied the fact and been at pains to disguise it from me. Their only explanation is that •m 126 they liacl evaded it by transferring, or trying to transfer, the negotiations to St. Petersburgh, and considered it as withdrawn. It does not appear to have been, strictly speaking, a demand for compliance within five days, but for an ansA\er of some kind within that time. With regard to the "Treaty of Alliance," the Yamen, in conversation with me, scout the idea as preposterous, I was inchned at first to believe, from what the Russian Charge d' Affaires told me, that there must have been some phrase in the Emperor's speech capable of having forced on it the meaning of the words attributed to him in the published message, but in the version of the speech communicated to me yesterday by the famen, of which a translation is .inclosed, there is nothing that could bear such a construction. It contains, as the Chinese Ministers remarked, nothing but commonplaces, though these were on this occasion more than usually inappropriate. It is quite in accordance with the Chinese habit of putting a good face on things that the conclusion of the Agreement with regard to Port Arthur, though forced from them by threats, should be referred to as a further strengthening of the bonds of friendship. At the last New Tear banquet at the Yamen Prince Kung, in proposing the health of the foreign Representatives, expressed, in the Emperor's name, the hope that " all their wishes would be gratified during the coming year," a wish of which the literal fulfilment would leave His Majesty but little power or territory. I cannot, of course, be sure that the version of the speech supplied to me by the Yamen is accurate or complete, but the probabilities of the case are strongly against the existence of any Treaty of Alliance, of which signs would at once appear in the shape of a determination to resist all demands from other Powers, and consequently of any reference to it. I have, &c. (Signed) CLAUDE M. MacDONALD. Jnclosure 1 in No. 186. Sir C. MacDonald to the Tsung4i Yamen. MM. les Ministres, Peking, April 20, 1898. I HAVE the honour to inform your Highnesses and your Excellencies that I have received a telegram from Her Majesty's Secretary of State for Poreign Affairs to the effect that the text of messages exchanged between the Emperors of Russia and China respecting the agreement with regard to Port Arthur has been published by the Russian G-overnment, and that the message from the Emperor of China states that the friendship between the tM'o countries has lately been strengthened by a Treaty of Alliance. I have the honour to inquire, for the information of Her Majesty's Government, whether the above correctly represents the effect of the message sent by the Emperor of China, and I have also to request that I may be supplied with a copy of the original Chinese text of the message. I beg for an early answer to this despatch. I avail, &c. (Signed) CLAUDE M. MacDONALD. Inclosure 2 in No. 186. The Tsmg-li Yamen tc Sir C. AlacDonald. Kuang Hsii,, Srd moon {inter e), 1st day (Translation.) {April 21, 1898). THE Princes and Ministers have the honour to acknowledge the receipt of Sir C. MacDonald's note of yesterday (note quoted). , The Yamen have the honourto observe that the statements contained in the note under acknoAvledgment are at variance with the wording of the Imperial telegram (sent to the Emperor of Russia), A copy of this telegram, reverently transcribed, is inclosed, in order that Sir C. MacDonald may communicate it to Her Britannic Majesty's Government. (Seal of Yamen.) 127 Inclosure 3 in No. 186. Imperial Telegram. (Translation.) His Imperial Majesty the Emperor of China to His Imperial Majesty the Emperor of Eussia : Greeting ! Olsr the 14th January Hsii Ching-cheng telegraphed to us that your Imperial Majesty had told him that your sincere regard for China was unaltered, and again that you had said that relations with China were friendly and intimate, and that you had begged him to address you in person if any matter required it. AVe were rejoiced to hear this. This day the Tsung-li Yamen report that your Imperial Majesty's Representative PavlofF came to discuss the leasing of Port Arthur and Talienwan, fixed the 2'7th March as the date within which the Treaty (should be) concluded, and said that he would write a note (to the Yamen, demanding an answer in five days, (These proceedings) by no means accord with the friendship which has existed for centuries between the two countries, and with the words spoken by your Imperial Majesty to Hsii Ching-ch6ng. Hsii Ching-cheng is now appointed our Ambassador to proceed to Russia and carry on negotiations, and we hope that your Imperial Majesty will receive him, and let him come to a satisfactory arrangement with the Foreign Office, out of regard for the friendly relations existing between the two countries, and in accordance with your Imperial Majesty's expression of sincere regard. Jnclosure 4 in No. 186. Reply of His Imperial Majesty the Emperor at the Audience of the Bussian Minister on April 5, 1898. (Translation.) THE telegraphic message from His Imperial Majesty the Emperor of Russia which we have read (referring to the) drawing close of the bonds of intercourse, has caused us much pleasure. The ancient friendship between our two States has existed for more than 200 years, and the friendliness of our relations has lately been still further increased. From this time forth may the two States conduct their mutual intercourse with sincerity, sympathizing with each others joys and sorrows, to the advantage of all the merchants and people of both countries. We trust that, when reporting to the Emperor of Eussia by telegram, you will communicate these our sentiments. No. 187. Sir C. MacDonald to the Marquess of Salisbury. — {Received June 13.) My Lord, ' Peking, April 29, 1898. I HAVE the honour to inclose a copy in translation of the Chinese precis of the Ao-reement for the lease of Port Arthur and Talienwan, referred to in my telegram of'' the 20th April. It bears every sign of foreign authorship, and the original cannot have been drafted by a Chinese. I have no doubt that the document correctly represents the sense of the original Ao-reement, for it fully corresponds with what I have been able to learn of the contents of the latter. I have, &c. (Signed) CLAUDE M. MacDONALD, 128 Inclosure in No. 187. Husso-Chinese Agreement with regard to Port Arthur and Tulienwan. (Translation.) 01& the 6th day of the 3rd moon of the 24th year of Kuang Hsii (27th March, 1898), His Majesty the Emperor of China especially deputed the Grand Secretary, Li, and the Vice-President of the Board of Eevenue, Chan*, as Plenipotentiaries to settle the matters connected with the loan of Port Arthur and Talienwan with the Russian Charge d' Affaires,* PavlofF. The Convention drawn up is as follows : — Article I. In order for the protection of the Russian fleet, and (to enable it) to have a secure base on the north coast of China, His Majesty the Emperor of Cluna agrees to lease to Russia Port Arthur, Talienwan, and the adjacent waters. But this lease is to be without prejudice to China's authority f in that territory. Art. II. The boundary of the territory leased in pursuance of the foregoing extends from Talienwan northward in accordance witli the requirements (of the situation) on land, and of the protection of the territory, and permission shall be given for its being placed at whatever distance may be necessary. The exact boundary and the other details of this Convention, shall he jointly arranged at St. Petersburgh with Hsii Ta-jen, after the signature of this Convention, with all possible expedition, and a separate special Article drawn up. After the boundary has been decided, all the territory included in it, and the adjacent waters shall be entirely handed over to Russia to use under lease. Art. III. The term of lease is fixed as twenty-five years from the date of signature. On expiration an extension of the terra may be arranged between the two countries. Art. IV. Within the term xixed, in the territory leased to Russia, and in the adjacent waters all movements of forces, whether naval or military, and (the appoint- ment of) high officials to govern the districts, shall be entirely left to Russian officers, one man being made responsible, J but he is not to have the title of Governor-General or Governor. No Chinese troops of any kind whatever are to be allowed to be stationed within this boundary. Chinese within the boundary may leave or remain at their pleasure, and are not to be driven away. Should any criminal cases occur, the criminal is to be handed over to the nearest Chinese official to be punished according to law, in accordance with the arrano-ement laid down by the Vlllth Article of the Russian-Chinese Treaty of the 10th year of Hsien Feng (I860). Art. V. To the north of the territory leased there shall be left a piece of territory, the extent of which is to be arranged by Hii Ta-jen and the Russian Foreign Office. This piece is to be entirely left to Chinese officials, but no Chinese troops are to enter it except after arrangement with the Russian officials. Art. VI. The Governments of the two countries agree that, as Port Arthur is solely a naval port, only Russian and Chinese vessels are to be allowed to use it, and it is to be considered a closed port as far as the war and merchant -vessels of the other Powers are concerned. As to Talienwan, wilh the exception of a part within the port which, like Port Arthur, is to be reserved for the use of Russian and Chinese men-of-war the remainder is to be a trading port, where the merchant-vessels of all countries can freely come and go. Art. yn. Russia definitely recognizes the territory leased,§ but Port Arthur and Talienwan are of special importance. (As to) provision of funds, she will herself erect what buildings are required for the naval or military forces, for the erection of batteries or barracks for the garrisons, and generally provide all the funds required. Art. VIII. The Chinese G9vernment agrees || that the principle of the permission given in the 22nd year of Kuang Hsii (iSbO) to the Manchurian Railway Company for * The form of reference to the Russian Charge d 'Affaires shows be}oiid any doubt that this is not the original text. — H. C. + Probably " sovereiffn rights " are meant. — H. C. J Text requires amendment. — H. C. § There is certainly some omission here in the text. — H. C. il This appears to be the meaning of the text, bijt the constrijction throughout this Article is verv incoherent. — H. C. • / 129 the construction of a railway shall now, from the date of signature, be extended to the construction of a hranch line from a certain station on the aforesaid main line to Talienwan, or, if necessity requires, the same principle shall be extended to the construc- tion of a branch line from the main line to a convenient point on the sea-coast in the Liaotung Peninsula, between Ting-tzu (Newchwang) aud the Yaki River. The provisions of the Agreement of the Sth September, 1896, between the Chinese Government and the Eusso-Cbincse Banlc shall be strictly observed with regard to the branch line above mentioned. The direction of the line and the places it is to pass shall be arranged by Hsii Ta-jen and the Manchurian Railway Company. But_ this railway concession is never to be used as a pretext for encroachment on Chinese territory, nor to be allowed to interfere with Chinese authority or interests. Art. IX. This Convention shall come into force from the date of exchange * [sic] by the Plenipotentiaries of both countries. After Imperial ratification exchange shall take place at St. Petersburgh. No. 188. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, June 16, 1898. YOU should shortly telegraph facts about Ching-ting-Tai-yuen-fu Railway, Tai-yuen-fu Si-ngan-fn Railway, Peking-Hankow Railway, with special reference to my telegram of 9th June, and any other railway concessions already given or about to be given. Your opinion is especially desired upon the effect which would probably he produced in the Yang-tsze Provinces by the granting of railway concessions to foreign Syndicates or to Russo-Chinese Bank. No. 189. Sir C. MacDonald to the Marquess of Salisbury. — (Received June 17.) (Telegraphic.) Peking, June 17, 1898. WITH reference to your Lordship's telegram of the 9th June : In reply to your Lordship's warning, the Tsung-li Yamen yesterday declared that no negotiations had been entered into with the Russo-Chinese Bank for financial assistance in connection with the Peking-Hankow Railway. "Whilst not denying that the Russian and French Representatives had spoken to them, they declared that nothing had been said about a loan, and that their remarks had been made only with a view to prevent Sheng, the Railway Director, from breaking with the Belgian Syndicate. I informed the Yamen that your Lordship's message was mainly directed against the financial assistance foreshadowed by the open support accorded to the Belgian scheme by Russia and France. No. 190. Sir C. MacDonald to the Marquess of Salisbury. — {Received June 18.) (Telegraphic.) Peking, June 18, 1898. PEKING-HANKOW hue : Your Lordship's telegram of the 16th instant. Provisional Agreement signed last year with Belgian Syndicate. Syndicate finding tlie provisional terras unprofitable, Definitive Agreement not yet signed. My telegram of yesterday : French and Russian Representatives are now making efforts to prevent quashing of the Belgian contract. Cheno-ting-Taiguan line. I am credibly informed that this Concession was con- firmed by Imperial Edict about three weeks ago. Russo-Chinese Bank signed a contract * Probably these are errors in the text : " Shall come into force on signature, ratifications to be exchanged at St Petersburgh " is a probable emendation. — H. C. [253] S 130 some mouths ago^ provided tliat work on the Russian line is begnn within two years. Peking Syndicate has wi-itten arrangement with Russo-Cliinese Bank as to carriage of [? coin] by this line, Syndicate agreeing not to construct another within 100 li (30 miles). Taiguan-Singan hue. I have no details us yet. It is reported that this extension has already been granted to the Russo- Chinese Bank, but the report is not confirmed. Mauchurian railways. Extension from main line to Tahenwan was conceded recently to Russian Government. Shantung. The German Convention of last March permits the construction of two railway lines (one from Kiao-chau to Ciiinan-fu, and the other from Kiao-chau via Ichou to Chinan-fu) by a Company in which German and Chinese merchants may take shares. T am informed a preliminary Agreement for the construction of a line from Hankow to Canton witli American capital was signed in Washington last month. I have no particulars. French railways. No details are known : See my despatch of the 15th April. In last April the right to extend a railway beyond frontier to Yunnan city was conceded to the French Government. A further Concession for line from Pakhoi to some point in Kuangsi is said to be at present under negotiations in Paris. Shanghae-Nanking Railway : See my telegram of the 17th May. Shansi. The Peking Syndicate has acquired right to construct branch railways, and will to-day sign an Agreement giving similar rights in North Honan (see my telegram of the 2nd June). As to the last paragraph of your Lordship's telegram, a reply will be given soon. No. 191. Sir N, O'Conor to the Marquess of Salisbury.- — {Received June 20.) Mj Lord, St. Petersburgh, June 14, 189S. IN obedience to the instructions contained in your Lordship's telegram of the 9th instant, I spoke to Count Mouravieff yesterday respecting the Circular to the foreign Representatives lately issued by the Russian Charg6 d'Affaires at Peking, requiring that foreigners entering Port Arthur or Talienwan shall be provided ■with passports, although they need not necessarily be vise' at the Russian Consulate. 1 again reminded his Excellency that passports were only required in China in case •of foreigners undertaking extended journeys in the interior of the countrj^, and that the withdrawal of the original requirement of a visa of passports for these ports at the Russian Consulate was in a measure nullified by the present Circular. The regulation was not only contrary to practice, but to the stipulations of the JXth Article of the Treaty of Tien-tsin, and its maintenance would establish an iiividious distinction between the ports in tlie north and in other parts of China. In making these representations, under instructions from your Lordship, I expressed the hope that he would give instruc- tions to rescind the regulations. Count Mouravieff' said that he would like to examine the question carefully, and that he would be obliged if I addressed a note to him on the subject. At the same'time he rather imphed that although the order would be withdrawn in respect to Talienwan, which was an open port such as was referred to in Article .IX, this regulation would be maintained as regarded Port Arthur, which was not now, more than previouslv, an -open port. ]n connection with this matter, I may mention that a short time ago the Bel^-ian Minister, under instructions from his Government, asked for permission to send a Com- mercial Agent to Port Arthur, solely with a view to the development of trade, and that the application was refused. I have, &c. (Signed) N. R. O'CONOR. 131 Inclosure in Ko. 191. Sir N. 0' Conor to Count Mouravief. M. le Ministre, St. Petershurgh, June 13, 1898. ACCORDING to information received from Her Majesty's Minister at Peking-, tlie Russian Charge d'Affaires has lately addressed a Circular to the foreign Representatives in that capital, stating that foreigners landing at Port Arthur or Talienwan are required to have passports, but that the visa of the Russian Consulate is optional. Your Excellency is aware that passports are only required in China for extended travels in the interior of the country, and in drawing your attention to this Circular I have, under instructions from Her 'Majesty's Principal Secretary of State for Eoreig-n Affairs, the honour to point out to your" Excellency that tliis regulation is not in accordance with Article IX of the Anglo-Chinese Treaty of Tien-tsin of 1858, and to express the hope that instructions will be given to rescind tliis regulation. I avail, &c. (Signed) N. R. O'CONOR. 1^0. 192. Sir N. O'Conor to the Marquess of Salisbury. — (Received June 20.) My Lord, St. Petershurgh, June 14, 1898. I CALLED on Count Mouravieff yesterday, and, in obedience to your Lordship's insi ructions, I inquired of his Excellency whether the Russo-Chinese Agreement published in the "Times" of the 3rd instant, of which I showed him a copy, was a correct version of the Agreement. If so, I said that I had instructions from your Lord- ship to point out that the 6th Article was inconsistent witli tlie assurances given to Her Majesty's Government in his note of the 22nd March (3rd April), as also willi our Treaty rights. His Excellency replied that the Agreement was one exclusively between the- Russian and Chinese Governments, which was not meant to be published, but that it would not prevent the Russian Government adliering to the assurances which had been given to Her Majesty's Government, and which were quite accurately stated in the House by Mr. Curzon. His Excellency avoided saying whether the text of the Agreement was accurate or not, and when pressed on the subject replied that he was unwilling either to admit or deny its correctness, as if he did so, and strong exception were taken to this- Article, a request for its abrogation would probably follow, and it would be impossible for the Russian Government to amend or alter a formal Convention of this kind. All he could say was that the assurances given to Her Majesty's Government in regard to respecting existing Treaties between China and foreign Powers would be maintained. I have, &c. (Signed) N. R. O'CONOR. No. 193. Sir N. O'Conor to the Marquess of Salisbury. — (Received June 20.) My Lord, St. Petershurgh, June 15, 1898. ON attending Count MouraviefF's weekly reception this afternoon his Excellency referred to my note respecting passports for Port Arthur arid Talienwan, copy of which was inclosed in my despatch of the 14th Junt\ ;• His Excellency said that it would be impossible to dispense with passports for Port Arthur, and that this was in accordance vvith the obligation previously existing. As regarded Talienwan, passports^ would not be required when it was formally opened to trade ; at present there was no proper Civil Administration that could be properly held responsible for the protection of foreigners, As soon, however, as a competent police administration was established passports would be dispensed with, and [253] S 2 "-Wi^ 132 he thought it not unreasonable to expecc that allowance would be made for the confusion which no doubt existed there at the present moment. His Excellency added that without being- able to say what would be the precise ultimate character of the port, beyond that it would be open to foreign trade, he thought it might possibly be eventually declared a free port, and he begged again to assure me that there was no desire on the part of the Russian Government to interfere with any of our trade privileges or rights guaranteed b}' Treaty with China. I have, &c. (Signed) N. E. O'CONOE. No. 19i. Sir C. MacDonald to the Marquess of Salisbury.-— {Received June 20.) (Telegraphic.) Peking, June 20, 1898. AN official request was recently made by the Chinese Government for harbour accommodation at Port Arthur for their cruisers expected shortly from Europe. I am informed, on good authority, that M. Pavloff reminded the Minister of a former verbal understanding that only Russian military instructors should be employed in North China. He stated that the use of the port could not be extended to Chinese war-sliips on which foreign non-Russian instructors were engaged. No. 195. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, June 21, 1898. T EEQUEST you to inform me whether it is true that the lighthouse-keepers at Lao-tie-shan, in G-ulf of Pechili, have been dismissed, and replaced by Russians. Is the lighthouse service under the control of Sir R. Hart ? If so, was he consulted in the matter ? No. 196. Sir C. MacDonald to the Marquess of Salisbury. — {Received June 21.) (Telegraphic.) Peking, June 21, 1898. I WAS assured yesterday by the Yamin in the most formal manner that the Eusso- Chinese Bank was not in any way interested in the Belgian Concession for the Peking- Hankow line. No. 197. Sir E. Satow to the Marquess of Salisbury. — {Received June 22.) My Lord, _ TSkio, May 26, 1898. I HAVE tlie honour to inclose translations of two series of questions addressed to the Government on foreign policy by Members of the Lower House belonging respectively to the Progressist and Liberal parties, and of the answers given thereto yesterday by the Minister for Foreign Affairs. The Liberal party had asked whether any communications had passed between the Imperial Government and that of Her Majesty, or did the two Governm.cnts concert measures together in regard to the lease of Wei-hai Wei, and the Government answer was that some time ago Her Majesty's Government having asked the Imperial Government wliether they had any objection to the lease of that place by Great Britain after the withdrawal of the Japanese troops, a reply had been given stating that there was no objection. I have, &c. (Signed) EENEST SATOW- 133 Inclosure 1 in No. 197. Questions addressed to the Government by the Liberal Party. (Translation.) WHAT diplomatic action did the Grovernment take in regard to the lease of Kiao-chau hy Germany, and Port Arthur and Talienwan by Russia, and did the Government enter into correspondence or negotiations on the subject with the Governments of those two countries, or with the Governments of other foreign countries ? -. Did any communications pass between the Government and the British Govern- ment, or did the two Governments concert measures together in regard to the lease of "Wei-hai Wei by Great Britain ? 3. What steps do the Government propose to take, and what attitude do they intend to adopt vis-n-vis China, with a view to the maintenance of peace and the preser- vation of the balance of power in the East ? 4. What steps do the Government propose to take vis-d-vis China with reference to the Shashi affair ? 5. How are the negotiations between Japan and Hawaii progressing P Inclosure 2 in No. 197. Reply given by the Government to the Questions addressed by the Liberal Party. WITH regard to the first question, it is thought that now is not the time to make a definite statement on the subject. 2. With regard to the second question, some time ago the British Government asked the Imperial Government whether they had any objection to the lease of Wei-hai Wei by Great Britain from China after the withdrawal of the Imperial troops from that place. A reply was given that there was no objection. 3. With regard to the third question, the Imperial Government desires as far as possible to enable China to maintain her security. 4. With regard to the fourth question, the Imperial Government are now conducting negotiations with the Government of China. 5. With regard to the fifth question, tlie Governments of Japan and Hawaii have agreed to submit the Hawaiian question to the arbitration of a friendly State, and negotiations on the subject of the points to be referred to arbitration are now proceeding. Inclosure 3 in No. 197. Questions addressed to the Government by the Progressive Party. (Translation.) WHEN some years ago the Liaotung peninsula was retroceded in conformity with the advice of Russia, Germany, and Erance, was any definite assurance given by those three Powers that they would not in future occupy or lease, &c., the territory in question ? If such an assurance was given, it is desired that it may be shoAvn. If it was not given, why was it not required ? 2. It appears that Russia has not only obtained a lease of Port Arthur and Talienwan, but that she has also, in addition to this, secured from China many other special rights or special agreements with reference to railways, mines, and military matters, &c. What facts, in reference to these points, have been definitely ascertained up to the present moment by the Imperial Government ? 3. It appears that Germany, Erance, and Great Britain have also secured, or are about to secure, from the Government of China many special rights or special agreements. What facts have been definitely ascertained up to the present moment by the Imperial Government ? 4. With reference to the recent relations between European Powers and China, what steps have been taken by the Imperial Government to maintain the status quo in the East, and protect our rights and interests. 134 Inclosure 4 in No. 197. Reply given by the Government to the Questions addressed by the Progressive Party. (Translation.) WITH regard to the first question, no definite assurance was given. The reason for no definite assurance being given was because the circumstances of that time did not permit of it. 2. With regard to the second question, the Imperial Government received a communication from the Russian Government, stating that it had leased Port Arthur and Talienwan, and territory in the vicinity of those ports, from China, and that Talienwan would be opened to foreign commerce. It is reported that Russia has also obtained the special right of constructing a branch railway from the East Siberian trunk line to a suitable point in the Moukden peninsula. 3. With regard to the third question, it is believed that the information obtained by the Imperial Government does not differ in the main from what has hitherto been seen in the press, or has been derived from other sources of intelligence. With regard to details, there are points as to which information is still unreliable. 4. With regard to the fourth question, no definite statement can at present be made as to the steps which the Imperial Government, shaping their action in accordance with the conditions of affairs at home and abroad, and giving full consideration to actual interests, may see fit to take. No. 198. Sir C. MacDonald to the Marquess of Salisbury. — [Received June 22.) (Telegraphic.) Peking, June 22, 1898. WITH reference to your Lordship's telegram of yesterday : Ten days ago the lighthouse-keepers were paid off, and were replaced by Russians. Sir R. Hart, who is in control of the Chinese lighthouse service, was not consulted. Russia leases the territory on which the lighthouse stands ; the former keepers have been reappointed to other northern lights by Sir R. Hart. No. 199. , Sir C. MacDonald to the Marquess of Salisbury. — {Received June 23.) (Telegraphic.) Peking, June 23, 1898. IE replying to a note written by me to the Russian Chargd d' Affaires, in accordance with the instructions contained in your Lordship's telegram of the 2nd June, M. Pavloff states that, in accordance with the Russo-Chinese Convention of the 15th March, Port Arthur will remain closed, in the future as in the past, to foreign commerce ; Article IX does not therefore apply. With regard to Talienwan, it cannot be considered as a port " effectivement ouvert " until the establishment of a customs service similar to that which exists at other ports . opened by Treaty. A formal declaration to that effect will have to be made to the Representatives of the Treaty Powers. The Russian Foreign Office approved of the above reply, which was submitted to them. No. 200. Sir C. MacDonald to the Marquess of Salisbury. — {Received June 23.) (Telegraphic.) Peking, Ju7ie 23, 1898. REFERRING to my telegram of to-day, the Russian Charge d'Affaires left Pekino- yesterday for Talienwan for the purpose,, he told me, of organizing a general administra- tion and customs establishment at that place. 135 He informed me that there would be one general settlement but no concessions, and that duties would be collected for the Chinese Government by Russian officials according to the Chinese Tariff. No. 201. Sir C. MacDonald to the Marquess of Salisbury. — {Received June 23.) (Telegraphic.) Peking, June 23, 1898. THE Agreement for the concession in the north of Honan Province, granted to the Peking Syndicate, mentioned in my telegram to your Lordship of the 18th June, was signed the day before yesterday. No. 202. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, June 23, 1898. IT is desirable now that Kowloon and Wei-hai Wei are arranged that we should settle the order in which other projects should be pressed on the Yamen. 1 should put first Messrs. Jardine's railway from Nanking to Shanghao; then the Peking Syndicate's lines; then the right of the Hong Kong Bank to finance the Newchwang line ; and then the opening of Nanning-fu. It is urgent at the same time to extend the opening of the rivers to non-Treatv provinces. Telegraph whether you agree in this list, and if there are others. lZS No. 203. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, June 23, 1898. EXTENSION of Hong Kong. Colonial Secretary, Hong Kong, who is now on leave, is returning at once tp make inquiries as to additional staff' that will be required, and details connected with assumption of jurisdiction in the new territory. You should instruct Her Majesty's Consul at Canton to render every assistance, and obtain the co-operation of the Chinese officials. ■ ' ' ■■-' Consul should forward anv existing statistics of revenue/ land redstrv, &c., to Hon"- ong. • '■ Ascertain also, and inform Hong Kong, with a view to assisting the Colony in the prevention of smuggling, what arrangements Maritime Customs propose, and wher6 customs stations will be placed. No. 204. The Marquess of Salisbury to Sir N. 0' Conor, Sii"' „ , Foreign Office, June 23, 1898. I HAVE received your Excellency s despatch of the. Hth instant, reportin°- your conversation with Count MouraviefF with regard to the text of the recent Agreement between Russia and China, as published in the "Times" of the 3rd instant. ' 1 approve the language which you held to his Excellency on the subject. I am, &c. (Signed) SALISBURY. 136 No. 205. Sir C. MacDonald to the Marquess of Salisbury. — (Received June 26.) (Telegraphic.) Peking, June 26, 189S, ALL the projects mentioned in your Lordship's telegram of the 23rd June are beina: pressed on the Yaraen, as well as the scheme proposed by Mr. Pritchard -Morgan for a Central Mining Administration; the relative urgency of each of these must be decided by circumstances. I will press the lines of the Peking Syndicate as soon as the latter have decided vvhat they want, but as complicated commercial details are impossible for me to arrange, and seeing that the value of a concession in general terms is almost nil, the negotiations should be carried on by their agent. No. 206. War Office to Foreign Office. — (Received June 27.) (Extract.) War Office, June 25, 1898, ' I AM desired by the Secretary of State for War to acquaint you, for Lord Salisbury's information, that the officers and men of the Royal Engineers, selected to proceed to Wei-hai Wei for the purpose of preparing surveys and furnishing informa- tion, embarked on the 3rd instant, and may be expected to arrive at Hong Kong on the 9th July. The Admiralty have been requested to provide passages for them from Hong Kong to Wei-hai Wei. A copy of the Instructions which have been given to the party is herevi^ith inclosed. It will be observed that they have been accepted by the Lords Commissioners of the Admiralty, who are also dispatching a naval survey party. A copy of the detailed Instructions is also inclosed. Inclosure 1 in No. 206. Instructions for the Officer Commanding the Survey Party about to be dispatched to Wei-hai Wei. THE port of Wei-hai Wei, with certain adjacent territory and islands, having been leased by China to Her Majesty's Government, I am desired by the Secretary of State for War to acquaint you that you have been selected to proceed thither, in command of the party detailed in the margin,* for the purpose of making a survey and reconnais- sance of the territory in question, in conjunction and co-operation with the officers of the Eoyal Navy who have been directed by the Admiralty to undertake a survey of the harbour and its vicinity from a naval point of view. Tou will confer with the Senior Kaval Officer of the sur-veying ship, and in concert with him, will arrange for the execution of these surveys in such a manner as to subserve the requirements of both the War Office and the Admiralty. You will under- take the measurement of a base and the observations for triangulation, with such a degree of accuracy as you may jointly decide to be necessary and sufficient, communi- cating the results to your naval colleague, and affording him access to all information you may acquire. The objects of the survey are as follows : — (a.) To enable Her Majesty's Government to decide upon the boundaries of the territory, whether as a British sphere of interest or for purposes of actual occu- pation. (b.) To enable the Admiralty to form an estimate of the extent of ground to be reserved for naval establishments. * 2 R.E. ofiBcers and C non-commissioned officers and sappers. 137 (c.) To enable the naval and military authorities to advise as to the defences which may be deemed requisite for the protection of the naval establishments. (d.) To furnish the Inspector-General of Fortifications with such large scale surveys and plans as may be needed for the design and execution of such military and public works as may be decided upon. Further details as to the scales to be employed for the maps, the extent of territory to be surveyed on each scale, and the particular points requiring special attention, and report will be subsequently communicated to you. Inclosure 2 in No. 206. Detailed Instructions for Survey of IVei-hai Wei. IS pursuance of the last paragraph of the General Instructions, the following observations are forwarded for your information and guidance : — 1. The territory occupied by the Japanese troops at Wei-hai Wei is understood to comprise the Isl/indof Liu-kung and a band 5 ri in width from the coast-line of the bay, and no Chinese troops were to approach within 5 ri of the occupied territory. A ri is equal to 2"45 statute miles. The rayon of occupation is, therefore, 12^ miles, and the outer zone extends the same distance beyond it, and includes the greater portion of the Shantung promontory, that part which lies between its outer boundary and the south and east coast being practically included in the prohibited territory. These boundaries will, until a definite agreement with China is completed, afford a guide for the extent of ground to be surveyed ; but as a much shorter line than the curve drawn at a distance of 24| miles from the harbour can be found by drawing a line across the neck of the peninsula about the meridian of 121'' 40' cast longitude, it will be preferable to adopt it as the boundary, and the military reconnaissance should, in the first instance, be made over a belt about 5 miles in width on either side of this meridian, with a view to selecting suitable natural features, such as water-partings or ravines, extending from the north to the south shore in such a manner as to be easy to define, to watch, and to guard, whether for fiscal, administrative, or military purposes. The rest of the reconnaissance of the peninsula is not pressing. The scale of this reconnaissance will be 1 inch to a-mile, with approximate hill shading. 2. The belt of actual occupation will probably not need to be as extensive as that which the Japanese considered necessary. It should, however, include all positions and localities which now are or eventually may become necessary for naval, military, or civil purposes — sites for Admiralty establishments ; for forts and batteries which may be requisite now or in future ; for barracks, hospitals, sanitaria, civil buildings, commercial storehouses, and private residences ; together with a zone to give security to the defences, cultivable land, woods, water supply, and other amenities for a British occupation. This tract should be surveyed on a scale of 2 inches to a-mile, based on accurate triangulation, the stations of which should be permanently marked ; and the map shoidd be hill shaded in the first instance, or the features shown by approximate contours. It should be subsequently contoured at intervals of 100 feet. 3. The main island, the smaller islands, the shores of the harbour, and the probable sites of works and buildings which may become necessary in the immediate future shoidd be surveyed on a scale of 2-5-00' ^r approximately 25 inches to the mile, with contour^ at 2i5-feet intervals. 4. Detailed plans on a scale of xio» ^^' 1^ ^^^^ ^o an inch, will be required of the smaller islands, and of sites where works and buildings are to be erected. These plans should be contoured at intervals of 5 feet. 5. A general reconnaissance report should be prepared on the resources of the territory, both that which is to be actually occupied, in full detail, and that over which rights are to be reserved, in so far as may be requisite. In the former case, besides the existing works which should be described, water [253J T 13S supply,- sanitafj conditions, towns and villages, cultivation and cr^ops, food resources, cpmmunications and means of transport, positions suitable for naval and military establishments, nature of soil, building materials, fuel and coal will be reported upon. In the latter less detail is needed. -6.. Steps will be taken to procure, if possible^ from the Japanese Government any surveys or plans which may have been made under their direction. 7. The order in which the work should, be carried out will be decided in concert with the Head of the Adhiiralty surveying party, probably in the following consecu- tion : — Base measurement and triangulation of coast-line of harbour and islands. Survey of islands and shore of harbour, so far as-requiredj on scale of ^-^xi- Detail plans on scale of j^^. General 2 inch to a- mile survey up to occupation limits. Reconnaissance of the rest of promontory. 8. Arrangements should be made before departure to have Chinese acquainted with the ??orthern Chinese or Mandarin dialect (which is not understood in Hong Kong and Canton) engaged, as clerk, office-keeper, store-keeper, chainman, cooks and servants. They will probably have to be procured in the northern Treaty ports. May 10, 1898. No. 207. Mr, Gosselin to the \larqiiesf< of i^alishury. — {Received June '1~ .) (Telegraphic.) Paris, June 27, 1898. WITH reference to Sir 0. MacDonald's telegram to your Lordship of the 18th instant, I have the honour to report that a telegram has been received from Shanghae at the Ministry for "Foreign Affairs, announcing that a Contract has been signed by which the Concession of the Peking-Hankovi'^ line has been granted to a Franco-Belgian Syndicate. No. 208. Mr. Gosselin to the Marquess of Salisbury. — (Received June 28.) My Lord, Paris, June 27, 1898. WITH reference to the Concession obtained by the Franco-.Belgian Syndicate for the construction of the Peking-Hankow Railway, I have the honour to state that this evening's newspapers puhlish the inclosed ofllcial communique from the Ministr" for Torcign Afiairs, according to which the Contract granting the Concession tor the railway has, thanks to the support of the French and Belgian Representatives in Peking, been accorded by the Tsung-li Yamen to the Franco-Belgian financial group. The hne, 1,300 kilom. in length, traverses the rich and populous Provinces of Chile, Honan, and Hoa-Pe, and its traffic will he increased by the Concession granted to the Russo-Chinese Bank of the railway destined to unite the rich coal-mining basin of Ping-ting to the town of Ching-ting (Tcheng-ting) on the Peking-Hankow line. The communique congratulates the country on this success obtained by French diplomacy at a time when the railway question is destined to play so important a part in the relations of China with the Powers. I have, &c. - (Signed) MARTIN GOSSELIN. 139 Inelosure in No, 208. ,„ ,', • ' Extract from" Le Temps" of June 28,1898. > 'LE Mini §tre des Affaires J^trang^res vient d'etre informe, par un tel^gramroe date de Shang-hai, de la signature duContrat qui accorde au Syndicat Franco-Beige la concession du chemin de fer de Pekin a Han-Keou. Engages depuis plus d'une annee, les pourparlers relatifs a cette entreprise ont rencontre les plus grandes difficultds. Le resultat obtenu est dA a I'union et a la perseverance des industriels Eran9ais et Beiges, secondes activement par les deux Gouvernements et les Repr^sentants en Chine de la Erance et de la Belgique. La ligne, d'une longueur de 1,300 kilora. environ, relie la capitale Chinoise au grand centre commercial de Han-Keou sar le Yang-Tse-Kiang, en traversant les provinces particuli&rement riches et peuplees du Tchili, de Ho-JSTan, et de Hou-P^. Elle est done assuree d'un trafic des plus r6mun6rateurs ; ce trafic se trouvera •augmente encore' du fait de la concession a la Banque E,uss0-Chinoise de la voie ferr6e destinee a relier le riche bassin houiller de Ping-Ting a la ville de Tclieiig- Ting sur la ligne de Han-Keou a Pekin, En dehors de la part importante reserves a I'industri^ Erangaise dans les commandes de materiel auxquelles donneront lieu ces deux entreprises, I'influence Erari^aiise en Chine ne saurait manquer de retirer d'heureux resultats de ce succfes obtenu par notre diplomatic, au mouieiit oti la question des chemins de fer joue un r61e si important dans les relations Internationales de I'Empire Chinois. No. 209. The Marcpitss of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, June 28, 1898. AN expert in defences. Colonel Lewis, R.E., with a survey party, has left r for 'Wei-hai Wei. They are due at Hong Kong on the 9th July. Yam6n should be informed, and requested to instruct local authorities to aflfard facilities. Lewis should be ' informed of progress of boundary negotiations, and you should. arrange for his. seeing, you after he has started survey if you consider it desirable. ; , No. 210. r Sir C. MacDovald to the Marquess of Salisbury. — {Received June 29.) (Telegraphic) Peking, June 29, 1898. I HAVE i^eceived telegraphic information from Her Majesty's Acting Gonsul-General at Shanghae, to the effect that on 27th June the Contract for the Peking-Hankow Railway 'was signed with the Belgian Syndicate. ' No. 211. i'r;---^r^* /,. ■ '-'Sir-Q. MatlJontild to the Mdtques^.of SuUshury .^^{Reffeived July 2.) t :" . "; (Telegraphic.) Peking, July 1, 1898. THE Convention respecting Wei-hai Wei was signed to-day. It comes into ' '6'6%ratiOn fPOHT'date' of isignatTirerand-^be-rftFti-fiea/tion is--te~take -pla«j& .as -saoBAas jp©ss.ib.le in London. The latter part of the clause referred to m my telegram of 8th June, as finally [253J T 2 140 settled, reads : " Great Britain shall have, in addition, the right to erect fortifications, station troops, or take any other measures necessary for defensive purposes, at any points on or near the coast of the region east of the meridian 121° 40' east of Greenwich, and to acquire on equitable conditions within that territory such sites as may be necessary for water supply, communications, and hospitals. Within that zone Chinese adminis- tration will not be interfered Avith, but no troops other than Chinese or British shall be allowed therein." No. 212. Admiralty to Foreign Office. — [Received Jufi/ 4.) Sir, Admiralty, July 1, 1898. I AM commanded by my Lords Commissioners of the Admiralty to forward herewith, for the information of the Secretary of State for Foreign Aflairs, an extract from a letter from the Commander-in-chief, China, dated the 19th May last, relative to the state of affairs at Hankow and Shashi. I am, &c. (Signed) EVAN MACGEEGOR. Inclosure in No. 212. Vice-Adiniral Sir E. Seymour to Admiralty/, (EKtract.) " Centurion" at Chefoo, May 20, 1898. THE "PhcEnix" left on. the loth for Hankow, where it is reported that strong feeling exists amongst the Chinese against the new methods of collecting the li-kin. She called at Woosung on the 17th May for coal and a pilot, and left the next day for her destination. On her arrival the " Esk " will be sent higher up the river to Shashi, where some riots have taken place. At present the ill-feeling appears to be directed against their own officials, but I have thought it desirable to send another ship in case Europeans should become involved in their hostility. The " Pigmy " remains at Shanghae. No. 213. Sir C. MacDonald to the Marquess of Salisbury. — [lleceived July 7.) (Telegraphic.) Peking, July 7, 1898. ' NAVIGATION of inland waters. ^ ^ According to a report received from Her Majesty's Acting Consul at Chinkiang, the boat population have damaged launches at Chinkiang-pu and Yangchow, and there is serious opposition to passenger traffic. The Admiral has been requested to dispatch a man-of-war in case the disturbance hould spread, and Mr. Consul Scott from Shanghae is being sent to assist the Acting Consul. I told the Yamgn at an interview ^that they will be held responsible for aU damage and opposition. 141 No. 214. China Association lo the Marquess of Salisbury. — [Received July 8.) My Lord, _ ],j9^ Cannon Stred, London, Jidii 8, 1898._ Tariff Revision. — The intimation which the Chinese Government has given of ItA intention to demand " revision of the Tariff and of the Commei-cial Articles," in accordance with Article XXVII of the Treaty of Tien-tsin, is not unexpected. The probabiUty was noted in the letter which the Association had the honour to address to your Lordship ou the 2nd November, 1896, when it was admitted that, " from a combination of various causes, including currency changes, the actual duty collected under a nominal 5 per cent, standard does not exceed 3^ to 4 per cent." The Chinese are fully entitled, therefore, to a revision of the scale fixed in 1858. They will have to give as well as take, but the broad result will be in their favour. The language of Article XXYII does not restrict revision to the Schedule of Duties, and the Association will be interested to learn precisely what scope is to be attributed to the demand. Great changes have, as the Yamen truly observes, taken place in forty years ; great changes have taken place within the last twelve months ; but it is a remarkable tribute to the wisdom which dictated the Treaty of Tien-tsin that it •continues broadly applicable to foreign trade and intercourse to-daj'. Complaint has been frequent, and is still frequent, that its stipulations are ill-observed, but no suggestion is heard of need for abrogation of any of its clauses, or for radical change. It is hoped that none such will be proposed, as it is believed that the altered conditions of modern intercourse can be provided for by additional Agreements and subsidiary Eegulations. The Association's letter of the 2nd November was inspired by the belief that his Excellency Li Hung-chang proposed asking for an increase of the Tariff, and enumerated various conditions upon which the demand might be entertained. The Committee see no reason to modify, in any essential, the views which were then expressed. The solicitude of Her Majesty's Government, seconded by the ability and energy of Her Majesty's Minister at Peking, has obtained recognition for several of those conditions, in anticipation of the equivalent demand. The boundaries of Hong Kong have been extended. The West River has been opened to Wuchow. The principle has been aflBrmed that the Chief of the Maritime Customs Service shall always be a British subject, so long as the volume of British trade exceeds that of any other Power. The opening of inland water-ways to steam is assured in principle, although the Chinese Government appears to be endeavouring, characteristically, to minimize the Concession. It is hoped that the admission of foreign control over certain sources of inland taxation may prove a commencement of fiscal reform. Important questions are, however, still pending, and the' Association desires to offer certain remarks that may be thought to deserve consideration, pending the negotiations to which the Yamen's communication will give rise. Railways. — The question of supreme moment is railway development, and no one interested in the Par East can view without anxiety the international rivalry to which it is o-iving rise. This might be immaterial if the rivalry were solely financial. Under a Government sufficiently strong to maintain autonomy, it matters little who makes railways the essential thing is to get them made. But the Government of China is politically iielpless, and it is impossible to banish apprehension that railways constructed by foreign States, under State auspices, with State aid, may be held in the near future to constitute territorial claims. Two ways of abating the risk appear possible. China may be encouraged and helped to assert her right of sovereignty or spheres of national interest from which alien enterprise shall be excluded, may be defined. A Railway Board. — It is superfluous to repeat that the maintenance of Chinese integrity appears to the Association to consist best with the interests of British commerce. Wisdom and foresight would have dictated the creation in China of a railway bureau with a foreign staff, on the model of the Custom service. With such a guarantee of efficient supervision and administration the Chinese Government would, it is believed, Lave been able to raise sufficient capital under its own guarantee. If it is too late now to affirm such a scheme in its entirety, it may still not be too late to organize a department 142 capable of imposing some measure of uniformity, and of exerting such a degree oi control as to prevent rival concessions assuming national hues, and being administered under different systems on exclusive lines. The political element in those concessions cannot be ignored, and circumstances are conceivable in TV'hich . preferential freight and differential rates miahc be made to subserve national ends. ■ The Peki7ig-Hankoiv Line. — The reported Concession to Belgium of the right, to rpafe^ a line from Peking to Hankow may illustrate the position. The Yang-tsze Valley. — The Association is led by this incident 16 repeat the expres- sion of its anxiety as to the steps that have been taken to give precision to China's promise that no portion of the Yang-tsze region should be leased or ceded to a foreign Power. Manchuria has been given up to Eussia, and it is practically certain that no Britisli interest would be admitted in the line which Eussia is about to construct between Eiriu and Talienwan. It would be consistent to 'expect that Eussia should refrain fromi encroaching on the British sphere. It would be immeasurably preferable that important trunk lines should be made by China herself with foreign capital, because- foreign capita? is necessary, but foreign capital attracted, as it might be attracted, by provisions for foreiigu management under Imperial control and Imperial guarantee. Failing such methods^, however, the Association ventures to suggest that Parliament might -be invited; to protect British interests by a British guarantee. The proposition is based, of course, on the assumption that England is interested in maintaining the Yang-tsze region ihtact^ and that the control of its approaches is a matter of Imperial concern. . It is based on. the further assumption that the Eusso-Chinese Bank is a Eussian State bank, and that an enterprise executed by a State bank has apolitical aim. Commercial' enterprise may be left to com])ete with commercial enterprise ; private capital may be left to compete with private capital, but the operations of a great State bank cannot be rivalled by private finance either in regard to promptitude or daring; State Finance. ^-^t&te finance must be opposed by State finance, and the Association ventures to suggest that a great trunk line leading from North China into the heart of the 'Yang-tsze Valley is an enterprise too pregnant with political importance , to be disregarded. The contract with Belgium appears to be scarcely less transparent than the alleged transfer of the Chengting-Taiyuen Concession to France. The real control rests, in each case, with the predominant partner in the alliance, which seems to hold China in its grip. It maybe contrary to British precedent for Her. Majesty's Government to finance a railway on foreign soil ; but the circumstances are novel, and; it is believed that a proposal to guarantee the cost of the Peking-Hankow line would be approved as readiliy as the proposal' to guarantee a Chinese loan. The cost has been estimated roughly at 5,000,000/. Interest on that sum at 2^ per cent, would be 125,000/. a-year. Russia and Manchuria. — It is felt that Eussia's declaration of interest in Manchuria thinlyveils practical annexation, and that she is extending her influence over North China as rapidly as she was extending jit over Northern Manchuria- twelve months ago. The declaration in Article VI of the late Eusso-Chinese Convention that Port Arthur would be reserved, for Eussian and Chinese ships is inconsistent with Article LIII of the Treaty of Tien-tsin ; and a recent declaration that even Chinese ships will be excluded unless they are officered ' by Eussians throws aside the last pretence of disguise. Port Arthur, we have since been frankly told, is considered Eussian, and Eussian merchants will conse- quently have preferential advantages, in shipping goods thither from i a Eussian, port. The door of Port Arthur is shut in our face. The only remaining doubt is whether the postern of Talienwan will be left ajar. ^' Your Lordship will, it is trusted, pardon a digression that may explain the. distrust with which the Association would regard the construction of the Hankow line by Eusso- French finance. ' ■ Significance is attached to the promise which China has given not to alienate any portion of the Yang-tsze region, and the pretension to push forward a Fraricd- Eussian railway into rhe vital centre of the district is regarded as an intrusion that would be vehemently resented- if the case were reversed. The difficulty of persuading. .China to refuse such concessions, in the absence of a rival offer, is admitted. It is sucrgested.>that her difficulty might have been obviated by a request that the work should be°entrusted' t-b British hands. ' y JBivrmah Railways.-r^Tlie question of railway, connection. , with Burmah assumes .greater importance in view of recenti events. A maritime nation may prefer water tolanfl carriage, especially where a splendid waterway is the alternative to a rugcred and difficult railway route. 143 • ■:■ The upper readies of the Yaug-tsze are still ilnsurveyed',; but it may be taken for- granted that steam transport,, of some kind will be employed' Upon them, under the^ provisions, of. the 'recent promise that all Chinese water-Rrays shall be thrown' open t(^ steam. There will be a limit, however, where these cease to be navigable, and when considerations of accessibility and- distance will turnthe balance in favour of railway com- munication with Bprmah. If these reflections seem premature, the Association ventares to point to the rapidity of recent developments as a reason why no time Should be lost ' in exploring the inter- vening region an^ trying to discover feasible lines of approach. It cannot be expected that the exploration required should be carried out by private, enterprise, yet it is of great importance to British interests- at large. It must,- of course, be conducted by competent engineers, whose first duty would be to ascertain the feasibility of extending into South- west China -the r.ailway now in cource of construction from Mandalay to the Kunlong ferry. ■ The work is onewhich the Government may, in the opinion of 'the Association, be fittingly requested to undertake.- It would not be costly, but it would take' time, and no time should therefore be lost. Wusung.^—T^lTnm^ from the head-waters to the estuary of the Great Eiver, the ■Association notes with gratification that Wusung is added to the list of opep ports.' It is hoped that prompt steps will be taken to delimit a British Concession. Much land at Wusung, comprising some of the best water frontage, is owned by British subjects ; and these would feel justly aggrieved if their foresight were defeated at the last moment by the anticipatory action of rival Powers. -Hankow afibrds a present illustration of the degree of consideration they might expect in such an event. River Conservancy. — The prospect that wharves and jetties will shortly be coii- structed to accommodate the traffic that may be anticipated when railway communication with Shanghae is completed adds force ;to the arguments that were addressed to your Lordship in paragraph 35 of the Association's letter of November 1896 : in favour of the creation of a Conservancy Board.* The continued neglect to deal with the Wusung ► Bar may be explained by willingness to await the result of the survey which has been in progress ; but it is urgent that an authority should be set up to prevent reckless construction of jetties, which has done irremediable harm at Shanghae, and might quickly affect the already narrow channel across the Wusung Bar. Nanning. — The Concession recently exacted, by France, of the right to make a railway from Pakhoi to Nanning adds cogency to the appeals which have been addressed to your Lordship and your Lordship's (jredecessors in favour of opening Nanning as a Treaty port. Holding the opinion that these several railways are so many political •stakes driven into regions which an endeavour will be made one day to encircle by, a cordon, the Association has noted with grave regret the admission of French interest in a province which constitutes the Hinterland of Hong Kong. The present trade of Pakhoi is with Hong Kong.- It is apprehended that, in some- way not yet perhaps clearly apparent, France will try to stem and divert that natural course. The opening of Nanning as a Treaty port would go far to secure for Hong Kong the equal opportunity which is -all -that it desirqs. The fact is not, overlooked that the^ opening of internal water-ways to British steamers necessarily comprises right of access to Nanning; ,but stress is laid on the right of residence, and on the valuable help in combatting barrier taxation that is afforded by Ihe presence at a terminus of a Consular and Customs staff. The information at the disposal of the Association tends to confirm that impression ; and the Association ventures to urge, again, that Nanning should be opened as a Treaty port before it incurs the fate of Talienwan. Transit Passes. — The opening of Wuchow has helped powerfully, as the Association anticipated, to secure recognition of transit passes so far. But a letter addressed lately by Her Majesty's Consul at Canton to the Hong Kong; Chamber of Commerce confirms ,the appreliension expressed in the Association's letter to theForeigii Office dated the 2,9th April, 1897, that the provincial authorities would endeavour to defeat transit passes by imposing, under the name of " destination tax," the li-kin they are obliged to forego en Toute.f The probability was foreseen that. the. officials would -" accept the situation and reduce barrier taxation on all goods affected to a common level." But the right of terminal taxation, alleged in the Governor's Proclamation, " would really permit., tkern." (it was pointed out, "to collect, under, the name of 'destination dues,' an amount calculated to reimburse them for the levies abandoned en route." Mr. Brenan's letter -* Copy appended. t Vide extract from Mr. Bourne's Report, appended. 144 (whicli is appended for facility of reference) shows tliat this is exactly what is being done. It is of common knowledge that fiscal irregularities flonrish in the Two Kwang more vigorously than in any oiher portion of the Empire. Excessive taxation along the channel of the West Kiver is alleged to be the chief reason why goods destined for Nanning are shipped first from Hong Kong to Pakhoi, and carried thence overland to the upper waters for reshipment to Xauuing. The opening of Treaty ports is a powerful agent in combatting these irregularities. Foreign Collector ates. — The time may not be ripe for extending to the Two Kwaug^ the experiment which Sir Eobert Hart is inaugurating in the Yang-tsze Valley. The ground may be usefully prepared, perhaps, by continuing the contest on the present lines. But the pertinacity displayed by the Kwang Mandarins will lend additional interest tO' that important measure of reform. Much obstruction will doubtless be offered by the numerous petty officials and underhijgs who have been accustomed to batten on li-kin stations, and whose source of emolument will be stopped by the transfer of the collection to foreign control. The experiment may not be unattended with danger, for the ramifications of the present system extend deep and far, and the controlling power of the Executive has been weakened by recent shocks to its prestige. But the risk must be encountered ; for a pass has been reached when the Chinese Government must adapt itself to modern surroundings or collapse, and the requirements of modern administration cannot be met by a mediasval system of finance. Signs are not wanting that the people approve the change. They have been patient, like an overworked horse, but they are alive to the prospect of relief, and it will be for their benefit, as well as for that of the Empire, if the system which has- just been inaugurated can be gradually extended to other regions, and to other sources of revenue than those with which it is now commissioned to deal. I have, &c. (Signed) E. S. GUNDEY, Bonorary Secretary. Inclosure 1 in No, 214. Extract from Mr. Bournes Report on the Trade of Central and Southern China. (No. 458 of 1898.) G3. SINCE my visit to this place in 1885, the import trade in foreign goods has almost entirely shifted from the West Eiver route bj' way of Po-se T'ing (latitude 23° 45', longitude 105° 56') to the Tonquin route by way of the Eed Eiver and Meng-tzu. This revolution, great indeed if the conservative habits of the Chinese are remembered, is entirely due to the energy of the French in vigorously enforcing on the Chinese Govern- ment their right to transit passes to cover goods from Meng-tzu to Yunnan Fu. The result is that if our goods are cheaper here than they were, and that Yunnan Fu is well supplied with foreign goods of all sorts, at least, those light enough in weight to bear caravan transit. Inclosure 2 in No. 214. Extract from Letter addressed by the China Association to the Foreign Office, November 2. 1896. 35. AETICLE XXIS of the Treaty of Tien-tsin provides for the payment of tonnage dues ; and clause X of the appended Eules empowers the Customs service to- control " the duties of harbour-master, also the distribution of lights, buoys, beacons, and the like, the maintenance of which shall be provided for out of the tonnage dues." Dredging and other operations necessary to conserve and improve the channels of the rivers giving access to Treaty ports are also presumably implied. Great inconvenience and expense have resulted from the neglect of these duties ; notoriously in the case of the Wusung Bar, at the entrance of the river leading to Shanghae, and of the Peiho, which is actually closed to navigation above Tang-ku. A breach in the embankment of that river, which occurred months ago, has been left unrepaired, with the results that the water is pouring out on the plain, the channel is silting up, and that not only can steamers no longer reach Tien-tsin, but that there is a risk of the native carso-boats which are 145 employed ap lighters being stopped. The peculiar character of a fiscal system which permits residue to be treated as personal profit, and leads, therefore, to outlay being regarded as personal disbursement is, no doubt, measurably responsible for this neglect of necessary public works. There is, at any rate, no machinery competent to deal promptly with such matters. It is suggested that provision be made for'the formation of Conservancy Boards, on which the local Chinese authority, the Customs, and the Chamber of Commerce should be represented. Inclosure 3 in No. 214. Consul Brenan to Hong Kong General Chamber of Commerce. Sir, Canton, April I'd, nm. IN reply to your letter of the 11th instant, I beg to state that I am not aware that any change is about to be made in the mode of collecting li-hin in this province ; that is, any change that will substitute regularity and uniformity for the present confusion and uncertainty. The li-hin authorities are trying to make their operations less open to objection by changing the name of the tax ; they believe that foreign Powers will say nothing against a destination tax (tso-li), so that what was formerly called li-kin is now called tso-li, and, as much as is practicable, it is being collected at destination. The provincial officials now believe that they have discovered a way of turning our flank and neutralizing the, to them, evil effects of transit passes. If they have their way, the permission to sell transit-pass goods en route will not be of as much value as I hoped. In communicating to pae this modification of the transit-pass rule, the Viceroy laid down that no matter whether the merchant carried the goods to their original destination, or sold them en route, it was encumbent on the Chinese purchaser to pay tso-li as soon as he obtained possession of them. I am, &c. (Signed) BYEON BEENAN. Inclosure 4 in No. 214. Hong Kong General Chamber of Commerce to Consul Brenan. Sir, Rong Kong, April 27 , 1898. I HAVE the honour to thank you for your interesting despatch of the 19th instant, from which my Committee learn with regret that the inland taxation on foreign imports continues to be shrouded by irregularities and confusion, and for the improvement of which you seem unable to hold out any present prospect. This Chamber has been led to hope, from the apparent readiness with which it was promised, you should be supplied with a list of the tariffs at the different destinations, that some definite information would be vouchsafed with regard to the actual amount of taxation foreign goods incurred before they reached the hand of the consumer ; but, when the manner of collection of the taxes is considered, this seems as far from realization as ever. My Committee are strongly of opinion that no stone should be left unturned to compass this necessary end, and are therefore on the point of again addressing Her Majesty's Minister on this subject, bespeaking his continued efforts to enforce on the Chinese Government some scheme whereby consistent taxation can be guaranteed, and the present condition of uncertainty finally terminated. I have, &c. (Signed) E. M. GEAY, Chairman. No. 215. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, July 9, 1898. IS it true, as stated by Johnson, Stokes, and master of " bhanghae " in a telegram: to a firm here, that Sheng informs them that he cannot negotiate for the Hankow- Canton line as it has been granted in a prior contract, presumably to the Belgian^ Syndicate, the firm here say ? [253]' U 14G No. 216. Sir C. MacDonnld to the Marquess of Salisbury. — [Received July 11.) My Lord, Peking, May 16, 1898. I HAVE the honour to report that, taking advantage of the presence at Chefoo of Admiral Sir Edward Seymour, I proceeded to that port with the view of conferring with him personally on several points connected with the important negotiations now proceeding with the Chinese Government respecting the cession on lease of certain portions of the Kowloon and Shantung promontories to the English Government. I was accompanied by Mr. Cockburn, Chinese Secretary of this Legation. I left Peking on the 3rd May, staying one day at Tien-tsin, where I met, by appointment, his- Excellency Wang Wen-shao, Viceroy of Chihli Province, with whom I discussed and settled, together with Mr. Consul Scott, several outstanding local questions, -On the 5th instant I left Taku in Her Majesty's ship "Alacrity," which Admiral Seymour had kindly sent for me, arriving at Chefoo on the 6th. During ray five days' stay at Chefoo I had many opportunities of discussing with Sir Edward Seymour the details of the coming, occupation of Wei-hai Wei, as also the Admiralty • requirements at Kowloon, and we were able to come to a thorough under- standing on these points. I left Chefoo on the morning of the 12th, reaching Peking on the 14th instant. During my absence Mr. Bax-Ironside acted as Charge d'Affaires. , I have, &c. (Signed) CLAUDE M. MacDONALD. No. 217. Sir C. iMacDonald to the Marquess of Salisbury. — [Received July 11.) My Lord, Peking, May 21, 1898. I HAVE the honour to inclose herewith copy of a despatch from Her Majesty's Consul at Canton, giving particulars of the murder of a French missionary in Kwangsi, as reported in my telegram of 3rd May. I am very reliably informed that the demands made at an interview with the Yamen yesterday by M. Pichon, the French Minister, in connection with this case were : — 1. A Concession to construct a railway from Pakhoi to Nanning ; 2. Construction of a chapel at Pakhoi ; 3. A pecuniary indemnity of 100,000 fr. ; and 4. The responsible officials to be punished. In response to these demands, the Yamen suggested that the Eailway Concession should be granted in a document by itself, apart from the granting of the other demandSj and that the chapel should be built at Yuugan-chou, the scene of the murder, instead of at Pakhoi, and the French Minister undertook to refer these modifications to his Govern- ment for their favourable consideration. I had the honour to report the above to your Lordship in my telegram of this day's date. I have, &c. (Signed) CLAUDE M. MacDONALD. In closure in No. 217. Co7wul Brenan to Sir C. MacDonald. Sii"' ^ . Til, Canton, May 4, 1898. ON the 2nd instant I had the honour to send you a telegram stating that a French missionary had been murdered in the Province of Kwangsi. I have since learnt the following particulars : The occurrence happened about .a fortnight ago at Yungan-chou, in the P'ing-lo Prefecture. While walking through the streets the missionary noticed a placard directed against the Christian religion. Having discovered the author of the placard, the missionary, 147 with two converts, proceeded to his house and attempted to arrest him. Out of this a disturbance arose in which the passers-by took part, and in, the end the missionary and the two converts lost their lives. I have, &c. (Signed) BYEON BEENAN. No. 218. Sir C. MacDonald to the Marquess of Salisbury. — {Received July 11.) My Lord, Peking, May 23, 1898. WITH reference to my despatch of the 11th ultimo, I have the honour to transmit herewith copy of an extract from an Intelligence Eeport which I have received from Her Majesty's Consul at Chungking, shewing the probable increase to the revenue of China which would accrue from a proper and honest management of. the li-kin and salt taxation in the Province of Sstich'uan. Sstich'uan is not one of the districts in which the li-kin and salt taxes have been set apart for foreign collection by the terms of the recent Anglo-German Loan. I have, &c. (Signed) CLAUDE M. MacDONALD. Inclosure in ISTo. 218. Extract from Chungking Intelligence Report for the Quarter ending April 30, 1898. Native Li-kin. — The handing over of the down-river li-kin and salt tax to the Customs has been much discussed here. It is much to be desired that it should be extended to this province, where li-kin requires drastic reforms. The Kuri Fu li-kin yields about 200,000 taels a-year to the Government, and it is said about three times that sum to the private pockets of the officials. The Tsti Lin Ching salt gives a revenue of 2,500,000 taels, which could easily be quadrupled by good management and the introduction of simple machinery. (Signed) GEORGE J. L. LITTON, Chungking, April 30, 1898. Acting Consul. No. 219. Sir C. MacDonald to the Marquess of Salisbury. — {Received July 11.) My Lord, Peking, May 23, 1898. I HAVE the honour to inclose herewith to your Lordship copy of extracts from an Intelligence Eeport which I have received from Her Majesty's Acting Consul at Chin- kiang reporting a phenomenal decrease in the transit-pass trade at that port, and also giving further particulars of the new line of Japanese steamers on the Yang-tsze. I have, &c. (Signed) CLA.UDE M. MacDONALD. Inclosure in No. 219. Extracts from Chinkiang Intelligence Report for the Quarter ending March 31, 1898. Decrease of Transit Trade. — The transit trade during this quarter decreased in a phenomenal manner. This is due in a measure to the China New Year holidays, but more especially to the general excitement and spirit of unrest at present prevailing. The total number of transit passes for the conveyance of goods from the interior was only 129, as compared with 1,600 .applied, iar at this Consulate during the previous quarter. I am informed that trade at Chinkiang has never before been at such a low ebb. [253] U 2 148 New Line of Steam-ships. — Early in January a new line of steamers was started on the river under the Japanese flag, and owned by the Osaka Mercantile Steam-ship Com- pany. Only two small coast steamers are running at present, but I hear their place will be taken by ships which are being specially built at Osaka for the navigation of the river. This line is worked by the Nippon Yusen Kaisha (Japan Mail), and the agency here is held by a British firm. (Signed) HUBEET L. HTGGS, Chinkiang, April 30, 1898. Acting Consul. No. 220. Sir C. MacDonald to the Marquess of Salisbury. — (Received July 11.) My Lord, Peking, May 24, 1898. WITH reference to ray despatch of the 18th March, I have the honour to inclose herewith to your Lordship copy of a despatch which I have received from Her Majesty's Consul at Canton, mentioning the excellent effect on the Canton officials of the abolition of the kerosene tax-farming Syndicate. I have, &c. (Signed) CLAUDE M. MacDONALD. Inclosure in No, 220. Consul Brenan to Sir C. MacDonald. Sir, Canton, April 22, 1898. I HAVE the honour to report that the kerosene tax farmer has now paid me the value of the oil seized by him while it was still the property of Messrs. Shewan, Tomes, and Co., and that I have consequently informed the Viceroy that this case is settled. Some weeks ago the Viceroy issued a Notice that by order of the Tsung-li Yam^n, the tax-farming Syndicate was forthwith abolished, the reason given being that the Syndicate's proceedings gave rise to so many thorny questions. Severe as was the penalty for the Syndicate's repeated attempts to intimidate the trade by high-handed action, I felt that Messrs. Sheman, Tomes, and Co., were still entitled to recover the value of their stolen property, and after some delay the Syndicate reluctantly complied with my demand. Since the abolition of the kerosene tax farm the li-kin on kerosene, formerly 30 cents a-case, has now been reduced to 15 cents ; and this payment franks it throughout the province. In Canton the tax is levied by the li-kin office ; in outlyinjy districts the machinery for collecting it has not yet been established, but as soon as it is, I fear the same question will again present itself as to whether transit-pass oil is or is not liable to the terminal 15 cents a-case. The farming Syndicate when starting had deposited 400,000 taels into the Pro- vincial Treasury as payment in advance. When the Syndicate was suppressed, half this sum still stood to the credit of the Syndicate, and an application was made for its return. As a rule, such deposits are looked upon as windfalls for the Treasury, but on this occa- sion, probably because influential officials were interested in the concern, the Viceroy agreed that the Syndicate should be paid off out of the receipts from the new kerosene tax. The effect on the Canton officials has been excellent. They now -realise that illegal exactions will not be tolerated, and that when a dispute arises, it is better policy to settle with the Consul locally than to let the matter be referred to Pekin" I have, &c. (Signed) BYKON BEENAN. 149 No. 221. Sir C. MacDonald to the Marquess of Salisbury. — [Received July 11.) My Lord, Peking, May 24, 1898. I HAYE the honour to inclose herewith to your Lordship copy of a despatch, and its inclosures, which I have received from Her Majesty's Consul at Canton with regard to the new Eules for transit-pass trade which have been drawn up by the Chinese Government. I am approving Mr. Brenan's language in his despatch to the Viceroy. I have, &c. (Signed) "CLAUDE M. MacDONALD. Inclosure 1 in No. 221. Consul Brenan to Sir C. MacDonald. Sir, Canton, April 28, 1898. I HAVE the honour to inclose copy of a despatch from the Viceroy, giving me notice of the new Eules by which foreign goods under transit-pass may be sold en route on certain conditions. The gloss put upon the Eule hj the Viceroy would seem to indicate that such goods will in future be liable to a li-hin tax, from which they have hitherto been exempt. His Excellency professes to understand that, once arrived at their destination, the goods become at once liable to li-hin, and the words " whether they are taken further or not " are obviously meant to meet the German contention that not until the goods are taken beyond the destination mentioned in the past are they liable to further taxation. The Viceroy's remarks on li-hin on kerosene seem to me quite irrelevant. He implies that, as li-hin is now the same as full and half duty, there ought to be no complaining on the part of the foreign merchant. Li-kin, of course, is not a substitution of, but an addition to, the tariff duty, and the Viceroy's argument is meaningless. From other sources I understand that the intention of the Provincial Government is to so reduce the li-kin and import duty by junk that it will not pay to import by foreign vessel, and thus to divert the duty and taxes from the Imperial to the local Exchequer. I shall not engage in a barren discussion over hypothetical cases with the Viceroy, but shall wait until by their action the li-kin officials have committed a breach of the Treaty. Meantime, in my reply to the Viceroy, I have reserved whatever rights our merchants enjoyed before the new Eule came into force. I have, &c. (Signed) BYEON BEENAN. Inclosure 2 in No. 221. Viceroy I'an Chung-lin to Consul Brenan. (Translation.) ;Sir, Canton, April 2, 1898. I HAVE the honour to inform you that I have received a despatch from the Tsung-li Yam^n to the effect that the Inspector-General of Customs, after consultation with the Yamen, has formulated the following Eules with reference to transit-pass goods : — 1. Transit-pass goods may be sold en route, but the pass must be handed to the •officials at the place where goods are sold for examination and sealing. 2. When transit-pass goods have arrived at the destination named on the pass, the pass should immediately be cancelled, upon which the transit-pass goods are in exactly the same position as goods not covered by a pass. The effect of this latter Eule, I would point out, is that transit-pass goods, after their arrival at the destination named on the pass, whether they are taken further or not, must pay li-hin. 150 Eeceiitly foreign mercliants have frequently omitted to return the transit passes taken out by them to be cancelled, and I have accordingly the honour to request you to instruct them hereafter to give up their passes immediately the goods have arrived at their destination. Should there be no li-kin office, nor any local official Tam^n at the place in question, the pass should be sent to you to be forwarded to the proper authorities so that it migjit be cancelled. !No inquiries will be made as to former breaches of this Eule by foreign merchants. If, however, these occur again, the Commissioner of Customs will be instructed not to issue passes in the future to firms that do not surrender them in accordance with the above Eule. As regards the kerosene li-kin, this has now been reduced by one-half, which makes it much about the same as the full and half duty. This reduction has been made on account of my desire not to treat Chinese and foreign merchants difierentially. Formerly when foreign merchants, having paid the import and transit duty, sold kerosene to Chinese merchants, a further tax of 30 cents a-case was payable. This seemed very heavy, and looked like differential treatment, but now the tax for natives and foreigners alike has been reduced. Hereafter Chinese merchants must pay this tso-li tax; so also oil conveyed by foreign merchants under transit-pass, no matter whether it be sold en route or at destination, must, in accordance with the Yamen's despatch, pay the destination tax when it reaches the hands of the Chinese dealer, and the foreign merchant must not attempt to screen him. In communicating this information to you, I would ask you to instruct the merchants to act in accordance with the Eules here laid down. In closure 3 in No. 221. Consul Brenan to Viceroy I^an Chung-lin. Your Excellency, Canton, April 19, 1898. , I HAVE the honour to acknowledge the receipt of your Excellency's despatch of the 2nd instant, informing me that it had been decided by "the Tsung-li Yam§n that merchandize proceeding inland under transit-pass might in future be sold en route before reaching the destination mentioned in the pass. Your Excellency adds that once the pass has been surrendered the goods are liable to li-lcin taxation like non-transit-pass goods. In acknowledging your Excellency's despatch, in order to prevent misconception, I think it well to state that I cannot admit that the change in the transit-pass Eules curtails the freedom from taxation which certificated goods enjoy under Treaty. I have, &c. (Signed) BYEON BEENAN. No. 222. Sir C. MacDonald to the Marquess of Salisbury. — [Received July 11.) My Lord, Peking, May 27, 1898. IT is possible that before this despatch reaches your Lordship's hands the text of the German Convention with China for the lease of Kiao-chau will have been published. I have the honour to inclose a precis. AH the important provisions contained in it have already received your Lordship's attention, and I do not, therefore, make any further comment on it. I have, &c. (Signed) CLAUDE M. MacDONALD. 151 Inclosure in No. 223. Precis of the German Agreement with China with regard to Kiao-chau. (From the Chinese Text.) Preamble. THE preamble ' states that the Ts'ao chow missionary case has been settled, and that China, being willing to make a return for the aid previously given her by Germany, the following Agreement has been made, in the hope of further cementing the friendship of the two countries, arid fostering comriiefcial relations : — Section I. Article 1. The Emperor of China, desiring to strengthen the friendship of the two countries, and to increase their military power, agrees that within 100 Chinese li (about 30 miles) of Kiao-chau Bay, German troops shall have full liberty of movement, but the sovereign rights of China remain. If China desires to take any administrative measures she must first come to an arrangement with Germany. .There is to .be no obstruction by China of German improvements of waterways, &c., and the stationing of troops, &c., by China within the territory named requires a previous agreement with Germany. Art. 2. As the Emperor of Germany desires that Germany, " like other Powers," should have a coaling and docking dep6t on the Chinese coast, the Emperor of .China has already agreed to lease to Germany the territory north and south of Kiao-chau Bay for a term, in the first instance, of ninety-nine years. Germany may erect forts, &c., for the protection of the place. Art. 3. The administration of the leased territory during the term of the lease is left entirely to Germany. The boundaries are then described. (These are difiicult to follow in the Chinese text,- the names of places being difierent from those on foreign maps. The area has, however, been officially made known at Berlin.) The exact boundaries are to be settled after joint survey. Chinese men-of-war and merchant-vessels and vessels belonging to nations in amity with Germany will receive from her equally friendly treatment at Kiao-chau. The waters of the -bay being placed entirely under German control, Germany may at any time make Eegulations for the vessels of other nations, and such Eegulations must be equally observed b)'- Chinese vessels. There will be no other difficulties made. Art. 4. Germany to buoy the approaches. Dues to meet the cost of harbour improvements will be payable by the vessels of all nations, including China. But Chinese vessels will be liable to no other dues. Art. 5-. If before the term of this lease expires Germany' desires to restore Kiao- chau Bay to China, the latter will repay the expenses incurred there, and will grant a more suitable place to Germany. The latter agrees never to lease to another Power the territory leased to her by China. Chinese within the leased territory may remain, provided they show themselves law-abiding, and will receive German protection. Land required by Germany is to be bought from the proprietor. OiTenders against Chinese law escaping into the territory leased to Germany are to be given up, to -the Chinese officials on written application, but the latter are not to eflect arrests in tliat territory themselves. As to Customs stations, of which some are stated to exist beyond the 100 li radius, it is provided that- arrangements iand Eegulations are to be subsequently drawn up. -•''■_ *' , (There seems, to 'be a- hiatus in the Chinese text which runs, after referrince to the existing stations outside the 100 li radius : " But within the 100 li radius it has been agreed ....," and there breaks off. Probably, " that no Chinese Customs stations shall be permitted," is left out.) 152 Section II. — Railways and Mines. Article 1. China agrees to permit Germany to construct two railway lines in the Province of Shantung : one from Kiao-chau, past Wei Hsien, Ch'ing Chau, Po- shan, Tzil-ch'uan, and Tsou-p'ing to Chi-nan and the Shantung frontier; the other from Kiao-chau to I-chou, and thence past Lai-wu Hsien to Chi-nan Fu. The railway from Chi-nan Fu to the frontier of Shantung is not to be begun until the line to Chi-nan Fu has been built, in order that arrangements may be made for a junction with the main line constructed by China. The route of the line is to be left for future arrangement. Art. 2. For the construction of the above-mentioned lines a German-Chinese Company is to be formed (the Deutsche-Chinesische GeseUschaft), in which German and Chinese merchants may take shares. Art. 3. Arrangements for carrying out the above axe to be made by the two countries as soon as possible. The German-Chinese Company is to receive favourable treatment from China, and to enjoy all the other privileges granted to Chinese-European (or foreign) commercial Companies established elsewhere in China. This Article is conceived only in the interests of commerce ; it has no other design, and the railways mentioned in no way constitute an annexation of Shantung territory. Art. 4. Within 30 li (10 miles) of the above railways, as, for instance, in Wei Hsien and Po-shan Hsien, on the northern line from Kiao-chau to Chi-nan Fu, and in I-chou Fu and Lai-wu Hsien, on the southern line, from Kiao-chau, vifi, I-chou to Chi-nan Fu, Germany is permitted to excavate coal, &c. The necessary works may be undertaken by German and Chinese merchants combining their capital. Mining Eegulations will be subsequently drawn up. The German merchants and workmen shall, as in the case of railways, receive favourable treatment from China and the same privileges as other Companies. This Article is also conceived only in the interests of trade, and has no other design. Section III. If within the Province of Shantung any matters are undertaken (N.B. the wording is very wide) for which foreign capital or assistance is invited, China agrees that the German merchants concerned shall first be asked ^whether they wish to undertake the works and provide the materials. If they do, China may make any arrangement she pleases. The remainder of the Convention provides for ratification and exchange of ratifications. No. 223. Sir C. MacDonald to the Marquess of Salisbury. — {Received July 11.) % Lord, Peking, May 27, 189S. ON the 11th mstant I had the honour to report to your Lordship by telegraph an outbreak of rioting at Shashih in the Yang-tsze Valley, and I now have the honour to inclose copy of a despatch which I have received from Her Majesty's Consul at Hankow, reporting the action taken locally for its suppression. In reply to representations, the Tsung-li Yam^n have informed me that they were telegraphing to the ofiicials concerned to afford every protection to foreigners, and that t'hey had already telegraphed to that efiect on hearing of the outbreak. I have no news from Hankow concerning the riot later than the 15th instant which I telegraphed to your Lordship in my telegram of the 16th instant. ' I have, &C.5 (Sigded) CLAUDE M. MacDONALD. 153 luclosure in No. 223. Consul Warren to Sir C. MacDonald. Sir, Hankow, May 13, 1898. I TELEGEAPHED to you yesterday giving further particulars of the riot at Shashih, which took place about 6 p.m. on Monday, 'the 9th instant. I have now the honour to report proceedings up to the present date. Immediately on the receipt of the telegrams from Shashih, on the night of the 9th, reporting the outbreak, I telegraphed to the Acting Viceroy, I'an Chi-hsun, asking him to give immediate orders for the repression of the riots, the protection of foreigners and the punishment of the rioters. In response to my request, his Excellency at once telegraphed to Shashih, and on the following day dispatched one of his steamers to the spot, taking up officers specially deputed to deal" with the case, in conjunction with the Ching-chou Taotai. On the evening of the 10th telegrams were received from Shashih reporting the total destruction of all foreign propertj^, with the exception of the Consulate junk, the house occupied by the agents of Messrs. Butterfield and Swire, and the property of the Swedish Mission. It was stated that no lives had been lost, and that the foreigners were coming down to Hankow by boat. On the same day Captain Chadwick, commanding Her Majesty's ship " Esk," received a telegram from the Senior Kaval Officer at Shanghae instructing him to proceed with Mr. Clennell to Shashih as soon as that gentleman arrived from Shanghae. Mr. Clennell arrived here on the morning of the 11th, and I advised him to await the arrival here of the fugitives, who were expected to-day. The steam-ship "Kuling" arrived from up-river this morning, bringing down the ladies and children from Shashih ; she reports all quiet, and the foreigners in safety under the protection of the Chinese officials. I inclose a copy and translation of a despatch dated the 11th May,* which I have received from the Taotai, setting forth the causes of the riot, and the measures taken to repress it. The statement as to the immediate cause of the riot is, I believe, correct ; it certainly agrees with what I have learnt from other sources ; but it is beyond doubt that a strong feeling has existed for some time, and the Hunanese were only waiting a pretext to create a disturbance. The same feeling exists generallj^ throughout these districts, and is increasing in intensity ; and it is highly advisable that the naval strength in the river should be reinforced. Last night I received a telegram from the Senior Naval Officer at Shanghae, informing me that Her Majesty's ship " Phoenix " had been ordered here from Chefoo. The " Phcenix " will arrive about the ] 8th instant, and, in view of the importance of British interests in Hankow, and the very uneasy feeling at present prevailing, I have requested Captain Chadwick to remain here until the arrival of the " Phcenix." All foreigners are reported to have left or to be leaving Shashih, and a delay of a few days in Mr. Clennell's return to that place seems to be of little importance as compared with the effectual safeguarding of our interests here. I have to-day tele- graphed to you to this effect. ' I have, &c. (Signed) PELHAM L. WAREEN. No. 224. Sir G. MacDonald to the Jfarquess o/ Salisbury. — {Received Jidy 11.) My Lord, Peking, May 27, 1898. IN continuation of my despatch of ihe loth April, I have the honour to report that Mr. Luzzatti, agent of the Peking Syndicate, after much negotiation with the Board of Commerce of Shansi, and certain members of the Tsung-li Yam^n, has drawn up a set of regulations which I am given to understand embody the modifications in the original contract alluded to in ray despatch above quoted, * Not printed. • [253] 2" lo4 These refjulalions were signed ou the 21st instant b}' Mr. Luzzatti and the repre- sentatives of The Shansi Board of Commerce, in presence of the members of the Tsung-li Yamen, who subsequently also affixed their seal. I inclose herewith a copy of the regulations : they were drawn up by Mr. Luzzatti, agent of the Syndicate, who alone is responsible for them : the good offices of the Marquis Salvage, my Italian colleague, and myself only being called on (except in the instances reported in my previous despatches) when the Tsung-li Yam^n showed signs of a flacfgitig interest in the proceedings. I do not venture to criticise the Eegulations, buttlLere is no doubt that the concession, if properly worked, will prove of immense value. I have, &c., ' (Signed) CLAUDE M. MacDONALD. Inclosure in No. 224. Hegulatioxs agreed upon by the Shansi Bureau of Trade and the Peking Syndicate for mining purposes, iron works and transporting mine products of all kinds in the Province of Shansi. 1. TEE Governor of Shansi having sanctioned the request of the Shansi Bureau of Trade for the sole right to open and work coal and iron mines throughout the districts of Yti-Hslen. and Ping-ting-Chou, and the Prefectures of Lu-an-Fa, Tse-chou-Fu, and Ping-yang-Fu, and also petroleum wherever found, the several concessions granted are now transferred for operation to the Pekin Syndicate for the period of sixty years. Mining engineers shall first be sent to find in what township and hills the mines are situated and what they produce, and make maps thereof with explanations inserted, which shall be submitted to the Governor of Shansi that he may see that the proposed works are not injurious to the place ; and he shall report thereon to the Tsung-li Yamen for record and at the same time issue a permit for the mines to be opened without the least delay. If mining lands belong to the people, the lease or purchase shall be made by arrangement with the owners for a reasonable price ; if it be Government land, the tax to be paid on it shall be double the ordinary land tax for that locality. 2. The Governor of Shansi has authorised the Bureau of Trade to negotiate a foreign loan not to exceed 10,000,000 taels ; should the mining engineers employed find this snm insufficient, the Bureau may borrow more only of the Pekin Syndicate. 3. All matters of administration, exploitation, employees and finances shall be controlled by the Board of Directors of the Pekin Syndicate, and the Chief of the Shansi Bureau of Trade shall co-operate. 4. Each mine must have one foreign and one Chinese manager, the foreigner to control the works, the Chinese to attend to all matters between natives and foreigners, xiccounts will be kept by the foreign system; receipts and payments of money to be . controlled by the foreign manager and audited by the Chinese manager. At all mines Chinese should be employed as much as possible. All salaries to be' paid by the Syndicate. 5. When prospecting for mines, if there be any boring or sinking of pits to examine mineral deposits, an arrangement should first be made with the landowner to com- pensate him for any crops injured. If a mine be opened on private land an arrangement must be made with co-operation of the local officials to lease or buy the land for a reasonable price fair to both parties as a measure of justice. Wherever land leased or bought for mines contains cemeteries or mortuary shrines some plan must be devised to avoid them ; there must be no excavation. After mines are opened, should there be damage to life or buildings from subsidence in the mines, the Syndicate shall make charitable compensation. G. Wherever mines are worked there shall be paid yearly to the Chinese Government as producer's tax [lo-ti-shui) 5 per cent, on the cost of extracting the output of the mines. From the profits shown by the yearly accounts there shall first be paid 6 per cent, interest on the capital employed, and next 10 per cent, shall be set aside as a sinking fund for yearly repayment of capital and consequent reduction of interest, payments to sinking fund ceasing when the invested capital is wholly repaid ; and from the remaining net profit 25''per cent, shall be paid to the Chinese Government, and the remainder shall go to the Syndicate for its own disposition. 155 In future, wherever . foreign capital is used to work coal or iron mines in Ch^na, this rule for a 5 per cent. Government tax on the output shall be enforced, so that all may . be. treated alike... This capital being money; lept by rnerchants for mining purposes, the Chinese Government will not in any way be responsible for losses incurred in the . business. I. The area of ihe mineral districts of Yii-Hsien, Pingrting-Chou, Tse-chou-Fu, Lu-aij- Eu,. is very extensive, and many mines may be worked, therein, . But the accounts and •■profits ,of each mine must be kept distinct from the. others ;. the gains of one mine should not be made to. offset the losses of another, and so cause the Government income to esuffer reduction. 8. .All machinery, piaterials, and, supplies needed for the mines shall on importation be subject to the rules in force with the Kai-ping and other mining companies and pay one full duty and a-half to the Maritime Customs, and shall be exempt from all inland li-hin taxes. The products of the mines when exported from a sea-port shall pay export duty according to the Customs tariff. 9. The Syndicate is to control the mines for sixty years, on expiration of which term all the mines of the Syndicate, whether new or old, profitable or not, shall, with all plant, materials, buildings, land, railways, bridges, and all property acquired by the capital of the mines, be handed over gratis to the Chinese Government, and in due time the Bureau shall request the Governor of Shansi to send deputies to take delivery. 10. It is important that each mine measures should be taken to prevent discord between officials and people. For this purpose, the Bureau should request the Governor ' to appoint a deputy, and the Syndicate should nominate one of the gentry, the salaries of both to be paid by the Syndicate. II. On first opening the mines foreigners must of course be employed as mining engineers and foremen, but later on the Bureau and the Syndicate should arrange to select for such positions any Chinese who may be proficient in mining, engineering, or managing work. For subordinate positions of little responsibility, Chinese should be entirely employed, and Shansi natives as much as possible so as to encourage improve- ment. 12. The miners employed should be chiefly Shansi men, and should be paid fair wages. After the mines are opened, the Bureau and the Syndicate should select from European and American Mining Eegulations suitable ones to apply to questions of compensation to miners for injuries while at work, to pensions for the aged after long service, the limit of daily working hours, &c., and obtain for such Regulations the approval of the Governor. 13. In opening the mines the Syndicate shall establish a school of engineering and mining in some locality convenient to the mines, and there shall be selected twenty or thirty promising youths by the local officials and gentry to study in this school under foreign instructors, and thus prepare for future employment on railways and in mines ; the expenses for this school to be met by the Syndicate. 14. The 10,000,000 silver taels to be loaned to the Bureau of Trade by the Peking Syndicate is an estimated sum. After the capital necessary for opening each, mine has been supplied by the Syndicate, the Syndicate will be authorized to print share certificates and conditions for the capital furnished, and fix the time of sale. Chinese merchants who apply for shares within the fixed time shaU. be allowed to buy of shares for sale any number they wish. 15. Chinese merchants who wish to buy shares may get them from the Bureau, who will procure them at current market rates ; or they may themselves buy or sell the shares at pleasure. If any Chinese gentry or merchants shall within the terra of 60 years acquire three- fourths of all shares of any one mine, that mine may then be redeemed from the Syndicate, and the Bureau shall report upon same, and direct that shareholder to take charge of the mine. 16. If within the area authorised for opening mines there be mines already worked by the people, such private mines shall not be appropriated ; but if a proprietor be willing to lease or sell his mine, the Bureau and the Syndicate shall offer a reasonable price for it, no compulsion shall be used. 17. Whenever it may be necessary for any mine to make roads, build bridges, open or deepen rivers or canals, or construct branch-railways to connect with main lines, or with water navigation to facilitate transport of Shansi coal, iron and all other mine products from ihe Province , the Syndicate, on reporting to the Governor of Shansi, is authorised to proceed with the works, using its own capital*without asking for Government funds. Kegulatioiis for the bi-ancli-railwavs are to be made in due time, [253] " X 2 156 With reference to the Cheng-tmg-Tai-yuan Eailway, for the construction of which the Bureau has borrowed capital from others, the Peking Syndicate, to avoid disputes, shall not construct any railway within 100 li on each side of it. Private land required for the works authorized as above shall be leased or bought according to the rules already in force with other public companies. No encroachment of private property shall be allowed, and the local authorities must be applied to for protection. 18. At the end of every year a printed account of profit and loss shall be rendered by each mine to the Bureau, and each mine shall appoint one Chinese and one foreign auditor to examine the accounts and certify that they are correct ; and a general account of profit and loss for all the mines shall be jointly prepared and submitted to the Governor, who will send copies to the Tsung-li Tamen and board of revenue for audit. Payments due to the Government shall be reported at the same time. 19. These mines being under the sovereignty of China, should China ever be at war with another country, the Syndicate will obey the orders of the Chinese Government prohibiting any aid to the enemy. 20. These Eegulations shall be made out both in Chinese and foreign text, each party to have a copy for reference. Signed in Peking on the twenty first day of May, 1898, being the second day of the 4th month of the 24th year of the Emperor Kuang Hsii. Peking Syndicate, Limited J \ ^& -' Gen. Agent of the Peking Syndicate, Limited, Signature of the Chief of the Shansi Bureau of Trade. N-B. — This contract authorized by Imperial Edict has been signed by Mr. A. Luzzatti and Mr. Tzao, Chief of the Shansi Bureau of Trade at the presence of the Ministers of the Tsung-li Yamen and at their request. No. 225. Sir C. MacDonald to the Marquess of- Salisbury. — {Received July 11.) (Extract.) _ Peling, May 27, 1898. THE inclosed draft Convention for the extension of Hong Kong territory represents the results of the negotiations with the Yam^n already reported to your Lordship by telegraph. ' _ I cannot say that I had any great difficulty in inducing the Yamen to acrree in principle to an extension of Hong Kong territory, for they recognized readily enouo^h the necessity for it. They had in contemplation, however, only such a limited extension as would enable the British authorities to fortify both sides of Hong Koi;g Harbour and to defend the hills overlooking it, and expressed their hopes that m-y demands would not go further. This was at an interview on the 5th April. I told them that nothing more would be asked than was necessary for the defence of Hong Kong, but I was unable at the moment to give them any precise details, for I did not myself know what was wanted. I had already applied to the Acting Governor of Hong Kong, and from him I received on the 13th April a chart showinc^ the present limits of British territory, the maximum extension considered desirable by the miUtary authorities, and a frontier which would be acceptable if this maximum could not be obtained. He informed me, in reply to subsequent inquiry, that a copy of this chart had been sent to the Colonial Office on the 9th November, 1894, so that I was able to refer to it in my telegrams to your Lordship. With the chart the Acting Governor enclosed a Memorandum by General Barker drawn up m 1894, and his own observations on it, and copies of letters from the Hong Kong branch of the Navy League. Jhese documents contained sundry arguments in favour of an extension of Hong Kong territory, such as the necessity for a new rifle- range andfor exercise ground for the troops, the inadequacy of cemetery accommodation J57 at Hong Kong and the like ; but in view of the fact that, as far as I could estimate, the area demanded amounted to some 200 square miles, I did not think it desirable to put forward these considerations in presenting the case to the Yamen, for they would have met me with offers to give us all territory required for the purposes named. Accordingly, in the Memorandum I presented to them I confined myself to demon- strating the strategical necessity of the line from Mirs Bay to Deep Bay, shown on the Hong Kong Chart as our frontier, and of the islands to the south and west being also placed under our jurisdiction, and I suppHed them with a tracing of the chart showing the limits required. I also represented the difficulty of China's position in case war were threatened between England and another Power, for she could neither grant nor refuse assent to the laying of mines on the Chinese side of the harbour of Hong Kong without giving offence to one side or the other. , When I called a day or two later to discuss the matter, the Ministers showed that they had been far from expecting a demand for so large an extension as that indicated. I invited them to compare it with what had been leased to Germany at Kiao-chau and to Eussia in Liaotung, a comparison I was able to make the more effectively that I had, through the kindness of Sir Edward Seymour, been supplied with maps drawn to the same scale of these different concessions. The Yamen tried to put Wei-hai Wei into the balance, but I told them that Wei-hai Wei had been leased to us as much in their interests as our own, and that we would give it up to-morrow if Eussia would leave Port Arthur. I was not, I said, respon- sible for the amount of territory asked. It had been determined by the military autho- rities at Hong Kong so long as 1894, and we should, long before this, have invited China to make over to us what was necessary for the Colony's safety had we not been afraid of setting an example to other Powers. The time was now opportune for China to make the concession to us without any risk of counter-claims. The Ministers were naturally not disposed to give way without opposition, and they met my demands by sundry counter-proposals, such as that Great Britain should have full liberty to erect fortifications on the Kowloon mainland, and station troops at any points she pleased with full freedom of movement. I answered by demonstrating the inconveniences of such an arrangement, and the only point on which I agreed to con- sider the possibility of some arrangement was the retention of Chinese jurisdiction in the city of Kowloon. On this I shall make some remarks later on. It took more than one discussion to secure the consent of the Yam^n to the lease of so great an area as that shown in the chart, and when they had accepted it, the discussion of details began and supplied material for several more interviews. Instead of describing these in detail it will, I think, be more convenient to make observations on the various points included in the inclosed draft Convention, taking them in order as they appear in it : — 1. The Preamble was accepted without objection as an adequate basis. 2. The question of the nature of our title to the extension of territory was more troublesome. I tried to obtain an absolute cession, but could not resist the force of the argument that all other nations who have obtained leases of territory would follow suit, ■ which might be inconvenient for ourselves. The principle of a lease having been admitted a term of ninety-nine years seemed sufficient. 3. The only part of the new boundary needing survey is the line connecting Mirs Bay with Deep Bay. 4. The retention of Chinese jurisdiction within Kowloon city was the point on which the Yam§n showed the greatest determination, and the concession made to them went far to reconcile them to the general demand. Apart from the fact that there were Japanese, German, and Eussian precedents for such an arrangement, the Ministers, of whom two of those chiefly concerned in the negotiations were Cantonese, sliowed con- siderable anxiety as to the effect on public opinion in the Canton Province of any sudden and conspicuous change in existing conditions. If the adminisrration of law in Kowloon city were transferred to the Hong Kong Government, the latter would, of course, be obhged to inforce a number of rules to which the population are at present not liable, and I think it probable that the Yamen was right in anticipating that this would lead to trouble. I should recommend that every effort be made by the Hong Kong authorities to work smoothly with the Chinese officials and to induce them to cordially co-operate in all matters where their assistance is needed. I do not, as I have already said, expect the Chinese jurisdiction in the city to be of long continuance, but I should be sorry, for the sake of general British interests in China, if, after the Chinese have met our 158 •wishes in so friendly a spirit, we were at once to set t6 work to obtain a further coa- cession. ' 5. The provision for free iise of the road from Kowloon city to the mainland was inserted at the Yaraen's request, though I told them that the movements of Chinese officials were in no way restricted in British Colonies. ' 6.' The reservation of the; existing landing place hear the' city was'a point on which they laid much 'stress. I accepted it With reluctance!, and it inay possibly prove incoh- venient, but it was necessary to make some concession in order to obtain our • main demand without great friction and under pressure of threats. I hope that in view of this consideration the inconvenience, if any, will be tolerated as long as possible. ' ■ 7. The ' railway clause was introduced at' a late stage in the negotiations. The Ministers said' that the Chinese Government fcontemplated building a line froni Canton to Kowloon city, and they asked for 'a promise that this should be allowed, on the ground that the line would not pay if it stopped some miles short of Kowloon. I said that very possibly we should build a line from Kowloon to the frontier which might meet the Chinese line, but in any case it was impossible to allow a line under Chinese control to run through territory under British jurisdiction. Tlie Ministers then altered their draft clause to- the form in which it now stands. 8 and 9. The clauses providing against expulsion or expropriation of the inhabitants, and for dealing with extradition cases need no comment. 10. The last clause, regarding the use of Mirs and Deep Bays by Chinese men-of- war, is one for which I am still awaiting your Lordship's sanction. As explained by telegraph the concession was necessary to make the Tamen agree to the lease to us of the whole waters of those bays. I had, as already explained, placed the whole territorial demand before them in a map several weeks before, and they were naturally reluctant to make additional concessions at the eleventh hour. Moreover, they had been counting on Mirs Bay as a harbour for their southern squadron when it comes into existence. I explained to them the withdrawal of our Western frontier somewhat to the east- ward as induced by our desire to give no foreign Power a pretext for interference with Treaty ports or the approaches thereto. They seemed to appreciate this, though at first inclined to suspect our magnanimity to be intended to induce them to give far more on the east side. I have also ventured to recommend that before the Convention is signed a pledge should be given by the Hong Kong Government that they will take proper measures for the policing of Mirs Bay, and the other territory placed under their control, and for the prevention of smuggling. No definite agreement has been made on the point with the Chinese Government, but it was understood that such measures should be taken." Previous to the inclusion of Mirs Bay in the lease I was authorised by the Colonial Office, through your Lordship, to promise an energetic enforcement of existing arrange- ments, and with that inclubion the necessity for the assistance of the Colonial authorities in preventing smuggUng becomes much greater. Protection of the revenue of China is not primarily the duty of the Colonial Government, but that duty is morally imposed on them by the circumstances under which they obtain an increase of territory, for our demand was based on, and justified solely by the necessity of providing for the better protection of Hong Kong. I do not mean to suggest that the Hong Kong Government would be slow to do whatever can be rightly expected from them, but I think that by pledging themselves before the extension of territory is actually assured they may find it more easy to reconcile the local public to measures otherwise perhaps distasteful. Inclosure in No. 225. Draft Convention for the Extension of Hong Kong. WHEEEAS it has for many years past been recognised that an extension of Hong Kong territory is necessary for the proper defence and protection of the Colony it has now been agreed between the Governments of Great Britain and China that the limits of British territory shall be enlarged, under lease, to the extent indicated crenerally on 159 the annexed map.* The exact boundaries shall be hereafter fixed when proper surveys have been made by officials appointed by the tw,o Governments. The term of this lease shall be ninety-nine years. It is at the same time agreed that within .the, city of Efpiivloon the Chinese officials now stationed there shall continue to exercise jurisdiction except so far as may be inconsistent with the military requirements for the defence of Hong Kong. Within the remainder of the newly leased territory Great. Britain shall have sole jurisdiction. Chinese officials and people sliall be. allowed as heretofore to use the road from, Xowloon to Hsin-an. It is further agreed that the existing landing-place near Kowloon city shall be reserved for the convenience of Chinese men-of-war, merchant and passenger vessels, which may come and go and lie there at their, pleasure, and for the convenience of movement of the officials and people within the city. When hereafter China constructs a railway to the boundary of the Kowloon territory under British control, arrangements shall be discussed;" It is further understood that there will be no expropriation or expulsion of the inhabitants of the district included within the extension, and that if land is required for public offices, fortifications, or the like official purposes, it shall be bought at a fair price. If cases of extradition of criminals occur they shall be dealt with in accordance with the existing Treaties between Great Britain and China and the Hong Kong IRegulations. The area leased to Great Britain, as shown on the annexed map, includes the waters of Mirs Bay and Deep Bay, but it is agreed that- Chinese vessels of war, whether neutral or otherwise, shall retain the right to use those waters. This Convention shall come into force on the 1st day of July, 1898, being the 13th day of the 5th moon of the 24th year of Kuang Hsli. It shall be ratified by the Sovereigns of the two coimtries, and the ratifications shall be exchanged in London as soon as possible. ' In witness whereof, &c. No. 226. Sir C. MacDonald to the Marquess of Salishury. — {Received July 11.) My Lord, Peking, May 27, 1898. AS already reported to your Lordship, by telegram, the demands made by France for compensation for the murder of a French missionary in Kuangsi, were four in number : an indemnity of 100,000 fr., the erection of a chapel at Pakhoi, the punish- ment of the officials of the district, and the Concession for a railway from Pakhoi to Nanning. I heard on very good authority that these had all been granted. The Yaraen have since denied to me that they have committed themselves to granting them, but I have little doubt that they have practically done so. The reason for making the Eailway Concession a separate matter is that the Chinese are anxious to avoid establishing precedents for compensation for attacks «n missionaries taking the shape of commercial Concessions, and they hope, rather foolishly, to do so by nominally closing the missionary case before the other matter is taken up. They did this in the case of the German Agreement for the lease of Kiao-chau Bay, which begins by declaring that the Shantung missionary, case has already been closed, - ' The French demands are not at all excessive. I have already expressed my belief that, the proposed railway will not injure us commercially, provided, of course, that no diflferential rates are allowed^, as to which I shall insist on specific assurances from the Yamen. The Yam^n ha.ve practically promised that JSTanning shall be opened, even if no settlernent of this railway question is come to with .France. ■ . . il have, &c.. , -- ■r ; ' ■ (Signed) CLAUDE M. MacDONA:LD. * Not printed. 160 No. 227. Sir C. Mac Donald to the Marquess of Salisbury. — {Received July 11.) My Lord, Peking, May 28, 1_898_. I HAVE tlie honour to inclose herewith to your Lordship copy of a communication which I have received from the Eussian Charge d'Affaires, and which, as I reported to your Lordship in my telegram of the 21st instant, announces that foreigners visiting any part of the territory in the Liaotung Peninsula recently granted to Eussia by China must be provided with a passport vise by the Eussian authorities, I had previously, in my telegram of 13th May, informed your Lordship that a Circular to the above effect had already been issued by the Eussian Consul at Tien-tsin, and on the 22nd instant I received your Lordship's telegram,'" informing me that it was without the knowledge of the Eussian Government that the Eussian Admiral and Consul had issued such a Circular, and that M. Pavlow had been instructed by his Government to order the Consul to cancel the announcement that passports were necessary for foreign travellers in the said territory. Seeing, however, that I had only just previously received the note from M. Pavlow, of which a copy is inclosed, and which distinctly states that it is in obedience to the instructions of his Government that he announces that foreigners must carry passports for the territory above mentioned, I thought it worth while to inform your Lordship of this extraordinary discrepancy between the accounts of the Eussian Government and of their Eepresentatives here, and I did so in my telegram of the 22nd May. I have acknowledged to M. Pavlow the receipt of his despatch, and have informed him that I am awaiting the instructions of Her Majestj^'s Government upon it. At a late hour on Sunday, the 22nd instant, M. Pavlow called upon me and said that he had received a telegram from his Government, directing him to cancel the instructions which had been issued respecting the viseing of passports for Talienwan and Port Arthur at Eussian Consulates. He stated that the whole thing was a suggestion of the Eussian Admiral, who had been much troubled by various individuals at Port Arthur selling opium and bad spirits to the troops. At the request of the Admiral he had telegraphed to his Government, and not having received an answer he had taken upon himself to issue the Circular, which I proposed to withdraw. I said that of course he would inform me in a despatch of the withdrawal of his Circular. To this he assented. All the foreign Ministers have received identical Circulars, and my German, Austrian, Italian, American, Spanish, and Japanese colleagues have informed me that they have referred the matter to their Governments. Up to date, however, I have not received the promised official withdrawal from M. Pavlow. I have, &c. (Signed) CLAUDE M. MacDONALD. Inclosure in No. 227. J/. Pavlow to Sir C. MacDonald. Legation Imperiale de Russie en Chine, Pekin, M. le Ministre et cher CoUegue, le 7 (19) Mai, 1898. ME conformant aux instructions que je viens de recevoir du Ministere Imperial des Affaires fitrangeres, j'ai Thonneur de vous faire part que dorenavant tons les sujets (Strangers se rendant a Port Arthur et h Talienwan ou k un autre point du territoire qui a ete cede en usufruit au Gouvernement Imperial par le Gouvernement Chinois devront etre munis de passeports delivr^s par leurs autorit^s comp^tentes respectives et dfiment vises dans un des Consulats Imperiaux de Eussie. En portant a la connaissance de votre Excellence ce qui precede et en esp^rant que vous trouverez utUe de donner aux Consulats relevant de la Legation d'Angle- terre a Pekin de's instructions relatives au sujet susmentionn^, ]e saisis, &c. (Signe) A. PAVLOW. * Repeating No. 12.5. IGl (Translation.) Imperial Russian Legation, Peking, M. le Miuistre and dear Colleague, 7 (19) May, 1898. lis" obedience to instructions -winch I have received from the Imperial Ministry for Foreign Affairs I have the honour to inform you that henceforth all foreign subjects going to Port Arthur and Talienwan, or to any other place in the territory which has been leased to the Imperial Government by the Chinese Government, must be furnished ■with passports issued by their respective competent authorities, and duly vis^s at one of the Imperial Eussian Cosulates. While informing your Excellency of the above, and hoping that you will see your - way to give the necessary instructions on the subject to the Consuls under the orders of the British Legation at Peking, I avail myself of the opportunity, &c. (Signed) A. PAVLOW. No. 228. Sir C. J\lacDonald to the Marquess of Salisbury. — [Received July 11.) My Lord. Peking, May 28, 1898. WITH reference to my telegram of the loth instant, I have the honour tO' inclose herewith to your Lordship copy of a despatch which I have received from Her Majesty's Consul at Kiungchow, giving an account of the French occupation of Kuahg-- chou Wan. I hare, &c. (Signed) CLAUDE M. MacDONALD. Inclosure 1 in No. 228. Acting Consul O'Brien-Butler to Sir C. MacDonald. Sir, Kiungchow, May 3, 189&. I HAVE the honour to report that the French man-of-war " Duguay-Trouin " arrived here on the 13th April to relieve the " Pascal," which left for Tonquin the next day. The latter vessel returned to Hoihow from Along Bay on the 19th. Soon after her arrival, M. Kahn, the French Vice-Consul, took great care to let everyone know that she would leave the next morning for Hong Kong, and that he was going there with her for a trip. No one, however, believed that Hong Kong was the real destination of the " Pascal " as soon as it became known that M. Kahn was being accompanied by his Chinese writer, and that he had requested that, his letters might be sent on board the " Duguay-Trouin " to await his return, instead of being sent to his house. As I was convinced that the "Pascal "had really gone to Kwang-chcw Bay, I asked information from a friend who happened to be going to Kwang-chow. On his arrival at Kwang-chow Bay, probably in the neighbourhood of Hao-chow, he was told that the French .men-of-war were at a place called Ma-hsieh Chiang (Ma-hsieh Harbour, in Cantonese Ma-ts'e Kang), about 30 li distant. He at once proceeded ta Ma-hsieh Shih (Ma-hsieh Market, in Cantonese Ma-ts'e Shi), presumably on the river or creek that flows into Ma-hsieh Chiang, and found four French men-of-war anchored, there. A Proclamation, of which he inclosed a copy, had been posted at Ma-hsieh Shih by the French on the 22nd April (copy and translation inclosed). No Proclamation was posted by the Chinese. The Wu-ch'uan and Sui Ch'i District Magistrates arrived at Ma-hsieh Shih on the 24th April for the purpose of handing the place over to the French. He concluded by stating that the mountains in the neighbourhood of Ma-hsieh are " very good," and that opposite Ma-hsieh Shih to the west there is an old fort which the French intend to pull down and replace by a new one. [253] Y 162 This morning a steamer arrived from Haiphong with newspapers, and I found in the " Courrier d'Haiphong " of the 21st April an account of the occupation of Kwang-chow Bay by the Erench, a copy of which I have the honour to inclose herewith. This account confirms the information which I have received from my messenger. I regret that telegraphic communication between Hoihow and all other places has been interrupted since the 21st April. I have, &c. (Signed) P. E. O'BEIEN-BUTLER. Inclosure 2 in No. 228. Proclamation issued by the French Admiral Po [Beaumont). (Translation. ) AT the present time China and France are' on terms of friendship, and trade together peacefully. When China had trouble with a foreign country two years ago, Prance devised means to assist her, and now there is peace. As the Prench merchant navy increases daily, the Prench Minister and the Ministers of the Tsung-li Yam^n recently consulted together, and it was agreed that coal mines should be started here. Hence, on this 2nd day of the intercalary 3rd moon of the 24th year of Kuang Hsu (22nd April, 1898) Prance has specially sent a man-of-war hither to hoist the Prench flag. Yoti people in this locality must not be alarmed, but must all live on peacefully together as in ordinary times. You also constantly notice our men-of-war visiting this place, but everything is done with peaceful intentions. Henceforth your trade will be more and more prosperous every day. The hoisting of our flag is intended for your protection, and you people must not dare to touch it, as this will be considered a punishable offence. It is highly necessary that you should be careful. A very urgent special Proclamation. Published on the second day of the intercalary 3rd moon of the 24th year of Kuang Hsu(22nd April, 1898). Inclosure 3 in No. 228. Extract from "Le Courrier de Haiphong " of April 28, 1898. Occupation de Kwang-Chau-Wan. LA bale de Kwang-chau-wan, qui est una des compensations que la Chine nous a ■accordees, a 4te occup^e officiellement le 22 courant. C'est le _ " Pascal," de I'escadre de FExtr^me-Orient, k bord duquel avait pris passage k Hoi-how notre Consul, M. Kahn, qui a rempli cette formalite. Un mat de pavilion a ete plante sur un ancien fort, et le pavilion Fran9ais hisse, pendant que la musique du bord se faisait entendre, et que I'equipao-e poussait de? hurrahs. ^ On a remarque I'absence des autorites Chinoises, mais par centre une foule considerable de celestes assistait k la c^r^monie, se rejouissant d'avance k la pensde de nous exploiter, et de rendre k nos hommes des marchandises aussi cheres que frelatees. Nous croyons savoir que dans quelques jours le " Bay3,rd," le " Duauay-Trouiq " et le ^' Jean Bart " iront se mouiller dans la nouvelle bale Prancaise, oil se' trouve deik outre'le " Pascal," la canonniere la " Surprise." * 163 No. 229. Sir C. MacDonald to the Marquess of Salisbury. — (Received July 11.) (Telegraphic.) Peking, July 11, 1898. IN reply to your Lordship's telegram of the 9th instant, I have the honour to refer your Lordship to my telegram No. 205 of 18th June. Last May the Chinese Minister at Washington, where the negotiations were mainly carried on, concluded a preliminary Agreement for the construction of a Hankow-Canton line with an American Syndicate. No. 230. Sir C. MacDonald to the Marquess of Salisbury. — [Received July 11.) (Telegraphic.) _ Peking, July 11, 1898. IN the Province of Kuangsi, in three districts near Wuchou, an insurrection has broken out, which has cost the lives of some Chinese officials ; but, according to the Yamen, the measures taken for its- suppression are proving successful. No. 231. Sir E. Satoiv to the Marquess of Salisbury. — [Received July 12.) My Lord, ■■ Tohid, June 11, 1898. VICE-ADMIEAL SEYMOUR has informed me officially, in a despatch of which I have the honour to inclose a copy, that the quarters at Wei-hai Wei, vacated by the Japanese troops, were found to be in an excellent state of order and cleanliness throughout, and that a large quantity of furniture was left behind for the use of the officers and men of Her Majesty's ships. Eor this thoughtful act of kindness on the part of the Japanese authorities he requested me to express such appreciation as seems suitable in the proper quarter. I have accordingly addressed a note, of which a copy is herewith inclosed, to the Japanese Minister for- Foreign- Affairs^ embodying -the substance of the Admiral's letter, and requesting his Excellency to make it known in the proper quarter. I have, &c. (Signed) EENEST SATOW. In closure 1 in No, 231. Vice-Admiral Sir E. Seymour to Sir E. Satow. Sir, " Centurion," at Wei-hai-Wei, May 31, 1898. I HAVE the honour to inform you that the quarters recently occupied by the Japanese troops at Wei-hai Wei, which have now been taken over by us, were found to be in an excellent state of order and cleanliness throughout. A large quantity of furniture was also left behind for the use of our officers and men, which has much ■ contributed to their comfort on taking up their new duties. Eor this thoughtful act of kindness on the part of the Japanese authorities I wquld ■ ask you to express such appreciation as' seems to you suitable in the proper quarter. (Signed) ' ' E. H. SBYMOUE. [253] Y 2 164 Inclosure 2 in No. 231. Sir E Saiotv to Baron Nishi Tokuji :ro. M. le Ministre, Tokid, June 11, 1898. I HAVE the honour to acquaint your Escellency that I have received a despatch from Vice-Admiral Sir Edward Sej^mour, Commander-in-chief of Her Majesty's naval forces on the China Station, informing me that the quarters occupied by the Japanese troops at Wei-hai Wei, which have now been taken over by the forces of the Queen, were found to be in an excellent state of order and cleanliness throughout. A large quantity of furniture had also been left behind for the use of the officers and men, which has much contributed to their comfort on taking up their quarters. This thoughtful act of kindness on the part of the Japanese authorities will in the ordinary course be made the subject of a report to Her Majesty's Government, but, in the meantime, having been asked by Vice-Admiral Seymour to express his sincere thanks, I hasten to beg your Excellency to be so good as to make this known in the proper quarter. T ts kp &.0 (Signed) ' EENEST SATOW. No. 232. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, July 13, 1898. IT does not seem that the battle of Concessions is going well for us, and that the mass of Chinese railways, if they are ever built, will be in foreign hands is a possibility that we must face. One evil ot this is, that no orders for materials will come to this country. That we cannot help. The other evil is, that by differential rates and privileges the Managers of the railways may strangle our trade. This we ought to be able to prevent, by pressing that proper provisions for equal treatment be inserted in every Concession. No. 233. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) _ Foreign Of ce, July U, l89S. Much anxiety prevails here about three railways. The Peking-Hankow line, about which I have already telegraphed to you : it is desired to acquire the rights to this line in exchange for those over the northern railway extension to Newchwang. As to the second, namely, the Shanghae-Nanking line, for which Messrs. Jardine, Matheson, and Co., have offered. ^s to _ the Peking-Chinkiang line, the third, and apparently the most important: great fear is expressed bya Syndicate connected with the Hong Kong Bank that on the lapse of the present Chinese concession it will fall into foreign hands. If they can get a subsidy from the British Government, they are prepared to offer for it. But they arenot likely to get this. If the chance of having the concession is put actually within their reach, I do not think they will insist on this condition. I think you may safely urge it as an unconditional offer. 165 No. 234. Consul Searl to the Marquess of Salishury. — {Received July 17.) (Telegraphic.) Canton, July 17, 1898. KUANGSr rebellion. ^ The Imperial troops were encountered 4th July by rebels, who retreated with loss in a westward direction. 5,000 troops are on the spot, and more can be sent. Eebellion is still not quelled, and in case of reverse to troops might be serious, considering tlie provinces' disaffection. Insurgents who are believed tol)e badly armed are at present estimated at 6,000. It is difficult to obtain reliable information. No. 235. Viscount Gough to the Marquess of Salishury. — [Received Jidy 18.) My Lord, Berlin, July 12, 1898. WITH reference to Sir F. Lascelles' despatches of the 30th April last, I have the honour to inclose copies and translation of an article in the " Berliner Neueste Nachrichten" of the 9th instant, giving a statement of the further commercial and industrial Concessions secured by Germany in the Province of Shan.tung, as published in the " Peking Official Gazette " of the 8th March. The article in question observes that extensive privileges are granted to Germany in the province, which may, under certain circumstances, entirely exclude foreign com- petition; and it also points out one or two small discrejaancies in the political part of the Treaty, as published in Germanj^ and as now given by the " Peking Official Gazette," the most important being^ that, according to the latter, Germany has the right, not only to move troops through tKe 50 kilom. zone of Kiao-chau, but also " to take possession of the territory in question whenever the German Emperor wishes to do so." I have, &c. (Signed) GOUGH. Inclosure in No. 235. Extract from the " Berliner Neueste Nachrichten" of July 9, 1898. THE Treaty between German}'- and China for the lease of Kiao-chau was published after the arrival of the document in Berlin on the 28th April last. A very valuable supplement to it consists in the concessions made by China in regard to mining rights and the construction of railways. According to a publication in the " Peking Official Gazette," the text of which has only now come to our knowledge, these Concessions are more extensive and more advantageous in their details than could be inferred from the Speech made in the Eeichstag on the 8th February by the Imperial Secretary of State for Foreign Affairs. Herr von Billow stated on that occasion that further negotiations were still pending with regard to the extent of these Concessions. The further communications were made by the "Peking Official Gazette " on the 6th March last, reproduced in the " Allgemeine Zeitung," are as follows : — " 1. The Chinese Government sanctions the construction of two lines of railway in Shautunff. One of these lines will run from Kiao-chau and Tsinan-fu V\k Wei-tsein, Tsin-chow, Pa-shan, Tse-chuen, and Sai-ping to the boundary of the Province of Shantung. The second line will connect Kiao-chau with Chin-chau, whence a branch line will be made to Tsi-nan vi^ Lai-wu-hsien. The latter, however, will only be commenced when the main line has been completed, in order to give an opportunity to the Chinese to connect this line with their own railway system in the most profitable manner. The determination of places which the line from Tsinan-fu to the boundary of the province shall pass through is reserved for a later decision. " 2. For this purpose of carrying out the construction of these railways, a joint 166 German and Chinese Company shall be formed, with the necessary branch establishments ; this Company will be entitled to raise loans and appoint its own Directors. " 3. All necessary agreements will be made by a Conference of German and Chinese- Delegates. The Chinese Government will use their best efforts to obtain for the Delegates- of the German Bailway Company every conceivable facility for their work on Chinese- territory, and to afford them the most effectual protection. The net profits derived from the railways will be divided among the shareholders in just proportion, to whichever nation they may belong. The object of the construction of these railway lines is merely the development of trade. In demanding it, Germany has no treacherous intentions- towards China, and especially is not aiming at any illegal extension of territory in the province. " 4. The Chinese Government concedes to German subjects the right of acquiring- propeny in mines along the whole length of the railway line, and within a distance of 30 li on either side of it. Chinese capital may take part in the working of the mines. " In this, also, Germany is not actuated by treacherous designs against China, but merely desires to develop commerce and the mutual relations between the two countries.. "Further Concessions to Germany. "If the Chinese Government or individual Chinese subjects should at any time have- plans for the development of Shantung, for the execution of which foreign capital is-- required, they shall, in the first place, apply to German capitalists for it. Similarly, in. the event of machines or other materials being required, German manufacturers shall, in the first instance, be applied to. Only when German capitalists or manufacturers have refused their assistance shall the Chinese be entitled to apply to other nations." The above indicates that Germany has secured extensive privileges as regards the development of the Province of Shantung, such as will under certain circumstances- entirely exclude foreign competition. It may be anticipated that under the powerful, protection of the Imperial Government German enterprise will take advantage, in an adroit and diligent manner, of the sphere of action which is offered to it ; and very promising beginnings have already been made. In the first part of the Treaty, which relates to the lease of Kiao-chau, the Chinese publication shows no material divergence from the official German version. Minor discrepancies are probably only due to different translations. It is of importance to note,, however, that according to the Peking " Official Gazette " it is not merely permissible for German troops to pass free at any time through the leased territory within a radius of 50 kilom. round the Bayof Kiao-chau, as stated in the German publication, but that the Emperor of China has agreed that " German troops may at any time, whenever the German Emperor wishes it, take possession of the territory in question." The German publication, in the concluding paragraphs, also stated that an under- standing would be arrived at with regard to the Customs frontier, and the mode of collecting the customs duties ; in the Chinese version, on the other hand, it is said : " The Gierman authorities will abstain from any interference in the aflfairs of the /i'-Hn - stations situated on the borders of the leased territory." An authoritative explanation of these discrepancies will no doubt be given by the Imperial Government. No. 236. Viscount Gough to the Marquess of Salisbury. — (Received July 18.) My Lord, Berlin, July 13, 1898. WITH reference to Sir F. Lascelles' despatch of the 28th April last, I have the honour to report that several articles have recently appeared in the semi-ofiicial German press dealing with the question of the development of Kiao-chau. The " jSTorth German Gazette" of the 1st instant states that as soon^ as the- number of Europeans established at Kiao-chau is sufficiently large, it is intended to introduce a system of self-government analogous to that existing at the European commereialsefrtle- ments in the Treaty ports in China. The Municipality thus created will have the right of self-taxation, and will be charged with the police and sanitary administration, &c. 167 When the German squadron took possession of the Bay of Kiao-chau, the Admiral at once issued a Proclamation forbidding the sale of land. This measure was, of course, only temporary, and since then the German' authorities have concluded agreements with the Elders of the different villages, according to which the latter engaged, in return for a payment equal to twice the amount of the Chinese land tax, not to sell their land to any ■one but the German Government. The price to be paid by the Government for any land they may wish to purchase, is that which was usual prior to the German occupation. The ■Government now consent to resell portions of the land thus acquired to European settlers -conditionally, i.e., with a clause in^ the deed of sale providing that it shall again be placed at their disposal if required for the streets, harbour works, or public buildings of the future town. According to the " Cologne Gazette " of the 1 2th instant, tlie new German town is not to be built on the site of the present insignificant village of Tsin-tan, but on a spot, within the bay of Kiao-chau, which is naturally well protected and admirably adapted for the creation of a large harbour for modern sea-going vessels. Detailed plans of town, harbour works, and quays must be worked out before, definite ■sales of land can be allowed ; and surveys are now being made with a view to eventually drawing, up these plans in a careful and complete manner, so as to avoid mistakes which might in the future prove irreparable. ,• The object in view is to create a first-class harbour, provided with all the require- ments of modern shipping, and by this means to develop Kiao-chau into a commercial ■centre on a large scale. The " Frankfurter Zeitung " publishes a private telegram from Shanghae, stating that the Governor of Kiao-chau has asked the German merchants already settled there whether the application of the German Customs Tariff to the newly acquired territory would suit them. I have, &c. (Signed) GOUGH. No. 237. '.. - The Marquass of Salisbury to Sir C. MacDonald. •(Telegraphic.) ■ Foreign Office, Jtdy 18, 1898. . ,. PEKING-HANKOW line. Inform Chinese Government that Her Majesty's Government require full information as to whom and on what terms this concession has been granted. No. 238. The Marquess of Salisbury to Sir E. Satow, Sir, . Foreign Office, July 18, 1898. I HAVE received your despatch of the 11th June, inclosing a copy of a despatch from the Commander-in-Chief on the China Station with regard to the transfer of the Japanese quarters at Wei-hai Wei to the force landed from Her Majesty's ships. I should wish you to express to the Japanese Government the thanks and appreciation of the Government of Her Majesty for the care which was taken to hand over the buildings in such a good state of order and also for the consideration shown by the Japanese authorities in leaving behind a la,rge quantity of furniture for the use of the British officers and men. I am, &c. (Signed) SALISBUEY. 168 No. 239. Sir C. MacDonald to the Marquess of Salisbury. — (Received July 20.) (Telegraphic.) Peking, July 20, 1898. PRESENT state of Eailway Concessions: (1) Shanghae Nanking; (2) Peking- C3iinkiang ; (3) Peking-Hankow. 1. Is certainly the most valuable of the three financially. A preliminary Agreement has been signed by Jardine's Syndicate, and they ought to get the Concession providing they do not haggle over terms and delay matters. 2. Will not pay according to the opinion of experts. The head of Jardine's firm informs me that the risk of a long trunk line is too great to permit them to undertake it. I have had no application from any British Syndicate. An application has been made for this Concession to the Yam&i by the German Minister on behalf of a Syndicate of his nationality, to be granted when the present Chinese Concession lapses. 3. Has been under negotiation for a year and a-half, and the definite Agreement was signed with a Belgian Syndicate on the 27th June. Belgian Minister has assured me that the Eussian Government have no interest, financial or otherwise, in this Concession, and he further said that Her Majesty's Minister in Brussels would receive a similar assurance, if desired, from the Belgian Foreign Office. I have had formal assurances to the same effect from the Chinese Government, which assurances I conveyed, at their request, to your Lordship in my telegram of 21st June. Experts say that this line also will not pay. No. 240. Sir C. MacDonald to the Marquess of Salisbury. — {Received July 20.) (Telegraphic.) Peking, July 20, 1898. WITH reference to the disturbances in the neighbourhood of Chinkiang, consequent on the new Eegulatious for inland steam navigation, reported in my telegram of 7th July, Her Majesty's Consul at Chinkiang telegraphs on the 14th July that the Taotai has promised to afford full protection, and that, according to report of British merchants a passenger trade is being freely carried on by steam-launches, except at Paoying at which place the Taotai promises protection will be now afforded by the local authorities. No. 241. The Marquess of Salisbury to Sir C. MacDonald. Sir, _ Foreign Office, July 21, 1898. I HAVE received your despatch of the 27 th May last, giving an account of your negotiations with the Tsung-li Yamen for obtaining the extension of the territory of Hong Kong, and I approve your proceedings in the matter. I am, &c. (Signed) SALISBURY. No. 242. ' Hie Marquess oj Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, July 22, 1898, EEFEEEING to my telegram of the 6th June : ■ ^ ^t/ ' ^ ' Internal navigation. How does question of Regulations now stand? 169 No. 243. The Marquess of Salisbury to Sir C. MacDonald. « (Telegraphic.) Foreign Office, July 22, 1898. YOtr may inform the Tsung-li Tam^n, if you see no objection, that Her Majesty's Government will support them against any Power which commits an act of aggression on China by reason of China having granted to a British subject permission to make or support any railway or similar public work. No. 244. Sir C. MacDonald to the Marquess of Salisbury. — (Received July 23.) (Telegraphic.) Peking, July 23, 1898, AT an interview which I have with the Yamen to-morrow, I will lay before them the unconditioaal offer mentioned in the last paragraph of your Lordship's telegram of the 16th instant. The German firm referred to in my telegram of the 20th instant has, however, made a definite offer as follows : Loan of 4,500,000/^. for term of thirty-five years, at 5|- per cent, interest, at 92 ; the entire line and property to be the security. Purchase of materials to be through a German firm and, unless cheaper elsewhere, in Germany. A Chinese Administrator, an engineer, and a financial manager — the two last to be Germans — to form the Board of Management. In case of default, line to be put under foreign control. No. 245. Sir C. MacDonald toJhe Marquess oj Salisbury. —[Receitied July 23.) (Telegraphic.) Pehing, July 23, 1898. THE battle of Concessions is not, in my opinion, going against us, as your Lordship suggests in your telegram of 1 3th July (which, owing to telegraphic interruption, took nine days in transit). Up to the present, any Concessions granted to other nationalities are far out-balanced in financial value by the Shansi and Honan mining and railway Concessions, and by the Shanghae-Nanking Eailway Concession with its possible extensions. I have consistently informed the Chinese Government that, as to differential rates and privileges, we want none ourselves, and cannot admit that other nationalities have a claim to them. No. 246. Sir 0. Ma6Donald to the Marquess of Salisbwr'y. -^{Received July 23.) (Telegraphic.) Pehing, July[23,lS9B. IN reply to your Lordship's telegram of yesterday, Eegulations for inland steam navigation are being altered in conformity with my emendations, to which the Chinese Government have agreed. The promulgation of the Eegulations in their new form will soon take place. [2^3] 170 ■No. 247. Sir C. MacDonald to the Marquess of Salisbury. --{Received July 2i.) - - i (Telegraphic.) ' PeJdng,July24:,_l^'d^. THE Viceroy at Canton has telegraphic information of the total defeat of the Kuangsi rebels, reported in my telegram of 1 1th July. Above reaches me by telegraph from' Her Majesty's Coiisul at • Canton,'- the 23rd July. No. 248. , V, ■< ,, - Sir P, MacDonald to the Marquess of Salisbury. — [Received July 25.) i My Lord, Peling, June 9, 1898. ' IN continuation of my despatch the 28th May on the subject of the viseing of national passports for Port Arthur and Talienwan, I have the honour to state that it was not until the 31st instant that M. Pavlow sent round to his colleagues tbe promised withdrawaTof his Circular note of the 19th May. This he did in a letter, copy of which I have the honour to inclose. It will be seen that .the Eussian Charge d'Afiaires commences his second letter by informing his colleagues that it is written in order to complete his first of the 1 9th May. From a perusal of this letter it will be seen that it contained a definite statement to thie effect that national passports for Port Arthur and Talienwan must be vise at a Eussian Consulate, which statement in itself appears to be complete enough. ■' - As your Lordship will observe, in the second letter it is stated that the viseing of passports at a Eussian Consulate is optional. As there seemed to be some doubt as to whether it was obligatory for persons visiting Port Arthur and Talienwan to be in possession of national passports, the letter not being quite clear on this point, I wrote privately to M. Pavlow, and asked him to be so kind as to let me know whether passports were obligatory. He replied in the affirmative. I acknowledged the inclosure to this despatch, and in so doing pointed out to M, Pavlow that; according to Article IX of the Tien-tsin Treaty, British subjects visiting Treaty ports were not required to hold passports. To this communication Ihave as yet received no reply. I have, &c. (Signed) CLAUDE M. MacDONALD. Inclosure in No. 248.. M. Pavlow to Sir G MacDonald. M. le Mmistre et cher Collogue, psMn, le 19 (31) Mai, 1898. POUE completer ma note du 7 (19) courant, j'ai I'honneur de faire part k votre Excellence que d'apres les dernieres instructions qui m'ont ete donn^es par le Ministere Imperial, le visa dans les Consulats de Eussie des passeports nationaux delivres k dee (Strangers se rendant a Port Arthur et k Talienwan ou sur un autre point du territoirs c^de en usufruit au Gouvernement Eusse par le Gouvernement Chinois sera entiere- ment facultatif, mais il est entendu que les Consulats Imp(^riaux de Eussie en Chine auront k viser, suivant les instructions regues, les passeports nationaux des etrangers se rendant sur le territoire susmentionne qui les leur presenteront a cette fin. Veuillez, &c. (Signe) A. PAVLOW. 171 -'• ; ■ ' ■ (Translation.) '" ' ■ , Russian Leqatio'n,' ■■ M. leMinistre and dear 'Colleague, Peyfcm^, 19 (31) May, 1898. IN continuation of mj note of the 7tli.(19tli) instant, I have the honour to inform your Excellenc.y that in accordance with the last instructions which I have received from the Imperial Ministry, the visa at, the Eussian Consulate of national passports issued to foreigners proceeding to Port Arthur and Talienwan or tq aiiy otlier place situated in the territory leased to the Eussian Government by the Chinese Government, shall be entirely optional, but it is understood that the Eussian Consulates in China will have to viser in accordance with the instructions received, the national passports of foreigners proceeding to the above-named territory, who shall present them for the pui-pose. : , Eeceive, ,&c. , (Signed) ; , A. PAVLOW. - No. 249. Sir C. MacDonald to the Marquess of Salisbury-. — {Received July 25.) My Lord, ^ _ ' PeHn^, Jw/ie 10, 1898. AS I had the honour to inform your Lordship by my telegram of yesterday, the Convention for the extension of Hong Kong territory was duly signed yesterday forenoon at the Tsung-li Yamen, the signatories on behalf of the Chinese Government being ' the Grand Secretary Li Huug-chang and his Excellency Hstl Ying IC'uei, who is President of the Board of Civil Office and a Cantonese. The Convention as signed is identical with the draft inclosed in my despatch to vour Lordship of the 27th May. '' I have, &c. (Signed) CLAUDE M. MacDONALD. No. 350. Sir C. MacDonald to the Marquess of Salisbury. — (Received Jidy 25.) My Lord, Peking, June 10, 1898. I HAVE the honour to inclose herewith to your Lordship copy of extracts from an Intelligence Eeport which I have received from Her Majes'ty's Consul- at Samshui' showing the condition of affairs in that district of the West Elver. : ' ' . 'I have, «&c. (Signed) CLAUDE M. MacDONALD. Inclosure in No. 260. ., Extracts from Samshui Intelligence Report for Quarter ended April 30, 1898. 1. Piracy on the West River. ON the 26th February rumours were current that a band of pirates contemplated making a raid on Jardine, Matheson, and Co.'s hulk anchored at Hokow. The compra- dore in charge reported the matter to me, and as he seemed somewhat alarmed, I commnnicated with the Magistrate, but nothing occurred. " ' ', Piratical attacks, ; both ashore and afloat, are of frequent, one might almost" say of daily, occurrence along the river, and the officials seem incapable of coping with 172 As the Magistrate explained to me, he is unable to hunt out and capture the desperadoes himself, and therefore he has to employ others to do so, which means a large outlay every time a pirate is caught, and as the Government do not supply him with the necessary funds for the purpose, the pirates for the most part escape. Since he has been here, however, a period of about ten months, he has captured some sixty odd men, forty of whom were decapitated. This will show the disorderly state of the province, which has been aggravated, it is said, by the rice famine existing for some months past. 2. Criticism of the Central Government by Local Officials. It is worth noting, perhaps, in passing, the freedom with which the local officials criticise, at the present moment, the high officials in Peking. It appears to me this out- spokenness is more common amongst them than I have ever known it before, and it may possibly be regarded as a sign of the times. What they say is, in effect, that the Emperor is surrounded by unscrupulous Ministers, who have not the welfare of the Empire at heart, and whose sole care is to derive what advantage they can from their position. The dynasty, they say, is exhausted, and they point to the fact that it has already been in existence for over two centuries and a-half, a period which history shows is the limit for any Eeigning House in China. 3. Collection q/" Li-kin by Foreigners. With regard to the placing of the collection of the li-kin in foreign hands, they admit it is quite possible to carry it out. The Emperor has but to command, and the officials will have no option but to obey. They do not consider that the change would give rise to trouble, as it would be a welcome measure to the trading classes, who are now ground down by excessive taxation, only a fraction of which finds its way to the public exchequer. 4. Falling off in Li-kin Revenue at Samshui. The Customs Deputy informs me that the li-kin authorities were at their wits' end to know how to deal with the collection of revenue at Samshui. Instructions had been received from the Viceroy that they were on no account to interfere with trade in which foreigners were concerned, or to take any action likely to embroil them with the Consuls, or conflict with the foreign customs. Consequently neither li-kin nor duty is being levied on goods entering by foreign steamers and cargo from Canton and Fatshan destined for up-river by foreign vessels as well as native produce arriving from Wuchow for shipment hence is equally exempt. Unfortunately little advantage is being taken by foreign firms of this relaxation of the rules, owing to the fact that the port is still without resident merchants to push the trade. The Li-kin Deputy complains bitterly of the way in which his revenue has diminished from this cause and also on account of the dwindling away of the native trade, the scarcity of rice affecting the purchasing powers of the people. (Signed) HEEBEET F. BEADY, Consul. Samshui, May 5, 1898. No. 251. Viscount Gough to the Marquess of Salisbury.— {Received July 25.) ^y^o^^^' , , , Berlin, July 21, 1898. WITH reference to my despatch of the 13th iustant, I have the honour to state that accordmg to the " Cologne Gazette " there is no doubt that the German Government mtend to make Kiao-chau a free port, trusting mainly to their profits from the purchase and sale of land to cover the necessary expenditure. The Government desired to make a declaration to this effect without delay but It appeared from the negotiations with local merchants that the latter were m favour of defgrnng such declaration until the land question had been finally settieu.. Ihave, &c. (Signed) GOUGH,;, 173 No. 252. Sir C. MacDonald to the Marquess of Salishur\j.— {Received July 25.) (Telegraphic. ) Peking, July 25, 1898. THE Chinese Government offer your Lordship their most sincere thanks for the promise contained in your Lordship's'telegram of 22nd July. At the same time, they inform me that no foreign Power has committed, or has threatened to commit, any aggression on account of concessions to British subjects, and they furthermore trust that no such aggression or threat will occur. No. 252. Sir C. MacDoncdd to the Marquess of Salisbury. — {Received July 25,) (Telegraphic.) Peking, Jidy 25, 1898. PEKING-HANKOW Eailway Concession. Chinese Government tell me that as soon as they receive from Shanghae the terms of the Contract asked for in your Lordship's telegram of 18th July, they will com- municate them to me. They further inform me that it is with a Belgian Syndicate that the Contract has been signed. No. 254. Sir G. MacDonald to the Marquess of Salisbury. — {Received July 25.) (Telesraphic.) Peking, July 25, 1898. HONG KONG-CANTON Eailway Concession. Messrs. Jardine, Matheson, and Co.'s Syndicate have applied through Sh^ng, the Director-General of Railways, for the above Concession. I am officially informed by the Chinese Government that the French Minister has warned them that French interests in Southern China will be injuriously affected if permission to construct the said line is granted to a British Syndicate. The Chinese Government entirely recognize the extreme weakness of such a contention. No. 255. , The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, July 27, 1898. PEESSUEE is being put on Her Majesty's Government to make some statement before Parliament rises about the opening of Nanning. Can you authorise such a statement being made? Yam^n readmitted, on the 12th April, the obligation under- taken at the time of the Burmah Convention, and gave you half promise on the 20th May. The}' agreed to give their final answer in a few days. Fulfilment of pledge must be insisted on. No. 256. Sir 0. MacDonald to the Marquess of Salisbury. — {Received July 29.) (Telegraphic.) Peking, July 29, 1898. OPENING of Nanning : Eeply to your Lordship's telegram of 27th July. I received assurances from Prince Ching, at an interview at which all the Ministers of the Yaro^n were present, that fts soon as arrangements can be made the 174 opening of Manning will take place, in fulfilment of ttie obligations laid down in the Burmali Convention. He, however, earnestry requests Her Majesty's Government not to demand- a fixed date for the opening, nor to demand that it shall be immediate, for the Chinese Government would be thereby embarrassed, at the present time, when the murder of a French priest in Kuangsi has involved them in negotiation with that country, and when the said Province of Kuangsi is in a most unsettled state. Spring of 1899 was the last suggestion of the' Yamen for the opening of Nanning, but it did notrmeet with my acquiescence. j; I would suggest, that the matter may be met by our insisting on the opening of Xanninrj- before the end of six months. . No. 257. Sir C. MacDonald to the Marquess of Salisbury. — {^Received July 30.) (Telegraphic.) ' v Fehing, Jidy 30, 1S^8. I AM provisionally^ accepting the amended Eegulations for inland steam naviga- tioh"^ which have been promulgated. '. , No. 258. "■ ' '• ■ ■' ''■"' llic Marquess of Salisbury to Sir G. MacDonald. (Telegraphic.) Foreigyi Office, Jidy 'SO, 1898. Wl'rH reference to your telegram of the 20th July, please state whether Eusso-Chinese Bank has any interest in the Peking-Hankow line, or whether the Belgian Syndicate has parted with its rights in the line to that bank. , U:f ; No. 259. t ■ (Sir C. MacDonald to the Marquess of Salisbwy. — (Received August 1.) (Telegraphic.) . Peking, August 1, 189S. , I HAVE no information here to confirm the suggestion in your telegralm of the 30th July that the Eusso-Chinese Bank has acquired the rights in the Peking- Hankow Eailway concession from the Belgian Syndicate. • ■ -^- -- - No. 260. Sir O. MacDonald to the Manjucss of Salisbury. — (Received August 2.) (Extract.) . , ,. . , , ,^ F.ekifu/, June 11, 18'JS. AT an interview with the yami-ji on the 24th April I expressed a wish to see the Eegulations to govern inland navigation before they were published, to 'satisfy myself that they contained nothing to which I should have to object. ' ' After some discussion, from which it was evident thafe the Ministers had a strqnw aversion 1o the course proposed, they promised to let ]ne see the Eegulations as soon'as they were definitely drawn up. , > , ' ' Again, at an interview on the 25th May, I drew attention to the near approach of the limit of time fixed for opening the internal waters to steamers, and reminded; the Yamfin that I had to see the Eegulations before they were issued. I repudiated any desire to damage the U-Jcin revenue, about which the Ministers displayed considerable anxiety, or to make unnecessary alterations, but I had to make sure that the new Eules contained nothing inconsistent with Treaty obligations and the original Concession. ^ Their Excellencies went back to the point from which we . started at .the previous interview of the 24th April, dwelt on the Concession being a free exercise of China's sovereign -rights for which she could make what rules she pleased, and were much opposed to any discussion of such Eules by me previous to publication. If I exacted the right of dr^<;ussion, the foreign Eepresentatives would follow suit, and the new. system could not be set in operation by the time fixed. ,'.;..,..;,, . .. • 175 -Besides, when :th6 .Concession was promised, it was understood that it -shoulcli be a spontaneous act on the, part of China, which had nothing to do with the" loan negotiations. > I recalled the history of the Concession. Although it was ostensiljly a promise freely given by China, it was, as their Excellencies knew, made at the request of Her Majesty's Government, at a time when Great Britain had strong reasons, for feehng aggrieved at the action of the Chinese Government. It was also to be remembered that, on account of bur vastly preponderating shipping and trade interests, Great Britaiii was the country most concerned ill the new departure. For these reasons I insisted again on being given an opportunity of discussing the proposed Eules before they were promulgated. To give an instance of the species of objection I was bound to make, I told the Ministers that I had heard from outside sources that the new Eegulations restricted the concession to Treat}'- port provinces. Now, the original announcement made to me contained no such restriction. It said that, " wherever the use of native boats is now by Treaty permitted to foreigners, they shall equally be permitted to employ steamers or steam-launches," and if this very distinct promise were restricted, I'would be^fforqed to object most emphatically. Eventually I was authorized to see the Inspector-General of Customs, who had the English text of the Eegulations, with the understanding that if I had any alterations to suggest, the Yaiiien would discuss them with me at the next opportunity. I. saw SirB. Hart, and suggested the alterations and additions marked in red* on the inclosed copy. He agreed to all except one---the alteration made in Eule 8; — and I intended at an interview on the 4th June, which had been delayed ten days by the death of Princ^ Kung, and of which the Yamen had notice from the ist June, to discuss the pro-posed changes in accordance with the- understanding come to on the 25th May.-; . I; was therefore much surprised to receive a note from the Ministers on the eyening of the '3rd' Jiihe issuing the Eegulations unaltered, similar notes being sent at the same time to the other foreign Eepresentatives.- A-t the interview next day I told their Excellencies plainly that I^ considered their action a distinct breach of their engagement to me, and protested against the Eules as violating the original Concession and unsatisfactory in other respects. I followed this up "with a note,' placing the objections on record and forwarding a copy of the Eules marked with the changes I required. In addition, I, yesterday, sent the Ministers a letter embodying the substance of your Lordship's telegram of the tjth June, in which I was instructed to make it clearly understood that Her Majesty's Government would insist oA satisfactory regulations.- '■• :' " ' '. I have the honour to inclose a translation of the Yamen's note of (the, 3rd June-, transmitting the Eules, and also a short Memorandum on the changes which- !■ am pressing. Inclosure 1 in No. 260. 2 he Tsung-li Yamen to Sir C. MacDonald. Kuang Hsu, 'i^th year, ^thonoon., 15th day > .(Translation.) (^«"e 3, 1898). EVEE since China has entered into commercial, relations with foreign countries steam traffic has. flourished and commerce has advanced in consequence, but hithertb steamers have not been permitted to navigate the internal waters. Lately Soochow and Hangchow have been opened as trading ports, and as native boats passing to and' frb mostly employ steamers to tow them, passengers and goods are transported conveniently and with dispatch. Chinese and foreign merchants are asking leave to estabhsh Companies and build ships for traffic at the ports, and it behoves China to modify her policy to suit the requirements of the times and secure the utmost adva,ntage;; The Yamen now proposes to authorize the opening of inland waters lo navigation by sniajl steamers in the hope that trade will extend and Xho, li-kin revenue be benefited. In obedience to instructions, the Inspector-General of Customs has cbnsidered a set of Eules for the inauguration of steam navigation in inland waters, which have been -carefully examined, and may be acted on experimentally. • "> ■ , * .Printed in erased type and -italics. 176 The Yamen having memorialized the throne and received an Imperial Decree authorizing them, and having also instructed the North and South Superintendents of Trade, the various Governor-Generals, Governors, Manchu Generals-in-Chief, and Lieutenant-Generals, the Inspector-General of Customs, the various Customs Taotais, and the Superintendent of Trade at Canton to conform to them, in duty bound sends a copy of the Eegulations drawn up by the Inspector-General of Customs, for the informa- tion of Sir Claude MacDonald, that he may in turn instruct Her Majesty's Consuls to notify British merchants. If Chinese and foreign trade should henceforth increase, without detriment to China's sources of revenue, it will be most fortunate. The Princes and Ministers avail, &c. A copy of the Inland Steam Navigation Eules is appended. Inclosure 2 in No. 260. Inland Navigation Rules, loith alterations proposed by Sir C. MacDonald in italics. (A . ) — Registration. •1. The inland waters of the T^eatf ^rt p^eviaees Chinese Empire are hereby opened to sfflali steamers, native or foreign, piyiag fteia specially registered at Treaty ports. The word " inland " has the meaning assigned to it in section 3, paragraph 4, of the Chefoo Convention. 2. Small All steamers at Tseaty pefte engaged in trade, whether plying only in the waters of tbe a Treaty port, or going thence inland, are to be reported at the Customs and take out papers at the Customs containing owner's name and residence, name and type of steamer, number of crew, &c., in addition to whatever national papers they are allowed or required by law to carry. Such Customs papers are to be renewed annually, and are to be surrendered on change of ownership or when the vessel ceases to ply. The fee for the first issue of Customs papers will be 10 taels, and for each renewal 2 taels. 3. Sifiall steamers thus registered at the Customs may ply freely in the waters of the port without reporting their movements at the Customs ; but if they go inland they must report both departure and return. No unregistered steamer will be allowed to proceed inland. 4. As regards exhibition of lights, prevention of collisions, shipping of crews, and inspection of machinery, &c,, all such steamers are to observe the rules in force at the port they belong to. Such rules shall be published and form part of the Customs papers. (13.) — Revenue. 5. Cargo shipped under these Regidations at Treaty ports is to be reported to the Customs, and is to pay such duties as the Customs d e ci de *e fee le¥iab}e are entitled to levy under Treaty. Cargo brought to a Treaty port from inland is to be similarly dealt with. 6. Cargo landed or shipped inland is to pay at the place of landing or shipment whatever dues or duties the local Eegulations call for, subject to Treaty provisions. 7. If such steamers have vessels in tow, they must bring-to at whatever stations the vessels towed are required to stop at for their own cargoes and . the cargoes of boats towed to be dealt with as local Eules prescribe, and with'due regard to Treaty provisions. The local Rules shall be published through the Customs. Such steamers are not to tow on the Yang-tsze, without a special licence from the Customs. (C.) — Judicial. 8. Ofiences inland, whether against revenue laws or affecting person or property, are to be dealt with by the local authorities of the district in the same way as if there committed by their own people; but if the vessel concerned is foreign owned or the person impUcated is a foreigner or a Chinese employed on board such foreign-owned vessel, the local authorities are to communicate with the nearest Commissioner of Customs, and the Commissioner in turn with the Consul, wlie jaay eead a deputy te watefe tfee pseeeedtHrgs. -H tbe ©ffeade? is a iefeigaefj be is *© fee s»t te tfee Geesttl at tfee Bearest g^aty pwt iH tfee aaftse? p^e^jfeed fej^ Tfeaties wfeere f oreignefs witbe«t paoapoFts are aPFCSted 177 concenied, to whom the offender will be sent in the manner prescribed by Treaty, and who will investigate the change and act in accordance with Treaty and precedent. 9. If any such steamer passes inland stations that ought to be stopped at, without stopping, or if the crew, &c., create trouble inland, the inland barrier may inflict the penalty its Hegulations provide for such offence, and the Customs may withdraw the Customs papers and ref'use the vessel permission to proceed inland again. Where a foreign-owned steamer is concerned, the merchant retains the right to an investigation of the irregularity and the penalty under the Rides of the 31s« May, 1868. The above Eules are for the inauguration of steam traffic on inland waters, and are subject to such changes as may from time to time be found necessary. Inspectorate-General, March 9, 1898. Inclosure 3 in No. 260. Memorandum on Rules for Steam Navigation Inland {inclosed in Note to Yamen of June 3, 1898.) . , rl. — (i.) THE restriction to the " inland waters of the Treaty Port provinces " is inconsistent with the terms of the original Concession. (ii.) There is no necessity for the insertion of the word " small." The size of the steamers may safely be left to be decided by the necessities of navigation for the require- ments of trade.* (iii.) " Plying from Treaty ports " would impede purely local traffic. There are sections of the tipper Yang-tsze and other rivers which are practically cut off from Treaty ports by rapids, &c., yet it might be found advantageous to maintain steamers on these sections. (iv.) This interpretation of the word "inland" is introduced to cover "places on the sea-coasts " without possibility of doubt. 2. The addition of the words " engaged in trade " will relieve private launches, &c., from the formalities of this rule. 4. This addition is designed merely to secure publicity of the Eules referred to. 5. — (i.) Added for the sake of clearness. (ii.) It is obviously out of the question to allow the Customs a free hand to decide what duties they shall levy. The alteration invokes Treaty restrictions. 6. The same objection holds against this rule as it stands. The alteration subjects it to Treaty provisions. 7. — (i.) Again here a similar objection, which is removed in the same way. The publication of the " local Rules " being desirable and easily accomplished, it is also provided for. (ii.) Li-kill stations abound on the Yang-tsze, and the Li-kin authorities are afraid that if towing by inland steamers becomes general, much evasion of the revenue will result. The argument has some force, but is scarcely strong enough to support a total prohibition of towing on the Yang-tsze by inland steamers. I have therefore introduced, the condition " without a special licence from the Customs." .The restriction to steamers specially licensed to tow will suffice for the protection of the Chinese revenue, and at the same time will not interfere with the enterprise of reputable foreign, traders. 8. This rule as altered is less cumbrous than the original, and less likely to cause friction in practice. It is desirable at the outset that jiidicial control over steamers and crews in inland waters should be regulated as simply as possible, and the simplest procedure seems to be to make offences justiciable at the nearest Treaty port. As it stands, the rule leaves too much power in the hands of local authorities, from whom opposition, open and covert, must be expected, and would lead to abuses. 9. The addition safeguards the rights of foreign owners. The Eules referred to are " Eules for joint investigation in cases of confiscation and fine by the Custom-house authorities " (see p. 555 of Hertslet's " China Treaties.") [253] - 2 A ^HP 178 ,;', , ' No. 2«i. ' , :-., The Marquess of Salisbury' to Sir C. Mac Donald. Sir^ Foreign i>ffice, August 5, 1898. ,, , , I HAVE received your despatch of the 11th June last, reporting your uegotiations With the- Tsung-li Yamdn for the drawing _up and prbmulgatioh of the new Eegulations for steam navigation, on the internal w;itervS of China, and I approve your proceedings in the-matter. '-' ' ' - "' ■- I am, &c. (Signed) SALISBUEY. . No. 262. Sir C. MacDanald to the Mo^rquess^ of Salisbury . — {Received August 6.) (Telegraphic.) Peking, August 6, 1898. I WAS informed by the Yamen this afternoon that neither Francs nor any other Power was opposing the opening of Nanning, and that arrangements would be made for its opening as soon as the Kwangsi rebellion was crushed. No. 263. ' ■ ' • Sir C. MacDonald to the Mai-qiiess of Salisbury. — (Received' August Q.) { Telegraphic.) ' Peking, August Q, iU^. PEKING-HANKOW Eailway : My telegram of 1st August. " A Sbanghae newspaper has published what purports to be a copy of the Belgian Agreement. It is considered that the efiect of the clauses relating to the Eusso-Chines^ Bank— though the wording of these is very obscure— is that the bank advances the capital and holds the shares, which there is nothing to show they will put on the market. , When I to-day protested strongly to the Yamen against the Agreement, they declared that as far as they knew the prdvisions I referred to were not contained in it. The . Agreement, they assured me, had not yet been submitted to the Throne for ratification, and, moreover, would not be ratified if the efiect were found to be such as described by me. '' No. 264. Sir C. MacDonald to the Marquess of Salisbury. — {Received August 6.) ('^^^S^^P^^-) , . n , , ■ r ^^^'''9' ^^ff^^ 6, 189,S. WITH regard- to the Pakhoi-Nannmg Eailway, the Yam^n state that notes have been exchanged with the French Minister to the efiect that France would build this line if any other Power offered to do so ; but they deny that an Agreement aivins the railway to the French has been si-rned. o t No. 265. Sir C. MacDonald to the Marquess of Salisbury. — {Received August 7.) (Telegraphic ) Peking, August 7, 1898. A CIVIL Syndicate m Tonquin the "Mission des fitudes dans la Chine Meridio- nale, has, according to a report received from Her Majesty's Consul at Ssiimao organized two expeditions for the exploitation of Central China ' One party was to leave Mengtsze for Yunnan Fu, and further, if necessary this i» probably the expedition reported m my telegram of the 9th May, which as I have ascertained since, is under the leadership of the French traveller, M. Bon in ' 179 The second pan V was tu start from Lungchow for the Yang-tsze,, journeying; vi4 Kwtogsi, Kweichow, 'and Hunan, and Her Majesty's Consul at Hankow has reported their arrival in the latter province, wliere they are now engaged in purveying. No. 26(). Sir C. MacDonald to the Marqti.ess of SaUsharyi— [Received August 8.) My Lord, Peking, June 18, 1898. 1 HAVE the honour to inclose translations of two noteworthy Decrees which appeared in the "Gazette" of the 11th June. They show that a real need for radical reform is thoroughly recognised by the Court at last, but there is little reason to hope that the Imperial admonitions will move the Chinese bureaucracy deeply. ■ -^ I have, &c. (Signed) CLAUDE M. MacDONALD. Inclo-sure 1 in Ko. 266. Imperial. Derree. (Translation.) FOE a long time past the condition of Imperial affairs has been a subject of discus- sion among the officials of the Empire, both metropolitan and provincial, with a view to bring about changes necessary for improvement. Decrees have been frequently issued by the Emperor, for a special system of examinations, for doing away with the surplus soldiery, for the alteration of the military examinations and for the institution of colleges. In spite of the fact that these things have so often been carefully thought out, and so many plans liave been formed, there is no general consensus of opinion, and discussion is still rife as to which plans are best. There are some among the older officials who affirm that the old ways are best and need no alteration, and that the new plans are not required. Such babblings are vain and useless. The Emperor puts the question before you tjius : In the present condition of Imperial affairs, with an untrained army, with limited funds, with ignorant '* literati," and with artisans untaught because they have no lit teachers, is there any difficulty in deciding, when China is compared with foreign nations, who is the strong and who is the weak ? It is easy to distinguish between the rich and the poor. How can a man armed with a wooden stick smite his foe encased in a coat of mail ? The Emperor sees that the affairs of the Empire are in an unsettled condition, and that his varrous Decrees have availed nothing. Diversity of opinion, each unlike another as fire differs from water, is responsible for the spread of the existing evil. It is the same evil as that which existed in the Sung and Ming dynasties {circa a.d. ].000 and 1500). Our present sj^stem is not of the slightest use. We cannot in these modern days adhere to the ways of the five Kings (circa B.C. 2500) ; even they did not continue exactly after the manner of their respective predecessors. It is like wearing thick clothes- in summer and thin ones in winter. • Now, therefore, the Emperor orders all officials, metropolitan and provincial, from princes down to " literati " to give their whole minds to a real endeavour to improvement. With perseverance, like that of the saints of old^ do your utmost to discover which foreign country has the best system in any branch of learning and learn that one. Your great fault is the falseness of your present knowledge. Make a special effort and determine to learn the best of everything. Do H6t merely learn the outside covers of the books bf knowledge, and do not make a loud boast of your own attainments. The Emperor's wish is to change what is now useless into something tiseful, so that proficiency may be attained and handed on to posterity. The Metropolitan College will be the' chief one, and must be instituted at once. The Emperor orders the Grand Councillors to consult with the Tsung-li Yam§n on the subject, and to' Gome to a decision as soon as possible, and then to memorialize the Throne. . , : ', Any of the Compilers and graduates • of the Hanlin College, the secretaries- of the Boards, "the officers of the Palace Guards, ' expectant Intendants, Prefects, district [253] 2 A 2 ISO Magistrates, and subordinate oflEicials, sons and brothers of officials, the hereditary officials of the Eight Banners, and the sons of the military officials of the Empire, can enter the College who wish to do so. By this means knowledge will be handed down from one generation to another. It will be strictly forbidden to members of the College to be careless or dilatory iu their studies, or to introduce as students any of their friends without regard for the latter's capabilities ; for such things would frustrate the benefit of this excellent plan of His Imperial Majesty. Kuang Hsu, 2Ath year, Ath moon, 2Srd day (./mw 11, 1898). Inclosure 2 in No. 266. Imperial Decree. (Translation.) NOW that intercourse between China and foreign nations has become so frequent, the savoir /aire of officials is of the greatest importance. The Emperor therefore hereby orders the Viceroys and Governors of the Empire to select from all grades of their subordinate officials such men as are- to their knowledge of good reputation in everyday life, and who are honest, and have some knowledge of modern things, and have no grave faults. The selected officials are to be sent to the Minister of the Tsung-li Yam^n, who will examine them, and present the successful candidates before the Emperor for appointment to special official posts. Kuang Hsu, 24:th year, Ath moon, 23rd day {June 11, 1898.) No. 267. Sir C. MacDonald to the Marquess of Salisbury. — [Received August 8.) My Lord, ^ Feking, June 18, 1898. I INCLOSE translation of a Decree pubhshed in ihe " Peking Gazette '' of the 12th June, which has for its text the advancement of commerce and -the extension of intercourse with foreign nations. The proposal to send members of the Imperial family abroad is considered a startling innovation. Hitherto their movements have been for political reasons very closely circumscribed. I have, &c. (Signed) CLAUDE M. MacDONALD. Inclosure iu No. 2G7. Imperial Decree. (Translation.) THE Tsung-U Yamen have reported to the Throne that in obedience to instructions they have considered the requests contained in the memorial of the Vice-President Jung Hui, for the appointment of special Ministers of Commerce, and the sending of members of the Imperial family to visit foreign nations. Commercial matters are of the highest importance, and the suggestion is one which deserves to be acted upon. As the result of a former consultation of the Tsung-U Yam§n on the subject, commercial bureaus have been estabhshed at the capitals of the provinces, and the officials of each province have ordered the leading gentry and merchants to elect from their numbers managers of the bureaus, who will then draw up commercial regulations. It is to be hoped that strict conformity to these Eegulations will lead to a daily improvement in trade ; and the Emperor orders the Viceroys and Governors of the provinces to direct the gentry and merchants -to strictly obey the official instructions, -and to consult together for the most speedy and satisfacto'ry arrangement of commercial 181 matters ; it is to be hoped that in this way the officials will be kept in touch with the merchants. We must not adhere bhndly to our old customs. Let the officials of each province memoriaUze the Throne, and inform the Emperor how commercial affairs are managed in their respective provinces. "With regard to the suggestion that members of the Imperial Family should go abroad, this is a new departur^i, but is quite in accordance with modern custom. The Emperor, therefore, orders the Court of the Imperial clan to select from the Trinces of the first three ranks any who are well versed in modern affairs and ideas, and who are on the side of modern improvement, and to inform the Emperor of their selection. The selected Princes will then await the Emperor's orders witli regard to their journey. Kuanq Hsu, 24iA year, 4i/t moon, 2Atk day {June 12, 1898). No. 268. Sir ('. Mac Donald to the Marquess of Salisbury. — (Received August 8.) My Lord, Peking, June 18, 1808. THE higher circles of the Chinese Government were considerably agitated by the sudden appearance on the 15th June of a holograph Decree dismissing W6ng T'ung-ho, a member of the Privy Council and Tsung-li Yam^n, and a President of the Board of Revenue, from office and sending him into retirement. The text of the Decree, a translation of which is inclosed, was markedly severe, and betrayed much personal resentment. I was inclined at first to believe that Weng's fate was not unconnected with the liberal changes foreshadowed by the Decrees of the 1 1th and 1 2th June, translations of which are inclosed in my two previous despatches of this day's date. However, the current opinion in Peking is that the Empress Dowager is reasserting herself, now Prince Kung is gone, and this opinion is supported by a Decree which appeared in the same Gazette (15th June) ordering all officials of the highest ranks to pay homage to the Empress Dowager on occasions when similar marks of respect are due to the Emperor. I have the honour to inclose a translation of this Decree. W6ng T'ung-ho made his first notable, public appearance as optimus in the Metropolitan examinations of 1856. This much-prized distinction earned for him later the post ,of tutor to the Emperor, by means of which he established a predominating influence at Court. He passed rapidly through various posts in the Central Administra- tion, until he became in 1886 a President of the Board of Eevenue. In 1895, during the Japanese war, he was appointed to the Tsung-li Yamen, and at the date of his degradation he was, as I have remarked already, a member of that body and of the Privy Council. A reactionary, his influence was invariably against innovation and progress. I found him extremely obstructive, notably during the Burmah frontier and West Kiver negotiations, but he appeared to me to be improving latterly. Personally, he was prepossessing, courteous, and «cliolarly — an excellent type of the Conservative •Chinese statesman. (Signed) ' CLAUDE M. MacDONALD. Inclosure 1 in No. 268. Jmperial Decree. An Imperial Mandate. {Translation.) WllNG T'UNG-HO, Assistant Grand Secretary and President of the Board of, Eevenue, has of late made many errors in the conduct of business, and has forfeited all ■confidence ; on several occasions he has been impeached to the Throne. At his private audiences of the Emperor he has replied to His Majesty's questions' ■with no regard for anything except his own personal feeling and opinion, and he has 182 made no attempt to conceal his pleasure or displeasure either in his speech pt in his countenance. It has gradually become clear that his ambition and rebellipus feeling have led him to arrogate to himself an attempt to dictate to the Emperor. It is; impossible to permit him to remain in the responsible position of a Grand Councillor. In, former days a strict inquiry would have been held, and his crime punished with the utmost rigour of the law. Taking into consideration, however, his long service as tutor to the Emperor, His Majesty cannot bring himself to mete out to him such a severe penalty,. Let Weng T'ung-ho vacate his posts, and retire into private life, as s^ warning that hie is preserved (froni a worse fate). Kuanq Hsu, 24:th year, Ath moon, 27th Jay {June 15, 1898). Inclosure 2 in No. 268. fmperial Decree^ (Translation.) IN future, whenever officials receive favours or gifts from the Empress Dowager, or receive promotion to the highest civil or military rank or to the Vice-Presidency of a B6ard, they must (stfter thanking the Etiaperor) present themselves before the Empress Dowager and thank her ; and in similar easeis all provincial Tartar-Generals, Lieutenant- Generals, Yiceroys,' Governors, and -Gommanders-in-chief must write their thanks to the Empress Dowager (as well as to the Emperor). ~ • • Kuanq Ilsil, 24:th year, Ath nioon, 27th day {June 15, 1898). No. 269. Sir (J. MacDonold to the Marquess of Salisbury. — {Beceived Au§ust 8.) My Lord, Peking, June 18, 1898. IN continuation of my despatch' of the 27 th May, I have the honour to inclose copy of a despatch which I have received from Her Majesty's Consul at Hankow, giving further particulars concerning the riot at Shashih. * I have, &c. (Signed) CLAUDE M. MacDONALD. " Inclosure in No. 269. ( 'onsul Warren to Sir C. MacDonald. Sir, Hankow, May 16, 1898. LAST night I received your telegram of that day's date, instructing me to keep you fully informed by telegraph as to the riots in Sungpu and Shashih. I at once telegraphed to you that all the Europeans from both these places had arrived here in safety, and that the Hunan men alone were responsible for the riots at Shashih; further, that the Consular junk in which Mr. Clennell lived was uninjured, and under the protection of Chinese gun-boats. From the reports of those come down from Shashih there is no doubt that the riot was deliberately planned, even to the dispute which was made the immediate pretext for the outbreak. A similar attempt was made on the previous day, but the intending rioters were dispersed. On the evening of Monday, the 9th, another Hunan man repeated the nuisance of the previous day, and, on being stopped by one of the Customs boatmen, promptly threw himself on the ground, and called out that he was seriously wounded. Gongs Were beaten, and the Hunan men immediately collected together, and proceeded to fire all buildings and boats the property of ' foreigners,' or in any way connected with foreign trade. Nothing was spared : the Custom-house, Haikuah' Bank, Commissioner of Customs' house,, China merchants' property, Jardine, Matheson, and Co.'s property, and the Japanese Consulate — all were destroyed. 183 Messrs. Butterfield and Swire's house was only slightly damaged, and the Swedish Mission was partially looted, but not burnt. The Consular junk was saved by the Ctiriese in charge, who managed to get hold of one of the native lifeboats, and the Wind'beihg fair, 'Succeeded in towing the junk to the othier side of the river." ;A11 other JTinks and hulks occupied by foreigners were burnt The Chinese authorities are now keeping guard over the ruins, aiid report that they have irrested sorne of thie ringleaders. ' '^ ■ '•- ' ' - ; : In view offthe fact that the riot was attempted on the previous day, the' Ideal •officials cannot iber corisidefed to have exercised pfcoper vigilance; When the riot broke •oiit they appeared on the scene with a few soldiers ; but did nothing bej'dnd exhorting the mob to keep the peace. ' The Hunan men are most unruly ; so much so, that the local officials consider it quite sufficient excuse for any outrage to say that it was perpetrated by Huiian men, whom, they make no scruple to confess, they cannot control. I am conviijced that this part of the Yang-tsze Valley will never long be free from outrages of the; same description as that which has just taken place at Shashih, until Hunan is thoroughly opened up,, and the people of that province taught that they cannot break the law with impunity. I have, &c. ■ , (Signed) PELHAM L: WAEEEN.' No. 270. Sir C. MacDonald to the Marquess of Salisbury. — {Received August 8.) My Lord, Peking, June 20, 1898. WITH reference to my despatch of the 27th ultimo and to previous •correspondence respecting an outbreak of rioting at Shashih in the Yang-tsze Valley, I have the honour to forward herewith to your Lordsliip copy of a despatch which I have received from Mr. Clennell, Her Majesty's Acting Consul at Shashih, reporting the steps taken by the Chinese authorities in connection with the rip t. ;; :I instructed Mr. Warren, Her Majesty's Consul at Hankow, to settle the case with, the Viceroy,: to ask for the punishment of the officials and ringleaders concernedj pay-^ ment for damage done, coupled with a dema,nd for an Imperial Decree against a recurrence of the riots. ■ I also urged him^by telegraph to press the Viceroy strongly for the opening up of Hunan, adding that, as the Chinese Goyernment had officially informed me over two months ago, ;that yo-chow..was tO; be opened, he should use his influence with his Excellency to fix a near date for the fulfilment of this announcement. I have approved of Mr. Clennell's action in writing to the Taotai informing him of the amount of damage suffered by Messrs. Jardine, Matheson,"and Co., Messrs. Butter- field and Swire, and by his own writer and servant, which he coupled with the intimation that the settlement of these private claims is a,l together without prejudice to any public steps which may be proposed or adopted in other quarters. i: rs Mr. Clennell, as your Lordship will note, states that he thinks Shashih is now as ■safe a place to live in as it ever has been. ' ' , ; ,, I have, &c. , j . , : (Sjgned) , CLAUDE M. MacDONALD.. ' Inclosure in No. 270. Acting Consul Clennell to Sir C. MacDonald. Sir, Shashih, June 6, 1898. I AM now in a position to report to you the, steps taken by the Chinese aujthorities in relation to the riot at this port on the 9th May, and to form an opinion as to its present condition as a place of safe residence for Europeans. On the 12th May, while at Hankow, I visited his Excellency Tan, Grovernor of Hupei, and at that' tinie Acting Viceroy of these provinces. In the course of a con- versation in which he and Chii, the Customs Taotai at Hankow, took part, I was told that no further disturbance bad occurred or was apprehended. Setting on one side the trifling quarrels which ' afforded the immediate occasion of .the riot, his Excellency could not tell me what was its real cause. There were, he said. 184 at Ching-cliou and Shashih about 1,000 soldiers, other than Hunanese, and they were reliable. Six a,rrests had been made. An officer named Cha, of the rank of Taotai, had gone to Shashih to co-operate with the ofFiciaits at Ching-chou. Lung Chao-lin, who holds the rank of expectant Prefect, and ]ia.s hitherto been in charge of the Pao-chia office, and also, I believe, of the projected Chinese internal loan, had likewise been deputed to attend to the question, and an expectant District Magistrate named T'sai had been sent to assist. In several communications , to Mr. Warren, his Excellency had evinced some anxiety that a British gun-boat should not proceed to Shashih. I asked what his objec- tion was, and gathered from his indirect reply that he did not feel at ease regarding the safety of Wuch'ang and Hankow. He advised me to delay my return to Shashih. At that time I was unwilling to stay in Hankow, though I ultimately did so for other reasons. A few days later, as you are aware, the Taolai of Ching-chou made me a similar request, also begging that no gun-boat should be sent here. In the light of what has since occurred I am inclined to think that this request for delay was due to a desire to get the Hunanese troops, hitherto stationed here, well out of the way before any foreigner returned. On" the 23rd May the Chinese gun-boat " Ts4 Hai" arrived with 275 soldiers, natives of several provinces, but mostly of Hupei, belonging to the Wu-Fang camp at Wuch'ang. Five days later the HUnanese troops (Wu K'ang camp) were sent dowrr river in the same vessel. They also numbered 270 or 280 men, and were under a Tsung- Ping named Chiang. On the day on which the Wu Fang troops arrived four persons, named Hsii T-jSn, Li T6-sheng, Chang T'ai-chen, and Yiian Hui-hao, were beheaded, and the remains of their heads are still hanging in baskets suspended on poles at the Customs jetty. These are said to have confessed to setting fire to the Commissioner's house and the China merchants' hulk — indeed to have rather gloried in the deed. Over thirty others are now under arrest, of whom I am told several will shortly suffer the death penalty. There is a story current, the truth of which I cannot vouch for, that one of the Headmen of the Hunan Guild was arrested and subjected to tortures of the most barbarous description, from the effects of which he died. Most of the men under arrest, including those who have been executed, are, I believe, Hunanese, but some Szechuan men have also been taken. Everyone agrees that the townspeople were innocent of serious participation in the riot, which was the work of the waterside population, and mainly of the Hunanese element in that. Proceedings have been instituted against Chang Hung-tse, a Szechuanese, the Manager of the China Merchants' Company. But he was warned in time, and has absconded — probably to Shanghae. There is an evident disposition on the part of the officials here to throw the blame of provoking the riot upon that Company, and it is said that they will be made to pay whatever may be required as compensation. This scheme is, of course, not avowed. It- has at least the merit of ingenuity, as the Company were probably the heaviest losers. I feel little doubt of the correctness of my information. ,.-. On my arrival here on the night of the 1st June I found my junk moored in a creek on the south side of the river opposite the town ; but I took the first opportunity of favourable weather to request the Taotai to lend me a steam-launch, the " Ch'u Wei," with the assistance of which I had it towed across to within a few yards of its orisrinal position yesterday afternoon. ° I have paid a cursory visit to the ruins. The walls and chimney-stacks of the Commissioner's house are standing, also the walls of the China merchants' property. The Customs Bank, which I had believed to have been destroyed, is only slio-htlv injured, and is already in a habitable state of repair, but the destruction of the other houses has been so complete that httle is recognisable. Two pieces of charred timber are all that shows above water of the China merchants' hulk, while of the Customs junks- not a trace has ever been seen. Eebuilding operations are in progress at the Custom- house, and the remains of other buildings are being demolished preparatory to re -erection A company of the Wu Fang soldiers, numbering fifty men, are stationed in five tents on the shore close to my junk. They have constructed a trench and mud wall round their encampment. Tlie Taotai of Ching-chou called upon me on the 2nd June while I was still on the south side of the river, and several other officials have come to see me since AlthouTli the lowu .•^(ielllt^ to be perfectly quiet, T am deferring mv return visits until I am -i litfle more ft)iili(lenl f)f' safel v. 185 On the 3rd June there was a street fight between members of the Wu Ch'ang and Hanyang Guilds. It was promptly suppressed, and I do not regard it as of any importance. Such fights are common here and in neighbouring towns. Chinese connected with the Swedish Mission report that " eye scooping " stories continue to be current in some quarters. However, they have asked me to write to Mr. Tjellstrom, of that Mission, that there is no danger in the men of the Mission returning, though the ladies and children had better wait a little while yet. Three men are under arrest for looting the Mission-house, and one or two arrests have been reported to me in connection with spreading the usual defamatory reports against foreigners. My writer complains of insulting words having been addressed to him in the streets. Her Majesty's ship " Esk " passed here yesterday afternoon on her way to Ichang. I went on board and explained the situation, but deemed it undesirable to detain her. As I told you in my telegram of the 2nd June, I found all Government property in order at this Consulate. My personal losses are insignificant. The only article of mine stolen was a clock, though the rioters opened several drawers and cupboards, including my stationery cupboard and archive press. Several Proclamations have been issued, but they have been so damaged by rain that I have hitherto been unable to obtain copies, I have asked the Taotai to supply them, and will forward copies to you if they seem of sufficient interest or importance. On the 4th June I received your telegram informing me that you had no instructions for me at present. I think it desirable, however, to write shortly to the Taotai to inform him of the amount of damage sufiered by Messrs. Jardine, Matheson, and Co., Messrs. Butterfield and Swire, and by my writer and servants, intimating to him that the settle- ment of these private claims is altogether without prejudice to any pubHc steps that may be proposed or adopted in higher quarters. I trust you will approve of this. Mr. Lung, above mentioned, told me this morning that it was intended to construct a ditch and fence entirely round the group of houses, &c., near the jetty which are connected with foreign trade, to station armed junks both above and below, and to regulate the ingress of natives to the space so reserved. An incidental result of the riot has been a serious check to native business, besides the complete suspension of the foreign or steamer-borne trade of the port. Several cash shops have failed in consequence. The Head of the river police (Ching Chiang Camp) called on me this morning. He explained that he had only 30 men out of a total force of 200 odd available at the time of the riot. Even of these several were on duty at the Swedish Mission or elsewhere, and of those at the foreign jetty 11 were wounded in an attempt to stem the riot. He himself was hit, but not hurt. I cannot feel sure that this story is true. These menrhad rifles, but, it is said, could not venture to fire without orders. One asks in some wonder wh}' the order was not given. My impression is that while they may not have neglected "their duty so egregiously as the Hunanese did, and while they certainly deserve credit for providing boats for the escape of the customs officers, and for assisting to tow my junk out of danger,' their conduct on shore was nothing to boast about. Several armed junks and the launch " Ch'u Wei " are stiU stationed close by me. However, I think Shashih is now as safe a place to live in as it ever has been. I have, &c. (Signed) W. J. CLENNELL. No. 271. Sir C. MacDonald to the Marquess of Salisbury, — {Received August 8.) My Lord, > Peking, June 22, 1898. ON receipt of your Lordship's telegram of the 9th June, with reference to the Peking-Hankow Railway, I lost no time in applying to the Tam^n for an interview, which was fixed for the afternoon of the 14th June. This meeting being afterwards postponed to the 16th by the Ministers, many of whom had been unexpectedly summoned to the Summer Palace, I thought it expedient to prevent further delays by conveying the Tist of your Lordship's message to their Excellencies through the Yam^n Secretaries, and this was accordingly done on the afternoon of the 14th June. On the 16th t^§ communication was repeated in detai^ to th§ Mipisters. They at [253] ' " 2 B ■ 186 once denied all knowledge of negotiations with the Russo-Chinese Bank for a loan in connection with the Peking- Hankow line. In any case, they said, the whole matter was in the hands of Sh§ng, the Director-General of Eailways, who in the ordinary course would only report to the Yam^n when he had come to some sort of a definite agree- ment, but at the moment, as far as their knowledge went, Sh^ng was dealing only with the Belgian Syndicate, and neither the Russo-Chinese Bank nor the Eussian Govern- ment had even broached the subject of financial assistance. It is true that the Eussian and French Representatives had spoken at the Yamen recently about the railway, but all they had done was to ask the Ministers to prevent Sh^ng from breaking with the Belgian Syndicate ; nothing more. The Grand Secretary Li was absent from the meeting (he was at the Summer Palace), and as the other Ministers were inclined to consider him the person responsible for Sheng's dealings, I took an early opportunity of obtaining from him a confirmation of the Yamen's assurances. This I did on the 18th June. Finallj^ to remove the smallest misapprehension, and at the same time to further impress the Yamen with the importance attached to this matter by Her Majesty's Government, I reviewed it again in an interview last Monday (20th June), when Li was present, and obtained the most formal assurances that neither the Russo-Chinese Bank nor the Russian Government were in any way pecuniarily interested in the construction of the Peking-Hankow Railway. I have, &c, (Signed) CLAUDE M. MacDONALD. No. 272. Sir C. MarDonaJd to the Marquess of Sal/'shvn/. — [Received Atigust 8.) My Lord, PeJcing, June 23, 1898. WITH reference to the last two paragraphs of my despatch to your Lordship of the 27th May, I have the honour to inclose copy of a note addressed to me by the Yamen on the subject of the assistance to be given hj the Hong Kong Government to the Chinese Customs authorities, and of the reply I returned to it. I have, &c. (Signed) CLAUDE M. MacDONALD. Inclosure 1 in No. 272. llie Tsung-li Yamen to Sir C. JfacDonald. Kuang Ilsii, 24:th year, Uh moon, lOth day (Translation.) _ _ [May 29, 1898.) IN the course of the interviews, during which Sir C. MacDonald negotiated the special Article dealing with the extension of the Hong Kong boundaries, his Excellency promised the Yam6n that the British (Colonial) authorities would be requested to crive the Kowloon Customs bond fide assistance in matters connected with the receipt of duties and search, and asked that a note should be addressed to him for communication (to the aforesaid authorities). The matters in which co-operation is required are as follows : — That opium, foreign, native, or prepared, shall not be allowed to be shipped without a permit from the Maritime Customs, and that the Hong Kong police shall maintain a thorough search in order to put a stop to any breach of this rule. That opium shipped without a permit shall be confiscated 'and sold at once, and the proceeds divided equally between the British authorities and the Kowloon Customs— the Hong Kong police to be rewarded from the half retained by the British authorities. That the Maritime Customs shall be authorized to collect the duties leviable on opium shipped under permit (at a point) near Houp- Kouff. That the opium farm, estabhshed at Hong Kong, shlll be continued, and while the farm shall be allowed to maintain the fixed number of branches at Hong Kong only the Maritime Customs shall also be authorized to send men from time to time to these branches to examine the books ai:;d stocks, 187 That the Hong Kong Hules, old and new, for the regulation of foreign opium shall be kept in operation. It is also requested that the present proposals shall be added to them and followed. Further, that arms shall not be allowed to be shipped for Chinese coast and riverine ports without a permit from the Maritime Customs. That the branch stations for the collection of duty already established by the Maritime Customs within the new frontier shall be retained where they are, and that the limits fixed for the movements of Maritime Customs revenue-cruisers on prevention duty shall remain as they are ; otherwise an additional regulation must be made laying down how duties are to be paid on goods carried by Chinese junks and West Eiver steamers (at a point) near Hong Kong ; or the Hong Kong Harbour Master should send the manifest of each vessel entering and leaving to the Maritime Customs without delay, for purposes of supervision. If the Kowloon boundary is extended the Maritime Customs will have to add to the immber of branch stations, and the British authorities should be asked to defray the cost of building them. As regards Customs matters, the Hong Kong authorities should be asked to recog- nize the Kowloon Commissioner as an (or the) officer appointed by China, treat with him amicably, and give him every assistance. As for boundaries, the limits of water demarcation should be carefully defined, and each country should administer the waters belonging to it. But if a vessel pursued by a revenue-cruiser on account of smuggling or other breach of the law should seek to escape by passing the boundary, both countries shall allow the pursuing cruiser to follow up the vessel across the boundary, in order to put a stop to " hide-and-seek " abuses. The Prince and Ministers have the honour to place the above proposals, which have been submitted by the Inspector-General of Customs, before Sir Claude MacDonald, that he may inform Her Majestj^'s Government, and that the Governor of Hong Kong may be instructed to let the British officials concerned know that zealous assistance should be given (to the Maritime Customs). ' It is expected that the revenues of both countries will reap advantage, and it is con- fidently hoped that the friendly relations existing between them will become all the more intimate. The Prince and Ministers avail, &c. (Seal of Yamen.) Inclosure 2 in No. 272. Sif C. MdcDondld to the Tsung-li Yamen, MM, les Ministres, Peking, June 10, 1898. IN" reply to the Yamen's note of the 29th May, 'with reference to the assistance to be given to Cliinese Customs authorities at Hong Kong, I am telegraphically instructed by Her Majesty's Government to assure your Highness and your Excellencies that as soon as the territory leased under yesterday's Convention has been handed over, the Hong Kong Government will take all possible precautions to prevent it from being used to facilitate smuggling into China, or in any other way detrimental to Chinese interests. The Yamen will recognize that it may be difficult at once to organize adequate police measures, but the Colonial authorities will be definitely instructed to use their best endeavours to fulfil this undertaking. While communicating .the above for the Yamen's information, I avail, &c. (Signed) CLAUDE M. MacDONALD. No. 273. Sif G MaeDondld to the Marquess of Salisbury/. — {Recdud August 8.) My Lordj, Peking, June 24, 1898. I HAVE the honour to inclose a translation of what I believe is an authentic version of the additional agreement concluded on the 7th May at Sti Petersburgh. [253] 2 B 2 188 An additidnal instrument of the sort is required ^^^^^ ^^^^f 1^5.1 wiTnclosed Agreement for the lease of Port Arthur and Tahenwan, a precis of which was inclosed in my despatch of 29th April. (Signed) ^CLAUDE M. MacDONALD. Inclosure in No. 273, Russiati Foreign Office's Special Agreement. ^^''"THE°SLrnments of Russia and China being desirous of adding some stip^^^^^^^^^^ to the Treaty concluded at Peking on the l5th March, 1898 (Russian Calendar), the Plenipotentiaries of both Governments have agreed upon the following :— ^^ ,, ^^^ Article I. In accordance with the Ilnd Article of the origmal Treaty the northern territory leased and yielded to Eussia-Port Arthur, Tahenwan, and the Liaotung Peninsula-shall commence from the north side of A-tang Bay on the .^^st ^^ast ot Liaotung and shall pass through the ridge of A-tang Mountam (the ^^^f^^^^^ ^"Jf ^^^^^ included in the leased ground) to the east coast of Liaotung near the ^o^Oi side oi Pi-tzii-wo Bay. Russia shall be allowed the use of all the waters adjacent to the leased territory and" all the islands around it. ^ a a A^*^^rr,,r.o Both countries shall appoint special officers to survey the ground and determine the limits of the leased territory. ^ n • „„^^;i„„„„ Art II To the north of the boundary fixed in Art. I, there shall, m accordance with Art. V of the Peking Treaty, be a neutral ground, the northern boundary of which shall commence on the west coast of Liaotung at the mouth of the Kai-chou River, shall pass north of Yu-yen-ch'ung to the Ta-yang River and shall follow the left bank of that river to its mouth, which shall be included m the neutral ^^^^ Art' III. The Russian Government consents that the terminus of the branch hne connecting the Siberian Railway with the Liaotung Peninsula shall be at Port Arthur and Talienwan, and at no other port in the said peninsula. It is further agreed in common that railway privileges in districts traversed by this branch line shall not be given to the subjects of other Powers. As regards the railway which China shall [may! herself build hereafter from Shan-hai-kuan m extension to a point as near as [lit. nearest to] possible to this branch line, Russia agrees that she has nothing to do with it, , Art. IV, The Russian Government assents to the request of the Chinese Government that the Administration and pohce of the City of Kinchow shall be Chinese. Chinese troops will be withdrawn from Kinchow and replaced by Russian troops. The inhabitants of the city have the power to use the roads from_ Kinchow to the north boundary of the leased territory, and the waters usually required near the city, but they have no power to use the sea-coast round about. Art. V. The Chinese Government agrees [lit. agrees to recognize]. 1. That without Russia's consent no concession will be made in the neutral ground for the use of subjects of other Powers. 2. That the ports on the sea-coast east and west of the neutral ground shall not be opened to the trade of other Powers. ,3. And that without Russia's consent no road and mining concessions, industrial and mercantile privileges shall be granted in the neutral territory. No. 274. Sir C. Mac'Donald to the Marquess of Salisbury. '■^{Receiv^d August 8.) My Lord, Peking, June 24, 1898. IN continuation of my despatch of the 11th June, I am glad to be able to report to your Lordship that the additions and alterations in the rules for internal navi- gation, which I proposed in my note of the 3rd June to the Yamen, have all been accepted in principle, except one. As regards this, the alteration in Rule 8, the Ministers, following Sir Robert Hart's advice, object that the preliminary investigation of offences committed by Chinese employed on foreign ships by the Consul concerned would entail 189 much inconvenience. The scene of the offence might lie at any distance from the Consulate, and the conveyance of parties and witnesses might be a very troublesome and expensive business. The rules being experimental, I propose at my next interview at the Yamen to waive this amendment for the present, but to reserve my right to bring it forward again should Eule 8 as it stands work badly, I have, &c. (Signed) CLAUDE M. MacDONALD. No. 275. Sir C. MacDonald to the Mafquess of Salisbury.— (Received August 8.) My Lord, Peking, June 24, 1898. I AM informed by the Tsung4i Yam^n that the French demands reported in my despatch of the 27th May, are still under discussion, the delay being caused evidently by China's objection to including the railway Concession with the other and more usual items of compensation for a missionary outrage. I thought it advisable, in view of the railway negotiations which I understand are being carried on mainly at Paris, to address the Ministers of the Yamen a note, warning them strongly against permitting preferential rates or duties of any kind whatever. I reminded them that any restriction of that nature would conflict seriously with China's Treaty obligations, and would be strenuously opposed by Her Majesty's Government. I have, &c. (Signed) CLAUDE M. MacDONALD. No, 276. Sir C. MacDonald to the Marquess of Salisbury. — (Received August 8.) My Lord, Peking, June 24, 1898. THE posts vacated by Weng T'ung-ho, ""as reported in my despatch of the 18th June, have been conferred by Imperial Decrees, dated yesterday, on Wang Wen-shao, Viceroy of Chihli, who is now a member of the Privy Council and Tsung-li Yamen, and a President of the Board of Eevenue. The Viceroyalty of Chihli is conferred on Jung' Lu, a Manchu of progressive tendencies, who has been General Commandant of the Gendarmerie at Peking during the past few years. The latter vacancy is filled by Ch'ung Li, one of the Ministers of the Tsung-M Yamen, and a President of the Board of Punishments. I have, &c. (Signed) CLAUDE M. MacDONALD. No. 277. J/r. Balfour to Sir C. MacDonald. (Telegraphic.) Foreign Office, August 12, 1898. I BEQUEST you to inform me whether you know anything of a concession said to have been granted by Imperial Edict to a Chinese Syndicate, and transferred to a French Syndicate for the construction of a railway to connect Kiang-kan with Hangchow, in the Che-kiang Province. No. 278. Sir C. MacDonald to the Marquess of Salisbury. — (Received August 13.) (^telegraphic.) ^ Peking, August 13, 1898. IN my telegram of the 6th August, I reported that the Yamen had assured me on that date that they would not ratify the Agreement with the Belgian 190 Syndicate for the tekmg-Hankow line, if it were found to contain tlie provisions mentioned by me as to the loan being financed by the Eusso-Chinese Bank. I learnt on the 9th that the Yamen had, under the influence of Li Hung Chang, abandoned this position and intended to ratify the Agreement immediately. In view of the urgency of the matter, I addressed a note on the same day to the Yamen, in which I asked for an interview on the 10th or 11th instant, and informed them that the Chinese test of the Contract had reached me, warning them at the same time that if they did not give me another interview before they ratified the Agree- ment Her Majesty's Government would look upon their action as unfriendly, and would probably insist on the same rights being given to Great Britain in all the provinces adjoining the Yang-tsze. On the evening of the 10th the Yamen answered that they would appoint a day for an interview when they had received the Contract, which, they said, had not yet reached Peking for ratification. On the 11th I replied that I understood from this communication that they under- took not to ratify until they had seen me. To this they returned an evasive answer, to the effect that they were all engaged by ceremonies at the Palace connected with the Emperor's birthday, which would last some days. ^ I should add that I had already, on the 10th, sent them a note in which I criticized the Contract in detail, stating finally that I should have further objections to bring forward at my interview with them. I now hear on good authority that the Contract was ratified yesterday, the 12 th. That the ratification has thus been rushed through is undoubtedly due to the influence of Li Hung-chang, combined with strong pressure on the part of the Eepresen- tatives of Eussia, Prance, and Belgium, and if heavy payment is' not exacted from the Chinese Government for their bad faith, Li will persuade his colleagues that it is safer to slight England than any other Power, and any pressure which we may want to bring to bear in other matters will be without weight. I therefore think that Her Majesty's Government should insist either : — 1. On a written assurance from the Yamen that if British Syndicates apply for any railway concessions in the Yang-tsze provinces, they shall be given on the same terms as those which France, under cover of the Belgian Syndicate, has received in the Peking-Hankow Contract, and that no mining or railway concessions will be granted in those provinces unless they have been previously declined by British Syndicates ; or 2. On a written assurance that all railways for which British Syndicates are now in Treaty, that is to say — (a.) The Shan*hai-Kuan-Niuchwang line ; (6.) The line from Tien-tsin to Chinkiang (the latter, as I understand, in conjuaction with Germans and Americans) ; (c.) The line from Shanghae to ISTanking with its continuations and branches ; (d.) The lines in Honan and Shansi, should be granted without any further delay on terms identical with those contained in the Contract for the Peking-Hankow line. The latter consi^st, so far as I can learn, in complete control over the construction, choice of material, working, and personnel of the line, together with an Lnperial guarantee for the repayment of the loan. The second demand seems to me to be preferable on the whole ; it will be impossible to obtain either demand without bringing great pressure to bear, and I consider that the demand should be made not as a compensatory concession, but as a punishment for bad faith. No. 279. Sir C. MdcPonald to the Marquess of Salisbury .-^{jReceived August 13.) (Telegraphic.) Peking, August 13, 18^8 • I HEAE on good authority that the Yamen yesterday received telegraphic informa-- tion from the Viceroy at Catiton to the effect that a French squadron, consisting of seven men-of-war, had captured and occupied some forts in the neighbourhood of Kwano-chow Bay. ^ 191 No. 280. Sir C. MacDonaU to the Marquess of Salisbury.— {Received August 15.) (Telegf apHic. ) Peking, August 15,1898. I HAVE referred to Hangchow for information on the subject of your Lordship's telegram of 12th August, and will report as soon as possible. Nothing is known here. No. 281. Sir 0. MacDonald to j\f/\ Balfour.— {Beceived August 15.) (Telegraphic.) _ Peking, August 15, 1898. THE following facts have been reported to me by Her Majesty's Acting Oonsul- General, Shanghae. A contract was made last year by a Chinese Syndicate in Hangchow with a French Syndicate, to connect that city with the river at a point of 20 miles distant by a narrow gauge railway. So far nothing but a survey has been made. This is all that is known in Shanghae. No. 282. Mr. Balfour to Sir C. MacDonald. Sir, Foreign Office, August 15, 1898. I HAVE received your despatch of the 24th June, reporting the acceptance in principle by the Tamen of the additions and alterations suggested by you in the rules for internal navigation, with the exception of those as regards Article 8, and I approve your proposal to waive your amendment to this one for the present, reserving the right to bring it forward again should it, as it stands, work badly. I am, &c. (Signed) A. J, BALFOUE. No. 283. Mr. Balfour to Sir C. MacDonald. Sir, Foreign Office, August 15, 1898. I APPEOVE the terms of the note addressed by you to the Yam^n on the subject of the assistance to be given by the Hong Kong Government to the Chinese Customs authorities, and of which a copy was inclosed in your despatch of the 23rd June. I am, &c. (Signed) A. J. BALFOUE. No. 284. Mr. Balfour to Sir C. MacDonald. Sir, Foreign Office, August 16, 1898. I HAVE received your despatch of the 24th June, and I approve the action taken by you, as therein reported, in connection with the demands made by France for compensation for the murder of a French missionary in Kuangsi. I am, &c. (Signed) A. J. BALFOUE. 192 No. 285. Sir E. Monson to Mr. Balfour. — {Received August 17.) (Telegraphic.) Paris, August 17, 1898. WITH reference to Sir C. MacDonald's telegram of the 13th August, M. Delcasse tells me that, to his knowledge, no such operations have lately taken place, but that the Convention concluded during his predecessor's tenure of office has been put into force, and has only met with very slight opposition of a hostile nature. No. 286. j\tr. Balfour to Sir C MacDonald. (Telegraphic.) Foreig^i Office, August 17, 1898. WITH reference to your telegram of the 13th instant, inform Yam en that they must assent to your proposal No. 2 without delay, omitting from it the Shankaikuan- Newchwang Bailway, which we must deal with as a separate question. You are authorized to inform them, if you have any reason to apprehend that they will delay compliance, that, unless they agree at once, we shall regard their breach of faith concerning the Peking-Hankow Eailway as an act of deliberate hostility against this country, and shall act accordingly. After consultation with the Admiral, you may give them the number of days or hours you think proper within which to send their reply. The delay should not be of too long duration. It should be noted, on face of your demand, that Chingkiang Concession is for Americans and Germans, if they desire a share, as well as ourselves. Also make it clear that your ultimatum has nothing to do with the line to Newchwang. No. 287. Sir C. MacDonald to Mr. Balfour. — {Received August 19.) (Telegraphic.) Peking, August 19, 1898. I HAVE a meeting with the Yamen to-morrow, and shall address them in accordance with the instructions contained in your telegram of 17tli August. As regards the railway from Tien-tsin to Chinkiang, for which tenders have been made first by a German and then by a British Syndicate, it would be a most desirable arrange- ment if a combination between the two, which is now under negotiation in Europe, could be arrived at. With regard to American capital sharing in the concession I learn from the United States' Minister that there is an American Syndicate which is prepared to support the present Chinese holder of the concession, Yung Wing, and which he believes would invite British capital. There appear to be considerable difficulties in the way of bringing about a joint combination of British, Germans and Americans, but it might be possible to surmount these difficulties. No. 288. Sir C. MacDonald to Mr. Balfour. — {Received August 20.) (Telegraphic.) Peking, August 20, 1898. A NUMBER of British subjects, one United States' citizen, and one German subject, have since the 30th May last, purchased thirty lots of land in the neighbourhood of the projected terminus of the Russian railway at Newchwang. There was no prohibitory Proclamation ; all the Chinese owners were willing to sell, and the deeds have been definitely stated to be in order by the Taotai ; but the Russians are now endeavouring to prevent this Magistrate frorn sealing the deeds, which vere sent tp him by Her Majesty's Consul for registration. 193 The Tsung-li Yani^n were induced by M. Pokotilow, Manager of the Eusso- Chinese Bank here, to issue telegraphic instructions to the Taotai on the 17th August to postpone sealing the deeds, having been told by the former that Eussian railway land had been bought by the British subjects by violence. A Proclamation prohibiting further sale has now been issued by the Taotai, who, however, admits the legality of the previous thirty transactions. Her Majesty's Consul, who is also in charge of American and German interests, in Teliance on our Treaty rights, is demanding the return of the deeds duly stamped. I am communicating to my German and American colleagues the above informa- tion, which reached me j'esterday by telegraph from Her Majesty's Consul at Newchwang, and to-day I shall mention the matter at an intervievv with the Tsung-li Tam6n. No. 289. Sir C. MacDonald to 3fr. Balfour. — (Received August 21.) (Telegraphic.) Peking, August 21, 1898. EAILWAY concessions. I had an interview yesterday with the Tamen, at which they said they would do their very best to comply with Her Majesty's Government wishes. They disavowed ■completely any intention of discourtesy or unfriendliness towards Great Britain. I pressed on their attention the great seriousness of the situation. It would be well, in my opinion, if we test the sincerity of their protestations, by waiting a few days before taking any further steps. The negotiations for the Yang-tsze railways have been much delayed, and I myself have been greatly embarrassed by the absence of the Sj^ndicate's engineer, who was due a month a^o and has not arrived yet. No. 290. Sir C. MacDonald to Mr. Balfour. — (Received August 21.) (Telegraphic.) Peking, August 21, 1898. NEWCHWANG : Eussian opposition to purchase of land reported in my telegram of yesterday. At an interview yesterday the Yamen told me an inquiry would be made into the above matter, and that the Proclamation issued by the Taotai putting restrictions on the sale of land at a Treaty port was entirely without justification. They promised that the Taotai should be ordered by telegraph to lose no time in sealing the deeds. No. 291. Sir C. MacDonald to the Marquess oj Salisbury. — (Received August 22.) My Lord, Peking, June 25, 1 898. IN continuation of my despatch of 27th May, and with reference to my telegram of 23rd June, I have the honour to inclose copy of the Eegulations agreed upon by the Peking Syndicate and the Yiif^ng Company for mining and other rights in the north of Honan Province. I have, &c. (Signed) CLAUDE M. MacDONALD. [253] 2 C 194 Inclosure in No. 291. ■Regulatiuns agreed upon by the Yii-Feng Company and the Peking Syndicate for Miming purposes, Iron Worhs, and transporting Mine Products of all kinds in the Province of Honan. 1. THE Governor of Honan having sanctioned the request of the Yii-Feng Company for the sole right to work all mines around Huai Ching.Fu, and in all the hill country in Honan Province north of the Yellow Eiver, the several concessions granted are now transferred for operation to the Peking Syndicate for the period of sixty years. Mining engineers shall first be sent to find in what township and hills thy- mines are situated and what they produce, and make maps thereof with explanations- inserted, which shall be submitted to the Governor of Honan that he may see that the proposed works are not injurious to the place ; and he shall report thereon to the- Tsung-li Yamen for record, and at the yame time issue a permit for the mines to be- opened without the least delay. If mining lands belong to the people, the lease or purchase shall be made by arrangement with the owners for a reasonable price ; if it be Government land the tax to be paid on it shall be double the ordinary land tax for that locality. The Governor of Honan has authorized the Yii-Feng Company to negotiate a foreign loan not to exceed 10,000,000 taels. Should the mining engineers employed, find this sum insufficient; the Yii-Feng Company may borrow more only of the Peking Syndicate. 3. All matters of administration, exploitation, employes and finances shall be- controUed by the Board of Directors of the Peking Syndicate, and the chief of the- Yii-Feng Company shall co-operate. The Governor of Honan shall be requested to- send officials from time to time to inspect the accounts of receipts ' and expen- ditures. 4. Each mine must have one foreign and one Chinese Manager, the foreigner to* control the works, the Chinese to attend to all matters between natives and foreigners- Accounts will be kept by the foreign system ; receipts and payments of money to be- •controlled by the foreign Manager and audited by the Chinese Manager. At all mines- Chinese should be em,ployed as much as possible. All salaries to be paid by the- Syndicate. 5. When prospecting for mines if there be any boring or sinking of pits to examine mineral deposits an arrangement should first be made with the landowner to- compensate him for any crops injured. If a mine be opened on private land an arrangement must be made with co-operation of the local officials to lease or buy the- land for a reasonable price fair to both parties as a measure to justice. Wherever land, leased or bought for mines contains cemetery or mortuary shrines some plan must. be- devised to avoid them — there must be no excavation. After mines are opened should there be damage to life or buildings from subsidence in the mines, the Syndicate shaU make charitable compensation. 6. Wherever mines are worked there shall be paid yearly to the Chinese Govern- ment as producer's tax (" lo-ti-shui ") 5 per cent, on the cost of extracting the output of the mines. From the profits shown by the yearly accounts there shall first be paid 6 per cent, interest on the capital employed, and next 10 per cent, shall be set aside as- a sinking fund for yearly repayment of capital and consequent reduction of intere8.t payments to sinking fund ceasing when the invested capital is wholly repaid ; and from the remaining net profit 25 per cent, shall be paid to the Chinese Government, and the- remainder shall go to the Syndicate for its own disposition. In future, wherever foreign capital is used to work coal and iron mines in China this rule for a 5 per cent. Government tax on the output shall be enforced, so that all may be treated alike. This capital being money lent by merchants for mining purposes, the Chinese Government will not in any way be responsible for losses incurred in the business. 7. As the Syndicate will work mines in several places, the accounts and profits of each mine must be kept distinct from the others. The gains' of one mine should not be made to off-set the losses of another, and so cause the Government income to sufier reduction. 8. All machinery, materials, and supplies needed for the mines shall, on importation, be subject to the rules in force with the Kai-Ping and other mining Companies, and pay one full duty and a-half to the Maritime Customs, and shall be exempt from all inland 195 ^i-^m, taxes. Tlie products of the mines, when exported from a sea-port, shall pay export duty according to the Customs Tariff. 9. .The Syndicate is to control the mines for sixty years, on expiration of which term .all the mines of the Syndicate, whether new, or old, profitable or not, shall, with all plant, materials, buildings, lands,, railways, bridges, and all property acquired by the capital of the mines, be handed over gratis to the Chinese Government, and in due time the Yii-Feng Company shall request the Governor of Honan to send deputies to take •delivery. lU. It is important that at each mine measures should be taken to prevent discord between officials and people. For this purpose, the Yii-Feng Company should request the Governor to appoint a deputy, and the Syndicate should nominate one of the gentry. The salaries of both to be paid by the Syndicate. 11. On first opening the nunes loreigners must of course be employed as mining •engineers and foremen, but later on the Yii-Feng Company and the Syndicate should .arrange to select for such positions any Chinese who may be proficient in mining, •engineering, or managing work, For subordinate positions of little responsibility 'Chinese should be entirely employed, and Honan natives as much as possible, so as to encourage improvement. 12. The miners employed should be chiefly Honan men, and should be paid fair Tvages. After the mines are opened, the Yii-Feng Company and the Syndicate should select from European and American Mining Eegulations suitable ones to apply to -questions of compensation to miners for injuries while at work, to pensions for the aged After long service, the limit of daily working hours, &c., and obtain for such Eegulations !the approval of the Governor. 13. In opening the mines the Syndicate shall establish a school of engineering and mining in some locality convenient to the mines, and there shall be selected twenty or thirty promising youths by the local officials and gentry to study in this school under foreign instructors, and thus prepare for future employment on railways and in mines. The expenses for this school to be met by the Syndicate. 14. The 10,000,000 silver taels to be loaned to the Yii-Feng Company by the Peking Syndicate is an estimated sum. After the capital necessary for opening each mine has been supplied by the Syndicate, the Syndicate will be authorized, to print share ■certificates and conditions for the capital furnished, and fix the time of sale. Chinese merchants who apply for shares within the fixed time shall be allowed to buy of shares for sale any number they wish. 15. Chinese merchants who wish to buy shares may get them from the Yii-Feng 'Company, who will procure them at current market rates, or' they may themselves buy or sell the shares at pleasure. If any Chinese gentry or merchants shall, within the term of sixty years, acquire three-fourths of all the shares of any one mine, that mine may then be redeemed from the Syndicate, and the Yii-Feng Company shall report upon same, and direct that shareholder to take charge of the mine. 16. If, within the area authorized for opening mines, there be mines already worked by the people, such private mines shall not be appropriated, but if a proprietor be willing to lease or sell his mine, the Yii-Feng Company and the Syndicate shall offer a reasonable price for it, but no compulsion shall be used. 17. Whenever it may be necessary for any mine to make roads, build bridges, open or deepen rivers or canals, or construct branch railways to connect with main lines, or with water navigation to facilitate transport of Honan coal, iron, and all other mine products from the province, the Syndicate,. on reporting to the Governor of Honan, is ajithorized, to proceed with the works, using its own capital, without asking for Govern- ment funds. • Eegulations for the branch railways are to be made in due tjme. . ,' , Private land required for the works authorized as above, shall be, leased or bought according to the rules already in force with other public Companies. No encroachment, of private property shall. be. allowed, and the local authorities must be applied to for protection. 18. ;At the end of every year a printed account of profit and loss shall be rendered by each jnine to the Yii-Feng Company, and each mine shall appoint one Chinese and one foreign, auditor to examine the accounts and certify that they are correct ; and a gejieral account of profit and ,loss for all- the mines shall be jointly prepared and sub- mitted to the Governor, who will send copies to the Tsuug-li Yamen and Board of Eevenue for audit. ' Payments due to the Government shall be reported at same time. 19. These mines being under the sovereignty of China, should China ever be at war [253] 2 C 2 196 ■with another country the Syndicate will obey the orders of the Chinese Government pjoliibitincf any aid to the enemy. ' 20 These Eegulations shall be made out both ia Chinese and foreign text, each party to have a copy for reference. Signed in Pelting on the ^Ist day of June, 1898, being the 3rd day of the 5th manth of the 24th year of the Emperor Kuang-Hsu. (Signed) A. LUZZATTI, General Agent of the Peking Syndicate {Limited). (Seal of the Peking Syndicate, Limited.) (Signature of the Chief of the Yii-Feng Company.) (Seal of the Tsung-li Yam^n.) No; 292. Sir C. Mac Donald to the Marquess of Salisbury. — [Received August 22.) My Lord, Peking, June 25, 1898. AS I informed your Lordship by telegraph, Mr. Consul Hopkins was instructed to proceed from Chefoo to Wei-hai Wei to assist Admiral Sir E. il. Seymour in taking pos'^e'^sion of the place. I have the honour to transmit herewith a report of his proceedings as British Commissioner at Wei-hai Wei, which Mr. Hopkins has lately sent me. I have, &c. (Signed) CLAUDE M. MacDONALD. Inclosure 1 in No. 292. Consid Hopkins to Sir C. MacDonald. Sir, " Alacrity" at Wei-hai Wei, June 2, 1898. I have the honour to forward herewith copy of the Eeport of Captain Kinw Hall, E.N , and myself, on our proceedings as the British Commissioners appointed to take over the territorv of Wei-hai Wei and its dependencies, made to Vice-Admiral Sir E. H. Seymour, K.C.B. Several of the inclosures to the Eeport it is at present impossible for me to procure and forward. I have, &c. (Signed) L. C. HOPKINS. Inclosure 2 in No. 292. Captain Hall and Consul Hopkins to Vice-Admiral Sir E. Seymour. Sir, "-Narcissus" at Wei-hai Wei, May 21, 1898. WE have the honour to report as follows on our proceedings, as the British Com- missioners appointed to take over the territory of Wei-hai Wei and its dependencies. On the 22nd May Her Majesty's ship " Alacrity " arrived from Chefoo, bringing the Second British Commissioner, Mr. L. C. Hopkins, Her Majesty's Consul at that port. During the afternoon of this day Captain King Hall found in the town on the island a man claiming to be a United States' Citizen from Nagasaki, who was making preparations to start a drinking saloon. He was informed that this could not be permitted, and thereupon declared that many of the Chinese houses were stocked with liquor. The British Commissioners being of opinion that immediate measures were required to prevent the town becoming infested with the lowest class of drinking bars, and scenes of drunkenness and disorder resulting, issued a Notice forbidding the keeping of spirituous liquors in the Island of Liu-kung Tao on pain of the offender being removed summarily. A further Notice, for posting on the mainland, was also issued, forbidding liquor to be sold without a permit from the British authorities. At 8 AM. on the 23rd the Chinese cruiser "Fuchi" saluted the Japanese flag flying at the head-quarters on the mainland with twenty-one guns. This salute was returned b^ the Japanese gun- boat "Akagi." Her Majesty's ship " Narcissus " then saluted the Japanese flag with twenty-one guns, and the " Akagi " again returned the salute. About 11 the same morning the British and Chinese Commissioners, Lieutenant- Colonel Browne, D.S.O., Military Attache to Her Majesty's Legation at Peking, Commander Smith -Dorri en, of Her Majesty's ship "Alacrity," and Captain Mercer, E.M.L.I., assembled at the head-quarters to meet and say farewell to General Miyoshi and his stafF. There were also present the petty Chinese sub-Magistrate of Wei-hai city and two of the local Notables. After some short farewell toasts and speeches from General Miyoshi, at noon the Japanese flag was finally hauled down and the Chinese hoisted, both on the mainland and the Island of Liu-kung Tao. As soon as this was done, the " Fuchi " saluted her national colours with twenty-one guns. This was followed by a similar salute from the Japanese gun-boat "Akagi," the "Fuchi" returning it. Lastly, Her Majesty's ship " Narcissus " saluted the newly-hoisted Chinese flag, the " Fuchi " again responding. The Japanese Stafi" thereupon at once embarked on four transports, which left the harbour the same afternoon. Meantime, a force of about forty British, marines had been posted on the mainland since 6 a.m., together w^ith a small number of Chinese sentries. The following day, the 2.')th May, being Her Majesty's birthday, the men-of-war in harbour, including the "Fuchi" and "Aksgi," dressed ship, and a Eoyal Salute was fired by earh of them at noon. Li the morning the British and Chinese Commissioners landed, and visited together the various Government buildings and properties -on the island, which were then in turn formally marked and taken over. At 1.30 P.M. the four Commissioners, accompanied b}^ Lieutenant-Colonel Browne asad Commander Smith-Dorrien, again went on shore. A body of 100 British bluejackets, with the band of the " Narcissus," together with 50 Chinese seamen from the " Fuchi," under the command of Commander Napier, of Her Majesty's ship " Narcissus," were then marched to Observatory Island (now joined to the main Island of Liu-kung Tao be a causeway), where the two flag-srafTs had been raised. At this point the combined force was formed up in square, the Commissioners taking position inside. After a few sentences explaining the nature of the present ceremony and his pleasure at the friendly co-operation of the Chinese force, which were briefly translated to the latter by Captain Lin, the junior Chinese Commissioner, Captain King-Hall proceeded to read out annexed Proclamation and Declaration. Then the British flag was hoisted alongside the Chinese already flying, the force presenting arms, the Commissioners and all officers and men on the ground saluting, and the band playing " God. save the Queen." This done, the Chinese National Anthem was played with the same formalities, and the ceremony ended with three cheers for Her 'Majesty the Queen and one for the Emperor of China. The combined force, having first been inspected hy the four Commissioners, was then marched back, and six Headmen of the Island were introduced by the Chinese Commissioners, and the purport of the Proclamation and the Declaration which had been read explained to them. On the 25th Her Majesty's ship " Centurion," flying the flag of Vice-Admiral Sir E. H. Seymour, K.C.B., and Her Majesty's ship "Iphigenia" arrived. In the afternoon the British and Chinese Commissioners landed on the mainland, and accompanied by Captain Mercer, E. M.L.I. , visited and took over varif)us Govern- ment buildings, which included camps Nos. 1 and 2, hospital, storehouses, head- quarter offices, officers' quarters, and guest house, with such furniture as these contained. When this had been completed, the Chinese Commissioners produced some maps,, and a memorandum or list in Chinese, from the latter of which it appeared that only about one-sixth of the land on which stand the various mainland buildings just taken over, is Government land (91 " mou," out of about 600 " mou," say 15 acres out of 100), a small rent having been paid for the remainder by the Japanese. On the 26th, two ofl!icers of .Her Majesty's ship " Narcissus "' took over from the Chinese certain outljdng buildings omitted the previous day. On the 30th instant, the Chinese Commissioners having informed us that there were- still twelve buildings and premises on the island which had not been made over to us,, the four Commissioners landed, and visited and took over these properties, which include a reservoir, torpedo depot, paviUon, two walled camps, and other buildings. Attached are the Eeports by Surgeon N. J. Smith on the water supply of the Island of Liu Kung Tao, and the mainland in the vicinity of Wei-hai Wei. 198 List of llie buildings on the Liu Kung Tao, with plan. List of the buildings on the mainland. Proclamation dated the 24th May, and Declaration dated the 24th May. We have, &c. (Signed) G. KING HALL. L. C. HOPKINS. Inclosure 3 in No. 292. Proclamation. WE, the undersigned Commissioners appointed by Vice-Admiral Sir E. H. Sey- mour, K.C.B., Commander-in-chief of the China Station, do hereby take on lease on behalf of Her Majesty the Queen of Great Britain and Ireland, Empress of India, from the Commissioners appointed by the Tsung-li Yamen, on behalf of His Majesty the Emperor of China, the Island of Liu Kung Tao, the town of Wei-hai-Wei, and the mainland in the neighbourhood to the extent and on the terms which have been agreed upon by our respective Governments. Given under our hands, on Board Her Majesty's ship " Narcissus " at Wei-hai Wei this 24th day of May, 1898. (Signed) G. KING HALL, Captain, R.N. L. C. HOPKINS, Consul. Inclosure 4 in No. 292. Declaration. GREAT Britain having leased Wei-hai Wei with the consent of China, every one is enjoined to carry on his occupation quietly and peaceably as heretofore, and to observe the law. Disturbers of the peace will be punished. The principal inhabitants of Liu Kung Tao will be held responsible that from this date no new inhabitant is allowed on the island, or permitted to rent any building or place, or reside in the village, without first obtaining the permission of the Officer in Command. (Signed) G. KING HALL, Captain, R.N. L. C. HOPKINS, Consul. No. 293. Sir C. MacDonald to the Marquess of Salisbury. — {Received August 22.) (Extract.) Peking, Ju7ie 25, 1898. AT an interview on the 4th June I laid before the Yam^n a draft Agreement for the lease of Wei-hai Wei, which I had drawn up on the bases laid down in your Lordship's telegrams of 25th May and of 1st June and my telegram of 27th May. To reduce the discussion on details to a minimum I adopted the wording of the Hong Kong extension Agreement wherever apphcable, with the result that at this and succeeding' interviews the objections I had to meet were wholly confined to the territorial clauses, and to the quesiion of the extent to which the harbour could be used by the Chinese fleet as a base and for training purposes. The Ministers had nothing to say against the territory actually leased as soon as it was shown to them that it was less than that occupied by the Japanese, but thev at once objected to the extent of the outer zone. I had no difficulty in demonstrating that from a military and naval point of view, it was necessary for the protection of the territory leased, for it was well within the recollection of the Grand Secretary Li, that the successful Japanese attack during the War came from the bays to the south of the Shantung Promontory. The Ministers, however, persisted that the erection of forts, &c., in peace time would alarm the country people, and made a counter-proposal that the right to do so should be contingent on an outbreak of hostilities, and though I pointed out that it was 199 not the habit of foreign nations to wait for a war to commence before taking defensive measures of this kind, and urged other obvious reasons, they refused for some time to withdraw it. ; Their efforts being noticeably directed to making the concessions as innocuous as possible on paper, I endeavoured to meet their wishes and suggested different wordings, none of which were accepted. The building of fortifications inland, they said, would inevitably disturb the people of the Shantung Promontory, and though prepared to consent to the retention of "on the coast" they stubbornly objected to "in the interior," unless it were saddled with some impossible limitation such as " in the event of hostilities." My telegram of 8th Tune was sent to your Lordship at this stage of the discussion, and soon after the receipt of your Lordship's telegram of the 11th June I placed the alterations suggested before the Yamen. After some further haggling the text of the clause as given in the accompanying draft was agreed upon. Wei-hai Wei being the last important naval port, left to China in the north, the question how far it was to be used by the Chinese fleet promised at first to offer more serious difficulties. From the outset the YamSn were very anxious to secure some definite portion of the bay and of Luikung Island, and pressed for a stipulation to that effect. The translation inclosed of a note, dated the 12th June, indicated their aspirations in the matter. I refused to introduce anything into the Agreement beyond a general declaration that the harbour was free to Chinese men-of-war. I embodied the assurances I was authorized to give by your Lordship's telegrams of 25th and 28th May in a draft note, copy of which I have the honour to inclose, and this course was finally accepted by the Ministers. The wording was altered somewhat to meet the Yamen's wishes, particularly in the assurances referring to moorings and the appointment by the Admiralty of an officer to command the Chinese fleet, but as your Lordship will notice I have made the use of Wei-hai Wei by Chinese war-ships subject to the provision that this ofiUcer "shall have complete and entire control of the training and organizing of the. said navy, and that he shall be engaged under such satisfactory conditions as will give, a reasonable: prospect of good results." The draft inclosed embodies the final result of the negotiations : Inclosure 1 in No. 293. Draft Convention for the Lease of Wei-hai . Wei. ■ ■ IN order to provide Great Britain with a suitable naval harbour in North China and for the better protection of British commerce, in the neighbouring seas, the Government of His Majesty the Emperor of China agree to lease to the Government of Her Majesty the Queen of Great Britain and Ireland, Wei-hai Wei, in the province of Shantung and the adjacent v?aters, for so long a period as Port Arthur shall remain in the occupation of Eussia. The territory leased shall comprise the Island of Liu-kung and all islands in the- Bay of Wei-hai Wei, and a belt of land 10 English miles wide along the entire coast line of the Bay of Wei-hai Wei. Within the above-mentioned territory leased Great Britain shall have sole jurisdiction. Great Britain shall have, in addition, the right to, erect fortifications, station, troops,.. or take any other measures necessary for defensive purposes, at any points on or near the coast of the region east of the meridian 121° 40' east of Greenwich, and to acquire- on equitable compensation with that territory such sites as may be necessary for water supply, communications, and hospitals. Within that zone Chinese administration will not be interfered with, but no troops other, than Chinese or British shall be allowed therein. It is also agreed that wdthin the walled. city of Wei-hai Wei, Chinese officials shall continue to exercise jurisdiction except so far as may be inconsistent with naval and military requirements for the defence of the territory leased. Itis further agreed that Chinese vessels of war, w^hether neutral or otherwise, shall retain the right to use the waters herein leased to Great Britain. It is further understood that there will be no expropriation or expulsion of the inhabitants of the territory herein specified, and that if land is required for fortifica- 200 tions, public officers, or any official or public purpose, it shall be bought at a fair price. This Convention shall come into force on signature. It shall be ratified by the Sovereigns of the two countries, and the ratifications shall be exchanged in London as suon as possible. Inclosure 2 in No. 293. Jlie Tsung-li Yamen to Sir C- MacDonald. Kuang Usil, 24:th year, ith moon, litli day. (Translation.) June 12, 1898. THE Prince and Ministers of the Yamfen had the honour to receive, on the 8th June, a communication from the Superintendent of JSTorthern Trade, requesting consideration of the following representation from the Deputy in charge of affairs at Wei-hai Wei : — "In the Bay of Wei-hai Wei the only possible anchorage for large and small vessels is the portion close to Liu-kung Island, although the waters at the entrance near Wei-hai and towards the north-east are spacious ; they are shallow and unsafe in stormy weather. In winter, in the season of adverse winds, they are particularly unsuitable. The waters about Liu-kung Lsland are encompassed by hills, are deep and still unsafe for vessels at anchor. On the west side of the island there is a naval yard and parade ground fully prepared ; to the east there are barracks for troops and an exercise hall. " Now that Great Britain has leased Wei-hai- Wei and Liu-kung Island and (her ships) will moor with the Chinese war-vessels, both fleets must have their own store- houses and exercise grounds. A satisfactory arrangement would be that the east half of Liu-kung Island should form the British Settlement, and that the west half should remain under Chinese iurisdiction. The Yamen hen to observe that in the mooring torrether of Chinese and British war-ships at Liu-kung Island in the Bay of Wei-hai, each fleet should have suitable ground for storage and training purposes. But near Wei-hai itself the water is shallow, and the harbour too exposed to make a convenient anchorage. The safest moorings are in the deep and still waters near Liu-kung Island. There is excellent ground on both the east and west of the island capable of being prepared for storage and training purposes, and the request made by the Northern Superintendent of Trade has for its object the providing of both fleets with what they want when they anchor together (or, in the joint anchorage). The Prince and Ministers have the honour to submit the above for Sir Claude MacDouald's consideration, and to request the favour of a reply, &c. (Seal of Yamen.) Inclosure 8 in No. 293. Sir C. MacDonald to the Tsung-li Yamen. MM. les Ministres, PeJcing, , , 1898. IN connection with the condition attached to the lease of Wei-hai Wei to Great Britain, that Chinese vessels of war, whether neutral or otherwise, shall retain the right to use the leased waters, your Highness and your Excellencies requested the assistance of Her Majesty's Government in reorganising- the Chinese navy and in the traininff of Chinese naval officers and men by officers of the British navy, and more particularly requested that the naval harbour of Wei-hai Wei should be, as far as possible, utilised ■for this purpose. In reply to this request, I am now instructed by Her Majesty's Government to inform your Highness and your Excellencies that England wall give China every facility and assistance — compatible with British interests — at Wei-hai Wei for the promotion o'f the objects stated; that in the harbour specially-selected moorings will be given to Chinese vessels of war wherever possible; and that the British Admiralty will, at the request uf China, appoint an officer to command, organise, and train the Chinese fleet. 201 The above are subject to tlie provision that the said officer shall have complete and entire control of the training and organising of the said navy, and that he shall be engaged under such satisfactorj- condidons as will give a reasonable prospect of good results. I avail, &c. (Signed) CLAUDE M. MacDONALD. No. 294. Sir C. MacDonald to the Marquess of Salisbury. — [Received August 22.) My Lord, Peking, July 4, 1898. EEFEREING to my despatch of the 23rd June to your Lordship on the subject of the extension of the territory' of Hong Kong,* I have the honour to inclose copy of a letter which has been addressed to me by Sir Eobert Hart on the assistance required from the Hong Kong Government by the Chinese Customs authorities. A copy of this letter is being sent to the Hong Kong Government. In accordance with your Lordship's telegraphic instructions of the 23rd June, I have instructed Her Majesty's Consul at Canton to give the Hong Kong authorities every assistance in the directions indicated by your Lordship. I have, &c. (Signed) CLAUDE M. MacDONALD. Inclosure in No. 294. Sir E. Hart to Sir C. MacDonald. Sir, Inspectorate General of Customs, Peking, June 27, 1898. I HAVE the honour to acknowledge receipt of your Excellency's despatch of the 24th June, informing me that you have received a communication from Her Majesty's Secretary of State for Foreign Affairs, asking you, in view of the recent leasing to Great Britain of part of Kowloon peninsula and the adjacent islands, what arrangements the Imperial Maritime Customs of China would propose, and where stations would be placed, and in reply to state in the following numbered paragraphs what, in my opinion, will be necessary in and around Hong Kong and its new territory to safeguard the revenue interests of China, a task which will be made in consequence of the increased area to be looked after, both onerous and expensive. The proposals are made in the belief that Her Majesty's Government desire to give China liberal and sustained support in the protection of her revenue in that neighbourhood- 1. The right of the Chinese Customs to maintain its office in Hong Kong, where it is now only unofficially acknowledged, ought to be formal!)' admitted, and the status of the Commissioner of Customs as a Chinese official recognised. The existing sub-stations at Changchow, Capsuimoon, Lai-chee-kok, and Fotochow ought to be maintained as at present, although they are in the leased territory. If it should be found that other stations are required they may be instituted. 2. The Chinese Customs at Hong Kong shall have the right there to collect duty and li-kin on any opium and similarly dues and duties on general cargo shipped on any native vessel to or from China. The Customs ought also to have the right to one or more special jetties in proximity to junk anchorages at which cargo maybe examined and verified. 3. The Chinese Customs cruisers and launches may continue to exercise their functions within the waters of the leased territory. 4. No opium, raw or boiled, shall be landed or stored, taken deliver)'- of, or shipped in Hong Kong, British Kowloon, or any of the leased territory without a permit to be issued by a Colonial authority. Opium moved without permit, or found anywhere or in any quantity in contravention of Colonial Ordinance Shall be confiscated. 5. The opium farm, i.e , an official establishment with an exclusive right to retail * The demarcation of the extension of Hong' Kong territory not having been completed and the Order in Conncil applicable to it not having been promulgated, no further papers on the subject can be published at present. [253] 2 D 202 (only boiled) opium, shall be maintained, and the Ordinances Nos. 22 of 1887, and 21 of 1891, concerning opium movement, &c., shall be confirmed and_ amended to meet new circumstances, and to make good those points on which they are insufiicient. The boiling establishments of the farm, its retailing bhops, and its books and accounts shall be open at any time to the inspection of an ofiicer of the Chinese Customs specially deputed for that purpose. 6. All Ordinances regarding the possession, movement, preparation, or sale of opium in the Colony and its waters, afloat and ashore, shall be rigidly enforced by the Colonial Executive, and its officers rewarded from proceeds of seizures with a view to encouraging zeal. All proceeds of sale of confiscated goods shall be divided equally between the Chinese and Colonial Governments. 7. No arms, munitions of war, or contraband goods may be shipped on any vessel proceeding to a Chinese port in Hong Kong or its waters, without a permit issued or countersigned by the Chinese Custpms. 8. The Hong Kong Government shall pass such legislation as may be necessary to give effect to the above provisions. The above-numbered paragraphs are put forward merely to represent what I consider it proper should be done at Hong Kong to meet Chinese revenue requirements. I may, however, express the opinion that the system it provides for, and more especially the recognized presence of a fully authorized Chinese Customs at Hong Kong, gives promise of enabling measures to be taken which will make the working of the "West Eiver trade, especially at those places of call to seawards of the first port (Samshui) considerably easier than at present ; also, of securing arrangements which might facilitate the trade anticipated to grow up under the new inland steam navigation rules. In both respects anything which may be possible — and without a custom-house I do not see that much will be possible — is sure to redound to the commercial advantage of the Colony as well as of the Chinese trade. On this point, however, the occasion does not -call upon me to say more at Present. I I13/VG (Sc^ (Signed) ' EOBEET HAET, Inspectw-General of Customs. No. 295. Sir C. MacDonald to the Marquess of Salisbury. — {Received August 22.) My Lord, Peking, July 8, 1898. IN accordance with the instructions contained in your Lordship's telegram of the 16th June, and in continuation of my telegram of the 18th June, I have now the honour to forward to your Lordship a Memorandum, brought up to date, showing the various railwaj' and mining concessions recently granted by the Chinese Government or in course of negotiation. I have, &c. (Signed) CLAUDE M. MacDONALD. Inclosure 1 in No. 295. Memorandum on Eaihvay and Mining Concessions recently granted by the Chinese Government, or in course of negotiation. Manchuria. BY the Convention concluded between Eussia aud China on the 27th March, 1898, the permission given in 1896 to the Manchurian Eailway Company to construct a main line was extended to the construction of a branch, line from a point on the aforesaid main line to Ta-lien or to a convenient point on the sea-coast between Newchwang and ■ the Yalu Eiver. Article 3 of the Additional Agreement signed at St. Petersburgh ou the 7th May, 1898, arranges that the terminus of the branch line " shall be at Port Arthur and Ta-lieu and at no other port," in the Liaotung peninsula. 203 The provisions of the Agreement of the 8th September, 1896, between the Chinese Government and the Eusso-Chinese Bank apply to this branch line, the mute of which is to be decided by the Chinese Minister at St. Petersburgh and the Manchurian Eailway Company. Chihli, Honan, and Hupeh. Peking-Hankow Line. — A provisional Agreement for the construction of this line, was made between the " General Chinese Railway Board " and a Belgian Syndicate. The definitive Agreement was signed only last month. The terms of this are not yet known. Shansi and Honan. 1. Shansi. — "The sole right to open and work coal and iron mines throughout the districts of Yii-hsien and Ping-ting-chou, and the Prefectures of Lu-an Pu, Tse-chou .,Pu, and Ping-yang Pu, and also petroleum wherever found " has been acquired by an Anglo' Itahan Company styled " The Peking Syndicate (Limited) " under a contract sealed by the Tsung-li Tamen. Under this contract the Syndicate has also the right to " construct branch railways to connect with main lines, or with water navigation, to facilitate transport of Shansi coal, &c." 2. Honan. — The " Peking Syndicate " has also acquired rights similar to those obtained in Shansi in that portion' of Honan north of the Yellow Eiver. The contract, which is based on the Shansi one, was signed at the Tsung-li Yamen on the 21st June. These are most important concessions. The Syndicate have also received a promise for Southern Honan and are gradually working down to the Yang-tsze. 3. Shansi. — Some months ago the Eusso-Chinese Bank signed a contract for the construction of a branch line to connect T'ai-ytian Fu with the Peking-Hankow Eailway somewhere near Ch^ng-ting. I am reliably informed that this concession was confirmed last May by an Imperial Decree. The right to select and work a few coal and iron mines in the country adjoining the railway was also secured provisionally under this- contract. The Eusso-Chinese Bank have entered into a written engagement with the Peking Syndicate to carr}'' their minerals on special terms. If this railway is not built within s two years the concession lapses. Shantung. Section II of the German Convention for the lease of Kiaochow (signed March 5. last) permits the construction of two railway lines in the Province of Shantung, one from Kiaochow past "Wei Hsien, Ching-chou, Po-shan, Tzu-ch'uan, and Tso-p'ing to Chi-nan Fu and the Shantung frontier; the other from Kiaochou to Ichou, and thence past Lai-wu Hsien to Chin-an Fu again. For the construction of these hues " a German-Chinese Company is to be formed, in which German and Chinese merchants may take shares." The Convention also gives Germany the right to mine coal, &c., within 10 miles (31 li) of the above railways. Chihli, Shantung, and Kiangsu. Tien-tsin-Chinkiang Line.— A. railway from Tien-tsin to Chinkiang via Ts^-chou in ■ Shantung was authorized by an Imperial Eescript of the 11th February last. The con- cessionnaire is an expectant Taotai Jung Hung, but the capital to be employed is Americari (according to the Tsung-li Yamdn — the capital is to be English and American). This scheme was opposed in February last by the German Minister on the ground that no railway could be constructed in Shantung without a previous arrangement with Germany. Kiangsu, Anhui, and Honan. Shanghae-Nanking Eailway.— The preliminary Agreement for the construction of a line from Shanghae to Nanking by a.British Company was signed at Shanghae on the 13th May. This has to be confirmed by an Imperial Edict, but the Tsung-li ,Yamea [253] ' 2 D 2 204 authorized me to inform Her Majesty's Government that " the matter was settled subject to details of final arrangements." The Chinese Director-General of Eailways has applied to include in the Edict an extension from Nanking to Sin-yang in Honan, which will be a station on the Peking- Hankow trunk line. Hupeh, ^uangsi, and Kuangtung. Hankow-Canton Line. — A preliminary Agreement for the construction of a line from Hankow to Canton with American capital was, I am reliably informed, signed in Washington in May between the Chinese Minister and Mr. Washburn as representing an American Syndicate — but I have no particulars. Yunnan, Kuangsi, and Kuangtung. French Railways. — In April the right to extend a railway beyond the frontier to Yunnan Fu was conceded to the French Government. No details are known. A further concession for a line from Pakhoi to some point in Kuangsi is said to be at present under negotiation in Paris. General Mining Board. On the 29th June, Mr. Pritchard-Morgan's scheme for a General Mining Board was placed before the Tsung-li Yamen, who promised to consider it carefully. A copy of Mr. Pritchard-Morgan's document is appended. (Signed) CLAUDE M. MacDONALD. Peking, July 8, 1898. Inclosure 2 in No. 295. Draft Scheme for the Creation of a Chinese Imperial Mining Administration, by Mr. Pritchard-Morgan, M.P. 1 . EDICT to issue creating an Imperial Mining Administration to exist for a period of sixty years. 2. Such Administration to control all mines and minerals in China not already granted to others. 3. Such Administration to carry on operations in the following provinces and in such other provinces as the Government may hereafter determine. 4. Administration to be superintended by two high Chinese officials on the advice and recommendation of a " Legal and Financial Advis'er," a " Mining Engineer," and an " Inspector-General," each of whom shall be foreigners, and shall be called the " Advisorv Board." ^ 5. The Advisory Board shall provide all necessary moneys to make geological surveys and to explore and collect information regarding mines, which information shall' be at the disposal of all those who may be desirous of carrying on mining operations, and the Advisory Board shall also prepare laws and regulations for the working of all mmes. 6. Leases and licences shall be granted by the two high Chinese officials to Com- panies and persons of all nationalities upon equal terms and upon such conditions as the Advisor}^ Board may recommend. 7. Every inducement shall be offered to Chinese merchants and capitalists to embark m mmmg enterprises, and they shall be allowed to enter into partnership with all nationals. 8. The Board itself shall not work any mines. 9. Eents, royalties, and fees shall be charged on the same principles as those existing in other mining countries. 10. 5 per cent, of the gross receipts of such Board shall be paid to the Govern- ment or to the Provincial authorities, as the Government may direct. IL 6 per cent, shall be chargeable on all moneys advanced bv the Advisorv Board ' to the Administration. ' ^ 12. After payment of the expenses of the T^dministration one-fourth of the net profits shall be paid to the Government. 205 13. Skilled foreigners can be employed in the mines and on the works, but all manual labour shall be performed by Chinese. 14. A Museum and School of Mines shall be formed where Chinese alone shall be educated in practical mining and mineralogy, the expense to be paid by the Board before any division of profits. 15. No salaries shall be paid to or received by the Advisory Board. 16. No concessions, leases, or licences to work mines in China shall be granted except through the Administration, and no Concessions, leases, licences, or other alienation of the surface of any lands in the Chinese Empire shall be made or granted by the Chinese Government to any person or Power without the unanimous consent in writing of the Board. No. 296. Sir C. MacDonald to the Marquess of Salisbury. — {Received August 22.) My Lord, Peking, Jidy 9, 1898. I HAVE the honour to inclose an extract from a Memorandum drawn up by Mr. W. H. Wilkinson, Her Majesty's Acting Consul at Pakhoi. The extract refers to French railway enterprise on the Tonquin-China frontier, and is based on information reported in the Tonquin press. I have, &c. (Signed) CLAUDE M-. MacDONALD. Inclosure in No. 296. Extract from Memorandum on the Tonquin Press for May, 1898. The Langson-Ltingchow Eailway. — Langson presents (11th May) an animated appearance. Thousands of Chinese coolies recruited from the neighbourhood of Lungchow are engaged in constructing the permanent way for the extension of the Phulang-thuong Eailway (when the latter line was built Chinese were at first employed, but had to be dismissed because of their constant acts of brigandage ; the line was completed by forced Annamese labour, at a great cost in money and lives). The stonework for the bridge over the Sonki is finished, and the other bridges are being enlarged. Langson itself, however, does not benefit by all this activity, but seems half dead. The district i,s well-organized, but the natives (Thos) refuse to grow more than just what is sufficient tA support themselves, alleging that the greater the area they cultivate, the heavier are the taxes they have to pay the French. The Fives-Lille Company is installed at Lungchow ; studies for the line of penetration are ended, but work has not been commenced, the Company not having as yet come to an agreement with Greneral Sou. According to the " Courrier " of the 3rd, the Company, which is represented in Tonquin. by retired Colonel Valliere, proposes to abandon the line from Langson to Lungchow and its extension into Kwangsi in favour of a commercial railway through, Yunnan. The former line was in its inception entirely strategical and would in no case prove a commercial success ; in its stead has been suggested a railway from Langson through Shatke and Caobang, and thence to Baolac, Haysing, the Clear Eiver and Ssuch'iian [sic]. It would be far better to abandon all idea of extension beyond Langson, and to boldly recommence from Hanoi along the old mandarin dyke to Sontay, thence by the valley of the Clear Eiver through Vie-tri to Phudoan, Tuyenqoang and Hayang. No tunnel would be needed. (Signed) W. H. WILKINSON, Actim,g Consul. Pakhoi, June 10, 1898. . 206 No. 297. Sir C. MacDonald to the Marquess of Salisbury. — {Received August 22.) My Lord, Peking, Jidy 9, 1898. A SERIES of Decrees which have recently appeared in the " Official Gazette " indicate the existence in the mind of the Emperor of considerable dissatisfaction with the present state of affairs in China, and show that he is desirous of at least making an effort to improve it. The first, and in its future effects, probably the most important Ordinance, directs a radical change in the obligatory subjects at the competitive examinations, success in which is the usual mode of entrance into the public service. A species of essay, of... which the composition is governed by highly artificial rules, has hitherto been one of the most prominent features of these examinations. For this is now to be substituted a form of essay of a more practical character. The effect of this reform may be compared with the change that would be brought about if in England an absolute mastery of Sanscrit verse had been obligatory on all public servants, and were now dispensed with. In other words, the large army of students in the Empire will save some years of almost useless study. The change has been made with such suddenness that injustice- is done to those who have been preparing for the examination tinder present conditions, and considerable discontent must be aroused, but the future effect cannot be otherwise than good. The next subject of recent .Decrees, is the establishment of a College, or University,' at Peking. It is not clear what the exact course of study at this institution is meant to be, the Imperial Decrees only referring to its establishment in general terms, but the curriculum will evidently consist of various branches of European study, under Chinese and foreign professors. The new University would seem likely to clash to some extent with the already existing Government College, at which foreign languages and science are taught, and probably it would have been better to have enlarged and improved the present institution. Nevertheless, as one more sign of perception of the necessity for some departure from the present system of training men for public service, it is encouraging and welcome. A Decree of the 23rd June denounces abuses in connection with the Chinese' Internal Loan, and declares that no compulsion is to be used in obtaining contributions.- The subscriptions to this loan, nominally voluntary, have, in many cases, been procured by compulsion, and it would seem that the Emperor is now alive to the dangerous' discontent thereby aroused. To effect a change in the agricultural methods of an ancient Eastern nation would- seem a very hopeless task, but from a Decree published on the 4th instant, it appears' that a censor has made proposals for the estabhshment of a school of agriculture, on which the Tsung-li Yamen were asked to report. The Decree founded on their Eeport states that agriculture is the basis of the States' wealth, and that measures for its revival are urgently needed. The provincial authorities are, therefore, directed to examine all methods of cultivation, whether Chinese or foreign, with a view to their adoption by the people: No reference is made to any recent decay in the prosperity of agriculture, but it is observed that there is much unused land capable of cultivation in all the provinces, from which one may infer that an increase in the produce of the land tax is the real object of this solicitude. The Decree proceeds to promise rewards for successful treatment - of agricultural problems, and to direct the translation and circulation in provincial Colleges "of foreign! works on the subject. Two Decrees, pubHshed on the 27th June and 5th July, have reference to reforms in the Chinese army, but they throw no light on the nature of them, and merely refer certain suggestions to various Departments for examination. The last Decree I shall mention, which appeared on the 5th instant, contains a very frank admission of the need of reforms. It states that in foreign countries commerce' and industry thrive and progress, while in China, though there is no lack of ability, it is fettered in the bonds of ancient custom, and cannot free itself. As one means of assisting in its liberation it is ordained that any persons producing " new books." (presumably books .that show originality of thought)., or being ihe . first. i». use new methods, or to produce new instruments or appliances suitable for use, are to 207 receive rewards from. the State in the shape either of official employment, if they are fitted for it, or of some other distinction. In the case of inventions a certificate will be given, and the profits secured to the inventor for a fixed term of years — in fact patent rights will be granted. Eewards will also be given to those who, with their own resources, establish colleges, open up mines, or set up arsenals for the manufacture of rifles and cannon. In conclusion, the Tsung-li Yamen are directed to draw up Eegulations for effecting the above objects. It is impossible to be sanguine of these various plans being successful in their aim, but the Decrees summarized go further than anything previously emanating from the Sovereign of China in their recognition of the need of taking example from foreign nations. I have, liic. (Signed) CLAUDE M. MacDONALD. No. 21)8. Intelligence Division, to Foreign Office. — [Received August 2H.) THE Director of Military Intelligence presents his compliments to the Under- Secretary of State for Foreign Affairs, and begs to forward, with the request that it may be returned when done with, some correspondence respecting the present rebellion in Southern China. 18, Queen Anne's Gate, London, August 23, 1898. Inclosure 1 in No. 298. M7\ Lo7ig to Colonel McSwiney. Dear Colonel McSwiney, Hong Kong, July 20, 1898. I INCLOSE herewith a copy of a Eeport from the Officer Commanding Her Majesty's ship "Tweed" at- Wu chow to the Connxfodore in charge here, which the latter very kindly gave me. I dare saj^ that in due course it would reach you from the Admiralty Intelligence, but it saves time by my sending it on to you direct. Yours sincerely, . (Signed) S. S. LONG. Inclosure 2 in No. 298. Commander Smith-Dorrien to the Commodore at Hong Kong. Sir, , Wuchow, July 14, 1898. -■ - I HAVE -the honour to report that I arrived' here on the 13th July; and beg to forward the following facts which I have gathered from Her Majesty's Consul at this port (Mr. Hosie) as to the rebellion which has taken place in the Kwangsi Province : — 1, On the 28th June the city of Yung Hsien, situated 70 miles south-west of Wuchow, fell into the hands of rebels, and was sacked. Next day the large market town of Tung Hsu and district city of Peilin was taken and departmental city of Yulin. These cities are situated in the richest agricultural area of Kwangsi. The. origin of the outbreak is attributed to scarcity caused by the export' of rice, for which these districts are famous. .The rapidity with which' city after city has fallen gives rise to the belief that it is more than a local riot. The number of the rebels are here estimated as from 10,000 to 20,000, though this number is probably exaggerated. It is anticipated that they will march westward to Nanning, or else northward in direction of Kuilin. 208 2. The following Chinese troops have been sent to the front: — 2,000 from Koachow, 1,000 from Canton, and 200 from Kuilin. 3. Wuchow is protected by 200 Chinese soldiers, mostly unarmed. Hundreds of volunteers have been enrolled, and these men, armed with lamps, horns, whistles, and a few old rifles, assemble every evening and patrol the streets. Such a sight is almost incredible. The city wall is being repaired. On the "7th July some headless bodies were seen floating down the river, six of them being picked up here and buried. Much panic has existed in Wuchow, and hundreds of Chinese have left for Canton. There is a small guard of soldiers on top of a hill on the look-out for the rebels advancing, though the chief fear of the authorities here is a rising amongst the rowdies of the town, which might take place in case of rebel successes. 4. I am given to understand that the arrival of Her Majesty's ship "Tweed" has greatly calmed the minds of the people. I propose remaining here for the present till authentic news comes from the area of disturbance. I have, &c. (Signed) A. H. SMITH-DOEEIEN. P.S. — The following news has just been received : — Hsing Yeh was captured by the rebels on the 9 th July. Siege of Yulin has been raised. Kiu, on the left bank of the West Eiver, is threatened. 1,000 troops have moved forward to defend Kiu. 1,000 troops have occupied districts of Yung Hsien and Ting Hsu. District city of Peilin has been retaken. Eebellion has been instigated by Secret Society called the Triads. It is reported that Pinglo and Yungan are disaffected, and that they are preparing to join the rebels. One headless corpse floated past the ship this afternoon, 6 p.m., 14th July. A. H. S.-D. No. 299. Mr. Balfour to Sir C. MacDonald. (Telegraphic.) Foreign Office, August 24, 1898. A TELEGEAM from Shanghae, dated the 23rd instant, forwarded by Dalziel's Agency, reports that the dispute arising out of the Ningpo Josshouse is about to be settled by French withdrawing their claims to remove the buildings in consideration for an extension of their concession as far as Si-ca Wei, an addition of 20 square miles. No. 300. Mr. Balfour to Sir C. MacDonald. (Telegraphic.) Foreign Office, August 24, 1898. NEGOTIATIONS with Yamen may be facilitated if you informed them at once that, unless the very moderate terms already demanded are immediately complied with, we shall, in addition, require the Concession of another line, on same conditions as those granted in case of Peking-Hankow line of railway, and that additional demands wiU be preferred as the result of further delay. If you think it would conduce to the rapid and satisfactory termination of the negotiations, you are authorized to make a communication to them in this sense. 209 No. 301. Sir C. MacDonald to Mr. Balfour. — {Received August 25.) (Telegraphic.) Peking, August 25„ 1898. TIEN-TSIN-CHINKIANG Railway. A contract for a loan, of 5,500,000/. and construction of above line was signed on the 23rd August with a strong Anglo-American Syndicate by Yung Wing. Above information reaches me from Her Majesty's Consul-General at Shanghae. No. 302. 3Ir. Balfour to Sir C. MacDonald. Sir, Foreign Ofice, August 26, ] 898. I HAVE received your despatch of the 25th June last, reporting the negotiations which preceded the signature of the Convention for the lease of Wei-hai Wei, and I have to express to you m}- approval of your proceedings in the matter. I am, &c. (Signed) A. J. BALFOUE. No. 303. Sir C. MacDonald to Mr. Balfour. — (Received August 28.) (Telegraphic.) Peking, August 28, 1898. I HAVE received a visit from Sheng, the Director of Southern Eailways, who had been instructed by the Yamgn to call on me, and who declared himself ready to conclude contracts with Jardine's Syndicate for all the lines for which they were already in Treaty with him, namely — 1. The Canton-Kowloon Eailway. 2. The line from Shanghae to Nanking, with branch lines to Suchow, Hang chow, and, if possible, to Ningpo. 3. On condition that I did not support Yung Wing, whose Tien-tsin-Chinkiang Concession followed a line between the two places mentioned below, a railway from P'u-k'on, opposite to Chinkiang, to Lin Yang, north of Hankow, which is situated on the line from Peking to Hankow. With reeard to railways in Honan and Shansi, Sheng suggested that the Peking- Syndicate should construct branch lines, whenever such should be required, con- necting with the Peking-Hankow trunk hue. I pointed out that my demand was for a line connecting the mines with the Yang-tsze, the Syndicate having already the right, by the terms of their contract, to construct branch lines as suggested by him. I consider that Sheng's proposal offers a satisfactory solution to the part of the question of railway concessions which it affects. The American Minister has no information in regard to the Anglo-American Syndicate ; I am endeavouring to obtain further information in regard to it from Shanghae. No. 304. Mr. Balfour to Sir C. MacDonald. (Teleo-raphic.) Foreign Office, August 29, 1898. WITH reference to your telegram of the 28th August, please state whether the terms of concessions promised by Director of Southern Eailwa^-s are identical with those o-iven to the concessionnaires of the Peking-Hankow line, and whether they will be given Immediately, and on such terms that repudiation of them by the Tsung-li Yamen or Emperor will be rendered impossible. [253] 2 E 210 No. 305. Sir C. MacDonald to Mr. Balfour. — {Received August 29.) (Telegraphic.) Peking, August 29, 1898, BAEOJST HEYKING told me to-day that he had received thfe following telegram, which he was instructed to show me, addressed to him by his Government on the 26th instant, and directing him to come to an understanding with me in regard to the Tien-tsin-Chinkiang Eailway : — " The German and English banks are negotiating in regard to the Tien-tsin-Ohinkiang Eailway. " A declaration has been received here from the British Government that the action they have taken in Peking has not been in any way hostile to German interests, but has been taken in the common interest of both countries, and that a co-operation of British and German capital in China is what the British Government desire. " Should the Chinese Government decide to grant a Concession for the Tien-tsin- Chinkiang Eailway regardless of German claims, you are instructed to oppose such a decision, and, should it be necessary, you may inform the Chinese Government that the German Government would consider as ' lion avenu ' any Concession in Shantung which infringed the Treaty rights of Germany in that province, and would reserve the right of making the Chinese Government responsible for any such Concession in the event of its being granted by them." In regard to the last paragraph of this telegram I await j'our instructions. In accordance with your telegram of 1 7th August, I had already, at interview which I had with the Yamen on the 20th instant,, informed them that Her Majesty's Govern- ment were prepared to allow Germany and the United States to share in the Concession for the Tien-tsin-Chinkiang Eailway, and told them that I understood that the English and German Syndicates were negotiating in Europe with a view to arranging a com- bination. Baron Heyking, I am informed by the Yamfen Ministers, has hitherto been endeavouring to obtain the Concession for the German Syndicate exclusively. As a possible arrangement for the combination, I would suggest that the Yang-tsze end of the line should be constructed by the English, and the Shantung part bv the German, Syndicate. No. 306. Mr. Balfour to Sir C. MacDonald. (Telegraphic.) Foreign Office, August 30, 1898. WITH reference to your telegram of yesterday, the best solution of the Tien-tsin-Chingkiang Eailway question would, in my opinion, be the -joint construction of the line by British and German Syndicates. If the Germans wish specially to provide that the part passing through the Province of Shantung, if any, is to be constructed by German capital and the rest by English, I see no OTeat objection provided there are exphcit regulations about running powers and through rates. The simpler plan of a single joint enterprise covering the whole line would, however I think, be preferable. The representatives of the German and Enghsh Syndicates are to meet in London immediately, and they will, I hope, come to some arrangement as above : but the unknown Anglo-American Syndicate mentioned in your telegram of the 25th as having acquired the concession, but to whom no reference is made in your telegram of 29th instant may cause a difficulty. ' Have you any further information on this subject ? A report is current here that the line as now projected will not traverse Shantuns HaA^e you heard anything lo this effect ? °' Your German colleague has, I understand, been recommended to come to an agree- ment with you. I do not think there should be any difficulty in this. 211 No. 307. Mr. Balfour to Sir. F. Lascelles. Sir, Foreign Office, August 30, 1898. THE German Ambassador called on me to-day, and in the course of conversation on affairs in China, stated that the Yang-tsze Valley could scarcely be asserted to extend north as far as Tien-tsin, and that Germany could not agree to such an extension of our sphere of influence. The German Government were in accord with former observations of Lord Salisbury to the effect that a discussion between the two Governments with regard to a delimitation of their respective spheres of influence would not be opportune, and that a friendly understanding in each case as it arose would be preferable. They were, therefore, glad to take note of my declaration that the British action in Peking with regard to the Tien-tsin-Chingkiang line was not directed against German interests, and they participated in the wish I had expressed for joint action by British and German capital in China on the basis of thorough equality of rights. Such combined action, however. Count Hatzfeldt observed, could not be said to be furthered if, as appeared from the repprts from Peking, British capital was endeavouring to oppose or render ineffective a railwaj^ from Tsinan to Itshan, with its branches, for which the concession had been already definitely granted by formal Treaty with China. German capitalists were quite prepared to combine with British, on equitable terms, in the case of the Chingkiang Eailway, although the former already possessed the concession for the main part of the proposed line, i.e., the portion from Tsinan to Itshan. The German Government hoped that, in confirmation of the declarations I had made, I would bring mj^ influence to bear on the British group represented by the Hong Kong Bank, with the object of inducing them to assume a more friendly attitude towards the German group, and that the British Eepresentative at Peking would be similarly instructed. In conclusion, his Excellency said that the German Government had, on their side, instructed Baron Heyking, in consequence of my declarations, to arrive at an under- standing with his British Colleague in regard to the Tien-tsin-Chingkiang Eailway, but, in any case, to leave no doubt at Peking that Germany intended to stand on her Treaty rights, and to insist that German undertakings should be treated in accordance with most-favoured-nation principles. I told liim., in reply, that we had never suggested that Tien-tsin was in the Yang-tsze basin, and that^ for the rest, we recognized that Germany had the fullest right to most-favoured-nation treat- ment. I then showed him a copy of my telegram to Sir C. MacDonald of to-day. He expressed himself as quite satisfied with its tenour, merely remarking that Germany had never made the claim of exclusive privilege in Shantung attributed to her by Sir C. MacDonald, and referred to in the fourth paragraph of my telegram. He suggested that I should add a statement to the effect that the German Eepresentative at Peking had been instructed to come to an agreement wiflh Sir Claude MacDonald upon pending- questions, and with this suggestion I comphed. 1 am, &c. (Signed) A. J. BALFOUR. No. 308. Consul Mansfield to the Marquess of Salisbury. — {Received September 1.) My Lord Canton, July 22, 1898. I HAD the honour to receive on the 1 7th instant your Lordship's telegram of the 16th, to the effect that the line to Peking being interrupted, I was to report by telegraph the latest news with regard to the insurrection. To this I had the honour to reply the same day to the effect that there had been an encounter on the 4th July between the Imf)erial troops and the rebels, the latter retreatino' westward with loss. That some 5,000 troops had arrived at the scene of action and more were in readiness, but that the rebeUion was not yet at an end, and that taki'ncr into consideration the state of disaffection in Kwangsi, any reverse to the 'm2>'\ 2 E 2 212 Imperial troops might entail serious consequences. That the rebels, estimated at some 6,000, are beheved to be badly armed, but that it is difficult to obtain any rehable intbrmation. I have, &.C. (Signed) E. W. MANSFIELD. No. 309. ' Acting Consul-General Brenan to the Marquess of Salisbury. — [Received September 1.) My Lord, Shanghae, July 25, 1898. I HAVE the honour to forward, for your Lordship's information, copy of my despatch to Her Majesty's Minister at Peking relative to the recent riots in the Erench Settlement here. I have, &c. (Signed) BYEON BEENAN. Inclosure in No. 309. Acting Consul-General Brenan to Sir C. MacDonald. Sir, Shanghae, July 18, 1898. I HAVE the honour to report that serious rioting took place in the French Settle- ment on the 16th and the biorniug of 17th instant, in the course of which some fifteen natives lost their lives. The disturbance was due to an attempt of the French authorities to take possession of certain temple land known as the Ningpo Joss-house Cemetery. The ground is full of graves, and it is also used for depositing coffins until a favourable opportunity presents itself for removing them to the native districts of the deceased. The cemetery is within the limits of the French Settlement ; originally it was far removed from the inhabited portion of the Settlement, but by degrees new streets have been laid out, and houses have been built, until the cemetery is surrounded by dwellings. Twenty-four years ago the French Municipalit}'- attempted to make a road through the cemetery, but such serious rioting broke out that the French Consul thought it prudent to abandon his claim to the ground, and gave the Ningpo Guild to understand that they would be left in undisturbed possession. As years have gone on, the nuisance of having a cemetery in the midst of a crowded Settlement has made itself more and more felt, and some months ago the French Municipal Council decided to expropriate the owners and to pay them compensation. The Ningpo Guild and the Chinese authorities were duly apprised of the intention and they were urged to make their own* arrangements for removing the coffins to some other site. They would not admit that the French had any right to dispossess them and they refused to vacate the land. The French Consuls then gave the Chinese officials notice that the Municipal Council would take possession on a certain day ; and as the day drew near the Taotai became very u.neasy, and appealed to the Foreign Consuls to interfere in the matter, o-'-vino- hints that serious rioting and loss of life would result if the French Consul persisted*^ in his intentions. On the morning of the 16th, the day appointed for taking possession of the cemetery, a detachment from the French cruiser "Eclaireur" and a strong body of police marched to the cemetery, and affiorded protection to the workmen who were told off to make a breach in the cemetery wall by way of taking possession. An angry mob watched these operations, and, as time went on, the streets filled with crowds of men, who moved about making hostile demonstrations but the French showed great self-restraint, and no serious collision took place on that day. All night long the crowds ^lled the streets, and many lamps were smashed and lamp-posts uprooted. Early on Sunday morning a determined attack was made by the mob on one of the French police-stations, and when the small body of men within saw that their lives were in danger, they opened fire. 213 About the same time the police and the " J^claireur's " men attacked bands of rioters in other quarters, with the result that on Sunday morning, as far as can be ascertained, fifteen men were shot dead or bayonetted, and about forty were seriously wounded. After that the rioters seemed to have become intimidated for a time, and the streets were left to the police. Meanwhile many of the shops in both Settlements were closed, and orders were sent to _ all Ningpo men — and they form 50 per cent, of the population — to go out on strike. Some of the principal Ningpo merchants came forward in the afternoon, and through the good offices of a peacemaker came to an understanding with the French Consul, under which it was agreed that the French should postpone taking possession of the cemetery for one month, during which time the Ningpo Guild Trust to come to some amicable arrangement. _ The French Consul has given them to understand that he will not recede from his position ; the cemetery must be given up, but he is willing that this should be done in any way that will be most pleasing to the Ningpo residents. I do not believe that the members of the Guild really intend to surrender the cemetery,' but they have a great deal at stake in Shanghae, and they feared that, unless they could go to the rioters with sonie vague promise that all would be settled amicably, the coming night might be one of bloodshed and incendiarism. A notice has now been sent to the Ningpo men to keep quiet, and for the time being all danger is at an end, but business is still suspended, and I fear that the excitement will not subside for some time, I have, &;c. (Signed) BYEON BEENAN. No. 310. Mr. Balfour to Sir C. MacDonald. (Telegraphic.) Foreign Office, September 2, 1898. THE German banks represented by Mr. Hansemann, and the Jardine Syndicate represented by Mr. W. Keswick and by the Hong Kong and Shanghae Bank, have to-day signed an Agreement in regard to the construction, vik Shantung, of the Tien-tsin-Chinkiang Railway. Should this railway have been included in your ultimatum, you should inform your German colleague that the German banks will get their share in accordance with the Agreement between the Syndicates. In the event of the line not having been included in your ultimatum, you should arrange with/the German Minister to apply jointly with him to the Chinese Govern- ment for the concessions of the line to the Anglo-German combination on the same terms as those accorded for the Peking-Hankow line to the Belgian Syndicate. No. 311. Sir C. MacDonald to the Marquess of Salisbury. — {Received September 3.) (Telegraphic.) Peking, September 3, 1898. HER Majesty's Consul at Chefoo telegraphs that a notice was issued on the ^ 2nd instant by the German Consul at Chefoo, to the effect that Tsintau (Chingtao), in German Kiao-chou, had b«en opened as a free port on that date. 214 No. 312. Hong Kong and Shanghae Banking Corporation to Foreign Office. — [Received September 3.) Dear Mr. Bertie, 31, Lombard Street, London,, September 3, 1898. AS requested I now beg to hand you a copy of the Minutes of the meetings held between M. von Hansemann and ourselves. In case it may interest you, I also inclose copy of the telegram I have sent to our people in the East regarding our arrangement with Germany. I remaim, &c. (Signed) EWEN CAMERON. Inclosure 1 in No. 312. Minutes of Meetings held at New Court, St. Swithen's Lane, London, on the 1st and 2nd September, 1898. Present : Representing the German Syndicate — M. A. von Hansemann. Representing the British and Chinese Corporation (Limited) — Mr. W. Keswick. Representing the Hong Kong and Shanghae Banking Corporation — Mr. Ewen Cameron. Mr. Julius Brussel. M. VON HANSEMANN proposed the following, viz. :— " It is desirable for the British and German Governments to agree about the sphere of interest of the two countries regarding the railway constructions in China, and to mutually support the interest of either country.'" This proposal was agreed to. The following proposal of M. von Hansemann regarding the British and German spheres of interest for applications for Railway Concessions in China, viz. : — " 1. British sphere of interest, viz. ; " The Yang-tsze Valley subject to the connection of the Shantung lines to the Yaiig^tsze at Chinkiang ; the provinces south of the Yang-tsze ; the Province of Shansi with connection to the Peking-Hankow line at a point south of Chengting and a connecting line to the Yang-tsze Valley, crossing the Hoangho Valley. " 2. German sphere of interest, viz. : " The Province of Shantung and the Hoangho Valley with connection to Tien-tsin and Chengting, or other point of the Peking-Hankow line, in the south with con- nection to the Yang-tsze at Chinkiang or Nanking. The Hoangho Valley is under- stood to be subject to the connecting lines in Shansi forming part of the British sphere of interest, and to the connecting line to the Yang-tsze Valley, also belonging to the said sphere of interest." Was agreed to, with the. following alterations, viz. : — • " The line from Tien-tsin to Tsinan, or to another point ou the northern frontier of the Province of Shantung, and the line from the southern point of the Province of Shantung to Chinkiang to be constructed by the Anglo-German Syndicate (meaning the German Syndicate on the one part, and the Hong Kong and Shanghae Banking Corporation and the British and Chinese Corporation^ (Limited) on the other parfi, in tlie following manner, viz. : — " 1. The capital for both lines to be raised jointly. " 2. The line from Tien-tsin to Tsinan, or to another point on the northern frontier of the Province of Shantung, to be built and equipped and worked by the German group. " 3. The line from the southern point of the Province of Shantung to Chinkiang to be built and equipped and worked by the English group. " 4. On completion, the lines to be worked foi-joint account." 215 So far the Minutes of the proceedings of the meetings, and it is further agreed upon that neither the German group nor the EngHsh group will be bound to con- struct the lines assigned to their sphere unless the Shantung lines be constructed simultaneously. London, September 2, 1898. Approved of and signed by — A. VON HANSEMANN. W. KESWICK. EWEN CAMEEON. JULIUS BKUSSEL. P.S.— Wherever the term '' Valley " is used it means " Flussgebiet," the significa- tion of which is the districts through which streams flow into the Yang-tsze or Hoangho. (Initialled) A. von H. W. K. E. C. J. B. Inclosure 2 in No. 312. Hong Kong and Shanghae Banking Corporation to Shanghae Agent. (Telegraphic.) _ 31, Lombard Street, London, September 3, 1898. ADVISE Peking have arranged with German Syndicate railway line between Chinkiang and southern border Shantung to be constructed managed by English; through Shantung and north to Tien-tsin by Germany. Finance whole df railway line to be joint account, and when completed to be worked on joint account. Her Majesty's Minister Peking German Minister Peking to apply for Concession on the same termg as Peking-Hankow Kail way line. British Government German Govern- ment approve of arrangement made. German Syndicate undertake not to conipete in English sphere, or England in German. Inform Jardine, Matheson, and Co., D. A. Bank. Keep this information strictly private meantime. No. 313. Sir C. MacDonald to the Marquess of Salisbury. — {Received September 4.) (Telegraphic.) Peking, September 4, 1898. THE provincial authorities of Hunan Province have been instructed by the Tsung-li Yamen to arrange for the opening of Yochow in March next. Above information was communicated to Her Majesty's Consul at Hankow bv Viceroy Chang Chih-tung. No. 314. Sir C. MacDonald to the Marquess of Salisbury . —{Received September 4.) (Telegraphic.) Peking, September 4, 1898. KATIFICATION of Peking-Hankow Eailway Agreement." At an interview which I had with them yesterday, the YamSn entered into the following undertaking : — Within the next few days they will address a despatch to me, apologising for their auction, and consenting to the construction of the following lines by British Syndicates : 1. A line from Shangae to Nanking with a continuation vi^ Chinkiang to Sui Yang. They said, however, that the latter route was that followed by the line from 216 Tien-tsln to Chinkiang, for which they said that a Prehminar}^ Agreement had been signed between Yung Wing and the Anglo-American Syndicate ; and the continuation in question must be dependent on the cancellation of that Agreement. 2. A line connecting Hangchow and Soochow with Shanghae, to be continued if required to Ningpo. 3. A line from Canton to Kowloon. 4. The Peking Syndicate to be entitled to construct a railway to convey minerals from their mines to the Yang-tsze. The Yamen have also agreed to send me a Confidential note embodying a declara- tion that the terms accorded for the construction of these lines will not be inferior to those granted for the construction of any railways in China proper. The Manchurian lines are excluded from the scope of this Agreement. I venture to think that this is a satisfactory settlement. I did not give them an ultimatum, confining myself to a warning of the grave consequences which would now attend any failure on their part to keep their word. The fact that the fleet is concentrating is, of course, known to them. No. 315. Sir C. MacDonald to the Marquess of Salisbury. — [Received Sejotember 5.) My Lord, Peking, July 20, 1898. WITH reference to my telegram to your Lordship of 11th July, reporting the outbreak of an insurrection in Kuangsi, I have the honour to report that the insur- rection appears at present to be* one of those periodical uprisings against local ofiicials which are common enough in China, particularly in bad seasons, and would not be politically important but for its proximity to the Tonquin border. Her Majesty's Consul at Wuchow reports, in a telegram of the 12th July, that it broke out on the 28th June at a point 70 miles south by west of his post, and tliat it was moving southward and westward. Her Majesty's ship "Tweed" was expected at Wuchow on the 13th July. I have instructed the Consuls at Canton and in the West River to keep a close watch on the movement, and report developments at once. I have, &c. (Signed) CLAUDE M. MacDONALD. No. U6. Sir C. MacDonald to the Marquess oj Salisbury. — {Received September 5.) My Lord, _ _ Peking, July 22, 1898. IN continuation of my despatch of the 25th ultimo, I have the honour to inclose herewith to your Lordship copy of correspondence which has passed between V^ice-Admiral Seymour and myself with regard to the provisional administration of Wei-hai Wei. I have, &c. (Signed) CLAUDE M. MacDONALD. Inclosure 1 in No. 316. Sir C. MacDonald to Vice-AdmiraL Sir E. Seymour. ^"' T TTAT Peking, July 7, 1898. I HAVE the honour to submit, for your consideration, the following suggestions for the provisional government of the territory at and near Wei-hai Wei.'^recently leased to Great Britain by the Chinese Government : — _ 1. During the present provisional period the Chinese Commissioners to remain at Wei-hai Wei to co-operate with the naval authorities in carrying on the current affairs of the territory in the same friendly way as heretofore. Instructions have been issued in this sense to the Commissioners by the Tsuno--li Yam^n. 217 2. A naval officer to be made provisional Administrator of the territory, to be appointed by and to be responsible to the Commander-in-chief alone. 3. Such Administrator should be allowed much latitude as to his relations with the phinepe Commissioners, and be given full discretion to consult vpith them and obtain their advice in matters of detail. 4. Mr. Hopkins to return to Chefoo, where he wnll be available at any time should the Com niander-in-chief desire his services. The provisional Administrator should also keep in touch with the Consul at Chefoo and consult him whenever he feels it desirable to do so. I have, &c. (Signed) CLAUDE M. MacDONALD. Inclosure 2 in No. 316. Vice -Admiral Sir E. Seymour to Sir C. MacLonald. Sir, " Centurion," at Wei-hai Wei, July 14, 1898. IN reply to your Excellency's letter of the 7th instant respecting the provisional government of the territory at or near Wei-hai Wei, recently leased to Great Britain by the Chinese Government, I have the honour to remark as follows : — 1. I quite concur that the Chinese Commissioners should remain here to co-operate with us in carrying on affairs. Their locality should officially be Wei-hai Wei, and if they have an office on shore it should be in that city or on the mainland, but I see no objection to their residing, as they now do, in a man-of-war here, or privately on Liu Kung Island. 2. Also that a naval officer should be provisional Administrator of the territory, either with or without a Consular officer as his colleague, but that if not' as his colleague, still an official of Her Majesty's Consular Service should always be present here. See later on. 3. Further, that communication between the British Administrator and the Chinese Commissioners should be frequent and encouraged. 4. I agree that Mr. Hopkins migiit return to Chefoo on the understanding that he may at any time be consulted as to aifairs in this territory, and that he would actually come over here himself on the representation of the Senior Naval Officer at Liu Kung Tao that his services were urgently required for some contingency that arose. But also that, certainly at present, this jDlace shall not" be left without the presence of a British Consular official. - 5. I am aware that the demands on your Excellency for experienced officers of the Consular Service in China are just now very pressing, and I am anxious to make no more demands than seem to be necessary, but I feel it my duty to recommend and urgently request that at present this port shall not be left without the presence of a Consular officer who is skilled in the Chinese language, as we are otherwise entirely in the hands of a Chinaman hired by the month to interpret ; also that there may be here some English official with more acquaintance with Chinese ways and usages than a naval officer can be expected to have. 6. As I am probably leaving for a short cruise to Japan with a small squadron of ships on or about the 22nd instant, I feel it the more desirable that Mr. Consul Hopkins should remain here till the following week so as to confer with Bear- Admiral Fitzo-erald, who returns here about the 21st, and will remain in my absence, but after a few days I see no reason, should affairs be quiet here, why Mr. Hopkins may not then return to Chefoo, under the conditions I have ventured to lay down in para- graphs 4 and 5 of this letter. 7. The views here expressed are in keeping with what I have held all along regarding our administration of this place, and the hitherto prevalence of good relations may be partly due to the presence of a skilled official like Mr. Hopkins. I nFiVP (fee* (Signed) ' E. H. SEYMOUE. [253] 2 F 218 No. 317. Sir C. MacDonatd to the Marquess of Salisbimj.— [Received September 5.) My Lord. Peking, July 23, 189S. I HAVE the honour to inclose herewith copy of extracts from an Intelligence Keport which I have received from Her Majesty's Acting-Consul at Chinkiang, in which mention is made of the preliminary survey of the Shanghae-Nanking Kailway and of the Companies formed at Chinkiang for steam navigation inland. T h 3 vp occ (Signed) ' CLAUDE M. MacDONALD. Inclosure in No. 317. Extracts from Chinkiang Intelligence Report for June Quarter, 1898. The Shanghae-Nanking -Raihuay. — The preliminary survey has now been completed by Mr. Morrison, of Shanghae, and I am informed that the more minute survey will be begun in about six months. The country between Chinkiang and Shanghae is so interlaced with waterways that more than fifty bridges will be required for this section alone. Mr. Allen, agent for Messrs. Jardine, Matheson, and Co., tells me that it will be more than two years before trains can run. Tne Chinkiang station will be about three-quarters of a mile from the Concession, and the line will reach here from Shanghae by a tunnel pierced through the range of low hiUs which lies behind the Concession. Navigation of Inland Waters. — Several Steam-launch Companies have been formed here, and a number of launches obtained from Shanghae for the traffic. Those at present running are : — A Company with partly Chinese capital : Agent, Mr. Gregson. A Company with partlv Chinese capital : Agent, Mr. E. Starkey. Two launches belonging to Mr. Gregson, registered as his exclusive property, and flying the British flag. One launch belonging to Mr. Starkey, for which certificate of ownership has been granted, flying the British flag. A French Company, MM. Olivier and de Langenhagan, have also informed me, through their agent, that they intend to run launches on the Grand Canal under the French flag ; and Mr. Bowern, a British subject, and agent of a German firm, tells me that he is obtaining launches. An American Company is also being started, with partly Chinese capital, but, I believe, under the American flag. Up to the present only passengers have been carried, but as soon as affairs have quieted down along the Canal it is intended to carry up cargoes of piece-goods under transit passes. (Signed) B. TWYMAN, Acting Consul. Chinkiang, July 8, 1898. No, 318. Sir C. MacDnnald to the Marquess of Snlishury. — [Received September ;!.) My Lord, ^ Peking, July 23, 1898. I HAVE the honour to inclose herewith copy of extracts fmni an Intelligence Report which I have received from Her Majesty's Consul at Canton, containing several matters of local interest. I have, &c. (Sig-oed) CLAUDE M. MaoDONALH. 219 Inclosure in No. 318. Extracts from Canton Intelligence Report for June Quarter, 1898. Vigilance against Bobbers.— The Tsung-li Yamen have addressed a communication to the Viceroy, requesting him to enjoin upon his subordinates to use the utmost rigour in bringing robbers to justice. These instructions are the result of a despatch addressed to the Yam6n by the United States' Minister in Peking, quoting a Report from an American Missionary in Shautung on the disturbed state of the interior of that province due to the prevalence of brigandage and lawlessness. It it very evident that the Yamen fear that if any foreigner should come to harm through the acts of bandits, the Kiao-cliau history might repeat itself elsewhere. Opening q/ New Treaty Ports. — The Tsung-li Yamen have forwarded to the Viceroy a copy of a Memorial addressed to the Emperor and approved by him recommending the opening of new Treaty ports. The tenour of the Memorial is as follows : — Western nations attach the greatest importance to commerce. Since China has been open to foreign trade the customs revenue has largely increased, and during the present year has realised over 20,000,000 dollars, from which sum the greater part of the revenue required for the use of the Metropolitan Administration is derived. But at the present time there is a constant demand for funds, which it has been necessary to meet with foreign loans, and, after careful consideration, your servants have come to the conclusion that the opening of new Treaty ports can be relied upon to produce revenue. Yochou Fu in Hunan is near the Yang-tsze and easily accessible for war and merchant- vessels. The future Canton-Hankow Eailway will pass through Kuang-tung Province, and all kinds of produce for export will pass vi^ Youchou. The place is certainly the most important one on the borders of Hunan and Hupei. Of late the attitude of the Hunauese has been improving, and that province being conterminous with Hupei, the people are accustomed to the sight of foreigners. Should this place be opened as a Treaty port, both the geographical situation and the temper of the community would be equally advantageous. Again, San Tu Ao in the Funing Prefecture, Fukien Province, is, as it were, the back gate of Foochow, and an extremely important place. We have discussed this question in concert, and are of opinion that these two places should be opened as Treaty ports, so that an impetus may be given to trade and the sources of pi-ofit be enlarged. If your Majesty sees fit to approve, we will communicate vp-ith the high provincial officials at both places and desire them to take the necessary steps. We will also fix a dav for the opening of the ports, and inform the Foreign Minister at Peking, and send Instructions to the Inspector General of Customs. The above Memorial was dated the 24th March, and the Imperial rescript thereto was " Let it be as recommended." Telegraph Line to Kuangchow Wan. — The Yamen have informed the Viceroy that the French Minister has asked to have the Leichow telegraph line extended to Kuangchow Wan, and have requested him to communicate with the Telegraph Adminis- tration on the subject. The Viceroy has accordingly directed them to ascertain the nearest point on the line to Kuangchow Wan, and to prepare an estimate of the cost of extension to that place. _ . Canton-Hankoiv Line.--lu. a despatch to the Viceroy, Sheng Taotai points out the importance of contracting a line from Canton to Hankow, and states that the Notables of the two Kuangs, Hunan and Hupei, have asked to be allowed to co-operate in the construction of this line, so as to keep the profits accruing therefrom in the hands of Chinese to the exclusion of foreigners. The Imperial assent having been given, the important thing now is to get the line surveyed, and Sheng suggests that each province concerned should send deputies to make a survey and satisfy themselves that the line will be politically and commercially advantageous. Foreign engineers having already been sent from Hunan and Hupei,aceompanied by interpreters' provided by the Syndicate- in-chief it is deemed advisable to appoint a high official of ability and well versed in foreign matters to oversee the work, and Sheng mentions a certain Ts'ai hai-Luang, an , expectant Taotai in Hunan, as a suitable person. French Consul's Claim against Kerosine Tax Farm. — The French Consul claimed that a certain Xiao Hsiaofeng, a naturalized French subject, was a shareholder in the now abblished Chi Yu T'an^, and called for the refund of the amount of his capital [25,^!] " 2 F 2 220 embarked in the venture, with the interest accruing thereon. The Viceroy replied that if Liang were a Chinese, he would have to conform to the laws of his country in the premises, and that if he were a foreigner, he could not be a member of a Chinese-Tax Syndicate. ' (Signed) G. D. PITZIPIOS, Vice-Consul. Canton, July 6, 1898. No. 319. China Association to Foreign Office. — {Received September 6.) Sir, 159, Cannon Street, London, September 5, 1898. A RECENT telegram from the Shanghae branch of this Association indicates that the French authorities have taken the opportunity of disturbances about certain property at Shanghae, belonging to the Ningpo Guild, to demand a great extension of the area allotted to them for a Settlement under the Fi-an co-Chinese Treaty of 1844. The demand appears extravagant, and various considerations lead the Association to deprecate its admission. Questions of municipal extension and Consular ascendancy within the areas of the existing Settlements have been attracting much attention of late. Occasion was taken by the Shanghae branch of the Association to invite Sir Claude MacDonald's attention to the subject in a Memorandum dated the 7th May, 1897. Extension of the British Concession formed the subject of discussion, also, at a public meeting held at the Shanghae Municipal offices on the l7th June last. The British Settlement has, in fact, largely outgrown its original area, and much inconvenience results from the absence of municipal control over the outlying district. These inconveniences are indicated in a letter from our Shanghae branch, dated the 24th June, which I have also the honour to inclose, together with a report of proceedings at the meeting in question, and of correspondence between the Municipal Council and the Consular and Chinese authorities on the whole subject. These documents show that, not only is the need of extension admitted in principle, but that it has been the subject of urgent representations ascending from the Consular and provincial authorities to the foreign Minister's at Peking. There are at Shanghae three so-called forei-gn Settlements (British, French, and American), which were delimited successively in the years 1845, 1849, and 1862. As explained in the Shanghae Memorandum, the Treaties under which these areas were handed over are similar in purport, and there was a disposition at one time to administer them on similar lines. Widely differing conditions have, however, sub- sequently arisen out of circumstances and national peculiarities. The French authorities withdrew in 1 862 from the general scheme of administration which had been agreed upon between the three Consuls in 1854, and published in 1868 a Code of Reglements which give the Consul something like a gubernatorial power. The French Settlement has been administered since as a distinct municipality. The British and American residents, on the other hand, voluntarily amalgamated under one municipality in 1863, and the t^\•o Settlements have since been administered with conspicuous success by a single Municipal Council, which is annually elected, and on which the German residents in Shanghae are habitually represented. This area constitutes, in fact, a great cosmopolitan Settlement, from which the French alone stand aloof. It is this attitude of isolation, and the exclusive pretensions it implies, which inspire the hostility expressed in our telegram to their present demands. Riots, in which fifteen oi' twenty Chinese were killed, were precipitated in July by the pretension of the a,uthorities to confiscate certain property belonging to the Ningpo Guild, which lies within French limits. A similar pretension has found expression in a demand, that Mr. Hanbury, a British subject, who holds property in the French Settle- ment under register in the British Consulate, shall take out fresh titles from the French Consulate on the ground that " le Consul-Gendral de France seul a le pouvoir de d^livrer des titres de propriety ou d'affermage.'"' There was a disposition to assert that principle in the British settlement in 1845, .but the pretension was abandoned almost immediately on the representation of the United States Consul that it implied a territorial claim inconsistent with the fact that the 80il contmues td belong to the Emperor of China, The United States' Consul 221 protested in similar terms against a claim to exclusive privileges alleged by the French Consul in respect to the French Settlement in 1849, and his protest appears to have temporarily prevailed, although the original pretensions were subsequently revived, and are being asserted now, in uncompromising terms by M. de Bezaure. It was generally recognised up to 1869 that correspondence with the Chinese autho- rities regarding the affairs of the Anglo-American Settlement should be carried on by the British or United States' Consul, but a provisional arrangement wa,s come to in that year for the creation of a Court of Consuls, before whom the Anglo-American Municipal Council could be sued, and an arrangement has since grown up under which this corre- spondence is carried on by the Dean' of the Consular Body. The contrast between French pretensions and Anglo-American cosmopolitanism was reduced to something like an absurdity when the French Consul-General— the apostle of exclusion in respect to his own Settlement — claimed some time ago, as doyen, to preside over deliberations regarding the affairs of the Anglo-American Settlement, to interfere, in fact, in his neighbour's house in a way which he would have resented m et armis if his colleagues had asserted to a similar pretension in respect to his own. British residents feel that cosmopolitanism had been pushed rather far when a French, Portuguese, or, possibly, Japanese Consul may claim to conduct correspondence with the Chinese authorities respecting the affairs of a Settlement which is primarily our own, and a return to the principle that the British or American Consul — whichever happens to be senior — should alone preside at meetings and conduct correspondence affecting municipal concerns has been proposed. There is no desire to restrict otherwise the large freedom of residence and land- ownership which has hitherto prevailed. If the French have preferred to keep aloof, that IB their affair. But an exclusive claim to grant titles implies territorial pretensions, and it is felt that pretensions greater than ar6 asserted by otliers should be contested. Alter- natively, if they are admitted in the case of the 'French Settlement, they should be asserted in the case of the British Settlement, and the maxim laid down that all land within the greatly extended area that will soon, probably, be added to it must be regis- tered in the British Consular books. This review of the situation was necessary in order to explain fully the strength of the objection to the claims disclosed in the telegram. It would be to the general advan- tage, probably, that foreign municipal control should be asserted over Pootung. But that control should certainly not be French. Pootung is on the opposite bank of the river to Shanghae. The French have no interests there, whereas there are docks, wharves, and warehouses owned by British and American, subjects. Everything points, therefore, to its inclusion in the Anglo-American fold. The industries which have taken root in Pootung are concerned with shipping. Out of 3,838,4.36 tons of shipping entered at Shanghae in 1896 the French flag figures for only 117,137. The figures are :— Steamers entered Inwards. Nationality. British Chinese German Swedish and Norwegian Japanese French Number. Tons 1,691 2,252,907 746 822,799 234 260,681 206 160,786 113 146,437 .5H 117,137 The proposition that a Power whose shipping interests are relatively so small should control an area containing resources mainly applicable to shipping is fantastic. The French have an interest at Sikawei in the shape of a large Jesuit establish- ment, but Sikawei is between 4 and 5 miles from Shanghae, and much of the intervening land is owned by British and others. The very burying-ground of the entire foreign community comes within the area, and a natural dislike is felt to the prospect of seeing it pass under French law. The Association ventures, moreover, to suggest that the territorial pretensions of the French authorities are inconsistent with China's promise not to alienate any portion of the Yang-tsze region to another Power. The new concessions at Hankow had been 222 granted, unfortunately, before that principle was affirmed. But the French authorities have provided there an object-lesson which should prevent the admission of any similar claim elsewhere. If the stress laid on the matter appear extreme, it maybe replied that the irritation engendered by French pretensions in China is extreme, and that it is not by continued tolerance that those pretensions will be checked. Pretensions based on substantial interests demand consideration, although they may not always be easy to reconcile them with ours. The interests of Germany in China are substantial, but those of France are trifling compared with our own. The British Settlement of Shanghae — which is really cosmopolitan, embracing residents and land-owners of many nationalities- — has long since outgrown its limits. The demand for its expansion has therefore ample justification. This demand involves no territorial pretensions, but such a measure, only, of municipal control as may conduce to sanitary and police Regulation of a character consistent with our views. The area of the French Settlement, on the contrary, is ample for its purpose. The desii'e to extend it is inspired by territorial ambition, and by a desire to create political claims. The pretension to extend French authority over a district (Pootung) where no French interests e-xist, but where much British and American capital has been sunk is an illustration of this tendency. The owners of land in Pootung are other than French ; docks, wharves, and warehouses in Pootung subserve interests which are not French. The attitude of the French Consular authorities towards British land-owners at Hankow has been so inconsistent with justice or courtesy that British owners of land around Shanghae naturally dislike the prospect of similar treatment. It is regrettable that a Power whose attitude is so hostile should have acquired a foothold at such an important centre as Hankow. It will be still more regrettable if territorial pretensions that may become incon- venient are admitted in the mouth of the Yang-tsze region, at Shanghae. It is believed, indeed, that residents of all other nationalities would view with satisfaction the erection of a final bar against such exclusive claims by the inclusion of the land on both sides of the Hwangpoo, from Shanghae to the Yang-tsze — to the Kintoan beacon on one side, and Paoshan city on the other — within the Anglo-American • — which is really a great cosmopolitan Settlement. I have, &c. (Signed) R. S. GUNDRY, Honorary Secretary, China Association. Inclosure 1 in No. 319. Shanghae Branch of China Association to General Committee. (Telegraphic.) Shanghae, August 26, 1898. WITH respect to extension (of) French Settlement towards Sikawei it should be expressly stipulated for (that) other Europeans' property within the space will not be subject to French law (but) must remain subject to their (owners) own. Also insist on exclusion of the Shanghae Municipal Cemetery. Under no circumstances make the concession of Pootung to France. It would be disadvantageous to British shipping. Land-owners almost entirelv other than French. Urge avail of this opportunity to extend the Shanghae Municipal Council Settle- ment, including Pootung (with) equal rights to all including French. Treaty Clauses., Article II of British Treaty {of NcmUng) 1842. " His Majesty the Emperor of China agrees that British subjects, with their families and establishments, shall be allowed to reside, for the purpose of carrying on their 223 mercantile pursuits, without molestation or restraint at the cities and towns of Canton, Amoy, Foochowfo, Ningpo, and Shanghae." _ The principle that certain plots of ground should be marked off at each port for foreign residence was affirmed crudely in Article VII of a Supplementary Treaty negotiated by Sir Henry Pottinger at the Bogue in 1843. Title deeds for lands bought in these early Settlements are held from the Chinese authorities. _ Proof is wanting that the position of the French is superior to that of other nationalities. The principle of Concessions of a whole area to a foreign Government which re-leases to its subjects, came in only after the Treaty of Tien-tsin (1858). Article XVII of the United States' Treatij (1844). Citizens of the United States, residing or sojourning at any of the ports open to foreign commerce, shall enjoy all proper accommodation in obtaining houses and places of business, or in hiring sites from the inhabitants on which to construct houses and places of business,, and also hospitals, churches, and cemeteries. The local authorities of the two Governments shall elect in concert the sites for the foregoing objects, having due regard to the feelings of the people in the location thereof ; and the parties interested will fix the rent by mutual agreement, the proprietors on the one hand not demanding any exorbitant price, nor the merchants on the other unreasonably insisting on particular spots, but each conducting with justice and moderation. And any desecration of the said cemeteries by subjects of China shall be severely punished according to law." Article XXII of French Treaty (1844). " Tout Francais qui, conformement aux stipulations de I'Article II, arrivera dans Fun des cinq ports, pourra, quelle que soit la duree de son sejour, y louer des maisons et des magasins pour deposer les marchandises, ou bien affermer des terrains et y batir lui-meme des maisons et des magasins. Les rran9ais pourront, de la meme maniere, etablir des ^glises, des hopitaux, des hospices, des ecoles, et des cimetiferes. Dans ce but, I'autorite locale, apr^s s'^tre concertee avec le Consul, designera les quartiers les plus convenables pour la residence des Frangais, et les endroits dans lesquels pourrout avoir lieu les constructions pr^cit^es. Le prix des loyers et des fermages sera librement debattu entre les parties interess^es, et regie autant que faire se pourra, conformement k la moyenne des prix locaux. Les autorit^s Chinoises empecheront leurs nationaux de surfaire ou d'exiger des prix exorbitants, et le Consul, de son cote, veillera a ce que les Frau9ais n'usent pas de violence ou de contraiute pour forcer le consentement des proprietaires. II est bien entendu, d'ailleurs, que le nombre des maisons et I'etendu des terrains k affectes aux Fran§ais dans les cinq ports ne seront point limites, et qu'ils seront determines d'apres les besoins et les convenances des ayants droit. Si des Chinois violaient ou detruisaient des ^glises ou des cimetieres Frangais, les coupables serai ent punis suivant toute la rigueur des lois du pays."* '(Translation.) "Every FrencK citizen who, in conformity witt the stipnlations of Article XXII, shall arrive in one of the five ports, shall be free, whatever the length of his sojourn, to hire houses and warehouses for the storage of goods there, or to lease ground and thereon himself to build houses and warehouses. French citizens shall, in like manner, be permitted to establish churches, hospitals, alms-houses, schools and cemeteries. With this object the local authorities, after agreement with the Consul, shall designate the most convenient localities for the residence of French citizens, and the sites where the above-mentioned buildings may be constructed. The amount of the rents shall be freely discussed between the parties interested, and settled as far as possible on the basis of the average of the local prices. The Chinese authorities shall prevent their nationals from over-charging or exacting exorbitant prices, and the Consul on his part, will see that the French citizens do not use violence or constraint in order to force the consent of the proprietors. It is understood, besides, that the number of houses and the extent of ground to be assigned to the French citizens in the five ports shall not be limited, and that they shall be determined according to the needs and conveniences of the interested parties. Should Chinese subjects violate or 224 The French Consul at Shanghae to Mo: Hanhury. Monsieur, Shang-Hal, le 18 Juin, 1898. J'ai regu vos lettres des 26 Mai et 1" Juin ainsi que les documents qui les accom- pagnaient. Ces pieces ont dteemises par le Consulat d'Angleterre le 27 Novembre, 1861, et portent les Nos. 393, 394, et 395. D'apr^s vous, ils etablissent le fait de la propriete de M. Thomas Hanbury sur les lots Nos. 176, 177, 180, 181, 182, et 190 du plan cadastral de la Concession Frangaise. J'ai le devoir d'attirer votre attention sur Tirregularite des titres de propn^t^ que vous m'avez presentds pour les lots ci-dessus indiques. La Concession Fran9aise a ete gtablie en execution du Traite intervenu en 1844 entre la France et la Chine, et par la Proclamation du Taotai Liu de 1849. Des prescriptions de ce Traits et de la Convention de 1849 il results que les etrangers qui d^sirent aflfermer des terrains sur la Concession Frangaise ne peuvent le faire que par I'intermddiaire du Consulat de France. Le Consul-General de France seul a le pouvoir de delivrer des titres de propridte ou d'affermage, et tons les transferts doivent etre enregistres en la Chancellerie du Consulat-General de France. Ceci est, du reste, d' accord avec le principe de droit international locus regit actum. En consequence, je vous prie de vouloir bien vous adresser, dans le plus bref d61ai possible, k la Chancellerie de ce Consulat, afin de vous faire delivrer des titres de propriety r%uliers pour les lots 176, 177, ISO, 181, 182, et 190. Quant aux expropriations necessities par le prolongement de la Ning-Po, le Secretaire de la Municipalite a At vous transmettre les decisions du Conseil Municipal.* Agreez, &c. (Signe) BEZAURE. Inclosure 2 in No. 319. Memorandum on the status of British Interests in the British Settlement at Shanghae, addressed to Sir C. MacDonald hy the Committee of the China Association at Shanghae. THE Committee venture to suggest to your Excellency that in view of the fact that China has recognised, by her recent Treaty with Japan, the right of Treaty Powers to exclusive Settlements at the open ports — a right which has been already claimed at certain places by Germany and Japan — it would seem fitting and advisable to represent destroy Frencli diurohes or cemeteries the guilty parties shall he punished with all the rigour of the laws of the country." * (Translation,) Sir, _ 8hang-Hai, June 18, lg9^. ., , I have received your letters of the 26th of May and the 1st of June, together withthe (iociimeiits which accompanied them. These papers were issued from the British Consulate on the 27th of November, 1861, and are numbered 393, 394, and 395. According to yon they establish the fact that lots Nos. 176, 177, 180, 181, 182, and 190 on the survey map of the French Concession are the property of Mr. Thomas Hanbury. It is my duty to call your attention to the irregularity of the title to the property of the above- mentioned lots which you have presented to me. The Fronch Concession was established under the terms of the Treaty concluded between Prance an Kuan Zz4to barrier, in consequence of which his Excellency the Viceroy, in response to my request, telegraphed to the authorities there to diScotatinue all unnecessary interference. , ! On the 28th June Mr. Gregson complained to me that a steam-launch bound upwards for' Chingkiang P'u from this port was assailed at Wu T'ai Shan by a number of men, who, standing upon a pontoon bridge there, threw stones at the launch. The pontoon bridge wa,s closed, barring the way, and the launch people, anxious to avoid an affray, decided to return to Chinkiang and report the matter. On the evening of the 28th I visited the Taotai and received his verbal promise to telegi'aph the next morning, at the earliest hour possible^ to Yangchow, ordering the officials there to give the necessary protection. On the 30th June I received a complaint as to farther opposition on the part of native -boatmen to launch navigation. This I embodied in a despatch to the Taotai. ; On the 30th June and 1st July no launches proceeded beyond Yangchow, and even at this place they were compelled, owing t.o the disturbed condition of affairs, to land and ship passengers about a mile below the city, instead of at the regular landing- stage. On the 1st July the Taotai dispatched one of bis officers to Yangchow to make an inquiry into the circumstances of the rioting. Before he returned, on th^ 4th July I received both from the Taotai and his Excellency the Viceroy requests that the traffic lEflght be suspended, and a deputy was sent ' to the 'Consulate ' to make the request personally. . .They were unable, or unwilling, to fix a time for recommencement,, and I replied , that direct instructions had been received from Her Majesty's Legation in Peking' for the commencement of the traffic, and that, the : merchants being anxious to continue,.! did not feel justified in asking them to stop without direct orders from Her Majesty's Minister. 0. .-On the, 4th July I received news that one of Mr. Gregson's launches had been attabked at Chingkiang P'u, and that the passenger- station at that place had been broken up. Accordingly oii that date I telegraphed to you that the navigation of the inland waters had met with serious opposition ; that steam launches had been damaged by the boat people at Chingkiang P'u and Yangchow ; that the local authorities had failed to afford protection ; and that the British merchants objected to complying with the Viceroy's request that traffic should b^ suspended. The passenger stations of Messrs. Starkey and Gregson at Pao Ying Hsian had also been wrecked, on the 4th July. In answer to my request for directions contained in my -telegram of the 4th July, I had the honour to receive your telegrams of the 6th, 7th, and 8th July respectively. Mr.JStarMy's Launchen. — ^Mr. Starkey last month proceeded up the Grand Canal with steam-launch and house-boat under a permit specially obtained from the Taotai. On his return he complained that soon after arriving at Pao Ying Hsien on the 20th June, he and his hoat were attacked and stoned. In consequence of: this complaint, I Wxote on the 25th June to his Excellency the Viceroy asking him to have proclamations posted en rout-;. Mr. Starkey's boats commenced running to. Yangchow on . the 30th June. His station there shared in .the general wreck on the 29th June', ajid his premises at Pao Ying were also destroyed on the 4th July. On the 9th July, aftei- having made inquiries concerning the; boats tvhich returned on that day from the Canal to Chinkiang,. I felt justified in informing you by telegraph that no disturbance had occurred since the 5th July, and that the local authorities, except at Pao Ying Hsien, had taken measures to insure protection. I added that Yangchow rioters had been captured, the Taotai's deputy, who returned from that place on the evening of the 4th July, having informed. me that three arrests had been made. .' On the evening of the 9th July I received a telegram from Mr. Byron Brenan, stating that' Mr./ Scott would reach Chinkiang on the evening of the 10th July. I have, &c. (Signed) B. TWYMAN. 248 Inclosure 2 in No. 329. Acting Consul Scott to Sir C. MacDonald. gjj, Chinhiang, July 20, 1898. I HAVE the honour to report that immediately on my arrival here I called upon the Taotai ; and as Her Majesty's ship "Phoenix " had arrived on the 11th instant I invited Captain Cochran, the officer in command, to accompany me and discuss with the Taotai the difficulties which had arisen in the course of the inauguration ol the inland navigation. Mr. Twyman, who was cognizant of the whole circumstances, was also present at the interview. . j u i,- Captain Cochran explained to the Taotai that he had been specially deputed by his Admiral to investigate and report and, especially in the event of continued opposition, to proceed up the Grand Canal to Chingkiang P'u, the head of the inland navigation. The Taotai gave positive assurance that every measure had been taken to protect steam-launches plying in native waters according to the Ptegulations for inland navi- aation. The opposition which had arisen was due to some misunderstanding on the part of the local authorities, to whom instructions had been sent by telegram instead ot the usual formal dispatch. This, the Taotai added, had now been remedied, and iuli instructions in writing sent to the authorities. I replied that I was aware that British steam-launches were now running with passengers to most places on the Canal, but that at Pao Ying district no steps had been taken to protect the launches. I requested that special measures might be adopted to enable them to renew calling, and I expressed a hope that this be done within the next two days. . , i . . i, • I am happy to add that the Taotai did so, and Britisn merchants report that their steam-launches have resumed calling without opposition at Pao Ying district. On the 13th instant the Taotai retiirned the call of Captain Cochran and myself. He renewed his assurances as to the protection of steam-launches in connection with inland navigation, and laid special stress on the arrangements which he had made for vessels calling en route at Pao Ying district. On the 14th instant I telegraphed to you giving the Taotai's assurances as to protection, adding that steam-launches were running freely with passengers except at Pao Ying, but at this latter place proper arrangements were being made to enable them to resiime calling. At my interviews with the Taotai 1 further called his attention to the destruction of the landing stations by the mob. I complained of the neglect shown by the authorities in protecting British property and interests. British subjects had incurred certain losses, property had been destroyed, and their launches prevented from running, and I invited the Taotai's attention to their compensation. The Taotai hoped I would not press the use of the word "compensation," he added that he recognised the situation, and was prepared to extend special " consideration " to British subjects under the circumstances. Arrangements were made for a friendly discussion of the claims, the Taotai having suggested that his deputy meet me and go through the items with a view to an amicable settlement. I regret, however, to have to report that on the 19th instant the Taotai wrote that, acting under instructions from the Provincial authorities at Nanking, he was unable to continue negotiations in regard to the claims. The Viceroy held that the punishment of the rioters and the recovery from them of lost and damaged property was all that could properly be exacted from his Government. Indirectly, the Viceroy tries to raise the question as to the right of British subjects to open landing stations in inland waters ; forgetting, or perhaps, ignoring, the existence of the present landing stations on the Yang-tsze River ,where foreign steamers regularly call with passengers, &c. I am, however, to continue pressing the claims on behalf of British subjects — the total amounts to somo 2,000 taels. So far only passengers have been carried ; but to-day application has been made for the conveyance of cargo covered by transit passes, and I have duly called upon the Taotai to see that no interference is allowed in respect thereto. I have, &c. (Signed) JAMES SCOTT. 249 No. 330. Sir C. MacDonald to the Marquess of Salisbury. — [Received September 19.) My Lord, Peking, August 3, 1898. I HAVE the honour to inclose copy of a note addressed to the Tsung-li Yam§n, in which I have drawn the serious attention of the Chinese Govei-nment to the lawless state of Central Szechuan, and to the anti-foreign propaganda, of which the " Board of Foreign AflPairs " at Chengtu is apparently the moving spirit. I have, &c. (Signed) CLAUDE M. MacDONALD. Tnclosure in No. 330. Sir C MacDonald to the Tsung-li Yam&n. MM. les Ministres, Peking, August 2, 1898. 1 AM in receipt of despatches and telegrams from Her Majesty's Consul at Chung- king, whicli compel me to draw the serious attention of the Chinese Government to the condition of affairs in Central Szechuan. It appears that at Shun-ch'ing Fu the local officials, with a few of the gentry, have for years shown themselves determinedly hostile to foreigners, and have refused to allow houses to be let to missionaries. British missionaries have in consequence been forced to quarter themselves in an inn for the last six years, but even that was apparently objected to ; in 1893 there was a riot, and in 1895 another, in which two missionaries were treated with brutal violence. In May of this year a house was finally rented ; the District Magistrate was notified, but neither he nor the Pao-ning Taotai issued proclama- tions or gave protection, though requested by the missionaries to do so. The Shun- ch'ing Prefect, instead of giving protection, connived at the local opposition, and with the usual results. On the 15th June three missionaries were attacked and stoned, and one severely wounded, while passing through the city, and though protection was asked of the Prefect, he gave none, and later he and the other officials repeatedly refused to issue a Proclama- tion or to take any measures whatever to avert disturbances. On the 20th the Prefect feigned sickness, and could not be appealed to, and on the 27th the house leased by the ■ missionaries was destroyed, with all the property it contained. The Roman Catholic establishment was also gutted. As usual the disturbance did not end at Sheen-ch'ing. Later on a Roman Catholic Chapel at Yung ch'ang Hsien was attacked and looted, t^AO native Christians killed, 10,000 taels of silver stolen, and a French priest seized and held to ransom by a band of rioters. I am also informed that other acts of brigandage have occurred, and that the Protestant missions at Pao-ning and She-Hung are in grave danger. The Provincial Government appears to absolutely ignore the recent Imperial Decrees for the prevention of missionary troubles. All the conditions point to this, or to an utter incapacity on the part of those officers to exercise satisfactory control. Her Majesty's Consul, indeed, informs me that there is one band of brigands, led by an out- law known as Yll Man Tzu, which is able to terrorise two important districts in the centre of Szechuan and even to overawe the Chengtu authorities. In connection with the Shun-ch'ing affair Her Majesty's Consul has made the following demands : — 1 . Immediate restoration of their house to the missionaries, the officers to pay the whole cost of repairs ; 2. Punishment of the ringleaders ; 3. The local headmen to give security for future good conduct ; 4. Compensation for all property destroyed ; 5. Punishment of officials in fault. I shall look to the Yamen and see that these demands are fully satisfied and with the least possible delay. Witii regard to the last one, I may add that no settlement of the case can be considered satisfactory, which does not include the dismissal of the Shunch'ing Prefect, but for whose connivance and hostility the riot would have been impossible. [263] 2 K '260 There is yet one step, and that probably the most important of nil, which I must invite the Chinese Government to consider. The chief cause of the present troubles in Szechuan is the influence of the Board of Foreign Affairs at Chengtu. The head of this, Lai, Taotai, is notoriously anti-foreign, arwi the last man who should be invested with authority in international matters. Her Majesty's Consul at Chungicing is strongly of opinion that the Foreign Board should be abolished. His opinion is shared by me, and I must take this opportunity of stating- that, unless the present Board is done away with, other steps may have to be considered td insure that the transaction of foreign business at Gh§nglu is accomplished more satisfactorily. I avail, &c. (Signed) CLAUDE M. MacDONALD. No. 331. Sir C. MacDonald to the Marquess of Salishiry. — [Received Sejitember 19.) My Lord, Peking, August 4, 1898. I HAVE the honour to inclose copies of despatches from Her Majesty's Consuls at Wuchow and Canton, dealing with the rebellion in Kuangsi, the outbreak of which I reported in my despatch fo your Lordship of the 20th July. I understand from the Tsung-li Yamen that although the main body of insurgents has been dispersed and the backbone of the movement broken, the province is still in a very disturbed state, more particularly in the mountainous districts. I have, &c, (Signed) CLAUDE M. MacDONALD. Inclosure I in No. 331. Consid Hosie to Sir C. MacDonald. Sir, Wuchow, Jidy 9, 1898. I HAVE the honour to inform you that a rebellion of considerable magnitude, which is rapidly spreading, has broken out in the south-east of this province. On the 28th ultimo telegraphic news reached the local authorities here that the city of Jung Hsien, 70 miles south by west of this port, and within the Wuchow Prefecture, had fallen into the hands of rebels, and had been sacked. Next day the large market town of Tung Hsii and the district city of Lu Ch'uan to the south of Jung Hsien fell, and on the 30th the district city of Pei Liu was taken and the important departmental city of Yll Lin was surrounded. All these districts lie along the frontier of the Kwang- tung Province, and together form the richest agricultural area of Kuangsi. The origin of the outbreak is attributed to the scarcity and dearness of food owing to the export of rice, for which these districts are famous ; but the rapidity with which city after city has fallen points to more than a mere local riot. "Wuchow is practically undefended — -only some 200 soldiers, mostly unarmed, forming the garrison — and on the arrival of the news of the fall of Juno- Hsien a meeting of the gentry was hastily summoned by the authorities here, who were, and still are, in a state of great consternation, not to say fear, and it was arranged that a volunteer company should he at once enrolled — each shop supplying one man — for the defence of the city, and telegrams were forthwith dispatched by the Prefect to the Viceroy at Canton' and tlie Governor at Kwei-lin for assistance. The Prefect courteously sent me the telegraphic replies which he received. The Viceroy stated that he had sent instructions by wire to Kao-chou to move a force of 2,000 men across the Kwangtung frontier to the disturbed districts in Kuangsi, and that he was sending 1,000 Anhui soldiers from Canton to Wuchow, who should arrive here on the 5th instant. These men are turning up in instalments, being carried in native boats towed by steam- launches and small gun-boats. The Governor telegraphed that he was sending ail available troops from Kwei-lin, and 200 Hunan braves arrived on the morning of the 7th instant. The " Dosing," a small American steamer then in port, was chartered to convey these men to T'Sng Hsien, 25 miles west of Wuchow, whence urgent calls for assistance have been received, and she proceeded up-river the same afternoon at 4 o'clock. 251 Unfortunately,, some trouble arose on board -between the master of the vessel, an Ameripan citizen, and the ship's compradore; and the former, drawing his revolver, fired three shots at the latter, wounding him fatally. The "Dosing" returned to Wuchow without landing the ■ troops, who disembarked into native boats yesterday morning- and^ proceeded up-river to T'^ngHsien. The .death of the Chinese compradorgs is entirely overshadowed by the rebellion ; but the Chinese officials have taken action, and the master of the " Dosing " is being sent under arrest to the American Consul at (Janton to-day. ., Hundreds of volunteers armed with lampsv horns, whistles, and a feW' old rifles assemble every night and patrol the streets. The ■ Chinese officials are afraid not so much of the rebels coming here — although that is a possible danger— as of a rising of the bad characters in the city itself, and the people are in a state of absolute panic, hundreds leaving daily for Canton. The panic has been increased by the fact that some headless bodies have been seen floating down the river. I considered it advisable to telegraph on the 6th instant to the Commodore at Hong Kong for a gun-boat, and an hour after the message was dispatched I received a note from the Prefect begging me to try and get a gun-boat, whose presence here would calm the minds of the people. The Commodore replied the same day that all ships v/ere fully employed, and asking me to telegraph if assistance was urgently required. I replied the same evening that affairs appeared to be still more unsettled, and that help was urgently needed, and on the 7th instant the Commodore informed me that Her Majesty's ship " Tweed" was leaving next day for Wuchow. She will probably arrive iiere to-night- or to-morrow morning. I have, &c. (Signed) ALEX. HOSIE. P.S. — I have just received a note from the Prefect, in which he states that the city of Jii-lin has not yet fallen, but that rebels have appeared at two places within this district. A. H. Inclosure 2 in No. 3.31. Consul Mansfield to Sir C. MacDonald. Sir, Canton, July 23, 1898. I HAVE the honour to report that until yesterday the Provincial authorities had been seriously anxious at the state of affairs in Kuangsi. At an interview this morning with Wang Ts'un-shan, ■ the -VieeiKjy's Seeretary,' Mr, Pitzipios elicited the following history of the insurrection from the date of my Eeport of the 12th instant, the chief facts of which appear to be correct : — The main body of the rebels was assembled in the region comprising the towns of Jung Hsien, Pei Liu, Lu Ch'uan, Hsing Yeb, Yu Lin, and Po Pai, the area of dis- turbance being some 200 square miles. The disaffected numbered about 20,000, but only 5,000 or 6,000 of these were capable of bearing arms, and offering anything like an organized resistance to authority. Their arms were of a very primitive description ; the best they could muster being matchlocks. The authorities were, however, at first taken by surprise, the local troops in the district having been lately reduced to about 1,000, and the towns and cities of Jung Hsien, Pu Ch'uan, Pei Liu, aud, HaiugTeh were occupied., by the rebels, the District Magistrates in the first two cities being killed. The rebels also invested Yu Lin and Po Pai. On receiving news of the rising the Viceroy at once sent instructions . for the dispatch of 1,000 troops fromLien-chou-fu to Po Pal, and Yu Lin, 1,000 troops from Eao-chou-fu to Luch'uan and Po Pai, 1,000 from Chin-chou-fu to Yulln, 2,000 troops from Wuchow-fu to Jun Hsien and Pei Liu ; 2,500 more troops were sent from Kao-chou-fu and Lien-chou-fu as a reserve force. --■The troops converged from different points upon the disaffected districts, and ori three separate occasions- completely routed the 'insurgents. One rebel leEid^rj Liu Shou-ta, was, captured, ahd another, Li Li-t*ing, was slain. Several thousand rebels were killed, three small forts (probably earthworks) destroyed, and- 'the towns and cities retaken. Though considerable anxiety was felt among the Provincial authorities, the result [253] 2 K 2 252 of their prompt action seems to have been httle more than a massacre, for the official reports only give one dead and five wounded as the loss of the Imperial troops. Many lives seem to have been taken by the rebels at the commencement of the affair judging from the number of mutilated corpses which floated down the river to Wuchow. The so-called rebellion seems therefore to be completely quelled. It would seem to have been little more than a " rice riot," the initial success of which induced a despairing and down-trodden peasantry to raise the standard of revolt, knowing that they were too deeply committed to escape punishment in any case. It is to be hoped that mercy will be shown to the remnants of the rebels, and that the West Kiver trade, which had almost come to a complete stop, will speedily resume its normal course. I have, &c. (Signed) K. W. MANSFIELD. No. 332. Sir C. MacDonald to the Marquess of Sahshuri/. — {Received Septeriiber 19.) My Lord, Peking, August 5, 1898. I HAVE the honour to inclose a copy of Regulations governing trade on the Yang-tsze, which are about to be substituted for those issued in 1862. The original Regulations {vide Hertslet's China Treaties, p. 670) framed at a time when the Yang-tsze region v/as disturbed and Nanking and other cities were in the hands of the Taiping rebels, and have long been obsolete in some respects. The necessity for revision being urged by the foreign mercantile community, negotiations were opened in October 1896 with the Tsung-li Yamen by the Doyen of the Diplomatic Body. The Yamfin recognized that revision was desirable, and asked the Doyen to confer with his colleagues and point out in what particulars the Regulations were considered to require it. The question was then referred to the Consular Body at Shanghae, who were requested to ascertain the views of the Steam-ship Companies and merchants interested, and after further correspondence, three of the Consular Body — the British and Russian Consuls-General and the Acting Consul for the Netherlands — were reputed to draw up a draft of revised Regulations embodying the amendments desired. This draft, with a few alterations introduced by the foreign Representatives, was submitted by me, as Acting Doyen, to the Yamen on the 21st October, 1897. At various interviews after that date I pressed the matter on the attention of the Ministers, and eventually the Regulations, as inclosed, were framed bv Sir Robert Hart on the lines suggested by the foreign Representatives, and submitted to the Diplomatic Body in May. I approved them, after taking the opinion of the British firms interested. The Yamen inform me that my colleagues have also agreed to them, and that they have been sent to the Southern Superintendent of Trade at Nanning for promulgation. I have, &c. (Signed) CLAUDE M. MacDONALD. Inclosure in No. 332. The Yang-tsze Regulations, 1898. ARTICLE 1. Former Regulations rescinded. — The Revised Regulations of Trade on the Yang-tsze-Kiang (1862) having been amended, and the substance of their pro- visions having been incorporated in the present Yang-tsze Regulations, the said Revised Regulations of Trade on the Yang-tsze-Kiang are hereby abrogated, together with the Port and Customs Regulations thereon dependent. Art. 2. Ports, Stages, a7id Passenger Stations. — The merchant vessels of the Treaty Powers are authorised to trade on the Yang-tsze-Kiang at the following Treaty Ports : — Chinkiang, Nanking, Wuhu, Kiukiang, Hankow, Shasi, Ichang, and Chungking : and to land and ship goods in accordance with special regulations at the following non- Treaty ports : — Tatung and Anking, in Anhwei ; Hukow, in Kiangsi ; Lukikow and Wusueh, in Hukwang. 253 Shipment or discharge of cargo at any other points on the river is prohibited, and any violation of the prohibition will be dealt with in accordance with the Treaty pro- visions applicable to clandestine trade along the coast ; but passengers and their bag- gage may be landed and shipped at any of the regular passenger stations (at present consisting of Kiangyin and Ichang,' in Liang Kiang, Hwangtzekang and Hwangchow, in Hukwang : passengers baggage must not contain articles subject to duty, and the presence of dutiable articles will render the whole liable to confiscation. Art. 3. Three Classes of Vessels. — Merchant vessels trading on the river are to be divided into three classes : — First-class : sea-going vessels trading for the voyage up river beyond Chinkiang. Second-class : river steamers running regularly between any of the river ports or Shanghae and any river port. Third-class : small craft (lorchas, papicos, junks, &c.). These three classes of vessels will be dealt with according to Treaty and the Eules for the ports traded at. Art. 4. Sea-going Vessels. — Sea-going vessels trading no further up river than Chinkiang will be dealt with at Chinkiang in every respect like vessels trading at other coast ports ; but sea-going vessels on a voyage further up river than Chinkiang become thereby vessels trading on the river of the first class set forth in the preceding Article : 3ach merchantmen, whether steamers or sailing vessels, must deposit their Registers with the Consul, or, if Consularly unrepresented, with the Customs, at Shanghae, Woosung, or Chinkiang, where the Customs, on receipt of a Consular application or a deposit of papers, will issue a Certificate to the vessel, to be called the " Special River Pass," on which shall be entered the vessel's name, flag, registered tonnage, general cargo, and armament. The vessel may then proceed up river and at whatever Treaty ports she trades must report and clear, load and unload cargo, and pay dues and duties in the same manner as at other Treaty ports along the coast. On return to the port that issued it — Chinkiang, Woosung, or Shanghae — the " Special River Pass " is to be surrendered to the Customs, and the Customs, on having ascertained that all dues and duties have been paid and all other conditions satisfied, will then issue the Grand Chop to enable the vessel to procure her Register and proceed to sea. Art. 5. River Steamers.-— Ai\y steamer intended to trade regularly on the river may deposit her register at the Consulate at Shanghae, or, if Consularly unrepresented, at the Custom-house, when the Customs, on the receipt of a Consular application or on the deposit of the register, will issue a certificate, on which shall be entered the vessel's name, flag, registered tonnage, and armament, to be called the " river pass," that shall be valid during the current year ; such river pass must be renewed every year either at Shanghae or at Hankow or Icshang in the case of river steamers trading above those places, and not returning to Shanghae. River pass steamers will report and clear, load and discharge, and pay dues and duties in accordance with the Customs Regulations of the port concerned ; their tonnage dues are to be paid at the ports which issue or renew the river pass (Shanghae, Hankow, or Ichang). Infringement of River Port Regulations will be punished by the infliction of the penalties in force at other Treaty ports ; for a second offence the river pass may be •cancelled and the steamer refused permission to trade thenceforward above Chinkiang. Any steamer not provided with a river pass, if proceeding above Chinkiang, will come under the rule affecting sea-going vessels laid down in Article 4, and will be treated accordingly. Art. 6. River Pass Steamers' Cargo. — The former Regulation having been abroo-ated which made it obligatory to deposit coast trade duties simultaneously with paying export ■duties, river pass steamers will now pay duties in the same way as vessels at other Treaty ports along the coast, that is, export duties at the port of departure before shipment of exports, and import or coast trade duties at the port of discharge before release of imports, and similarly they will ship, tranship, and discharge cargo after report, examina- tion, and issue of permit, in the same way as vessels at Treaty ports along the coast. When tea is landed by a river pass steamer, the consignee, instead of paying coast i;rade duty, m.ay deposit a bond for the amount ; on proof of reshipment within a year the bond will be cancelled. When reshipped tea is relanded at another port — e.g^, re- shipped at Hankow and relanded at Shanghae — a new bond will be required in lieu of •coast trade duty, to be cancelled on subsequent reshipment ; and so on. Art. 7. Small Craft (Lorchas, Papicos, Junks, dtc.) : — (a.) Lorchas, &c., owned by foreigners, if provided with registers, and entitled to 254 fly national flags, are required to take out a special river pass either through .the Con- sulate or from the Customs direct at Chinkiang if proceeding' further up the riVer. They will report, work cargo, and pay duties like other sea-going special river pass vessels. (b.) Papicos, &c., owned by foreigners, but not provided with registers orveiltitled to fly national flags, are to take out Custonis registers atl the' port they belongto, and report, work cargo, and pay duties in, the same way as lorchas, &c. (c.) Chinese junks chartered by foreigners are only available for conveying foreign- owned cargo from Treaty port to treaty port ; they must take out special junk papers at the Customs, to be obtained in exchange for bonds executed at and'depbsited'With the Customs, the condition's of the bond being that the bargoes are bond fide M-eign property, and will be landed and pay duty at a Treaty port, and the penalty that if the cargoes fail to be so landed and pay duty no chartered j'iink will" thereafter be cleared for the foreigner in question. Such junks to report, work cargo, and pay duties in the same way as lorchas, papicos, &c. ■ Art. 8. Cargo Certificates. —Special river pass merchantmen, river pass steamers, and lorchas, papicos,'and junks, &c., must apply to the Customs at the port of departure for a cargo certificate (" tsung tan "), which, on the vessel's arrival at the port of destination, must be handed in to the Customs before permission to discharge can be given.^ The vessel will be responsible for the duties on all goods entered on the said cargo certificate, and not landed on permit at port of discharge. Art. 9. Miscellaneous. — Any trading vessel falling in with a revenue_ cruiser or Customs boat on the Yang-tsze-Kiang is to produce her papers for inspection if examina- tion of them is required. Vessels unprovided. wdth proper papers will be dealt with under the Treaty Articles penalizing clandestine trade along the coast. The Customs may seal, the hatches of any vessel trading on the Yang-tsze, and may place Customs officers on board to accompany her on the trip, whether up stream or down. Special river pass vessels of the first-class are not required to anchor to exhibit their papers at the intermediate ports passed and not traded at. Art. 10. Yang-tszi Customs a.nd Port Regulations.. — The adoption and promulgation of new Regulations for vessels trading on the- Yang-tsze having rendered meaningless sundry Customs and Port Regulations which- guided procedure under the former system, and having necessitated the substitution of fresh Regulations and different practice under the system now introduced, the ports concerned (Shanghae, Chinkiang, Nanking, Wuhu, Kiukiang, Hankow, Shasi, Ichang, and Chunking)- will proceed forthwith to arrange and publish new Rules and Regulations, and these are, on the one hand, to facilitate trade, and, on the other, to protect revenue and prevent smuggling. The above Regulations are open to revision when and if necessary. No. 333,, , Sir C. MacDonakl to the Marquess of Salisbury. — [Received September 19.) My Lord, Peking, August 7, 1898. I HAVE the honour to inclose copy of a despatch from, Her Majesty's Consul at Hankow reporting the acquisition of a Japanese Concession at that port. I have, &c. (Signed) CLAUDE M. MacDONALD. Liclosure in No. 333. Consul Warren to Sir G: MacDonald. Sir, , , Hankow, July 16, 1898. I HAVE just heard from the Taotai that the Japanese have obtained a Concession here, extending along the river bank for lOO^cJumg (roughly 1,2.09 English feet) below the German Concession, and running back to the railway line. The terms are the same as those on which Concessions have been granted to other foreign countries. I have, &c. ' (Signed) PELHAM L. WARREN. ■255 No. 334. Sir C. MacDonald to the ilarquess of Salishmy.— {Received September 19.) My Lord, Peking, Augzist 7, 1898. ; . I HAVE the honour to inclose copy of two despatches from Her Majesty's Acting .Oonsul-General at Shanghae with regard to a riot on the French Settlement, arising out of an attempt on the part of the municipal authority to obtain possession of a cemetery and temple belonging to the Ningpo Guild. From correspondence in the Shanghae press since Mr. Brenau wrote, it seems probable that in making this attempt an Agreement drawn up in 1878 between the then French Minister and the Tsung-li Yamen, providing for the undisturbed reten- tion of the land in question by the Guild, was overlooked. 1 have, &c. (Signed) CLAUDE M. MacDONALD. Inclosure 1 in No. 334. Acting Consul-General Brennn to Sir C. MacDonald, July 18, 1898. [See Inclosure in No. 309.] Inclosure 1', in No. 334. Acting Consul- General Brenan to Sir C. MacDonald. Sir, Shanghae, July 21, 1898. IN continuation of my despatch of the 18th instant, I have the honour to report further on the difficulties between the French and the Ningpo Guild. Active hostilities ceased on the 17th, when the French Consul-General made a promise to the representatives of the Ningpo community that he would defer removing the graves from the cemetery for three months. On his side, the Consul-General understands that, in the interval, the Ningpo people will themselves remove the coffins, while, on their side, the Ningpo Guild trust that the French will be per- suaded to accept some other site in exchange. Since the armistice was declared the Ningpo men of all trades have been still out on strike, and even the Ningpo bankers have refused to do business. The injury to trade has been serious, for steamers have been unable to load or discharge, and the regular coasting and river steamers have had to remain in port or to leave empty. I think there is little doubt that the Guild and the local officials calculated on the effect which this interference with trade would have ou all foreigners, and trusted that united pressure would be put upon the French Consul to give way to the demands of the Ningpo Guild. Several deputations of Ningpo men have waited on me, and the Taotai has also come to me in the hope that I would lend my good offices, and on each occasion stress has been laid on the great injury to trade caused by the strike, which both the Taotai and the Guild professed themselves unable to suppress. I have consistently, and so have my colleagues, pointed out that the measures which the Ningpo men were taking to secure the support of foreigners would have the contrary effect, and would merely serve to alienate all sympathy from them. The Shanghae Taotai all along have seemed to possess no influence with the Ningpo men. He has made himself very unpopular by yielding, in the first place, as the Ningpo population believes, to the French claim to the Ningpo cemetery, and subsequently by admitting in a proclamation, issued after that riot, that this cemetery was within French limits. Threats to burn his residence have been openly made, and his carriage has been attacked in the street. No advice or instructions that he might have given to his own people would have been listened to, but, fortunately for the business of the port, and for the comfort of the foreign population, the Provincial Treasurer was sent by the Nanking Viceroy to arrange matters with the Ningpo Guild and the French Consul. The Treasurer, Nieh Chi-kuei, arrived here on the evening of the 19th instant, and at once proceeded to confer with the influential Ningpo men residing here. 256 The next day he issued a Proclamation calling on the Ningo business men, workmen, and coolies to eud the strike and return to work, an order which was at once obeyed. The Treasurer is now engaged with the French Consul in discussing the terms of a friendly arrangement. The original intention of the French municipality was to take possession of the Ningpo cem^etery, and use the site for the erection of a hospital, a school, and a slaughter-house— this last a most uufortunate idea, under the circumstances. Before the French proceeded to take forcible possession of the cemetery no offer had been made by the Ningpo Guild to give another site iu exchange, but since the_ trouble began they have been able to make very advantageous proposals in that direction. Thl; French Consul will not, however, listen to such proposals until he has obtained satisfaction from the Ningpo Guild for having incited the riot, and from the Chinese officials for having failed to quell it. When these offences have been atoned for he will be ready to discuss the question of the cemetery. The probability is that the French will obtain a large extension of their settlement, that another site will be provided for the hospital, school, and slaughter-liouse, and that the French will give up their claim to the Ningpo cemetery on condition that it is no longer used for the burial of the dead or for the temporary storage of coffins. In cocnection with the riots, I should mention that when, on the I7th instant, matters looked serious, the Italian man-of-war "Marco Polo," thea lying at Wusung, sent up 150 men for the protection of the French settlement. They have now returned to their ship. The Commander of Her Majesty's ship "Phoenix" had made every preparation to land men from his ship and from Her Majesty's ship " Esk " in the event of their presence being necessary for the protection of the British settlement, and the volunteers were also in readiness to suppress any rioting in our limits, but their services were fortunately not required. The French cruiser "Jean Bart" arrived from Amoy this morning. I have, &c. (Signed) BYEON BRENAN. No. 335. The Marquess of Salisbury to Sir C. MaoDonald. (Telegraphic.) E'oreiga Office, September 19, 1898. WITH reference to your telegram of the 14th instant, in regard to Railway Concessions, I cougratiilats you on the satisfactory result of your negotiations with the Chinese Government. No. 336. Sir C. MacDonald to the Marquess of Salisbury. — {Received September 22.) (Telegraphic.) PeJcing, September 22, 1898. THE control of Government as held by the Emperor has been rendered, by Imperial Edict, subject to the advice of the Empfess-Uowager. This step may lead to important results. It shows that the measures recently taken by the Emperor are not approved. No. 337. Acting Consul- General Brenan to the Marquess of Salisbury. — [Received September 2Z.) (Telegraphic.) Shanghae, September 23, 1898. A PALACE revolution has occurred at Peking. The Emperor is dead, and the old Empress is in power. The reform party being hunted down. As the British Minister may not be in touch with you I telegraphed direct. , 257 . No. 338. Sir C. MaeDonald to the Marquess of Salisbury. — [Eeceived'Septemhcr^i.) (Telegraphic.) '. Peking, September 24, 1898. THE French Mission at Hochou has been sacked in a riot at that place. It involved no Britishers. Hochou is 50 miles north of Chungking. No. 339. Sir C. MaeDonald to the Marquess of Salisbury. — {Received Septeinber 27.) (Telegraphic.) Peking, September 27^ 1898. ANTI-REFORM measures in China: Continuation of my telegram of 22nd September. A Decree was issued yesterday cancelling all the more comprehensive measures for reform recently set on foot by the Emperor. It is said that a charge of conspiring against the Dowager-Empress has been preferred against several of the leading members of the Reform Party, who are now imprisoned awaiting their trial. Chang Yin-huan is acquitted from the above charge, but the Decree states that his frequent denunciation has shown his evil reputation, and he is detained in prison to await Imperial commands. It is thought probable he will be stripped of all his offices, and that, on the other hand, Li Hung-chang will be restored to power, though it is not likely he will resume his post in the Tsung-li YamSn. No. 340. The Marquess of Salisbury to Sir C. MaeDonald. Sir, Foreign Office, September 28, 1898. I HAVE received your despatch of the 5th ultimo, inclosing a copy oF the revised Regulations governing trade on the Yang-tsze, to be substituted for those issued in 1862, which had become obsolete. Your action in the matter is approved. i I am, &c. (Signed) SALISBURY. No. 341. 27ie Marquess of Salisbury to Sir C. MaeDonald. Sir, Foirign Office, September 28, 1898. I HAVE received your despatch of the 3rd ultimo, and I approve the terms of your note calling the attention of the Tsung-li Yamen to the lawless state of Central Ssiich'uan, and to the anti-foreign propaganda, of which the "Board of Foreign Affairs " at Chengtu is apparently the moving spirit. I am, &c. ' ' ' (Signed) SALISBURY. [253] 2 1- 258 No. 342. Sir C. MacDonald to the Marquess of Salisbury. — {Received September 30,) (Telegraphic.) Peking,^ September 30, 1898 CONCESSIONS in Honan and Shan si granted to the Peking Syndicate. An exceedingly bad impression has been created here, and any future British undertakings in this country will be detrimentally affected by the fact that the Syndicate has not yet commenced operations. The Agreement was signed on the 21st May last, and in April at the request, and relying on the assurances, of M. Luzzatti, the Syndicate's agent, the Italian Charge d' Affaires and I informed the Chinese Government that the engineers, machinery, and money were all ready, and the commencement of work was only awaiting the signature of the Agreement. Another disagreeable feature is that several of the Syndicate's agents and Chinese employes here have for the last three months received no pay. No. 34.3. Sir C. MacJDovxxld to the Marquess of Salisbury. — [Received September 30.) '(Telegraphic.) Peking, September 30, 1S9S. THE coup d'£tat. The sentence on Chang Yin-huan, G.C.M.G., is banishment, his place of exile 'being the frontier of Chinese Turkestan. Kang Yli-wei, the leader of the Keform party, has fled to Hong Kong; but, his brother and five other refoi'mers, all educated men of good standing, were publicly executed the day before yesterday for alleged conspiracy. Manchus are being selected to fill all the posts of importance in North China.,. No. 344. Sir C. MacDonald to tJte Mar(/)i,ess of Salisbury. — {Received October 1.) (Telegraphic.) Peking, October 1, 1898. A Chinese mob at a point between Peking and the railway station yesterday afternoon violently assaulted several foreigners who had to pass that waj'' froni the ti-ain. Among those assaulted was Mr. Mortimore of this Legation, and an English lady, who were severely attacked with mud and stones ; a member of the XJnited States' Lesfation had one of his ribs broken. There is a decided spirit of disturbance among the Chinese, though the fact that many bad characters were about yesterday in consequence of the mid-autumn festival may go some way towards accounting for these outrages. 1 have requested Admiral Seymour by telegraph to despatch a vessel to Taku, in case a guard should be required for the protection of this Legation, and I am making strong representations to the Tsung-li Yamen. No. 345. Sir C. MacDonald to the Marquess of Salisbury. — {Received October 1.) (Telegraphic.) Peking, October 1, 1898. ANTI-FOREIGN feeling. I do not anticipate any danger, but a good and reassuring effect will .be produced, as after the Japanese war, by the presence of a guard. The foreign Representatives decided this morning to send for a small guard to protect the respective Legations. I have asked Admiral Seymour to send me twenty- five marines with a machine-gun. The German, Russian, Japanese, and Italian Representatives had previously arranged for their guards. 259 No. 346. Sir C. MacDonald to the Marquess of Salisbury. — [Received October 3.) My Lord, Peking, August 15, 1898. REFEREING to my despatch of the 20th June, I have the honour to inclose, lor your Lordship's information, copy of a despatch from Her Majesty's Consul at Hankow reporting the arrangement come to with the Viceroy Cliang Chih-tung for the settlement of the Shashih riot. A,s,; regards the Hunan port Yo-chou, the opening of which, was announced in M^i'ch last, the Tsung-li Yamen informed me verbally on the 6th August that the, D,ecessa,ry arrangements would be completed soon. c^\ I have, &c. = , (Signed) CLA.UDE M. MacDONALD. Inclosure in No. 346. Consul Warren to Sir C. MacDonald. Sir, ^ Hankow, July 13, 1898. AT an interview which I had yesterday with the Viceroy Chang Chih-tung to- discuss the settlement of the Shashih riot case, a fairly satisfactory arrangement was- arrived at with regard to the punishment of the rioters, compensation for damages,, and punishment of officials guilty of neglect of duty. The Viceroy undertook^ — - 1. That the claims for compensation should be submitted to the Taotai and, myself, and that any amount we decided upon should be paid. 2. That the rioters should be properly punished. Four of the ringleaders have already been executed, and others are to be dealt with according to the degree in: which they are guilty. 3. An inquiry is to be held into the conduct of the local officials, and those found guilty of neglect of duty are to be punished in accordance with law. 4. The Viceroy, when reporting the settlement of the case to the throne, will ask for an Imperial Edict warning against any repetition of the offence. As regards the fixing of an early date for the opening of Ylieh-chou, the Viceroy assured me that, he was doing all in his power to hurry matters on, that he had written and telegraphed to the Governor of Hunan, and, would do so again, and would give me an answer on the ^libject as soon as he received a reply from the Governor. , We discussed at length the question of the opening of Hunan, and the Viceroy declared repeatedly that he would put no obstacles in the way, that he was aware that the opening up would benefit all parties, but there were difficulties that would take- time and patience . to overcome. What these difficulties were I could not induce him- to point out ; but I gathered that opposition was to be expected from the literati and gentry. Finally, his Excellency said that the question was one which did not rest with him,, but with the Imp.erial Government. I think, from the tenour of his remarks on the subject, that the Viceroy would be glad to see Hunan opened, but wishes to avoid the responsibility of recoi^mending the opening. The Viceroy throughout deprecated the connection of the question of opening Hunan with the settlement of the Shashih riot case. He insisted strongly that^, although the rioters were undoubtedly Hun'anese, still they were domiciled in Shashih, and that the riot was not an anti-foreign demonstration, but was the outcome of a long-standing feud between these settlers and the employes of the China Merchants' Steam, Navigation Company. I pointed out that, though the rioters commenced by attacking the China Merchants' Steam Navigation Company's premises, they in the end destroyed or looted all properties, houses, hulks, &c., that were either foreign or in any way connected with foreign trade. I further said that the opening of Hunan and the immediate opening of the Ylleh-chou were not asked for as a ■punishment, but as,- a, precaution, and that, provided they were opened, I -did not ^.appose we should iij^ist upon the opening being absolutely included amongst the, terms of settlement of the Shashih riot case. '' ' [253] 2 L 2 260 On leaving I told the Viceroy that I would report the result of our interview to you, and should await your further instructions. ^ I have, &c. (Signed) PELHAM L. WARREN. No. 347. Sir C. MacDonald to the Marquess of Salishurij. — [Received October 3.) /(Extract.) Pehing, August 19, 1898. IN extension of my telegrams on the subject of the Belgian Agreement for the Peking-Hankow Railway, I have the honour to report that, having received on the 7th 'instant from Her Majesty's Acting Consul-General at Shanghae a copy of the " China Gazette," containing what purported to be a copy of the Contract, I consulted an expert as to the effect of the financial stipulations contained in it, which, as may be seen from the copy forwarded direct to your Lordship from Shanghae, were very obscurely worded. His view was that the provision for the deposit of 78,000 shares in the Russian Bank pointed clearly to an advance of the purchase-money by them. I accordingly, when I obtained an interview with the Yamen on the (3th, laid stress on this point in the arguments I addressed to them against ratifying the Agreement. It was not, of course, possible to enter upon a detailed verbal examination of the whole Contract, even had the complete text been before me, and I therefore dwelt mainly on this point and on the dangerous provisions that the French text should rule, and the French or Russian Minister be the referee in case of difference of opinion between the Belgian Minister and the Yamen. It was evident from, the manner in which my warnings were received that neither Prince Ching nor most of the Ministers had had any knowledge of the contents of the Contract, for they showed unmistakable signs of alarm, ending by declaring that they would carefully examine the text when it reached Peking for ratification, and refuse to ratify it if the effect was as I described. TJiey also repeated their promise to send me a copy of the Contract as soon as it arrived. The only member of the Yamen who showed full acquaintance with the Contract was Li Hung-chang, who loudly denied that there was anything objectionable in it. After some discussion, Prince Ching observed that they must refuse ratification unless their doubts were satisfied. On the 8th I received private information to the effect that the Belgian Minister had given the Yamen the fullest assurances that the Russian Bank was not financially interested, except as agent, in the transaction, and that similar assurances had been telegraphed by Sh^ng from Shanghae. Next day I obtained fuller information to the effect that after I had left the Yamdn on the 6tli the Prince and Ministers had decided against ratification, but that in view of the assurances they had since received, and under the influence of Li, they had changed their minds and now intended ratifying the Agree- ment at once. This news reached me late in the afternoon, and there was only time to send to the Yamdn a hurried note to warn them of the prolaable consequences of ratifying before I had agaiu seen them; as mentioned in my telegram, I asked at the same time, in a separate letter, for an interview the next day or the day after. Late on the 10th they answered that the text had not yet reached Peking, and that my interview might therefore be postponed. To this I replied, on the 11th, that I took this as meaning that ratification would not take place till they had seen me ; but to this they returned an evasive answer to the effect that they were all engaged in Palace ceremonies in connection with the Emperor's Birthday, and could not receive me for some days. On the 12th I learnt on good authority that they had ratified the Contract. These facts I had the honour of reporting to your Lordship by telegram on the 13th instant, calling attention to the bad faith shown by the Yamen in stating to me of the 10th that the Contract had not reached Peking, while on the 12th they ratified it. I had the honour, in my telegram already referred to, of suggesting alternative demands for compensation from the Chinese Government. I felt it to be important that, at my first interview with the Yamen since the ratification, I should be able to speak to thism v/ith the full authority of Her Majesty's Government, and, owing to interruption of the telegraph lines, vpur Lordship's instructions did not reach me till the 18th. I had already asked for an interview, but the Yam§n delayed making an appointment until 261 ■ yesterday, when they fixed to-morrow as the date of it. There will probably not be time to report its results by this mail. The line to be taken will to some extent depend on the Yam^n's attitude, but I think ' it will probably be best to place the demands of Her Majesty's Government before them without using any precise threats, reserving the latter for use if they prove obstinate. I am the rather inclined to this course by the fact that one of our demands (that for the Tien-tsin Chinkiang Concession) is complicated by the tenders already put in by a German Syndicate with whom the British Syndicate is at the moment in conference with a view to combination. There is also some difficulty about some of the lines about which Messrs. Jardine, Matheson and Co. have been in negotiation with Sheng Taj^n. The Agreement for the Shanghae-Nanking line would probably have been signed by now had the Syndicate's engineer arrived at the time he was due, but his departure from England was postponed. Pending his report on that line it is not possible for the Syndicate to come to a definite decision as to the other projected lines. P.S. — I inclose copy of my note to the Yam^n of the 10th August, referred to in my telegram, and translation of a reply received from them on the 14th. The latter hardly requires detailed examination. Inclosure 1 in No. 347. Sir C. MacDonald to the Tsung-li Yam^n. MM. les Ministres, Peking, August ] 0, 1898. I YESTERDAY informed your Highness and your Excellencies that I should to-day address you in detail with regard to the Belgian Agreement for the Paoting- Hankow line. The Yamen will recollect that when the Belgian Syndicate first signed an Agree- ment with Sheng Taj^n in May, 1897, great objection to it was raised by myself and other Foreign Ministers on the ground, amongst others, that there was no security against its transfer to a bank or Syndicate of another nationality, and as was pointed out in a letter of May to the Yamen, there was good reason to fear that behind Belgium stood another Power. To this the Yam^u answered by assurances that no transfer would be permitted, and a clause was introduced into the Agreement to that effect. I then desisted from further opposition. This spring and summer, in reply to my inquiries, the Yamen have repeatedly assured me, even so recently as June, that the Russo-Chinese Bank in particular had no interest whatever in the Contract, and further promised to show me the instrument, so that I might satisfy myself on this matter. It was therefore with great surprise that I learnt that the Contract, as signed at Shanghae, contained stipulations directly contrary to these assurances. Your Highness and your Excellencies will find, if you examine the Contract, that by Article 24, the Belgian Syndicate is not bound to find a purchaser for more than 78,000 shares, and that by Article 18, these bonds are to be deposited with the Russian Bank. It is the persons who advance the money that hold tlie shares ; the bank holds the shares, and therefore it is the bank that advances the money. This is clearly, on the face of it, an infringement of the Yam^n's assurances to me, and I know not' how it can be explained away. Moreover, there is not, so far as 1 can see throughout the Contract, any provision for the issue of the bonds on any European market. Occasional reference is made to the country where they are issued, but what country that is, it is nowhere stated. I beg to remind the Yamen that when I made proposals on behalf of British capitalists, the Yamen assured me that the Belgian Syndicate was still in possession of the field. If the capital is now to be advanced bv the Russian Bank, or raised in France, the undertaking is no longer Belgian except in name. From the Contract itself, the Yamen cannot tell into whose hands full powers are being delivered, but thej can see from it that those powers are such as have never before been granted to a foreign Syndicate. I. will begin with the material for the construction of the line. It is but ordinary- prudence to take some security that the materials are good and sold at a fair price; butthis Contract provides none. It leaves it entirely (Article 25) to the good faith of the Belgi9,n Syndicate. They promise to furnish good materials at fair prices, but who is to decide 262 whether these conditions are fulfilled. The Chinese Company is dissatisfied, let us suppose, and that on reference being made to Peking, the Belgian Minister and the Yamen take different views. According to the Agreement, the matter is then (Article 26 and supple- mentary letter) decided by the Minister of the country, where the bonds are issued. No one can tell from the Contract who this is ; it may be the Minister of France or of Kussia, but I think the Yamen will feel some surprise if he takes their view, and insists, on the materials being rejected. The materials having been supplied by the Syndicate, the construction is then also intrusted to them. The French text, as received by me, states (Supplementary Contract, Article 1) that the Chinese Company " donne le pouvoir " to the Belgian Syndicate. The Chinese states that the Chinese Company appoints the Belgian Syndicate to select- a competent man, &c. Does the Yamen understand the full extent of the expression " donne le pouvoir l " Let them remember if they have difficulty in ascertaining it that by Article 29 of the principal Contract and Article 10 of the second, it is the French text that rules, and that if they differ in their interpretation of it from the Belgian Minister, it is the French or Russian Minister who will decide. ." The materials supplied and the construction completed, it is again, the Belgian Syndicate or their representative who is to work the line. But the list of employes is,- the Yamen may say, by Article 2 of the second Agreement, to be submitted for his decision to the Chinese Director. Are they sure that they fully understand the exact effect of the French words " devra soumettre k I'approbation du Superintendant ? " and that they will be able to make the Belgian and the French or Russian Minister accept their interpretation ? The personnel selected, the question of passenger and goods rates must be settled. It is settled by the Syndicate, though it must " presenter les listes k I'approbation du Superintendant." Does this give him the right to alter them or to fix them as he pleases ? The answer depends on the views of the Belgian Minister and the Repre- sentative of Finance or Russia — it is not one that the Yamen can decide. Therefore, to sum up, there is withdrawn by this Agreement from Chinese control all check on the quality and price of the materials ; all concern with the construction of the line ; and all power of interference with the selection of the employes and the fixing of the rates. ' , The materials may be so costly that the line cannot pay .its expenses. China cannot prevent this, but she must make up any deficiencies in the interest arising from it, and so with the other matters. All that is left to China, in fact, is the privilege of making good a deficit. The line remains nominally Chinese, but it may be seized under the mortgage clause (Article 10) if the Chinese Company does not fulfil its engagements relative to the repayment of principal and interest, and of that fulfilment the Belgian Minister and the Russian or French Minister are judges. For instance, it is declared by Article 19' that the Chinese Company has now a capital of 13,000,000 taels. Suppose it be found that their capital is a few hundred or a few thousand taels short of this sum : is that a' failure to fulfil its engagements ?■ The Yam^n may not think so, but perhaps the foreign Ministers will. ' I have now shown what powers the foreign Syndicate possesses. They cannot be deprived of them unless (Article 25) they fail to scrupulously execute their engagements, and it is the Belgian Minister and the French or Russian Minister who decide that point. I could mention much else in the Contract to which objection could be taken, but it would extend this despatch to too great a length. I have said I hope enough to make thfe Yamen realize the nature of the Contract, and I shall have more observations to make at my next meeting. I avail, &c. (Signed) CLAUDE M. MacDONALD. Liclosure 2 in No. 347. The Tsimg-li Yamhi to Sir C. MacDonald. (Translation.) Sir, Peking, August 14, 1898. ON the 10th instant we received your despatch stating that the Belgian Loan Contract for the Paoting-Hankow Railway was not in consonance with previous assurances of the Yamen. You also expressed most earnestly your anxiety on China's behalf 263 because the powers gcaated by the Contract were such as had never been given before. Your despatch analysed the provisions of the document at great length, and we feel the deepest respect for your vicarious solicitude. The Contract may be seen to contain twenty-nine Articles. Your despatch repeatedly quotes the 24th Article, but ignores in an unaccountable manner the con- cluding words of Article 29. Tf your Excellency can apply yourself quietly and thoroughly to the consideration of these concluding words, and will then review the contents of jour own despatch, we think that you will yourself recognize that your arguments are untenable. It is not necessary to look at the Chinese version of the Contract ; let us make a careful translation of the French version, so that your Excellency may not repeat your words : " Do not forget that by Article 29 of the Contract it is the French text which rules in cases of doubt." The French text, translated word for word, reads : — " The Belgian Control Bank and the Russo-Chinese Bank will, directly they have cognizance of this Contract, take steps for the fulfilment of the clauses with which they . are concerned. The said banks must only carry out those provisions which really concern them. The Chinese General Bailways Administration, in conformity with Article, 14 of the Wuchang Contract, recognizes the Belgian Syndicate as having the sole responsibility." The special business of the banks mentioned in the Contract is the deposit and payment of funds. The banks have nothing to do with the making of the road and such matters. The sole responsibility stated to attach to the Belgian Syndicate is the con- struction and management of the line, and this they cannot transfer to another nation. It will therefore be seen that, in view of these concluding words, there is clearly ■ not the slightest discrepancy between the provisions of the Contract and the Yamen's assurance of May, 1897 (mentioned in your despatch) that no transfer from Belgium to another Power would be permitted, or the Yamen's assurance of June of this year (also mentioned in your despatch), that the Russo-Chinese Bank had no interest whatever in this Contract. Again, having these words in the Contract, the Belgian Syndicate may deposit the 78,000 bonds which they buy, either in the Russo-Chinese Bank or any other foreign bank, and they may seek for other purchasers of bonds beyond the above number, but the sole responsibility for the line remains with the Belgian Syndicate. This is manifestly in exact accordance with the YamSn's previous assurances. The French text reading thus, it follows that if the Minister at Peking of the coimtry where the bonds are sold be asked at some future time to act as Arbitrator, it will be quite impossible for him to pervert the meaning of the clause. No other nation can therefore interfere with this matter. But if vour Excellency fears that tne, receipt and payment of funds by the Russo- ' Chinese Bank, on behalf of the Syndicate, will pave the way to a future interference, with the construction of the line, and other matters, let us point out that it is a universal -practice for Syndicates to designate the banks with, which they have dealings in the receipt and payments of their funds, and if you should argue that ail the banks with ■which they have dealings have the right to interfere with the Syndicate, we would -remind you that there, are numberless Companies, railway and mining, which engage English banks to receive and pay out their funds, but in what possible manner could these banks conduct the business of so many Companies ! We yesterday received a despatch from the Belgian Minister, Baron de Vinck, in ■ i which he states. positively that the Russian Government has no connection with this affair and that no shares have been bought by the Russo.-Chinese Bank ; the only business of the bank being to remit money to the railway at those places where the ■ bank has branches in China, and that the bank will confine itself to this woi-k. Having this despatch placed on record, your Excellency's misgivings may^ be entirely removed. As to the fact that the Belgian Syndicate has asked only the Russo-Chinese Bank to remit its funds, to the exclusion of the banks of other nations, it may be stated that there is a good reason for this procedure.' The Belgian Syndicate is extremely intimate with the Russo-Chinese Bank,, and, moreover, among all the banks in the Treaty ports ■ lof China, and in Europe, the Russian firm is the. only one in yv^hich the Chmese ^> Government hold shares. It is therefore extremely proper that a bank with China as I a shareholder should transact the business of the railway of a Chinese Company and . keep and pay out its funds.. _ ... With regard to the question of shares, the Yam^n yesterday, wrote to the Belgian Minister asking him to notify the Belgian Syndicate that when the bonds are issued 264 for sale, the merchants of all nations are free to buy them with no reservation. , If then British merchants are of opinion that the line will be profitable, they are quite at liberty, when the bonds are issued for sale, to take steps to purchase largely. As to the building of the road, the purchase of materials, the management of the road after completion, the personnel, and prices, every detail has been intrusted to the Belgian Syndicate by the Chinese General Railway Administration and the Belgian Syndicate is solely responsible. No other nation is connected in any way with these affairs. Such being the true state of the case, we fail to see any want of harmony with previous assurances. Your Excellency may, however, maintain that the advantages granted to the Belgian Syndicate are excessive, and such as have never been given to a foreign Syndicate. But from the letters of Sheng Ta-jen we find that the advantages in question are not so great in some respects as those given to the British merchants who are under- taking the Shanghae-Nanking line. Why then is your Excellency still unduly anxious ? A fair view of the question is this : — In borrowing funds for the construction of a railway, if the lenders of the money or their representatives were not allowed to have anything to do with the concerns of the line (prior to the repayment of the loan with interest), would your Excellency permit your merchants to commit themselves to such a wild cat undertaking ? What you would not permit your own merchants to do, you can hardly require the merchants of other nations to undertake. To sum up our remarks : — The Contract certainly does, as your Excellency states, make the French text the decisive reading, and the French text of the concluding sentences as to the limits of the banks' powers and the responsibility of the Belgian Syndicate is still more definite than the Chinese version. We have therefore the honour to send you this reply, and have, &c. (Seal of Yamfin.) No. 348. Sir C. MacDonald to the Marquess of Salisbury. — {Received October 5.) (Telegraphic.) Peking, October 5, 1898. LEGATION guards. A meeting of foreign Representatives yesterday decided to notify the Chinese Government of the proposed departure from Tien-tsin for Peking to-mori-ow of bodies of British, German, and Russian marines, and to ask that all facilities, including a special train, should be extended to them by the Chinese authorities ; the French, American, Japanese, and Italian marines to come straight on to Peking on their arrival at Tien-tsin. The meeting was held in consequence of the refusal of the Viceroy of Chihli to permit any foreign soldiers to leave Tien-tsin for Peking without special permission from the Tsung-li Yam en. It is very likely that the Chinese Government will make a protest similar to that of 1895, but it would be very ill-advised at the present crisis to give way to their protests, and it is absolutely necessary that the decision of the foreign Representatives should be put into effect. No. 349. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, October 5, 1898. THE Chinese Minister asked that you should be instructed not to bring British sailors into Peking, as it Avas a slur upon the Chinese Government. I repUed that until I had heard your views upon the subject I could give you no instructions, but that I understood that you had only followed the example, of the Russian Government in sending for a guard, ' , 265 He also asked me what fortifications we were erecting at Wei-hai Wei. I replied that for the present any armament we might wish to place there would probably be placed on the island, but that it must largely depend on the kind of enemy we might have to fear. No. 350. Sir C, MacDonald to the Marquess of Salisbury. — [Received October 6.) (Telegraphic.) Peking, October 6, 1898. IN reply to the second part of your Lordship's telegram of yesterday, referring to the Chinese opposition to the bringing up to Peking of guards for the foreign Legations, I have the honour to inform your Lordship that no single foreign Representative took the initiative in the matter ; the responsibility rests with the whole Corps Diplomatique as a body. All the foreign Representatives are of one opinion as to the absolute necessity of having the guards brought to Peking in consequence of the indifferent manner in which the Chinese Government have regarded the recent outrages, and the very inadequate precautions they have taken to prevent their recurrence. .--I - . I ^ ' No. 351. The Marquess of Salisbury to Sir C. MacDonald. Sir, Foreign Office, October 8, 1898. I HAVE received your despatch of the 19th August last, on the subject of the Belgian Agreement for the Peking-Hankow E-ailway, and I approve your proceedings in the matter, and your note to the Tsung-li Yamen of the 10th August, objecting to the ratification of the Agreement. I am, &c. (Signed) SALISBURY. LUiJiunui 'm No. 352. Sir E. Satow to the Marquess of Salisbury. — {Received October 9.) (Telegraphic.) T6hi6, October 9, 1898. CHINESE coup d'etat. _ _ _ ' _ The Japanese war-ship " Oshima " is now lying at Tien-tsin, and will be joined there by the '■ Akagi." Two ships, the "Katsuraki" and " Suma," will be sent to Taku. I have telegraphed in this sense to Sir Claude MacDonald. No. 353. Sir C, MacDonald to the Marquess of Salisbury. — (Received October 11.) (Telegraphic.) Feking, October 11, 1898. THE coup d'etat and anti-reform movement. Continuation of my telegram 30th September. Decrees are being daily published cancelling the majority of the recent progressive edicts issued by the Emperor, and the retrogression of the anti-reformers is developing. It is said that Li Hung-chang himself is by no means in favour, and great uneasiness as to their positions is being felt by all those ofiicials who have had any dealings with foreigners. None of the Emperor's band of reformers seem to have been men with any power to support the reform, and the Emperor himself seems to have bowed meekly to the storm. There is no ground for supposing that there is any foreign influence at work. , ) , i J. I .,, , 1 II ^— ~^~' I n II I ■■ [253;] 2 M • [■■' " 266 No. 354. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, October 11. DO you see any objection to the War Office sending out an officer at once to Hong Kong to recruit a battalion of Chinese for Wei-hai Wei ? No. 355. The Marquess of Salisburif to Sir C. MaoDonald. Sir, Foreign Office, October 12, 1898. THE Chinese Minister read to me a telegram stating that the security of the Legations at Peking was complete, and he desired that I would instruct you to with- draw the marines whom, in concert with the other foreign Missions, you bad summoned to Peking for the protection of Her Majesty's Legation. 1 replied that I would inform you that the Chinese Government had made this request, and had desired that you should receive instructions on the subject. I added, however, that I could not possibly interfere with your discretion in the matter in any way. The Legation could not be left without adequate protection, and could not be placed in this respect in an inferiority to th© other foreign Missions at Peking, and, therefore, I felt it right to leave your judgment entirely unfettered in the matter. He informed me that the great apprehension of his Government was lest all the other smaller Powers should think it necessary to follow the example of the greater Powers, and so to assemble a composite foreign force at Peking, which would niake the preservation of order difficult. J. 8jin " &c " (Signed) ' SALISBURY. No. 356. Sir C. MacDonald to the Mo,rquess of Salisbury. — {Received October 13.) (Telegraphic.) Peking, October 13, 1898. CHINESE battahon for Wei-hai Wei. There is no objection, so far as I can see, in the proposal mentioned in your ordship's telegram of 11th October. No. 357. The Marquess of, Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, October 15, 1898. ON the 12th October a telegram was read to me by the Chinese Minister asking that you might be instructed to withdraw the marines, as the Legations at Peking were perfectly secure. He said his Government were apprehensive lest the smaller Powers should follow suit, and so assemble a composite force which would make the preservation of order , difficult. I replied that I could not in any way interfere with your discretion in the matter, but would inform you of this request. I must leave your judgment absolutely unfettered in the matter, as Her Majesty's Legation could not be left without adequate protection, or placed in this vespect in an inferior position to other foreign Missions. 267 No. 35S. Sir a. MacDonald to the Marquess of Balishury .—{Received October 16.) (Telegrcaphic.) Peking, October 16, 1898. HEALTH of Emperor. The Prince and Ministers of the Yamen yesterday voluntarily told me that the rumours with regard to the Emperor's health and designs upon his life were well known to them. In acoordance with my instructions, I made no statement to them officially. Prince Ching informed me officially that the health of the Emperor was much improved, and that he is often present at audiences, together with the Empress- Dowager. The latter, Prince Ching said, was not wholly oiDposed to reform, but China was not prepared for such sweeping measures of reform as those recently laid before the Emperor. The Prince confidentially askfed me how the present unrest could best be calmed down. I do not expect my advice will be carried out, though they received it with every sign of approval. My suggestion was that a very reassuring effect would be produced by a certificate as to the Emperor's health given by a foreign doctor. Prince Ching begged me as a friend to deny the current rumours, which he assured me were false. No. 359. 'Sir C. MacDoiiald to the Marquess of Salisbury. — (Receifed October 17.) My Lord, Peking, August 22, 1898. ON receipt of a telegram from your Lordship on the 9th instant, with reference to the action of the French Consul-General at Shanghai in calling upon Mr. Thomas Hanbury to register in the French Consulate there three lots of ground in the French concession, Chinese title deeds of which were registered in the British Consulate in 1861, I replied by telegraph on August 10 that I had referred the question to Her Majesty's Cojisul-General at Shanghai. T have now received Mr. Brecan's report, copy of which I have the honour to enclose, front which your Lordship will see that the so-called French concession at Shanghai is not actually a concession but a settlement, and that the case is therefore not analogous to the Hankow case. I accordingly sent to your Lordship this day a telegram to that effect, and advised that Mr. Hanbury 's agents should apply to Her Majesty's Consul-General for advice and assistance. I have informed Her Majesty's (^nsul-General that I conclude from his I'eport that Mr. Hanbury 's agents were justified in refusing to register the land iji the French Ocaisulate. 1 have, &c. (Signed) CLAUDE M. MaoDONALD. Inclosure 1 in 359. Acting Gomul'General Brenan to Sir -C. MacPonatd. Sir, Shanghai, August 13, 18^8; I HAVE the honour to acknowledge receipt of your telegram of lOth instant asking for information as to the legal status of the French settlement, and the, French Consul's action with regard to the registration of Mr. Hanbury's lotS; I now inclose two memoranda on these subjects. To prevent misapprehension, I may mention that Mr. Hanbury's deeds of lease do not represent the Ningpo Joss-house, or the Ningpo Cemetery, about which trouble [263] . £ M 2 268 has arisen between the French Consul-General and the Chinese Authorities. This property adjoins Mr. Hanbury's. I have, &c. (Signed) BYRON BRENAN, Acting Consul-General. Inclosure 2 in No. 359. Memorandum on the Legal Status of the French Settlement. IN the British Supplementary Treaty of 1843, Art. VII, it is _ stipulated that ground and houses shall be set apart by the local officials in communication with the Consul for British subjects and their families. In compliance with this Article, in 1845, the Taotai, in consultation with the British Consul, defined the limits of a British Settlement ; and in the agreement arrived at between these two officials it was stipulated that if. individuals of other nationalities wished to rent ground or houses within the limits of this settlement set apart for English merchants, application must first be made to the English Consul. In the French Treaty of 1844, Art. XXII, it is stipulated :—" To this end the Local Authority, in consultation with the French Consul, shall point out the most suitable localities for the residence of French subjects, and the places where the above- mentioned buildings may be erected." In 1849 the French Consul, M. Montigny, requested the Taotai to give effect to this Article XXII, and the two then agreed that a certain site should be set apart, and this site forms the present French Settlement. The Agreement of 1849 stipulates that "should people of other nations wish to rent land within the said limits, they must repair to the said Consul, who will consider and act." It would thus appear that the Legal Status of the British is exactly the same as that of the French Settlement. We renounced our pretensions because they were untenable under the Treaties, the French have persisted in theirs in the face of the Treaties. * Both in the English and French Settlement, the American Consul refused' to be bound by the stipulation requiring an U.S. citizen to apply for land to the English Or French Consul. Appealing to Art. XVII of the U.S. Treaty of 1844, he insisted on title deeds being issued to U.S. subjects through the U.S. Consulate. , By 1854 the interests in the maintenance of good order were so great, and the municipal arrangements so insufficient, that need arose for more perfect regulations, and all the Consuls of that day, including the English and the French, joined in a comprehensive scheme, the representatives of these two Great Powers abandoning without reservation all their previous pretensions to any exclusive rights or jurisdiction over their respective settlements. These regulations were signed by the British, American, and French Consuls, and the limits within which they were to operate were the above-mentioned British and French Settlendients.- At that time, in- 1854, the French Settlement was still undeveloped, it was wholly occupieid by Chinese, and formed a suburb of the Chinese city. In the subsequent years the French, taking advantage of the rebellion, succeeded by various measures in making the whole of the river bank in their settlement pass into foreign ownership. In 1862 the French Consul established a separate municipal council, and in 1866 a " Code de Beglements d' organisation inunicipale " was issued which definitely put municipal affairs, whether affecting foreigners or Chinese, under French control. These were replaced in 1868 by a new set of rules called " Beglement d'organisation municipale de la concession Francaise," which is still in force. These regulations say nothing about registration of lots. Land in the French Settlement pays a land tax of 1,500 cash a mow to the Chinese Government, This is paid by each lot-holder direct to the Magistrate of the Shanghai District, and the receipts for this tax are made out in the name of the Chinese magistrate. The French Consul at Shanghai does not issue leases or subleases as is done in the so-called " Concessions " at some ports in China. Where at a port a " Concession" exists the Chinese Government has leased in perpetuity to the Foreign Government the 269 whole concession site, after which the Foreign Government has given subleases in its own name. In the French Settlement in Shanghai some of the sites are held by foreigners under Title Deeds issued by the Taotai ; others are held under deeds of lease direct from the original Chinese owner. In these transactions the French Consul does not intervene. After the sale has been completed the purchasers as a rule register their deeds at the French Consulate and receive a document certifying that it has been so registered. In some instances foreigners have refused to register their deeds' in the French Consulate. Some years ago a quantity of land was reclaimed along the river shore of the French Settlement. For this accretion title deeds were issued to the respective riparian owners by the Taotai direct, not by the Taotai to the French Government and then by the French Consul to the riparian owners, Inclosure 3 in No. 359. Correspondence respecting Mr, T. Hanhury's Lots in the French Settlement. MESSRS. iVESON and Co., Agents for Mr. Thomas Hanbury, hold three title deeds, issued by the Shanghai Taotai in 1861. These were obtained in the usual way, i.e., Mr. Thomas Hanbury settled his terms with the Chinese proprietor, and then, through his Consul (British), he sent in to the Taotai the Chinese deeds of perpetual lease, in return for which he received title deeds issued in the Taotai's name. These were registered in the British Consulate Land Register as Lots 400, 401, and 402 ; Title deeds No. 393, 394, and 395. In the month of Jime, 1898, the French Municipal Council decided to make new streets, and in order to effect this it became necessary to expropriate a strip of Mr. Hanbury's land. The French Consul thereupon requested Mr. Hanbury's Agents to produce his title deeds for inspection. In sending them back the French Consul pointed out that these title deeds were not registered at the French Consulate, and requested that this formality should be gone through. (A copy of the French Consul's letter is annexed.) Messrs. Iveson and Co. replied that they could not do this without referring to Mr. Hanbury in England, and the French Consul consented to await Mr. Hanbury's xeply. This has not yet been received. Inclosure 4 in No. 359. M. de Bezaure to Messrs. Iveson and Co., June 18, 1898. [See Inclosure 1 in No. 319, page 224.J No. 360. Sir C. MacDonald to the Marquess of Salisbury, — {Received October 17.) My Lord, Peking, August 26, 1898. WITH reference to my despatch of the 15th instant, reporting the settlement of the Shashih riot case, I have the honour to inform your Lordship that an Imperial Decree w^s issued on the 24th instant, in response to the Viceroy Chang Chih-kung's Memorial, alluded to ia Mr. Warren's despatch of the 13th July, copy of which was inclosed in my despatch of the 15th instant. The Decree is in accordance with the terms of settlement detailed in Mr. Warren's despatch. It prescribes the punishment of the officials concerned, orders compensation to be made to foreigners for their losses, the proper amounts to be ascertained by the Taotai and Her Majesty's Consul, and strongly warns the provincial authorities to guard against such outbreaks in future. I have, &c. (Signed) CLAUDE M. MacDONALD. 270 No. 361. Sir C. MacDonald to the Marquess of Salislury.'-{U&celved October 17.) My Lord, Peking, August 26, 1898. I -HAVE the honour to report that on the 24th instant an Imperial Decree was issued to the effect that in the month of October the Emperor and the Empress- Dowager will proceed to Tien-tsin by railway. The Decree sets forth that the reorganization of the military forces is necessary for the independent strength of China, and that Western methods of drilling, &c., must "be introduced. Frequent inspection is also called for, and therefore, on the 1 9th October, the Emperor and Empress-Dowager will proceed to the Imperial Hunting Park, an inclosure of some 40 miles in circumference, a few miles south of the city. They will stay in that neighbourhood inspecting troops, &c., till the 29th October, when they will take the train to Tien-tsin and remain there for ten days, returning to Peking on the 8th November. The programme of reviews, &c., at Tien-tsin, is deferred till the Imperial party is in residence at the Hunting Park. Rumours of this first visit to the outer world by the Emperor and Empress- Dowaget have been current for some time, but considerable uncertainty was felt that the project would be carded out. (Signed) ' CLAUDE M. MacDONALD. No, 362. Sir C. MacDonald to the Marquess of Salisbury . — [Received October 17.) My Lord, Peking, September 2, 1898, I HAVE the honour to inform you that an Imperial Decree appeared in the " Peking Gazette " of the 30th August, abolishing, on the score of economy, several important official posts and a host of minor ones, both in the capital and provinces. The following is a list of these Offices : — In Peking : The Supervisorate of Imperial Instriiction (an office supposed to superintend the studies of the Heir- Apparent, but for many years a mere sinecure for literary services) ; the Office of Transmission (a Department for opening and recording Memorials to the Throne on routine business) ; the Court of State Ceremonial ; the Court of the Imperial Stud ; the Court of Imperial Entertainments ; and the Grand Court of Revision. The duties of these Courts were largely nominal. The entire staff of these six Offices is said to be 160 men. In the country : The Governors of those provinces where there are also Viceroys ; these provinces are Hupeh, Kwangtung, and Yunnan ; the Directorship of the Yellow River ; the duties of this Ofl^ce are assigned to the Governor of Honan. All Comptroiiers of thie Grain Tax in provinces where there is no grain transport, and Comptrollers of the Salt Revenue in provinces where no salt is produced. In addition, all Sub-Prefects, Assistant Sub-Prefects, and Magistrates who have no territorial jurisdiction, but only special duties such as protection of the salt revenue, care of water communications, &c. Finally, the horde of Expectant officials at the various provincial capitals is to be carefully weeded out. These measures, if strictly interpreted, signify little less than a revolution in the Chinese official world. The terms of the Decree are extremely peremptory, and are reported to be drawn up by the Emperor himself. T have, &c. (Signed) CLAUDE M. MacDONALD. No. 363. Sir C. MacDonald to the Marquess of Salisbury. -^{ReCei^&d October 18.) (Telegraphic.) _ ^ Peking, October 18, 1898. PRINC-E CHING and the Ministers of the Yamen sent thanks to me yesterday, through three of the Yam^n secretaries, for my suggestion that a certificate as to the 271 Emperor's health should be given by a foreign doctor. The secretaries called to inforna me that the Chinese Government had arranged that Dr. Detheve, of the French Legation, should visit the Emperor at 7 o'clock this morning to certify as to his condition. They said the French doctor had been selected, as our Legation doctor is at home on leave. ' No. 364. The Marquess of Salisbury to Sir C. MaoDonald. Sir, _ Foreign Office, October 21, 1898. I HAVE received your despatch of the 26th August last, reporting the issue of an Imperial Decree in regard to the settlement of the case arising out of the riots at Shashih. Her Majesty's Government have learnt ^yith satisfaction that the question has now been settled in accordance with the terms on which Her Majesty's Consul at Hankow was instructed to insist, I am, (fee, (Signed) SALISBURY. No. 365. Sir C Scott to the Marquess of Salisbury. — {Received October 24.) My Lord, St. Fetersburgh, October 12, 1898. I ASKED Count Lamsdorff to-day whether he had received any recent news from China. His Excellency replied that he had jast received a report from M. Pavloff on the late Palace revolution at Peking, which seemed to bear a strong resemblance to former domestic revolutions in that capital, and n'ot to have been in any way stimulated by foreign influences. The report of the Emperor's death was undoubtedly false, but it was difficult to ascertain what was his real positioti at present. The Chinese Minister, Count Lamsdorff said, had just been to see him, and strongly objected to the presence of foreign troops at Peking, expressing great alarm at the possible consequences, and assuring him that there had been no necessity for summoning them to protect the foreign residents in the capital, who had been in no danger. _ Count Lamsdorff said, however, that he gathered from M. Pavloff's report that their presence had not only been necessary, but had exercised a very excellent and reassuring effect, and that the simultaneous arrival of the different foreign detacL ments had been a very good idea. He agreed with M. Pavloff in thinking that, even if the danger no longer existed, it would be advisable that they should not leave Peking until a short time after the escorts, which the other Legations had asked for, had arrived, so that the departure might also be simultaneous. His Excellency told me that he had been much pleased to learn from this report that M, Pavloff and Sir Claude MacDonald had been, during this crisis, on the best possible terms of mutual friendship and confidence, and he referred to certain sensational reports which had appeared in the pubUc press of both our countries in connection with recent events in China, the tendency of which he characterized as most mischievous. I have, &c. (Signed) CHARLES S. SCOTT. No. 366. Viscount Gough to the Marquess of Salisbury, — [Received October 24.) My Lord, Berlin, October 21, 1898 WITH reference to Sir F. Lasoelles' despatch of the 6 th ultimo I have the honour to inform your Lpr^ship t^at it is stated in th^ " Cologne Gazette " th^t 272 within the territory included in the free port of Kiao-chau no duties will be levied on goods to be consumed in the German district with the exception of an excise duty on opium. Only goods in transit from and to Chinese territory will be subjected to duty, according to'the rates fixed by the Treaties. I have, &c. (Signed) GOUGH. No. 367. Sir C. MacDonald to the Marquess of Salisbury. — [Received October 25.) (Telegraphic.) Peking, October 25, 1898. ANTI-FOREIGN outrages. A serious menace to the safety of Europeans is the presence of some 10.000 soldiers, who have come from the Province of Kansn, and are to be quartered in the hunting park, 2 miles south of Peking. A party of these soldiers made a savage assault on four Europeans (including Mr. C. W. Campbell, of this Legation), who wera last Sunday visiting the railway line at Lukon Chiao. The foreign Ministers will meet this morning to protest against these outrages. I shall see the YamSn to-day, and propose to demand that the force of soldiers shall be removed to another province, and, that the oflPenders shall be rigorously dealt with. No. 368. Sir C, MacDonald to the Marquess of Salisbury, — {Received October 29.) (Extract.) Peking, September 13, 1898. IN the Memorandum respecting railway and other Concessions in China, which I had the honour to send to your Lordship in my despatch of the 8th July last, I mentioned that Yung Wing had been granted permission, by an Imperial Rescript, to build the Tien-tsin-Chinkiang line. On the 30th July, at the request of the agent of the Hong Kong and Shanghae Bank, who informed me that the period of Yung Wing's Concession had lapsed, I addressed the Tsung-li Yam^n, advocating that the Concession should be granted to the bank. To this despatch I received no written reply, but I was given to under- stand that Yung Wing's Concession stood in the way of any other arrangement. After the ratification of the Belgian contract for the Peking-Hankow line, I made, by your Lordship's directions, on the 20th August, a demand to the Chinese Govern- ment for the concession to British Syndicates of certain railway lines in China. The Tien-tsin-Chinkiang hne was included in the list, with the proviso that the Concession would be shared if desired with German and American Syndicates. On the 3rd instanti received Mr. Balfour's telegram No. 268 of the 2nd September, informing me that an Agreement had been signed by English and Gei'man Syndicates in regard to the construction of the line in question, and instructing me to arrange with the German Minister to_ make with him a joint application to the Chinese Government to grant a Concession of the line to this combination. On the 10th instant, I addressed the Tsung-li Yam6n a note in accordance with these instructions. The German Minister the same day sent a similar note to the Yamen. I have the honour to inclose copies of these despatches. Inclosure 1 in No. 368. Sir C. MacDonald to the Tsung-li Yamen. ^^^r^-^ „. , , T. ,, . Peking, September 10, 1898. YOUR Highness and your Excellencies will remember that, on the 30th July I wrote to the Yamen requesting that the Concession for the Tien-tsin-Chinkiang Railway should be granted to the Hong-Kong and Shanghae Bank, ■ .273 I have now received Instructions from Her Majesty's Government informing me that an Agreement has been made by English and German Syndicates to a]jply for the Concession, and carry out the same in combination. I am directed to applv jointly with the German Minister to the Chinese Govern- ment for this Concession on the same terms as those accorded to the Belgian Syndicate for the Hankow-Peking line. The German Minister has already addressed the Yamen on the subject. I have, therefore, the honour to request that the right to construct this line may be granted to the Anglo-German Syndicates on the terms above mentioned, and shall be glad to receive an early and favourable reply. „^,^ , -r t^ . (Signed) CLAUDE M. MaoDONALD. Inclosure 2 in No. 368. Baron HeyUng to the Tsung-U YamSn. (Translation.) Peking, September 10, 1898., I HAVE repeatedly requested the Yam§n to grant the Concession of making the- Tien-tsin-Chinkiang Railway to the Deutsch-Asiatische Bank. The bank has now informed me that they have come to an arrangement with the English bank, and are very desirous to apply jointly with them for this Concession. Some of the Ministers - of the Yamen have already expressed an opinion that the best arrangement would be a joint undertaking of this railway by the English and German Syndicates. I have, therefore, the honour to request that the Prince and Ministers will ispeedily grant permission to the German and English banks to undertake the building of the Tien-tsin-Chinkiang line. I would also beg the favour of an early and favourable reply. (Signed) HEYKING. No. 369. Sir C. MacDonald to the Marquess of Salisbury. — {Received October 29.}* My Lord, Peking, September 14, 1898. T HAVE the honour to forward copies of two letters dated the 25th and 30th' August which I have received from Her Majesty's Consul, Newchwang, on the subject of the refusal of the local authorities to seal the deeds for certain land bought by British subjects on the plea that the land was required for the purposes of the Prussian railway. 1 have already sent your Lordship copy of Mr, Allen's telegram of the 19th August in my telegram of the 20th August. On the same day I spoke strongly to the Yam^n on the subject, and reported, in my telegram of the 21st August, that the Yamen had promised to take steps. I am glad to say that my remonstrance resulted in the deeds being duly stamped. I have, &c. (Signed) CLAUDE M. MacDONALD: Inclosure 1 in No. 369. Consul Allen to Sir C. MacDonald. Sir, Newchwang, August 25, 1898. I HAVE the honour to report that I sent you on the morning of the 19th instant a telegram to the following effect : — " Thirty lots of land have been purchased in the neighbourhood of the intended terminus of the Russian railway at this port by a number of British residents, a German, and an American, on various dates from the 30th May last onward. "The native proprietors of the land made these sales entirely of their own free wilL^ No Proclamations forbidding them to do so had been issued, and the Intendant of Circuit has explicitly pronounced the title-deeds valid. [253] 2 N 274 " "With a view to the I'egistration of these deeds, I have sent them to the Intendant in order to have them stamped (in the usual way) by the District Magistrate. 1'he Russians, however, are exerting themselves to prevent the latter from doing so. " The Tsung-li Yamen has been informed by M. Pokotiloff that British residents here have been making forcible purchases of Russian railway ground, and have been induced by him to send telegraphic instructions to the Intendant, on the 17th instant, to have the stamping of the title-deeds deferred. " The issue of these instructions having been effected by misrepresentation, is it not possible to cause them to be recalled by the Tsung-li Yam^n ? " Proclamations have been issued by the Taotai forbidding anymore selling of land, but he admits the legality of the foregoing thirty purchases. "I am making a demand that the several deeds shall be returned to me, duly stamped, taking my stand on Treaty rights, and being in (temporary) charge of the interests of the United States and of Germany at this port." I have further the honour to record the receipt of your telegram of the 21st instant, in reply to the foregoing to the effect that the Tsung-li Yam6n had stated on the 20th instant " that they would give telegraphic orders for the prompt stamping of the deeds ; that the Intendant of Circuit was not justified in publishing prohibitions at a Treaty port against the free sale of ground, and that inquiry would be made into the affair." Your telegram further directed me to send you one of the Proclamations in question. With reference to both these telegrams, I have the honour to report that the Taotai sent me tv/enty-six of the land-deeds duly stamped on the 23rd instant, together with a note promising to send me the remaining five deeds within five days' time, as he hoped. I should here explain that the real number of lots bought was thirty-one, and that the figure thirty given in my telegram was erroneous, I having overlooked one lot. Two districts ('"' hsien ") meet at this place : that of Kaip'ing (or Kiao-chou) and that of Hai-cheng. Twenty-seven of these pieces of land are situated within the district of the Kaip'ing Magistrates, and the remaining four within that of HaichSng. The Taotai informs me that the latter four were sent in error in the first instance to Kaip'ing, that they were only recently returned thence to himself, and that he has now sent them to the Haich^ng Magistrate (the proper authority) to be stamped and returned with promptitude. Meantime, it has come to my knowledge that tiie Russians attach special value to two of these HaichSng lots, and an intrigue is now on foot to induce the sellers of the lots, two men named Liu Yung-hsiang and Tai Tsung-chang, to declare"that the sales were illicit, they not being entitled to sell. I do not doubt that the sales were perfectly genuine, and the Taotai has committed himself to a pledge that they shall be officially recognized by the stamping of the deeds. Nevertheless, the intrigue is going on, and the Taotai so far countenances it that he tells me in a note that the said vendors are about to sue the middlemen in the matter. I believe the truth to be this : the Russians (MM. Litoff and Guichmann) have in their employ a disreputable Chinese writer, named Chin Ju-chin, formerly dismissed from the service of the Japanese Consulate. In the interests of his employers, by whom he is well paid, he has acquired the services of a small military Manchu official named O Ja-ting. The latter has bribed the vendors to adopt their present attitude of declaring the sales illicit (although they at first refused to do so) and arrested the middleman Wang Yu, whom he caused to be imprisoned by the Haifang-t'ing until yesterday, when he was released (at any rate cemporarily) upon my demand. I do not see how the Taotai can countenance the proceedings without discredit, but I fear that the Russian pressure will make our plain rights hard to defend. On this account I think it is much to be wished that one of Her Majesty's ships were here rather than the "Labiyaka." I have, &c. (Signed) E. L. B. ALLEN. P.S. — I have the honour to add that I have already sent off under separate cover to your address a copy of one of the Proclamations. E. L. B. A. 275 Inclosure 2 in No. 369. Consul Allen to Sir C. MacDonald. t Sir, Newchwang, August 31, 1898. I HAVE the honour to report that I sent you a telegram on the 27th instant informing you that I had received from the Intendant of Circuit, properly stamped, the whole number of title-deeds referred to in my despatch of the 25th instant. The last four deeds, about which I anticipated special difficulties, reached me on the 26th. I would here venture to express my thanks for the powerful help from yourself, which has eflPected a successful issue in the matter. I have, &c. (Signed) E. L. B. ALLEN. No. 370. Sir C. MacDonald to the Marquess of Salisbury. — -{Received October 29.) My Lord, Peking, September 16, 1898. I HAD the honour to send your Lordship a telegram on the 29th August with reference to the proposed extension of the French Settlement at Shanghae. I now forward copies of two despatches, dated the 29th and 30th August, I have received from Her Majesty's Consul-General, Shanghae, on the subject. At a recent interview with the Ministers of the Tsung-li Yamen I pointed out that in the extension asked for by the French, especially on the Pootung side of the river, was included a good deal of land the property of British subjects, and protested against such property being made the subject of a concession to another Power. I reminded them of the trouble caused at Hankow lately by a similar procedure. The Ministers seemed impressed by my remarks, and agreed to telegraph to the Taotai of Shanghae, with whom they said the French Consul-General was negotiating, to be cautious about dealing with land already in the possession of British subjects, and to consult with Her Majesty's Consul-General. In my despatch of the 5th September, I have explained more fully the attitude of the French with regard to the government of their Shanghae Settlement. I have, &c. (Signed) CLAUDE M. MacDONALD Inclosure 1 in No. 370. Consul-General Brenan to Sir C. MacDonald. Sir, Shanghae, August 29, 1898. IN reply to your telegram of the 25th instant, asking how British interests would be affected by the proposed extension of the French Settlement, I had the honour to reply on the 27th instant that commercial interests would not be affected unless the Pootung side was included in the proposed French Settlement, but that the extension, if granted, would greatly increase the local influence of the French. As the negotiations regarding the French extension are being carried on in Peking in connection with the settlement of the Ningpo Joss house question, I am unable to say what is the area of the extension the French are asking for ; but what the French Consul and the French Municipal Council here would wish to have is the river front on the east of the city, the suburbs on the south and west of the city, and all the land lying between the Sicawei road as far as the Roman Catholic Mission, and the great western road up to the Bubbling Well road. In addition they would like to have the land on the Pootung side across the river opposite the present French Settlement altogether about 5 square miles. The first named portion Hes away from the foreign business quarter, and the fact of its passing under the control of the French Municipal Council would have but a remote effect on British commercial interests. The extension would place under [253] 2 N 2 276 . French control a very busy part of the city suburbs and an important portion of the anchorage for native junks, and for this reason the measure would be very unpopular with the Chinese inhabitants. On the Pootung side it is different. A good deal of the land on that side is owned by British subjects, and Messrs. Butterfield and Swire have large godowns and wharves which they would be very sorry to see pass under French control. The fact that a large tract of land, out of all proportion to their requirements, is given up to French control exclusively, while the subjects of all Treaty Powers alike have but one general Settlement where no Municipal Regulations have the force of laws until they have been approved by the French as well as the Chinese authorities, cannot fail to give the French a preponderating influence with the local and pi'ovincial authorities. At such times as the French Consul is also senior Consul he becomes the mouthpiece of the Municipal Council of the General Foreign Settlement ; and in this way he would, in all questions of a municipal nature, appear as the representative of all foreign interests in the port. If the desire of the French is realized, their Settlement will encircle the Chinese city and the Kiangnan Arsenal. There are times when French Consuls do things in a high-handed way. Liable as we are at all times to have riots in Shanghae, the occasions for these will be more frequent if there is a large increase in the number of Chinese who are exposed to the arbitrary treatment of the French police. A riot at the arsenal might result in the landing of a force from ships of war, and it is not unreasonable to suppose that this force would not leave until the French had exacted very favourable terms. There will be some objection on the part of the English owners of property within the area of the contemplated extension who will resent being incorporated into the French Settlement, but their grievance will be more sentimental than real. It is significant of French pretensions at Shanghae that whenever there is a question of extending the general Settlement, which is open to all foreigners, and in the affairs of which all Treaty Powers alike have a voice, the French officials, as well as the Chinese authorities, take it for granted that the balance of power will have to be adjusted by giving up to the exclusive control of the French an area of equal extent. I have, &c. (Signed) BYRON BRENAN. Inclosure 2 in No. 370. Consul- General Brenan to Sir C. MacDonald. Sir, Shanghae, August 30, 1898. I HAVE the honour to inclose'the copy of a letter which I have received from the ' Chairman of the China Association. I think that what I have said in my despatches of the 13th August and of the 29th instant has anticipated nearly all the points now raised by the China Association. Taking the questions raised by Mr. Alfred seriatim I beg to make the following observations : — Paragraph 1. — Short of actual cession of territory to the French Government I do not see how land situated within the French Settlement can become subject to French law. The local French paper has claimed that as regards real estate on the French Settlement all foreigners are subject to French law. I do not think that responsible French officials put forward such pretensions ; and so far no case has occurred where the French Consul has claimed jurisdiction over the person or property of a foreigner. Paragraph 2. — The cemetery under the proposed French extension would come within French limits. I am decidedly of opinion that it should remain outside of all Settlements, if it cannot form part of the cosmopolitan Settlement. Paragraph 3.— I share the opinion that if Pootung cannot be incorporated in the cosmopoUtan Settlement that it should then remain Chinese. The owners of British property on the Pootung side are at present extra-territoriahzed as to their persons and property ; and their Chinese employes indirectly enjoy a certain amount of British protection. Chinese subjects in the French Settlement are entirely removed from JBritish intervention, and British property only receives such protection as the French police can give it. As the Chinese ofiicials are debarred from exercising any control 277 over their own people in the French Settlement, so are we debarred from looking to the Chinese Government for compensation for any injury caused by the unlawful acts of its subjects. (Signed) ' BYRON BRENAN. Inclosure 3 in No. 370. China Association to Consul -General Brenan. "Sir, Shanghae Branch, August 27, 1898. IT being generally reported that demands for the extension of the French Settle- ment are likely to be ceded, the Committee of this Association deemed it their duty to point out two or three conditions which are necessary for the protection of the interests of other Europeans : — 1. That property owned by other foreigners than French does not, by inclusion in the area of extension, become subject to French law, or of necessity to French registration. 2. That the Shanghae Municipal Cemetery and its approaches should be expressly excluded. 3. That no part ot Pootung should be granted expressly or solely to France, but that the whole river frontage should reasonably be under the control of the Shanghae Municipal Council, which includes all nationalities. The necessity for condition No. 3 in its entirety has only recently become apparent, owing to the contention of the French authorities that all land held within the limits of the French area should be under French law, and subject to registration in the French Consulate. The following telegram has, under' the circumstances, been forwarded to the general Committee of this Association in London : — " With respect to extension of French Settlement towards Sicawei, it should be expressly stipulated other European property within the space will not be subject to French law, must remain sabject to their own. Also, we insist on exclusion of Municipal Cemetery, under no circumstances making the concession of Pootung to France, it would be disadvantageous to British shipping. Land-owners, almost entirely other than French, urge avail of this opportunity. Extend Shanghae Municipal Council Settlement, including Pootung equal right to all French included." The Committee beg that you will be good enough to communicate their views on this subject to Her Majesty's Minister in Pekin. 1 have, &c. (Signed) E. F. ALFORD, Vice- Chairman. No. 371. Sir G. MacDonald to the Marquess of Salisbury. — {Received October 29.) My Lord, Pekin, September 17, 1898. REFERRING to my despatches of the 9th July snd the 2nd September, I have the honour to state that Imperial Decrees intended to launch China on the path of reform continue to appear, though there are few signs of any of them taking practical effect. The Emperor is evidently learning that it is one thing to issue a reform Edict and another to get it obeyed. Not long ago a Decree was issued, the object of which was to make the Throne more accessible to the subordinate portion of the oflficial world. At the beginning of this month a case was brought to His Majesty's notice, in which the Board of Ceremonies disobeyed this Decree by refusing to transmit a Memorial sent in by a Secretary. He was much enraged, and forthwith cafehiered the six head officials of the Board, that is to say, the two Presidents and four Vice-Presidents. On the 12th instant he followed this up by a fresh Decree dwelling on the circumstances and reiterating his previous instructions. Memorials were to be 278 presented as they came in, it being of the highest importance, in the present critical state of public affairs, that all such communications ■ should be examined as soon as possible. I Obstruction and delay were to be punished with the utmost rigour, and special commands were given that the previous Edicts on reform, all of which were enumerated, were to be hung up in a public place in each Yamen throughout the Empire, so that no one should be ignorant of their contents. Not satisfied with aU this, he issued, also on the 12th instant, a long and remarkable Decree calling attention to the advantages of Western methods, and inveighing against degenerate officials and conservative Ministers, who not only could not assist him in adopting their methods, but spread reports instead calculated to disturb the minds of the people. He wanted his subjects to know that they " could depend on their Prince," and appealed to them to make China powerful by working for reform with " united minds." The previous orders were amplified, and the privilege of memorializing the Throne, which formerly stopped at officers of a high rank, is now extended to practically every soul in the Empire. Next day, the 13th September, another Decree repeated the terms of the above in clearer detail, and laid down pi'ecisely the procedure each class was to observe in making itself heard. The severest penalties were threatened should there be any interference with the free exercise of this privilege by the high officers of Government, who were commanded to report by telegram the steps they were taking to fulfil the Imperial wishes. The series of Decrees above quoted are naturally creating a great commotion in the Chinese official world, and it will be interesting to note their effect. I have, &c. (Signed) CLAUDE M. MacDONALD. No. 372. *S'tV G. MacDonald to the Marquess of Salisbury. — (Received October 29.)' (Telegraphic.) Peking, October 29, 1898. MY telegram of October 25. The Foreign Representatives met yesterday, and drafted a note to ' the Yam^n demanding that the Kansu troops should be withdrawn at once. The troops in question have not been paid for some months, and are in a semi- mutinous state. They have declared their intention to drive all Europeans out of the north of China, and have cut the telegraph wires and destroyed portions of the railway line between Lukouchiao and Paoting Fu. Some disturbances have been caused by them on the railway to Tien-tsin, but the line has not been touched, and traffic has not been interrupted. In the city here all is quiet. The presence of these troops in the immediate vicinity of Pekin undoubtedly constitutes a serious danger to all Europeans. The Yam^n gave me a promise that the force should be removed, but have not yet carried it into effect. The note of the Diplomatic Body has not yet been answered. No. 373. Sir C. MacDonald to the Marquess of Salisbury. — [Received October 29.) (Telegraphic.) Peking, October 29, 1898. HEALTH of Emperor. As repoi'ted in my telegram of 18th October, Dr. Detheve, the physician attached to the French Legation, examined the Emperor on that day. The doyen of the Diplomatic Body has received from the Yamen a report of the doctor's diagnosis, which shows that the Emperor is afflicted with Bright's disease,' though there is no immediate danger from it. f think there is some anxiety on the part of the Empress-Dowager and her party to appease the opinion of other nations, which is adverse to them. 279 No. 374. The Marquess of Salisbury to Sir C. MacDonald. Sir, Foreign Office, November 4, 1898. I HAVE received your despatcli of the 16th September last relative to the proposed extension of the French, settlement at Shanghae, and I approve the language held by you to the Tsung-li Yamen on the subject, as reported therem. I am, &c. (Signed) SALISBURY. No. 375. The Marquess of Salisbury to Sir C. MacDonald. Sir, Foreign Office, November 4, 1898- T HAVE received your despatch of the 14th September last, reporting that the deeds for certain land purchased by British subjects at Newchwang had ultimately been sealed by the local authorities, and it is with much satisfaction that T have learnt of the consequent settlement of the case. Your proceedings in the matter are approved by me. I am, &c. (Signed) SALISBURY. No. 376. Sir C. MacDonald to the Marquess of Salisbury. — (Received November 6.) (Telegraphic.) Peking, November 6, 1898. THE Yamen have replied to the note from the Diplomatic Body referred to in my telegram of the 29th October, requesting the removal of the Kansu troops. The reply which was received by the doyen on the 28th October, acknowledges that this force is wanting in discipline, that their presence near Peking is likely to cause trouble, and that steps should be taken to withdraw them. ^Nothing has, however, been done to remove these troops, and a meeting of the foreign Representatives was held to-day to decide what further steps should be taken. It was decided unanimously to address a note to the Yamen, stating that if the troops in question were not withdrawn by the 15th instant, our respective Governments would adopt such measures as they considered necessary for the protection during the "winter months of foreigners in Peking and Tien-tsin. No. 377. Sir E. Satow to the Marquess of Salisbury. — {Received November 7.) My Lord, Tokio, October 4,, 1898. IT is reported here, on what seems to be good authority, that Marquis Ito, who was to leave Peking on the 30th ultimo, will carry out his intention of making a voyage up tbe Yang-tsze as far as Hankow, and that the Viceroy Chang Chih-tung has sent two Coijfidential Secretaries to Shanghae to offer him a welcome, and to facilitate in every way the prosecution of his journey. I have, &c. (Signed) ERNEST SATOW. No. 378. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) . . Foreign Office, November 9, 1898. HER Majesty's Government hear that difficulties are being thrown by Sheng in the way of the concession of the Tien-tsin- Chinkiang line to the Anglo-G-erman combination arranged here in September last.' 280 Concert with your German colleague as regards any support that you may consider advisable to the representations of the agents of the Hong Kong and Shanghae Bank and of the German Bank. Ko. 379. Colonial Office to Foreign Office. — (Received November 11.) Sir, Downing Street, November 11, 1898. I AM directed by the Secretary of State for the Colonies to transmit to you, for the information of the Marquess of Salisbury, a copy of a despatch from the Officer administering the Government of Hong Kong on the subject of the circumstances under which Kang Yu Wei escaped to Hong Kong. I am, &c. (Signed) EDWARD WINGFIELD. Inclosure in No. 379. Administrator Black to Mr. Chamberlain. Sir, Government House, Hong Kong, October 8, 1898. IN case a newspaper rumour may reach England on the subject, I have the honour briefly to detail the case of Kang Yu Wei, the Beformer and Adviser of the Emperor of China, in his recent attempts to sweep away abuses. Kang Yu Wei, apprised of the danger that threatened, managed to get out of Peking and embark on a steamer for Shanghae. This steamer was duly boarded at Shanghae by the Chinese officials to arrest him, but before their arrival, Kang Yu Wei had been transferred to the P. and O. steam-ship " Ballaarat." As the Chinese authorities had searched every ship from Tien-tsin that came in for this man, and as a fast Chinese gun-boat was lying with steam up at Woosung ready to follow the " Ballaarat," and as it was stated that two other gun-boats were ready to intercept her in the neighbour- hood of Eoochow, Her Majesty's ship " Bonaventure " convoyed the " Ballaarat " to Hong Kong to avoid any international complication that might arise from an attempt to violate our flag and to search the ship. On arrival at Hong Kong, I offered Kang Yu Wei, if he dreaded assassination or being got at by poison, accommodation in the police barracks until suitable arrange- ments could be made in a Chinese friend's house to receive him. This he gladly accepted. I have little doubt that if the Emperor's plans had been laid more wisely and boldly, and if he had summoned a regiment of soldiers true to him to the Palace before acting, he would have been beforehand with the Dowager-Empress, and have turned the tables on her. Though some of his schemes, such as reform in dress, were absurd and impractical, some were more wise and reasonable, and no one can deny that there is plenty of scope for reform. I have, &c. (Signed) W. BLACK, Major- General. No. 380. Liverpool Chamber of Commerce to the Marquess of Salisbury. — {Received November 12.) My Lord, Liverpool, November 11, 1898. I AM directed to inform you that a General Meeting of the members of this Chamber was held here yesterday under the Chairmanship of Mr. P. C. Danson, President, to hear addresses by Mr. R. A. Ycrburgh, M.P., and others on the China question as affectiog commerce. 281 The meeting was supported by several Members of Parliament for Liverpool, by many representatives of the Chambers of Commerce of South Lancashire and other districts, and by a very large body of representatives of the leading firms of this city. At the conclusion of Mr. Yerburgh's address, the following resolution, previously considered and approved by the Council of this Chamber, was moved by him, seconded by the Lord Mayor of Liverpool, supported by Mr. Archibald Little and Sir John Willox, M.P., and unanimously adopted, viz : — Resolved : — " That this Chamber, recognizing the immense field off'ered to British enterprise by the opening up of China and the development of its resources, trusts (1) that Her Majesty's Government will give every possible assistance to British merchants and capitalists who are engaged in business in that country, and prepared to invest money in it; and (2) that, especially in the matter of railway construction. Her Majesty's Govern- ment will secure for British enterprise in the Yang-tsze regions similar preferential rights to those which Germany, Russia, and Erance have already claimed in the regions of China which those Powers respectively regard as their special spheres of influence ; and the Chamber assures Her Majesty's Government of its strenuous support in the pursuit of the policy thus indicated." Further, as it has been announced in an Indian newspaper, viz., the " Pioneer " of the 16th October, that surveys for the extension of the Mandalay-Kunlon Railway, in the direction of Ch'ung-King are about to be undertaken by the Government of India, it was moved by Mr. C. Poyntz Sanderson, seconded by Sir Richard Temple, supported by Mr. Charles McArthur, M.P., and resolved :— " That this Chamber congratulates the Government of India on the commencement of the surveys for the Burmah- Yang-tsze Railway, and hopes that the line will be carried through to Ch'ung King." A copy of this latter resolution will be sent to the Government of India, and for your Lordship's information as to the progress of the Mandalay-Kunlon line I beg to inclose a printed extract from the latest " Administration Report on the Railways in India for 1897-98." I am to say in connection therewith that this Chamber has long pressed for the speedy completion of the Mandalay-Kunlon Railway, which it is hoped may furnish in the future an approach to the south-western and western provinces of China. In the absence of a railway through Siam and the Siamese Shan States to Yunnan, the Mandalay-Kunlon route seems that most likely to give access to the populous countries situated in the Upper Yang-tsze Basin. This Chamber directs me to ask for the subjects of the resolutions your Lordship's most earnest and careful attention, and that you will consider them together with your colleagues in Her Majesty's Government. I il3(VG &C (Signed) ' THOMAS H. BARKER, Secretary. Inclosure in No. 380. The Incokporated Chambek of Commekce op Liverpool. Extract from the Administration Report on the Railways in India for 1 897-98. [0. 8921.] Chapter II. — ■ Works Completed or in Progress. Burmah Railways (Metre Gauge). Mandalay-Kitnlon Section. — Work was in progress in April 1897 on the first four divisions of the railway (up to mile 200), but in August, owing to the delay caused by ihe suspension of work at the Gokteik Gorge, it was not considered advisable to carry on works too far ahead, and the fourth division was abolished, construction being restricted to the length between Myohaung and Lashio (ISt) miles). [253] -^ O 282 In July 1897 orders were received from the Government of India to restrict expendi- ture as far as possible. This restriction w^s removed in January 1898, and smce then every effort has been made to push all works as rapidly as possible. Fair progress has been made throughout, and by the end of the current^working season the formation between Myohaung and Thibaw will be practica ly completed with the exception of the gap of 61 miles at the Gokteik Gorge. The formation >etween Thibaw and Lashio will also be nearly completed. Beyond the gorge all the bricks that will be required have been manufactured, and work started on one major and on some fifty minor bridges. -i bq ■ i, ,i The bridging on the first two divisions, up toNammaw Station, mile <3, vvas mtiand, and will be completed before the rainy season begins. The first section of the railway, from Myohaung to Sedaw, 13 miles, has been worked for goods traffic since the 1st January, 1898. . , The difficulty experienced last year in getting labour for the rock cuttings and tunnels has been overcome by training the Burmans to do it by piece-work, and it has not been necessary to import any labour from India this season. j. •••«:; u The Salween survey division party completed 13 miles of survey at the most aiHicult portion of the Salween gorge and a reconnaissance map of the river to Runlon, when it was recalled in April to carry out the realignment of the Gokteik Gorge, No. 381. London Chamber of Commerce to the Marquess of Salisbury. — {Received ] if desired, with German and American Syndicates) — proposal for this line was sent to the Yamen on the 30th July. Honan and Shansi to Yang-tsze — to connect the mines of the Peking Syndicate with the Tang-tsze, (The contract gives the Syndicate the fight to connect by ra:il with navigable waters.) Kowloon to Canton (submitted by Jardine, Matheson, and Co., to his Excellency Sheng) . P'ukou to Sinyang — in connection with the Shanghae-Nanking Eailway. Soochow to Hangchow, with extension to Ningpo — (the two latter submitted by Jardine, Matheson, and Co,, to his Excellency Sheng, but were not included in pre- liminary agreement.) (Signed) CLAUDE M. MacDONALD. Inclosure 2 in No. 383, The Tsung-li Yamen to Sir C. MacDonald. Kuang Hsu, 24th year, 7th moon, 2lst day. (Translation.) {Heptember 6, 1898.) WE have the honour to observe that our two nations have been on friendlv terms for many years, and China has never had any intention of showing disrespect for Great Britain. There have recently been some slight mutual misunderstanding, but friendship has now been restored. On the 21st August your Excellency sent us a note requesting that Bri'ti^ merchants should be granted permission to build the following railways in China : — 1. Tien-tsin to Chinkiang. 2. Erom Honan and Shansi to the Yang-tsze. 3. Erom Kowloon to Canton. 4. Erom P'ukou to Sinyang. 5. Erom Soochow to Hangchow, Avith a possible extension to Mngpo. We find that proposals to build the lines from Kowloon to Canton, from P-'ukou to Sinyang, and from Soochow to Hangchow, have been discussed by his Excellency Sheng, Director-General of Railways, and British merchants. The Tsung-li Yamen is also writing to his Excellency Sheng to discuss the matter satisfactorily with British merchants, come to a fair arrangement on the lines of the regulations for our north and south railway line, settle the conditions, and report to us, when we will request the Emperor's ratification. As to the line from Tien-tsin to Chinkiang, your Excellency has already consented to treat it separately. The line from Shansi and Honan to the Yang-tsze sihould wait until the Peking Syndicate has commenced mining operations, when the question can .again be raised and suitably discussed. Mea,n while, we have the honour to send you this communication. (Seal of Yamen.) ^ Inclosure 3 in No. 383. Sir C. MacDonald to the Tsung-li Yamen. Peking, September 12, 1898. I HAD the honour to receive, on the 6th instant, your Highness' and your Excellencies' despatch on the subject of Concessions of railways to British merchants. I am highly gratified at this proof of the friendly relations existing between our respective nations. There are, however, two or three points in which the despatch calls for alteration. The Yamen promises to write to his Excellency Sheng to " discuss the matter satisfactorily with British merchants and come to a fair arrangement on the lines of the Eegulations for the north and south line, settle the conditions, &c." 289 This should be altered to "to enter into agreements with British merchants on terms not inferior to those of the north and south railway." Again : " The line from Shansi and Honan to the Tang-tsze should wait until the Peking Syndicate has commenced mining operations, when the question can again be raised and suitably discussed," should read— " With regard to the line from Shansi and Honan to the Yang-tsze, the Yamen recognize that by their contract the Peking Syndicate have the right to build a line for the conveyance of minerals and mining materials between the mines and a river port. This port will be Sinyang, which is in navigable communication with the Yang-tsze. Eegulations for this line will be made in due time." I have, _ therefore, to request that your Highness and your Excellencies will favour me with a reply signifying your assent to these alterations. (Signed) CLAUDE M. MacDONALD. Tnclosure 4 in No. 383. The Tsung-li Yam^n to Sir C. MacDonald. Peking, Kuang Hsu, 24ith year, 7th moon, 29th day (Translation.) (September 14, 1898). ON the 12th instant the Yamen had the honour to receive the British Minister's despatch on the subject of concessions of railways to British merchants [despatch quoted in full] . The Yamen is of opinion that the words "discuss the matter satisfactorily," contained in their former ^despatch, should not be omitted, as the conditions of the work of making railways vary with the locality, and it is, of course, necessary that Sheng Tajen should discuss the matter satisfactorily with British merchants on the lines of the north and south railway Agreement. The Yamen assents to all the other alterations, as already arranged at an interview with your Excellency. The Yampn is addressing the Italian Charge d' Affaires on the subject of the Peking Syndicate's line, and has the honour to send this reply to your Excellency for purposes of record. (Seal of the Yamen.) No. 384. Sir C. MacDonald to the Marquess of Salisbury. — {Received November 14.) My Lord, Peking, September 26, 1898. IN continuation of oiy despatch of the 16th September, I have the honour to forward to your Lordship the accompanying copies of correspondence which has passed with the Erench Minister at this Court in regard to the extension of theErench Settle- ment at Shanghae. I have, &c. (Signed) CLAUDE M. MacDONALD.. Inclosure 1 in No. 384. Sir C. MacDonald to M. Pichon. My dear Colleague, Peking, September 13, 1898. MB. BRENAN, British Consul- General in Shanghae, informs me that he under- stands that negotiations are going on for the extension of the Erench Concession at Shanghae, which extension will, if granted, include, besides other parts, about a square mile on the Pootung side. I do not know if Mr. Brenan's information is correct, but if it is I venture to think that, as at Pootung there is a great deal of property owned by British subjects, including large godowns the property of Messrs. Butterfield and Swire, we sliall have a repetition of the Hankow troubles, only in a severer form for I think my nationals may, indeed, I am sure they will, object to being put under L253J 2 Q 2 290 exclusive French municipal control, more especially if their consent is not at first obtained. You will remember that in the extra concessions at Tien-tsin, to the bye- laws of which you were kind enough to give your consent on the , the consent of all foreigners was first obtained. I know you are, like myself, actuated with the best desire to make matters go smoothly here in China, and will therefore, I am sure, pardon my pointing you out the dangers which are in front of you if M. de Bezaure persists in his demand for an extension of the Prench Concession on the Pootung side. Of course, if these districts are pat under a cosmopolitan Municipal Council, such as now exists outside the French Concession, where Prance has an equal say with other nations, nobody can object. ' I avail, &c. (Signed) CLAUDE M. MacDONALD. Inclosiirc 2 in No. 384. M. Pichon to Sir C. MacDonald. Men chcr Collogue, Pe'kin, le 13 Septembre, 1898. JE vais immediatement eclaircir la situation que vous me signalez et sur laquelle je n'ai pas d'indications precises, et je vous ecrirai pour vous renseigner. J'esp_6re Men, comme vous, que nous nous mettrons d'accord. Peut-etre serait-il necessaire, pour plus de clarte, qui je telegraphic a M. de Bezaure. Je vais, dans tons les cas, faire rechercher a la Chancel] erie le plan du projet d'extension de la Concession Eran9aise. Veuillez, &c. (Signe) A. PICHON. (Translation.). iVIy dear Colleague, Peking, September SO, 1898. I WILL immediately clear up the matter about which you write, and in regard to which I have no accurate information, and I will inform you of the result of my inquiries. I hope, as you do, that we shall come to an agreement. It may, perhaps, be advisable for me to telegraph to M. de Bezaure. In any case, I will have the plan of the proposed extension of the French Concession looked up in the Chancery. I am, &c. (Signed) A. PICHON. No. 385. Sir C. MacDonald to the Marquess of Salisbury. — {Received November 14.) My Lord, Peking, September 28, 1898. I HAVE the honour to report the following changes by Imperial Decree in the personnel of the Tsung-li Yamen. On the 4th September Hsli Ying K'uei, President of the Board of Rites, was dismissed from all his offities, together with the other Heads of the same Board, for having suppressed a Memorial to the Throne from a junior official of the same Board in support of reform measures. On the 7th September Li Hung-chang and Ching Hsin, President of the Board of Eevenue, were ordered to no longer serve on the Foreign Board. In the Gazette of -the 26th instant Chang Yin-huan was denounced, but he has not yet been formally • dismissed from office. Yli Lu was ordered to join the Board on the 7th September, and appointed the same day President of the Board of Bites. Yli Lu is a Mancliu, and has held high offices in the provinces for the last thirty years. He Avas lately Tartar General at Foochow. On the 26th instant Hsu Yung-i was again attached to the Yamen. He is a Vice-President of the Board of Civil Office, and was formerly a prominent member of. the Yamen. He was largely responsible for the French Convention of 1895 with jegard to Kiang Hung, and ceased to attend the Board, as reported in my predecessor's 291 despatcli of the 13tli August, 1895. He will probably assume au active part in the work of the Yameu in succession to Li Hung-chang and Chang Yinrhuan. I have, &c. (Signed) CLAUDE M. MacDONALD. No. 386. Sir C. MacDonald to the Marquess of Salisbury. — (Received November 14.) My Lord, Peking, September 28, 1898. O'N' the 22nd instant I had the honour to telegraph to your Lordship that the Empress Dowager of China had returned to power^ and that this event indicated a reversal of the recent reform policy of the Emperor. I now forward a- translation of the Imperial Edict issued on the 21st instant, in which the Emperor details his reasons for inviting the Empress Dowager to advise him in the government of the nation. The Decree naturally created much excitement in Peking, and rumours of impending disaster to the most prominent of the advocates of reform were prevalent. Subsequent proceedings justified the alarm and assumed the character of a coup a' E tat. The same day the house of Chang Yin-huan was surrounded by the police in search of one K'ang Yu-wei. This K'ang Yu-wei is a Chinese scholar of high repute who was, until lately,, editor of a Chinese newspaper in Shanghae known as " Progress." He was a strong advocate of reform, and was this year recommended to the Emperor, and on his arrival in Peking was given a position of Secretary in the Board of Works. He is said to have acquired great influence over the Emperor, and to have been his adviser in his recent reform measures. K'ang Yu-wei could not be found, and it has subsequently transpired that he has escaped and left Shanghae on the 27th in the English mail for Hong Kong. So keen was the hunt for him that on the 22ncl all trafiic was stopped on the Tien-tsin Railway line to prevent his passage. On the 24th instant orders were issued for the arrest of several ofB.cials who had been in relation with him, including Chang Yin-huan and Hsii Chih-ch'ing. The latter had recommended K'ang to the throne, and had been recently appointed President of the Board of Rites. Chang Yin-huan went to the Board of Punishments and. has remained a prisoner since. The precise charge against K'ang and his friends has not transpired, but it is supposed to be one of conspiracy against the liberty and eten the life of the Empress Dowager. It was reported on the 25th that Chang was to be executed the same evening or early next morning, and I thought it advisable to make an appeal on his behalf for at least due consideration of any charge brought against him. The report reached me late in the afternoon, and it was therefore necessary to take prompt measures. It was supposed that Li Hung-chang had been consulted by the Empress Dowager in the matter. I accordingly addressed a letter to his Excellency pointing out the horror with which such sudden executions were regarded by all Western nations, and the bad effect the secret and hasty condemnation of an official of Chang's rank, who was so well known in Europe, would produce, and begged his Excellency to use what influence he possessed to prevent such hurried action. I concluded my letter by saying that I appealed to him, Li, because he was the only Statesman now in Peking who was conversant with European methods, and would, therefore, thoroughly realize the disastrous impression which such a summary execution would produce throughout the Western world. It is well known that Li Hung-chang and Chang Yin-huan are deadly enemies, and it was generally reported that Chang's imprisonment was due to Li. The Grand Secretary replied saying that he highly respected my generous and humane motives, and he assured me that no summary action would be taken. That such summary action was seriously contemplated by the anti-reform party ifs undoubted. On the 26th instant a Decree appeared, of which I inclose a translation, ordering the reformers to be brought to a rigorous trial, exonerating Chang from collusion with K'ang Yu-wei, but denouncing him as of very bad reputation. It was directed that he be kept under supervision by the Board of Punishments, awaiting a further Decree. The Decree concludes by intimating that no further 292 inquiries will be made as to K'ang's associates. This was no doubt added to allay the anxieties of many ofl&cials who had had relations with K'ang. In particular there was a Society in Peking, lately established by him, called the " Protectors of the Nation," which is said to have had over 300 members. Another Decree was issued on the 26th instant, of which I inclose translation, reversing many of the reform measures of the past few weeks. The whole character of the proceedings above described gives strong ground for suspicion, that the movement is directed against the reform party of China, and that a rumoured conspiracy is the pretext for putting a stop to the sweeping changes decreed or contemplated by the Emperor. A significant Decree appeared on the 25th instant, of which I inclose translation, stating that the Emperor's health had been unsatisfactory for the past four months, and commanding the attendance of skilful physicians. I have, &c. (Signed) CLAUDE M. MacDONALD. Inclosiire 1 in No. 386. Imperial Decree dated September 21, 1898. (Translation.) THE affairs of the nation are at present in a difficult position, and everything awaits reform. I, the Emperor, am working day and night with all my powers, and every day arrange a multitude of affairs. But, despite my careful toil, I constantly fear to be overwhelmed by the press of work. I reverently recall that Her Majesty the Empress Dowager has on two occasions since the reign of Tung Chih (1861) assumed the reins of Government with great success in critical periods. In all she did Her Majesty showed perfection. Moved by a deep regard for the welfare of the nation, I have repeatedly implored Her Majesty to be graciously pleased to advise me in government, and have received her assent. This is an assurance of prosperity to the whole nation, officials and people. Her Majesty will commence to transact business from to-day in the side Hall. On the 23rd September I, the Emperor, will lead my princes and high officials to make obeisance in the Ch'in Cheng Hall. Let the proper officials reverently and carefully prepare the fitting programme of the ceremony. Inclosure 2 in No. 386. Imperial Edict dated September 25, 1898. (Translation.) SINCE the 4th moon I, the Emperor, have been frequently ailing in health, and in spite of long-continued treatment there is still no great improvement. Should there be any persons, either in the capital or the provinces, who are highly : skilled in -the treatment of disease, let the officials at once recommend them to the throne and await our orders. Should such men be in the provinces let them be sent to the capital without the least delay. Inclosure 3 in No. 386. Imperial Decree dated September 26, 1898, (Translation.) THE improvements and reforms instituted by the Court are designed fo meet the existing situation, in the hope that by means of them the State may. grow rich and strong and my people prosperous. It is not that we are fond of altering usages and are casting aside old things because they are old. We feel that they are a bitter necessity, and the officials and people of the Empire should bear the circumstances in mind. Yet on a close scrutiny of the present state of public feeling, we find that it is alarmed and suspicious, and the reason of this must be that there are officials who ■ 293 earry out our instructions badly and cannot sympathize witli our intentions. The result is that ignorant scoundrels indulge in useless speculations and discussions., !Por instance, the abolition and consolidation of oflScial posts had for its object the reduction of the number of officials without employment. Outside people, however, did not examine our reasons for the step, and as it was reported that we were being moved to radical alterations in the national usages they reasoned on that basis, and falsehoods were propagated without end. If we do not proclaim our real purpose, we have grave fears that this baseless gossip will increase and by disturbing the minds of the people completely frustrate our original intention, which was to strengthen the Empire. It was intended to consolidate the business managed by all the Yamens, such as the Imperial Supervisorate of Instruction, &c.. which were recently abolished as a measure of reform and in order to reduce the number oi unemployed officials ; but we find, on close examination, that if we reduce here we must augment there, and this would entail much circumlocution. It is better that all should remain as before, therefore let the Imperial Supervisorate of Instruction, the Office of Transmission, the Grand Court of Revision, the Court of Imperial Entertainments, the Court of the Imperial Stud, and the Court of State Ceremonial be established and transact their affairs as before ; there is no necessity to abolish them. The offices and posts without employ- ment in the provinces which should be abolished or consolidated shall continue to be thoroughly sifted and reduced. ■ ' With regard to the establishment of the official newspaper, the " Times," and the 'authorization given to scholars and people to present Memorials, the original purpose was that we should see with the eyes and hear with the ears of everybody, but the Court has now opened wide the path of access to the throne, and if there are useful "proposals for reform made in the statements of any of the different classes of Officials 'they are bound to be observed at once and set into operatior. At present, careless documents all alike in character pour in. All are full of frivolous statements, some even touch on the extravagant, and all are much wanting in order. Hereafter all officers whose duty it is to speak shall say what they have to say in '^^fitting language. In accordance with the prescribed rules, persons or officers who lare not competent to memorialize the throne are not permitted to submit ' sealed documents. The "Times," official newspaper, is of no benefit to good government and will vainly disturb men's minds ; let it be abolished at once. The Imperial colleges will be ground for the cultivation of talent. Apart from those which are already being gradually established in Peking and the provincial capitals, let the local officials in all prefectures and districts where it is proposed to establish minor colleges consider the local conditiolis and the convenience of the people. Let the temples* in the provinces remain j^s before; there is no need to makfe colleges of them and disturb the feelings of the people. Over and above the matters above mentioned, there are others which have been duly considered and put into operation, and others which are under consideration, such as trade, agriculture, re- organization of the army, and the development of resources, all of which are of undoubted consequence to the State and the. people, and must imperatively be introduced gradually. Those measures which are of no benefit to the present system of government, and are detrimental to the Constitution, need not be discussed. Let'theaix Boards and the Tsung-li Tamen make an investigation of these matters, consider them with special care, and submit a report to the throne so that they may be dealt with. , \ • 'V Th© Decree ©loses with an appeal to all classes of officials to give zealous assistance to the Emperor in carrying out the necessary reforms and stamping out abuses. ) Inclosure 4 in No. 386. Imperial Decree dated September 26, 189S. (Translation.) THE Board of Punishments have submitted a Memorial on a very grave ea.se, and request the. appointment of Imperial Commissioners to judge it conjointly. '■''['■' The Ministers of the Grand Council, together with the Board of Punishments and the Censorate, are hereby commanded to rigorously investigate the charges br-ought * N.B. — The original proposal was to turn them into colleges for the teaching of Western learnin"-. 294 against the ofladal criminals Hsii Chili-ch'ing, Yang Shen-lisin, Jui Lin, T'an Ssu- t'ung, Lu Kuang-ti, and K'ang Yu-wei's brother K'ang Kuang-jen. Chang Yin-huan has been several times denounced to the throne, and his reputation is a had one, but still he was not one of K'ang Yu-wei's band. Let the Board of Punishments hold him under temporary supervision and await an Imperial Edict. K'ang Yu-wei conspired to secure private ends, and his crime is exceedingly- grave. His accomplices, Hsii Chih-ch'ing and others, have been arrested and handed over to the Board of Punishments for trial. Besides the persons arrested, there is no guaranteeing that among officials and literati there may not be others who were seduced by him ; but the Court will act with great forbearance, and will not probe deeply, in order to make known our caution in inflicting punishments. No. 387. Sir C. MacDonald to the Marquess of Salisbury. — (Received November 14i.) My Lord, Peking, September 30, 1898. I HAD the honour to inform your Lordship, in a telegram of to-day's date, that six of the reformers referred to in my despatch of the 28th September were executed on the 28th instant. They included a brother of K'ang Yu-wei, the chief reformer, and, though subordinates, all were graduates and men of standing. Chang Yin-huan has been banished to Chinese Turkestan, where he is to be kept under rigorous surveillance. No precise crime is charged against him. The Edict announcing his punishment accuses him vaguely of being treacherous, fickle, and a sycophant. Last night a long Decree appeared dealing with the so-called conspiracy. K'ang Yu-wei is declared to have taken advantage of the Emperor's leaning towards beneficial reforms to plot a revolution, whiclx was to be opened by surrounding the Palace at Wan Shou-shan and seizing the Empress-Dowager and the Emperor. The haste in executing K'ang's chief accomplices, for it appears that the legal formalities had not been observed, is admitted to have been caused by Memorials, whose dominant note was fear of a revolution if punishment was delayed. The Emperor further states that he knows of many others, members of the '• Society for the Protection of the State," who are implicated, but that he will stay his hand and not push investigation further. I have, &c. (Signed) CLAUDE M. MacDONALD. No. 388. Sir C. MacDonald to the Marquess of Salisbury. — [Received November 14.) (Telegraphic.) . Peking, November 14, 1898. LI HUNG-CHANG has been ordered to Shantung to report xipon the best means of oDntroUing the Yellow River. This was announced by Imperial Decree yesterday. The Controller-General of the Yellow River, the Governor of Shantuno and Li Hung-chang are to work together in this matter. They are to submit a compre- hensive and efficient scheme to the Throne after having inspected the whole course of the river in the Province of Shantung. The task involves lengthened absence from Peking, and is an arduous one. Hsii, late Minister to Germany and Russia, and Hu Yil-fen, who negotiated the Newchwang Railway Loan with the Hong Koag and Shanghae Bank, have been appointed members of the Tsung-li Yamen. 295 No. 389. China Association to the Marquess of Salisburi/. — {Beceived November 16.) My Lord, 159, Cannon Street, London, November 14, 1898. THE announcement that Her Majesty's Minister had' obtained the consent of the Chinese G-overnment to an extension of British Kowloon Avas received with general and cordial satisfaction. Certain important strategical points which had been felt to constitute a menace to the safety of Hong Kong have been brought under control ; the sense of confinement has been relieved, and a prospect of relief from the constriction and espionage of the Chinese Customs has been opened up. The Agreement is couched, however, in general terms which leave much to be subsequently defined; and communications received from the Hong Kong Branch of this Association, express anxiety in regard to the conclusions that may be reached. Disappointment is felt, for instance, at the retention of Chinese jurisdiction in the City of Kowloon. That town and its suburbs have been a source of inconvenience to the Colony for many years, and hopes were entertained of bringing the whole area under police and sanitary control. The annoyance will undoubtedly be reduced, however, by obtaining control over the suburbs ; and the Committee trust that it will be found possible to exert beneficent pressure within the walls. The demands which have been put forward by the Customs authorities under cover of our promise to co-operate in safe-guarding the Chinese revenue, inspire more serious apprehension. That apprehension is probably exaggerated, because the pretensions of the Customs authorities appear inadmissible ; but there can be no doubt that it would be shared by every member of the Association if it were thought possible that they could be entertaine;!. The question is one of long-standing. Complaints of interference by the Chinese revenue-cruisers with the junk trade had been so persistent that cognizance was taken of the fact in the Chefoo Convention (1876) in the following terms : — " The Governor of Hong Kong, having long complained of the interference of the Canton Customs revenue-cruisers with the junk trade of that Colony, the Chinese Government agrees to the appointment of a Commission, to consist of a British Consul, an officer of the Hong Kong Government, and a Chinese official of equal rank, in order to the establishment of some system that shall enable the Chinese Government to protect its revenue without prejudice to the interests of the Colony." A Commission appointed in pursuance of that understanding agreed upon the following, among other conditions, which are expressed in an Agreement signed at Tien-tsin on the 11th September, 1886 : — " That an office under the foreign Inspectorate shall be established on Chinese territory at a convenient spot on the Kowloon side for sale of Chinese opium-duty certificates, which shall be freely sold to all comers, and for such quantities of opium as they may require." " That junks trading between Chinese ports and Hong Kong, and their cargoes, shall not be subject to any dues or duties in excess of those leviable on junks and their cargoes trading between Chinese ports and Macao, and that no dues whatsoever shall be demanded from junks coming to Hong Kong from ports in China, or proceeding from Hong Kong to ports in China, over and above the dues paid or payable at the ports of clearance or destination. " That the officer of the foreign Inspectorate who will be responsible for the. management of the Kowloon office shall investigate and settle any complaints made by junks trading with Hong Kong against the native Customs revenue stations or cruisers, and that the Governor of Hong Kong, if he deems it advisable, shall be entitled to send a Hong Kong officer to be present at and assist in the investigation and decision. If, however, they do not agree, a reference may be made to the authorities. at Peking for a joint decision." The Commissioners concluded with an expression of opinion that, " if the arrange- ments indicated were fully carried out, a fairly satisfactory solution of the questions connected with the so-called ' Hong Kong blockade ' would have been attained." The assumption was somewhat optimistic, as the arrangement has unquestionably proved more efficient for the purpose of protecting the Chinese revenue than for the alternative purpose of obviating the Customs blockade. The Kowloon Commissioner is, as a matter of fact, located in Hong Kong, where he has an office and a staff. His presence is not, however, recognized officially ; nor — thanks in a great measure, no doubt, to the discretion of the officers who have held the [2.j3] 2 U 20G j,ost — has their presence been seriously resented. No very definite objection could, in i'act, be offered so long as no official status was assumed, nor official action unduly obtruded. It is quite another thing, however, when the Government is asked to formally recognize the presence in Hong Kong of an Imperial Chinese Customs official and a Customs office and staff. It is still more serious when the Government is requested to authorize the collection, in Hong Kong, of duties {li-ldw included) on all goods and merchandize carried from or to any Chinese ports in Chinese vessels. To concede so much would be to place Hong Kong on the level of a Chinese Treaty port, and to accept for it the position of a fiscal dependency of Canton. The first admission would injure its status as a free port; the second would injure its prestige as a British Colony. Subsidiary demands that wharves and jetties shall be placed at the disposal of the Customs authorities to facilitate their operations; that the Customs cruisers and launches shall retain, in the waters of the newly ceded territory, the rights of seizure and search which they now enjoy; and that the Customs shall be allowed to retain their existing stations (two of which are in the very harbour, and others on islands in the immediate vicinity on the east and west) might almost suggest the presence of an underlying purpose to render impossible the acceptance of capital requests which it had appeared desirable, for some reason, to prefer. Grievances which had been, hitherto, in some degree sentimental Moiild then indeed assume a practical form. If the presence of Customs stations on the adjacent mainland and at the entrance of the harbour, and of Customs cruisers in the waters surrounding the Colony, has been a hindrance and a source of vexation M'hen these territories and waters were Chinese, the annoyance would be less endurable still when they assumed the character of foreign establishments within territory under British control. , Great allowance has been made for the position of Hong Kong, and greater allowance still for the inefficiency of Chinese Administration. The British Government does very much more for the Chinese fisc than any European Government would do for another Power ; and the Chinese Government responds by a degree of intrusion which no European Government would admit. It is no exaggeration to say that the entire native junk trade with the mainland is controlled by the staff attached to the Chinese Customs Office in Hong Kong ; for the Colony is supervised by Chinese native employes, while its waters are patrolled by Customs armed steam-launches ; and we may be sure that very little escapes such a system under European supervision. The arrangements made in pursuance of the Chefoo Convention may have minimised the ostensible trouble, but it is open to contention that the result has been attained at the cost of sacrificing the freedom of the port. The maintenance of the rule that junks shall not leave their anchorage at Hong Kong after dark may afford another instance in point. Instituted, no doubt, with a view to piracy rather than smuggling, it has nevertheless greatly helped the Chinese Customs authorities to prevent evasion of the cordon which they have found it easier to draw around the island than along their own coast, and has — since the original motive ceased to be cogent^-been regarded in the •Colony chiefly from that point of view. That Chinese traders and junk owners dislike these conditions is well known. Neither are the reasons which deter them from remonstrance far to seek, when we remember the methods of Chinese mandarins and the facilities which knowledo-e acquired in Hong Kong may afford for action on the mainland. The junk trade between Hong Kong and the mainland is an important distributing medium. If existing arrangements have prejudicially affected it, the intensity of the resentment felt at the prospect of further interference becomes intelligible. it may be permissible to insist, again, that the Chefoo Convention had two aims, although the second was imperfectly attained. The Chinese revenue has been safe- guarded ; but the annoyance from the Canton Customs revenue-cruisers remains • and the removal of the Customs cordon was one of the greatest benefits which the Colony hoped to derive from the extension which it has so long desired. It is suggested that opium affords the key of the situation. The temptation to smuggle a highly-taxed article which represents a large value in a small compass is great, and a good deal of what the Imperial Maritime Customs authorities call smuo-glin"- used, no doubt, to go on. That is to say that although the opium exported from^'Hong Kong to the mainland contributed, measurably, to the provincial revenue and to the i)rivate incomes of the provincial officials, it failed to benefit the Imperial Exchequer. , 297 &■' There is not, in casting this side-light on the situation, any purpose of deprecating the attitude which Her Majesty's Government saw fit to adopts It is desirable, however, •to'Tihrow all the facts of the situation into relief when we encounter ulterior demands ^uch as those which the Association is concerned to combat. The practical question is how willingness to assist a service and a purpose, towards which Her Majesty's Goverri- ■meht has naturally been sympathetic, can be reconciled with the desire of the Colony to seq the Chinese revenue stations and revenue-cruisers removed beyond the limits of British territory and British waters. : i-'' It has been suggested that this might bo accomplished by taking the collection of the opium revenue into our own hands. Hong Kong is rightly jealous of the status as an absolutely free port, to which its commercial prosperity is largely due. The creation ■of bonded warehouses, and insistence that all opium imported into the Colony shall be 4«posited therein, would be a certain infringement upon that status : but the incon- venience of admitting a foreign preventive service would be immeasurably greater. That is, then, the solution which is proposed. ' The Hong Kong Government would, presumably, in such case undertake to 'Collect as an export lax, and hand over to the Chinese authorities (after deducting the cost of collection) the recognized amount which the latter ought properly to collect as an import duty on their own soil. The service would be great, and the consideration required should be the complete removal of the Chinese customs and all its accessories beyond British limits. It would be desirable, as a corollory, that the proposed boundary-line of the new concession should be rectified. That which has been indicated appears arbitrary and unsatisfactory, in that it presents no natural division, whereas a good natural frontijer exists in a range of hills a little farther to the north. The extension would be slight, and the change would be an advantage to the Chinese nor less than to ourselves, as passes through hills can be more easily protected against smugglers than the open frontier which was at first proijosed. The terms of the Convention appear sufficiently elastic to permit the rectification as a logical consequence of surveys, which have, presumably, for their object to ascertain the line along which a boundary can be snost conveniently drawn. It would be desirable also, as a second precaution, to cease to recognize tlie Customs revenue-cruisers as men of war, as it is in that capacity that they haunt the ^waters of the Colony, to the constant vexation of all who have its prestige and inde- pendence at heart. The importance of this reservation become evident in face of the stipulation that "the existing landing-place near Kowloon city shall be reserved for the convenience of Chinese men-of-war, merchant, and passenger vessels, which may come and go and lie there at pleasure." The trade of Jersey with France is not comparable in volume to the trade of Hong Kong with Kwangtung. The situations are, however, analogous, and the mere supposition of the French authorities making, in regard to Jersey, such demands as the Chinese authorities are understood to have made in regard to Hong Kong, appears sufficient to demonstrate their inadmissibility. I have, &c. (Signed) R. S. GUJS^DRY, Honorary Secretary. P.S. I have the honour to inclose a duplicate of this letter, which the Committee trust that your Lordship will be good enough to communicate to the Secretary of State for the Colonies. R. S. G. Inijlosure 1 in No. .389. Hon^ Kong Branch of China Association to General Committee, London. Dear Sir, Hong Kong, July 30, 1898. IMPORTAlsT information has reached this branch in regard to the demands made upon the Hong Kong Government by the Imperial Maritime Customs, in connection Witt the recent accession of territory to this Colony. The matter has been before the Committee of this branch, and, at their request, I address you on the subject. I am sending you at the same time a short wire as follows :— '^ Customs demand plenary powers Hong Kong new territory. Strongly oppose. Letters follow." [253] 2 R 2 298 You are fully acquainted with the position occupied by the Imperial Maritime Customs in Hong Kong, at the present moment, under tlie arrangements made in September 1886 by the late Sir James Russell, under the provisions of the Chefoo Con- vention. For present purposes it is sufficient to say that their presence in the Colony is simply tolerated. They have no official position. They are not recognized and, in theory, the whole work of the Customs is done on the opposite mainland of China. Under the Convention of the 9th June last the whole of the mainland opposite Hong Kong, and for a considerable distance east and we.st becomes practically British territory (the City of Kowloon, about which we wired you excepted) under a lease for ninety-nine years. This Convention has not yet been published in Hong Kong, so that we do not know what special provisions there may be in it for the control and manage- ment of the new territory.- We are assured, however, that there is nothing in it about the Customs ; but that, at the same time the Convention was signed letters were exchanged between our Minister and the Tsmig-li 7 amen, to the effect that the British Government would do all it could to safeguard the Chinese revenue in the new territory ; and in connection with that promise the Chinese authorities have put forward the following demands : — 1. That the Commissioner of Customs now known as the (Chinese) Kowloon Commissioner shall be fully recognised in Hong Kong and by the Hong Kong Govern- ment as an Imperial Chinese officer, and his office in tlong Kong shall also be recognised and acknowledged. 2. That the Imperial Maritime Customs shall be fully authorised and empowered to -collect in Hong Kong all duties, li-kin included, on opium and on all goods and mer- chandise carried from or to any Chinese ports in Chinese junks or vessels. 3. That the better to enable them to do this they shall have set apart for them in the harbour two or more wharves or jetties, close to the junk anchorages. 4. That their cruisers and launches shall be permitted to exercise the same rights in the waters of Mirs Bay, Deep Bay, and all the waters newly assigned to us as they have done to date, i.e., complete access to all portions at all times with full rights of seizure and search in respect of all vessels, as if the waters Avere wholly Chinese. 5. The right to retain all their existing stations, Capsui-moon, Lai-Chi-Kok (in our very harbour) Fat-tow-moon, &c. (If there is one benefit we hoped to derive from the accession of territory, more acceptable than another, it was the prospect of getting rid of these stations.) 6. Extension of all the existing Ordinances regulating the movement of raw -opium and the preparation and sale of prepared opium to the new territory, with amendments and alterations to cure all existing defects and make them more stringent and binding. 7. That our Government should reward more liberally and under special provisions all officers of the Government who show themselves zealous and active in enforcing these orders and in making captures. 8. That all forfeitures, &c., should be divided equally between the Hong Kong , Government and the Imperial Chinese Government. 9. That an accredited officer of the Chinese Customs should be empowered at all times to enter and inspect the godowns, factories and store of the opium farmer, and examine his books. 10. That no arms, ammunition, explosives, or contraband (^f any description (this includes opium, salt, &c.) should be exported from Hong Kong to any Chinese port without the permit of the Chinese Customs in Hong Kong. 11. That all necessary legislative measures shoi^ld be prepared and passed to give effect to the above demands. My Committee desire me now to impress it upon you that these demands or proposals are, in their opinion, wholly inadmissible except as to ^No. 6, and that they should be most vigorously opposed in the interests not merely of trade, but of the position and prestige of Great Britain in Hong Kong and South China. The Imperial Maritime Customs should be required to remove all their existing stations from the leased territory to some points on Chinese territory outside the boundaries of our new Concession; and no further recognition should be afforded them and no further powers or privileges granted them in Hong Kong, or in the new territory, than they now possess in Hong Kong. We should all be glad if they could be got rid of entirely out of Hong Kong and and out of the surrounding waters ; and if the Chinese could be induced to collect 299 their Customs revenue in their ports as every other nation does, and not on the high seas and hy way of a blockade of our island. An opportunity now occurs for the revision of the existing arrangements ; but any revision ought to be in the direction of the loosening of our bonds and not of their being rendered more stringent and more weighty. I have, &c. (Signed) JNO. J. ERANOIS, Chairman. Inclosure 2 in No. 389. Letter from the Hong Kong Branch of the Association, (Extract.) September 2, 1898. AT a meeting of the Committee held on Thursday last, the following resolutions on the subject of the Imperial Maritime Customs establishment in and about Hong Kong were passed. Similar resolutions had been passed the same afternoon by the €ommittee of the Hong Kong Chamber of Commerce, so that they may be taken to represent the most advanced opinions of our leading men in the dispute now pending between the Customs and the Colonial Government. 1. That the customs office be no longer permitted to collect duties in the Colony or its waters. 2. That all opium arriving in the Colony be accounted for either through the agency of bonded warehouses or otherwise. 3. That the Government do all in their power to protect the Chinese revenue, more especially with regard to the opium farmer. 4. That the revenue stations and revenue-cruisers be removed beyond the limits of British territory and British waters. No. 390. The Marquess of Salisbury to Sir C. MacDonald. Sir, Foreign Office, November 16, 1898. THE Chinese Minister, in the course of a visit which he paid me to-day, inquired whether Her Majesty's Government would be willing to assist the Chinese Government in obtaining the services of English engineers for the purpose of advising as to the best means of preventing doods in the Yellow River Valley. I advised Loh Feng-luh to consult the authorities at the India Office on the subject, and also Sir C. Scott-MoncrieflF who had great experience of engineering works of this description. I am, &c. (Signed) SALISBURY. No. 391. The Marquess of Salisbury to Sir C. MacDonald. Sir, Foreign Office, November 16, 1898. THE Chinese Minister, who called here to-day, inquired whether Her Majesty's Government intended to send 10,000 men to Wei-hai Wei, an announcement to this effect having appeared in a Shanghae newspaper. I replied that I had no knowledge of any such steps being contemplated, but that a much smaller number of men would probably be sent to occupy Lui Kung Island. I am, &c. (Signed) SALISBURY. 300 No. 3,92 t. Sir C. MacDonald to the Marquess of Salisbury l-rrr:{B.cc.eiueduNov€mber 20.y r.,[r,.> ; I J*' (Telegraphic.) . • -- - Peking, November 20, 1898. GENERAL TUNG'S Kansu troop&;liave ;proceeded by orders to the northern frontier of Cliihli ; see my telegram of the 6th instant. No further action -vvill be required if the situation here does not now alter. ■1 .u No.- 393. • : Sir. C. M'acDonald to the Marquess.of Salisbury,— (Received November 20.) ' (Telegraphic.) ■/' , Peking,. Nove)nber 20-, JS^d^^ A BRITISH missionary, namecVElemiH^jiiasTbeen^ murdered irt South Kweichow. No details are yet to hand. Above reaches me by telegraph, fvon> ^er Majesty's Consul at Qlmugking.r . „^,tocI -r7r> No.soj^: Admiralty to Foreic/n .Office.— (Received Npvemb.er 21.). ,;.j.^ ., /..,-. Sir, 4eking previous to his departure. He declares the plot against the Emperor to be in conception and execution almost purely Manchu, and regards it as the result of the Emperor's conveision to the cause of reform, to which the high Manchu officials, and the Empress-Dowager are stubbornly opposed. He shows no sign of suspecting any foreign Power to have had a hand in the coup d'Stat, and has only once made vague reference to a supposed Secret Treaty between Russia and the Chinese Court for the support of the Manchu dynasty. From his manner of mentioning this it is plain that he has no definite knowledge that any such Treaty exists, nor of its terms or character. It must he remarked, however, that his knowledge of China's relations with fmeim Powers and of negotiations with them is very slight; he appears to have been absorbed in questions of internal reform and to have paid little or no attention to matters of foreign policy. He speaks generally of the desirability of Anglo- American alliance for the protection of China, and of the danger lo the world ol Russian control of the masses of Chinese, but only as a man repeating what he has read in the way of wide political speculation. ^ b 309 According to K'ang's account the relations between the Empress-Dowager and the Emperor have never been anything but strained. She has resented all attempts on his part to exercise real power, and he has felt deeply the position of inferiority and subjection in which she has until recently succeeded in keeping him. Until the Emperor became an ardent convert to the cause of reform this struggle seems to have been mainly one for power generally, without any striking difference in the ends for which power was to be used, and high officials sought the favour of the Emperor or Empress according to their belief in the probability of the one or the other obtaining or keeping the upper hand, the opinions of these officials as to the necessity of reform or their contrary determination to keep to the old ways, not entering into the question. It was, in short, a conflict involving no difference of principle. This state of things was changed when the Emperor became a reformer Whereas any given official might previously have felt assured that if he adhered to the Emperor's side and the Emperor ousted the Empress from power he would have the reward of comfortable continuance in office on the old lines, it was now evident that supporting the Emperor meant acquiescence, if not zealous co-operation, in changes that might seriously affect the whole position of the official class, curtailing their authorit\' and diminishing their pecuniary gains, besides exposing them to the risk of being removed to make place for younger men in fuller sympathy with the Sovereign's ideas. The Emperor, moreover, in seeking guidance in the new path on which he had entered, naturally turned to subordinate officials who had imbued themselves with Liberal ideas, rather tiian to the high officials who represented the ancient Con- servative view. Of the latter, the Manchus were the most bigoted, and to them the new policy was even more distasteful than to their Chinese colleagues. Their dissatisfaction grew deeper with each successive P^dict revolutionizing existing practice, and reached its climax when it was reported (according to K'ang, with truth) that the Emperor was thinking of altering the national coiffure. To the Manchus the abandonment of the queue, imposed as a symbol of conquest on the Chinese, was equivalent to a renunciation of Manchu sovereignty. The Empress-Dowager saw her chance in all this discontent, and placed herself at the head of what might be called the Reactionary party. It is not certain whether they contemplated any immediate action, though preparations were being made to bring troops to Peking under one of Yung Lu's Lieutenants named Tung Ch'iian, but matters were brought to a head by the Emperor's announcing his intention of holding a review of troops at Tien-tsin and by his shortly afterwards sending for Yiian Shih-k'ai, who commanded a body of foreign-drilled troops near Tien-tsin, to have audience at Peking. These two steps were taken to indicate, and according to K'ang did indicate, an intention of supplying himself with adequate military support to crush opposition to his plans of progress. The Empress-Dowager and the Manchu party accordingly acted before there had been time for this to be done. In the above summary I have pieced together K'ang's various statements to me. The analysis of the change in the political attitude of high officials introduced by the Emperor's conversion to reform is rather mine than his, but the account I have given he would indorse as a true statement of the progress of events. Evidently there is room for doubt as to whether a different account may not be. the true one. It may be that the Empress-Dowager's hostility to reform is either unfounded or exaggerated ; that she has merely become convinced that the Emperor's hasty changes cannot be carried out without exciting grave discontent and possibly rebellion ; that it is not safe to alienate the leading men of the Empire by showing an inclination to set them on one side; that what had already been done had filled the minds of all officials with alarm as to what might come next; and that to prevent disaster the policy of the Government must be steadied and made more cautious. One need not suppose her to have been moved by no other considerations than these, but these may have had some weight. They would be strongly reinforced by the prospect of regaining complete ascendency in the Government. Which of the two possible explanations is the true one is a problem on which subsequent events in Peking will have thrown light. The rumoured severity shown towards the Reform party seemi^ to support K'ang's statement of her hostility to change, Her reception of Prince Henry, which must be put into th? apposite seal©, 310 was due, he declares, to the urgent request of the Emperor, who believed it neces- sary in the interests of China's relations with foreign Powers. (Signed) HENRY OOCKBURN. September 27-29, 1898. No. 402. Sir P. Currie to the Marquess of Salisbury. — {Received November 28.) (Telegraphic.) Rome,^ November 28, 1898. INSTEUCTIONS have been sent to the Chinese Minister in London, who is also accredited here, to again urge that authority may be sent by your Lordship to Sir C. MacDonald to arrange for the withdrawal of the escort before the navigation is closed. The Chinese Government are pressing the same request at the other Courts, as they quite understand that all the escorts must be withdrawn together. His Excellency, who called upon me to-day, asked me to telegraph the above to your Lordship. No. 403. Foreign Office to India Office. Sir, Foreign Office, November 28, 1898. I AM directed by the Marquess of Salisbury to inform you that in reply to a recent request from the Chinese Minister for assistance and advice Avith a view to the prevention of floods in the Yellow River Valley, his Lordship recommended Lo Eeng Luh to apply to Sir Colin Scott Moncrieff, who has undertaken to supply him with a list of the best works on the subject. What the Minister, however, really most wished to obtain was the assistance of English engineers, skilled in dealing with inundations of this nature, and as this would probably be the only effective way in which Her Majesty's Government could render help in the matter, I am to inquire whether the Secretary of State for India would see any objection to applying to the Government of India for the loan of two or three ofl&cers for the purpose. Should the Government of India be willing to lend them, his Lordship would communicate further with Lo Eeng Luh as to the conditions on which they would be engaged. I am, &c. (Signed) PRANCIS BERTIE. No. 404. Sir C. MacDonald to the Marquess of Salisbury.— (Receded December 2.) (Telegraphic.) Peking, December 2, 1898. THE Sub-Commissioners of Mines for the Province of Szechuan have signed a preliminary Agreement with Mr. Pritchard-Morgan, M.P., for the financing and working of the mines of that province in conjunction with each other. The Sub-Commissioner of Mines for the Province of Szechuan are authorized to work all the mines in that province, with the exception of those which are already working. No. 405. Sir C. MacDonald to the Marquess of Salisbury. — {Received December 2.) (Telegmphic.) poking, December 2, 1898 LEGATION guards. ' Since the actual arrival of the guards the Tsung^i Yamen have never asked for then- withdrawal; neither have ^ny of the foreign Governments sent any recent 311 instructions on. the subject to their Representatives here. See your Lordship's telegram.* Navigation ceases for the winter very shortly. No, 406. The Marquess of Salisbu?'!/ to Sir C. MacDonald. (Telegraphic.) Foreign Office, December 2, 1898. WITH reference to your telegram of 2ncl December respecting the foreign guards at Peking, it appears to Her Majesty's Government that it is for the foreign lElepresentativcs to decide as to the date on which the guards can with safety he withdrawn. The request has received no encouragement here. No. 407. The Marquess of Salisbury to Sir C. Moo Donald. ('Jelegraphic.) Foreign Office, December 3. 1898. FOLLOWING telegi'am, dated the 2nd December, has been communicated by China Association from their Shanghae brau(;h : — "The French Consul has gone to Nanking, accompanied by a French man-of-war, and is trying to enforce great extension of their Settlement at Shanghae. "It is urgent that immediate steps should be taken to prevpnt increase of French jurisdiction where other nationalities have large interests at stake." Please report at once on this question. No. 408. Sir E. Satow to the Marquess of Salisbury. — {Received December 3.) (Telegraphic.) Tokio, December 3, 1898 IT has been agreed between the Chinese and Japanese Governments that if at Shashih another foreign Settlement is established, it shall be marked out in a situation lower on the river than the Japanese Settlement. No. 409. Sir C MacDonald to the Marquess of Salisbury. — [Received Decemker 5.) (Telegraphic.) Peking, December .j, 1898. HEK Majesty's Areting Consul-General at Slianghae telegraphed to me on the 3rd instant, stating that the China Association were anxious that I should telegraph to your Lordship that the Shanghae Branch of their Association viewed the demands made by the French at Nanking with grave apprehension. They fear that the acquisition of Pootung would follow on the surrender of the Chinese bund at Shanghae. and they have telegraphed in this sense to London. )JLv. Brenan, in forwarding this message, adds that, in his opinion, no grounds for such a fear exist at the present time. With reference to the above, the French Minister informs me that no concession at Pootung has been demanded, and that, Avithout first consulting the British Consul- General, no such demand would be made. * Repoaiin- No. ■102, [253] ■ 2 T 312 No. 410. Sir C. MacDonald to the Marquess of Salisbury. ^{Beceivei December 5.) (Telegrapliic.) Peking, December 5, 1898. EESPECTIN G the proposed extensions of the French Settlement at Shanghae, referred to in your Lordship's telegram of the 3rd December, Mr. Pichon informs me that he has forwarded the following instructions to the French Oonsul- General in Shanghae : — 1. All deeds to British property are to he registered in the British Consulate ; 2. All the Municipal Regulations are to be submitted for my approval before they can be enforced on my nationals ; ' , 3. All the titles to British property which are declared m order by the British Consul-General are to be considered so by the French authorities. The Admiral has sent a man-of-war to Nanking to look after British interests, at the request of Her Majesty's Consul-General at Shanghae. No. 411. Sir C. MacDonald to the Marquess of Salisbury. — {Received- December 6.) ^Telegraphic.) Peking, December 6, 1898. SHASHIH : Chino- Japanese Agreement, re foreign settlement. With reference to Sir E. Satow's telegram of 3rd December, I have the honour to state that Her Majesty's Consul at Shashih considers the impediment to free contract, with regard to land above Shashih or in Shashih itself, which would result from the proposal is an objection to it. Her Majesty's Consul also agrees with the general opinion of the mercantile community in this country that as a centre of active trade and enterprise, whether Br-itish or otherwise, Shashih will never succeed. No. 412. The Marquess of Salisbury to Sir C. MacDonald. Sii', Foreign Office, December 6, 1898. I HAVE received your despatch of the 11th October, reporting the repre- sentations made by you to the Tsung-li Yamen in consequence of the attack by a Chinese crowd in the streets of Peking on a number of foreigners, including a member of Her Majesty's Legation and an English lady, as well as the steps you took in conjunction with your colleagues, tor procuring a guard for the Legation. I approve your action in the matter. I am, &c. (Signed) SALISBUEY. No. 413. China Association to Foreign Office. — {Received December 7.) Dear Mr. Bertie, 159, Cannon Street. London, December 6, 1898. ALTHOUGH British interests in Cliina are by no means confined to the Yang-tsze region, everything connectc^d with that region has peculiar interest ; and the question of navigating the upper waters is being very seriously considered. The inclosed Memorandum, which has the full jipproval of the Committee, carries the question dealt with as far, perhaps, as it can be conveniently carried in that shape. Yours faithfully, (Signed) E. S. GUNDRY. 313 Inclosure 1 in No. 413. Memorandum respecting the Survey of the Upper Yamj-tsze. THE Foreign Office liave been gcocl enougli to communicate, for tlie information of the China Association, a despatcli from Her Majesty's Minister at Pelcing regarding the introduction of steam on the Upj)er Yang-tsze and the opening of Chengtu, the provincial capital of Szechuan, to foreign trade. Eight of access to Chungking by steam was granted vaguely in the Chefoo Convention (187f>), abandoned in connection Avith the negotiations for opening Tibet in 1890, and restored by Article VI of the (China-Japan) Treaty of Shimo- noseki in 1895. Chengtu is 350 miles by water and 220 miles by land beyond Chungking. Access to Chengtu implies permission, therefore, to carry'goods 200 miles farther into the heart of Szechuen, and the Association Avill learn with gratification that the opening of that important city as a Treaty port is kept in view as a political object. yir Claude MacDonald lays stress, justly, on the importance of endeavouring to reach the tipper Yang-tsze by steam., lie trusts that Mr. Little's recent enterprise will.be copied by others with larger craft, and that advantage will be taken of the opening of the inland waterways to place steamers on the river above the gorges. For while small steamers could, he conceives, be employed advantageously on the affluents, it is tolerably certain that large vessels could ascend 150 miles above Chungking to Hsu-chow (commonly known as Sui-foo). , He considers it an object of first-class importance, moreover, to investigate and settle definitely the question of navigation of the gorges ; " for, until the means of communication between Szechuen and the outer world are improved, that province will remain a potentially great but actually small field of foreign commerce." So great, indeed, ai'e the commercial advantages that would result if the Yang-tsze above Ichang were demonstrated to be navigable by steamers at a profit, that he asks whether the expense of a survey might not be partially borne by Her Majesty's^ Government. " What I would suggest," he continues, " is that the China Associa- tion or the Chamber of Commerce at Shanghae should be invited to take up the work,. with a promise of a grant-in-aid The best methods of carrying on operations must, of course, be decided by those intrusted with the work. It is obviously essential, however, that an expert in river steamer navigation should be employed." The Foreign OfB.ce have expressed willingness to receive any suggestion that the Association may have to offer on this point. Sir Claude's suggestion will certainly command the cordial appreciation of the Committee. The prospect of '' steam communication between Szechuen and the outer world" has been brought measurably nearer by Mr. Little's successful enterprise ; and the time has clearly come for a careful examination of the rapids and other dangers which obstruct navigation. These difficulties are caused by a succession of gorges, which narrow the channel, and in the breaks between which the principal rapids have been formed. The speed of the current at these rapids varies from a maximum of 8 to 10 knots,* when the summer floods are at their highest, to a minimum of 4 knots in some places in winter, Avhen the water is low. The rise and fall is great, varying from 50 to 100, and even 150 feet. Junks contrive to get up at all stages of the water. The chief danger seems to arise, in their case, from the necessity of hugging the shore — for the double purpose of escaping the current and facilitating towage. The stream in mid-channel is said to be comparatively free from danger, and sufficiently deep. This is confirmed by the rarity of accidents to descending junks drawing 6 feet. Rapids exist over 400 miles between Ichang and Chungking ; but the greatest difficulties are encountered in the .first 100 miles above Ichang. The several rapids present, naturally, varying degrees of difficulty. The worst are the Tung-ling, at the mouth of the Mi-tan gorge, which is about 500 yards long, and is infested with rocks ; the Tsing-tan, which comprises three rapids stretching over 2 miles ; the Yeh-tan, which is also about 500 yards in length ; and a new rapid, between 200 and 300 yards long, which was caused by the fall of a mountain side into the Lungwan gorge in September, 1896. That accident jeduced the width of the channel from 600 to 150 feet, and created an obstacle which was for the time insuperable. The Chinese authorities appear, however, to be gradually TeducirLg it by blasting and removing detriths at Ioav water. * The current in one rapid, the Miao-chi-tse, is estimated at 12 knots. [253] 2 T 2 314 A Memorandiim whicli Mr. Little has been good enougli to communicate for the information of the Committee conveys an impression that neither is the current insuperable by a full-powered steamer, nor are the dangers irremediable. The sympathetic attitude of the British authorities suggests the practicability of giving Sir Claude's proposal immediate shape. It is suggested that an expedition might be organized as follows : — 1. A Commander of Her Majesty's navy experienced in surveying. 2. A hydraulic engineer. 'ii. One or more experienced Chinese junk masters. 4. An upper Yaug-tsze pilot. 5. Two or more experienced captains of Yang-tsze steamers. Her Majesty's Government would be willing, doubtless, to give the services of a naval officer and an engineer. ' Each of the three principal Companies concerned in the Yang-tsze carrying trade would be willing, no doubt, to delegate a captain. The work could be carried on conveniently in junks with the aid, say, of a steam- launch, which can be chartered on moderate terms. A fund would have to be created to provide instruments, to pay the pilot and junk master, to pay for the hire of the necessary vessels, and other expenses of the expedition. 1 he cost need not be great, nor consequently involve an unreasonable demand on the liberality of the Treasury. An allotment of 5,0001. would probably more than cover the whole cost of such a survey as is proposed. An exhaustive survey and large outlay for improvements of the channel will be required, doubtless, later on ; every feature of the rapids will liave to be noted ; changes and peculiarities at high water, as well as obstructions, disclosed when it is low. The immediate project should, it is submitted, be less far-reaching. A j^reliminary survey on the lines suggested would enable salient features of the worst rapids to be registered, and an approximate estimate made of the cost of such blasting or other operations as appear to be urgent. (Signed) R. S. GUNDEY, Hon. Secretary, China Association. 159, Camion Street, December 6, 1898. Inclosure 2 in No. 413. Memorandum by Mr. Little respecting the Rapids on the Upper Yang-tsze. Hupeh. — Ascending from Ichang, the first rapid that presents any difficulty to a full-powered steamer is the Tung-ling (Pierced Mountain). The fall is not serious, but the river is infested with rocks necessitating a tortuous channel through them. The partial removal of two small reefs would greatly simplify the navigation. The current runs from 4 to 7 knots, according to the season. The next rapid met with is the Shin-t'an (new rapid), locally Ching-t'an. This consists of three rapids : really two races and one fall. The channel on the right bank over this fall allows ample room at the lowest water level ; but it impinges on a reef a quarter of a-mile below it, which lies almost athwart the channel, and is the cause of numerous accidents to ill-manned junks. This reef could be cut down with dynamite. Above this is the Yeh-t'en (flood rapid), a serious obstacle, but not dangerous: a smooth slope of water running 8 to 10 knots for a distance of half-a-mile. The next bad places are the two adjoining rapids of the Niu-k'ou (ox-head) and the Heng-liang-tse (transverse ridge). There is plenty of room, but the cross-currents, caused by outjutting reefs, lead to many capsizes. These could doubtless be modified by judicious blasting, but the work here is not so pressing as at other places. The above are all in the Province of Hupeh, and under the jurisdiction of the Viceroy of that region. Szechuen. — The next obstacle is the Miao-chi-tse (Temple Stairs). This is almost a facsimile of the Yeh-t'an, and offers no danger except in its SAvift current in winter, of 10 and 12 knots. This leads us on to tlie greatest actual impediment to the navigation (the " new rapid ") in the Yun-yang district, formed by the great land slide of 1896. This rapid has a fall at its head of 8^- feet in a distance of 100 yards, with hugh breaking waves 315 below and swift eddies, causing dangerous whirlpools (wliicli are ajDt to throw the junks caught in them on the rocks). Mr. l^yler, of the Imperial Maritime Customs, with two other engineers lent by the Lighthouse Department, was at work here all last winter (l;97-98), widening with dynamite the " gate '' in the reef over which this rapid flows, and, with a large staff of coolies, excavating the projecting point. For this work the sum of 3,000Z. had been allocated by the Viceroys of the i^\■o Provinces of Szechuen and Hupeh. The rapid has thus been greatly ameliorated, and has been rendered fairly passable at the lowest water by well-found junks ; but much yet remains to do. This is the last serious rapid, but from this point onwards are many places where the stream has failed to do what it has done in most reaches, viz., cut out a clean waterway, and has left mazes of flat-topped reefs in raid-stream, dividing the river into numerous channels. These places, where efiicient blasting would remove all danger, are — .1. The long group of reefs above the city of Peng-tu. 2. The Che-wei-tse (revolving reef), below Chung-chou. 3. The Tsan-pei-liang (silkworm's back reef), below Fuchow. All these reefs are covered in the rainy season, from May to November, and the danger is confined then to the swirling current throwing boats out of their course. Preliminary Survey.— This is a simple and inexpensive matter ; all that is needed is a small handy steamer for zigzagging across the river, and a couple of Chinese house-boats for the British Surveyors and theii' attendant blue-jackets. The steamer would take these junks in tow where required. The hire of these vessels for the three winter months, say, 1st January to 31st March (the time of lowest water level), may be estimated as under : — £ Charter of steamer, including ooal, crow (1 European and 12 Chinese), and insuiance, per month . . .. .. .. .. .. 125 Charier of two (Jhiuese Upppr Yang-tsz3 house-boats, each 100 feet long, per month (with their crews) .. .. .. .. .. 75 Food, hire of extra coolies to tow up big rapids when required; hiie of special local pilot, say. . . . . , . . . . . . 25 Hire of one experienced junk master and his assistants . . > . . . . 10 235 For 3 months .. .. .. .. .. 705 Navy officers and men's pay not included. Also any merchant captains deputed to accompany expedition would, of course, be paid by Steam-ship Companies deputing them. Steamer. — My twin-screw launch, the " Leechucn," is now up the river engaged in harbour work, and I should be very glad to charter her for this purpose. She is flat-bottomed, with spoon bow and stern, draws 2-9 feet light, is 55 feet over all, with 10 feet beam, has a comfortable European saloon forward, and is fitted out with all appliances for rapid work. ^^ (Signed) ARCH. J. LITTLE. 7, Park Place, London, December 3, 1898. jSfote. The cost of blasting with dynamite, as outlined above, must be estimated bv the Surveyors; but, seeing Avhat 3,001)/. has done for the Yiinyaag rapid, I should think 15,000/. or 20,000/. would cover the cost, and this could be quickly recouped by a toll on junks and steamers, which would be readily paid. Inclosure 3 in No. 413. Extract from Report by Mr. Bourne. ON the 22nd November. 1898, we took native boat and left Ichang for Chung- king, a distance of 400 miles. In a few hours we eaterod the Ichang gorge, and then for iOO miles we traversed that magic region of rapids and gorges, a visit to which can never be forgotten. This report is not concerned with its weh'd fairy-land scenery and extraordinary method of navigation, and I need only no'e, for the benefit of the public 316 at home, that no steamer, great or small, plies on the Yang-tsze above Ichang.f althcugh the Yang-tsze is the only channel of communication between the 40,000,000 of Szechuen and the provinces of the Lower Yang-tsze T alley, with Avhich they do a vast, trade, Whether a steamer could get over the rapids is a question for an expert. But T feel sure that, when China awakens to the immense advantage of steam navigation to her revejnue and to her people, the Upper Yang-tsze will easily be made navigable as far as Svichow-fu (Sui-fu). A careful survey wilf be made, and a passage cleared by dynamite in the very few places where it may be found necessary. The Yang-tsze at Chungking, above its junction with the Chia-ling River, is a stream 300 yards wide, with an average depth of 30 feet from bank to bank, and an average current of 3 knots at winter level. Its flood level in summer is 90 feet higher,, with an average current of perhaps 5 to 6 knots, and the river is then 630 yards broad. The fall between Ichang and Chungking is about 1 foot per mile There must be skilled control over the river channel, with power to do what may be necessary in the interests of steam navigation, before a permanent steam traffic can be expected. The traffic is now carried on by junks of an average capacity of 20 tons, the largest being of 80 tons. They are hauled up by main force of trackers — as many as 300 some- times to one junk. There are a good many wrecks, when cargo is damaged by water, but scarcely any is lost. Practically all the cargo that leaves Ichang arrives at Chungking some day; condition very uncertain. Mr. Eell makes the freight on cotton goods between Ichang and Chungking 3/. 8s. 3fZ. per ton. No. 414. The Marquess of Salisbury to Sir C. MacDonald. Sir, Foreign Office, December 7, 1898. I HAVE received your despatch of the 12th October, reporting that, at your request, the doyen of the Diplomatic Body addressed a note to the Tsung-li Yamen stating that the bringing of Legation guards to Peking was not due to the initiative of any one particular Legation, but to the deliberate and expressed wish of the entire Diplomatic Body, I approve your action in the matter. I am, &c. (Signed) SALISBURY. No. 415. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, December 8, 1898. PORETGN Settlenients at Shashih : Your telegram of the 6th December. We should not recognize the validity of an undertaking by the Chinese Govern- ment to the Japanese Government not to grant to us, if the necessity should arise, a Concession in a situation such as that between the Japanese Concession and the outlet of the canal leading to the Hau River, in lieu of present Concession. It is stated by China Association that Shashih is great centre of native trade, and that present British Concession is too far from business part of the town to be of use for such purpose. Xo. 416. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, December 9, 1898. AYITH reference to your telegram of the 5th December, urge Chinese Govern- ment, to refuse extension of Prench Settlement at Shanghae, and in lieu thereof to offer addition to international Settlement in which French applicants for land would be accommodated. * This was written before Mr. Liltle took up tlie " Lccchucn," wliicli is now at Chungking. 317 ; The inclusion of British-owned property in the lYench Settlement would cause great dissatisfaction in commercial circles here, and the safeguards offered might on some pretext be withdrawn ]ater on. No. 417. Sir C. MacDonald to the Marquess of Salisbury. — (Received December 11.) ■CTelegraphic.) Peking, December 11, 1898, EEEEBRING to ypur Lordship's telegram of the 8th instant, Mr. Clennell tele- graphs to me from Shashih to the effect that the topographical knowledge of the €hina Association is apparently defective. There is no British Concession, and the •canal has no outlet. Owing to its distance from the river, the Settlement near the canal would be of no value. The Consul adds that his despatches of the 6th and 10th December explain the situation. On receipt of these despatches I will telegraph again to your Lordship. No. 418. Sir C. MacDonald to the Marquess of Salisbury. — (Received December 11.) (Telegraphic.) Peking, December 11, 189b. THE Taotai at Newchwang has received instructions from the Tsung-li Yamen to grant extension of our Concession at that port. Above reaches me by telegraph from Her Majesty's Consul at Newchwang. No. 419. Sir C. MacDonald to the Marquess of Salisbury. — (Received December 12.) My Lord, Peking, October 18, 1898. IN continuation of my despatch of tlie 2Qth August last, I' have the honour to' inclose herewith copy of a despatch which I have received from Her Majesty's Consul at Hankow, reporting the payment by the Chinese authorities of the indemnity for the damage and losses involved by the recent rioting at Shashih. I have, &c. (Signed) CLAUDE M. MAcDONAIiD. Inclosure in No. 419. Consul Warren to Sir C. MacDonald. Sir, Hankoiv, October 3, 1898. I HAVE the honour to report that the Chinese authorities here have paid to me a sum of 9,216 taels in full settlement of the claims brought against the Chinese Oovern- ' ment on account of losses sustained by British subjects and their native ernployes during the riot that took place at Shashih on the '9th 'May last. The total amount of the claims lodged in the first instance was 12,924 taels, and as the Viceroy was anxious to know, without delay; what the claiin amounted to, I sent in the various claims as I received them. These claims were all made up by^ the native employes or agents of the British subjects concerned, and as on examination of them it was evident that some of them were much exaggerated, I suggested to the Viceroy that the amount to be paid should be settled by the Taotai and myself. After scrutiny of the claims and examination of the Chinese claimants, I cut down the total amount claimed to the sum above mentioned. 318 I may add that the Taotai offered 10,000 taels in full settlement, but this offer I did not feel justified in accepting. I have, &c. (Signed) PELHAM L. WARREN. No. 420. Sir C. MacDonahl to the Marquess of Salisbury. — {Received December 12.) My Lord, Peking, October 28, 1898. I HAVE the honour to inform your Lordship that a provisional Agreement has now been entered into between Her Majesty's Consul at Hankow and the local Taotai for the lease of the extension to the British Concession. I inclose copies of the corre- spondence relating to this Agreement, which I am sanctioning i subject to your Lordship's approval. On the 2nd March last the British Municipal Council at Hankow wrote a letter to Her Majesty "s Consul stating the conditions under Avhich they were prepared to accept the control of the proposed extension, and to furnish the funds required for the acquisition of the Chin('SL>-o^^ ned land. The Council suggested certain additions and alterations in the Agreement originally made by Mr. Carles, which Mr. Warren thought reasonable, and to which 1 saw no objection. With my concurrence, the assent of the Chinese authorities was obtained to these, and the resiilt is embodied in the provisional Agreement of last August (Inclosurc No. 4). T have much pleasure in testifying to the tact and abiiitj' shoAvn by Mr. Warren in brinofinr? these lona;. standing negotiations to a successful conclusion. I have, &c. (Signed) CLAUDE M. MacLONALD. Liclosure 1 in No. 420. Consul Warren to Sir C. MacDonald. Su', ^ Hankow, March 3, 1898. AT the request of the Chairman of the Hankow Municipal Council, I, on the 17tli ultuno, handed him a translation of the Agreement entered into by Mr. Carles and the Taotai Avith reference to the extension of the present British Concession. I have now received a letter from the Chairman, dated the 2nd March, a copy of which I beg to inclose, informing me on what terms the Council are prepared to take over control of the proposed extension. The Council suggest certain additions and alterations in the existing arrangement, and if these are agreed to, will provide the funds required to buy out the remaining Chinese owners of property on the new Concession. 1. I consider the stipulations as to the public road and the wall at the back reasonable; and I do not think that there would be much difficulty in obtainiu"- the consent of the Chinese authorities to the proposed arrangement. 2. The question of roads in the new Concession : Many of the old roads have been encroached upon by squatters or by land-owners, who have included the roads within their properties without having obtained any right or title thereto. It is pro- posed that the Chinese authorities should insist upon the ground thus encroached upon iaeing surrendered, and should hand the same to the Council, who will either use it, where practicable, for roads, or exchange it for other land in cases where it is desirable to alter the direction of the old roads. 3. The conditions of lease : I think that there is no doubt that objections will be raised by the foreigners at present owning ground on the proposed extension, to surrendering their title for anything short of a lease in perpetuity; and this is a question which there will be a difficulty in settling here. 4. The subdivision into lots : The ground is" at present occupied by lots of all sizes and shapes ; the property of various British and foreign owners. The subdivi- sion into lots as nearly rectangular as possible, will take some time, and will entail considerable expense upon the Council. In the present Concession a divided lot carries no vote with it ; and in the extension it would very probably happen in some instances 319 that a lot would be divided amongst three owners, none of whom would have a vote. I think that land tax should be levied according to area, taking the area of a lot in the present Concession as the standard, and that each complete area should carry a vote with it. 5. The question of the removal of graves, &c. : There seems to be no doubt that a good deal of property belonging to Chinese has been registered in foreign Consulates as the property of foreign owners, with the idea of extorting heavier compensation for removal than would have been allowed by the native authorities. The object of the Council is to defeat this scheme by stipvilating that, in the event of the Chinese authorities insisting on the removal of graves, houses, &c., they must arrange the com- pensation themselves with the so-called foreign owner. If the Council wish to remove graves, &c., from land, the property of a Chinese subject, they will, of course, com- pensate him ; but they expect the assistance of the Chinese authorities in arranging matters. On the whole the proposals of the Council seem reasonable ; and I venture to hope that they may meet with your approval. I think it would be advisable to take over the new Concession with as little delay as possible ; and, if you approve, I will try to arrange with the Taotai. The question of Chinese on the Concession will be a difficulty; but, seeing that on both the Russian and Erench Concessions there are still some Chinese remaining, there is no reason why the same privilege should not be extended to us. It will, of course, be a great advantage if we are able to buy out the Chinese at our leisure, instead of being subjected to the extortionate demands that will certainly be made, if we are forced to buy them ont at once. I have, &c. (Signed) PELHAM WAREEN. Inclosure 2 in No. 420. Sir C. MacDonald to Consul Warren. Sir, Peking, March 18, 1898. I RECEIVED yesterday your despatch of the 3rd March with regard to the extension of the British Concession. I see no objection to any of the modifications suggested by the Council in the arrangement made between Mr. Carles and the Taotai, and I shall be glad to learn that you have been able to obtain the consent of the Chinese authorities to the Council's proposals. With regard to the retention of Chinese in the extended Concession, I would suggest that you might possibly come to an arrangement with the Taotai that no further transfers of land within its limits to Chinese should be registered. This course, which was recently adopted at Tien-tsin, would have the effect of gradually reducing the number of Chinese landholders. As to the voting franchise on the extension, the Regulations, when framed, will have to be submitted to Her Majesty's Secretary of State, but I should be prepared to recommend for his approval any equitable arrangement such as you suggest. The question of the duration of the leases is one on which you should place yourself in communication with Her Majesty's Surveyor of Works. If the granting of leases in perpetuity is not opposed to any standing Regulation of the Office of Works, I should certainly be prepared to recommend that they be granted in the present case, though, of course, I am unable to pledge Her Majesty's Government. I am, &c. (Signed) CLAUDE M. MacDONALD. Inclosure 3 in No. 420, Consul Warren to Sir C. MacDonald. Sir, ' Hankow, September 15, 1898. I HAVE the honour to inclose a cop}" and translation of a provisional Agreement, entered into between the Taotai and myself, for the lease of the British Concession extension here. The Agreement has been siajnedin duplicate, and will be sealed with [253] ^ 2 U 320 our respective seals when it has received the sanction of yourself and the Tsung-li Tamen. This present Agreement is framed, as nearly as possible, on the lines indicated in my despatch i^o. 10 of the 3rd March last, and sanctioned by you in your despatch of the 18th March. With reference to the question of duration of leases, I learn from Her Majesty's Surveyor of Works that the Board of Works have decided that when the extension of the Concession becomes an accomplished fact, the Ofl&ce of Works must take over existing leases properly held, and those that are prepared to surrender their present leases must be accepted, and new leases on similar terms should be issued to them. The non-leased portions will be disposed of in accordance with the regular procedure. I have, &c. (Signed) PELHAM WARREN. Inclosure 4 in No. 420. Agreement for the lease in perpetuity of a piece of ground drawn up by Mr. Warren, Her Britannic Majesty's Consul at Hankow, for the management of international business, on the one hand, and by Taotai CM, wearing a button of the first class,, newly-appointed Provincial Judge for Hupei, Intendant of the Han, Huang, and T^ Circuit, and Superintendent of the Hankow Customs, on the other. IT having been arranged that the land at the back of the British Concession at Hankow is to be added to the aforesaid Concession, the matter is to be taken in hand, and the Taotai has been appointed by his Excellency Chang, Viceroy of Hukuang, to investigate the matter conjointly with Her Britannic Majesty's Consul, and to fix the boundaries. The Regulations which have been agreed upon are set forth in order below : — 1. At the back, the British Concession shall extend up to the city wall, with the exception of a strip of land 50 feet broad, which shall be public land. On the south it shall extend in a straight line from No. 1 Street (of the present Concession) back to the wall. On the north, it shall be bounded by the Russian Concession. Within these limits all the ground is to be leased to the British Government for a Concession. 2. Within the limits at the back of the British Concession, whatever land may have been already leased to the merchants of other nations, is only to be included in the British Concession when the British Consul has arranged matters sa,tisfactorily with the Consuls of the other nations, and has notified the Taotai to that eilect, when the land will be dealt with according to the Regulations of the existing British Concession. No Chinese will be allowed to have their domicile within the limits of the Concession. 3. The land within the limits at the back of the British Concession has an area of 337"05 mou (about 44"36 acres). Every year rent must be paid, consisting of land tax and tribute rice. The land tax is assessed at '117 taels per mou, making in all 39*435 taels. The amount of tribute rice payable is 2*84 sheng per mou, making in all 9'5722 piculs. Each picul of rice is commiited for 3 taels, making 28-017 taels. Land tax and tribute rice together thus amount to 67*452 taels, which is payable to the Hanyang Magistrate in the fourth moon of every year for transmission (to the Provincial Treasurer). 4. With regard to the land leased in perpetuity, and the houses on the land, and guild-houses and temples, and graves, if any of these pieces of land still belono- to a Chinese subject, the local officials will naturally have to hold an investivation and report to the Taotai, and conjointly with the Consuls, fix a fair price, and also allow for the expenses of changing houses and removing graves, and finally, fix a date by which they must haA^c cleared out. They will not allow exorbitant prices to be demanded, and the British Consul will also instruct the foreign merchants not to lower their prices unduly, so that it may be patent that all is done justly. If there are pieces of land already purchased by foreign merchants on which there are still houses, temples, or graves, inquiry must be made'of the foreign merchants and of the occupiers whether, at the time of the buvino- of the land, they had fixed upon a price for the buildings, and the amount of expenses entailed by changing houses and removing the graves, and had included it in the price of the land. If such arrangements have been made and carried out, it will be the duty 321 of the. local officials to see tLat the natives clear out. The Consul will, of course, deal with such foreign naerchants as have hought ground without having made arrange- ments for the price of the buildings on it, and for the expenses of changing houses and removing the graves, or who, having made such arrangements, have not yet carried them out. 5. Any old public streets or roads that may exist within the limits at the back of the British Concession, are not to be included in the assessment for the purchase of the land. When, later on, the foreign houses come to be built, if any of them encroach upon the space allotted to the roads, an equivalent amount of space must be left clear for the road, which must be made on the plan of the former one, and Chinese aad foreign merchants must be allowed to come and go at their pleasure. Furthermore, if the Chinese Government requires the land for the purposes of railway building, it must be yielded up. If at the time the lessee cannot come to a satisfactory arrangement with regard to the price with the lilailway Company, it will have to be settled in an equitable manner by the Taotai and the Consul conjointly. No excuses for refusing to yield up the ground will be admitted. 6. Both Chinese and foreign merchants are allowed to come and go at their pleasure on all the old public roads. If any Chinese subjects encroach on them and plant vegetables or build houses there, it wilf be the duty of the local officials to hold an investigation and order them to yield up the land, so that the Municipal Council of the Concession may make the roads. The Consul himself will have to deal with such foreign merchants as have already bought ground and are encroaching on the public roads by building houses on them. As regards the contingency of altering the course of the roads, it will have to be thoroughly threshed out, and both parties must be agreed, so that no injustice may be done. 7. Chinese and foreign merchants, without distinction, as w^ell as carriers of Government despatches, and men and horses carrying treasure, are allowed to come and go at their pleasure on the public street just inside the Ta-chih Gate, as well as along the public ground left vacant all along the wall, and formerly a public road. As regards tlie lighting and policing of this road, it has been settled that the Municipal Council of the Concession undertake that the road in question is also to be made by the Municipal Council. But although the road is to be made by the Municipal Council, it is still a public road, and is to be on the same footing as is the back road of the present Concession. 8. At present there are a large number of houses and mat-sheds, both large and small, OR the city wall which are foul smelling to the last degree ; it is but right, there- fore, that they should be sujDpressed. And after the Concession has been established, no one will asrain be allowed to build and establish himself on the wall. 9. All affairs on the Concession extension mutually involving Chinese and foreigners are to be dealt with according to the Regulations of the existing Concession. The above clauses, forming the arrangement of lease, have been drawn up in duplicate and signed, but they will not be sealed until they have been sanctioned by the higher authorities of the respective countries. Mr. Warren, Her Britannic Majesty's Consul at Hankow for the management of international business — (Signed) PELHAM L. WARBEN, Her Britannic Majesty's Consul. Taotai Chti, wearing a button of the first class, newly-ajopointed provincial Judge for Hupei, Intendant of the Han, Huang, and Te Circuit, and Superintendent of the Hankow Customs — (Taotai's signature.) Written at Hankow, 7th moon, 2ith year of Kuang Hsu (August 1898). No. 421. Sir C. MacDonald to the Marquess of Salisbury.— {Received December 12.) Myljordi, ^ ^ Peking, October 28, 1898. - IN my telegram of the 25th October I had the honour to report that a sa\'age assault was made on Sunday last, the 23rd, on a party of Europeans by Chinese f253l " 2 IJ 2 322 soldiers at Lukou-chiao, a village 10 or 12 miles from Peking. The party was visiting the railway bridge in course of construction at Lukou-chiao, whicli is the northern terminus of the Lu-Han line, and consisted of Mr. Campbell, the Assistant Chinese Secretary of this Legation, Major Radcliff, of the Indian Staff Corps, and Messrs. Cox and Norregaard, two railway engineers in the employ of the Chinese Government. The assailants belong to an army of some 10,000 men, which is under the command of a well-known General, Tung Eu-hsang, and was employed two years ago in the suppression of the Kansu rebellion. They were afterwards quartered at Paoting-fu, the administrative capital of this province, and remained there until recently, when they were ordered to encamp in the Imperial Hunting Park south of Peking. At Paoting they had made themselves notorious by an attack on a French Mission, and last week, during their passage along the Peking-Tien-tsin line, they mobbed the foreign engineer resident at Yang-tsun. As soon as I received Mr. Campbell's report of the assault, on the morning of the 24th, I addressed a note to the Yamen protesting against the presence of these uniformed brigands near Peking and the railway lines, and in view of their well- known anti- foreign professions, demanded their removal without loss of time to a safe distance. I, of course, insisted on a thorough investigation and punishment of the/ offenders. I saw the Prince and Ministers the same afternoon, and repeated my demands. The Yamen were very apologetic, and showed every disposition to meet my i wishes. They said a special Imperial Decree had been issued instructing Hu Ta-jen, the Director-General of Railways, to inquire into the affair and deal with the assailants at once, and they assured me that steps would be taken to pen the whole army tempo- ; rarily in the Hunting Park, and keep them out of mischief until they were drafted gradually to more distant stations. / , There can also be little doubt that the Chinese Government are themselves afraid 'of these Mahommedan brigands — for they cannot be called soldiers. The meeting of the foreign Hepresentatives, which I also reported in my telegram of the 25th instant, will form the subject of a separate despatch. I have, &c. (Signed) CLAUDE M. MacDONALD. No. 422. &> C MacDonald to the Marquess of Salisbury. — {Received December 12.) My Lord, Peking, October 29, 1898. AT the meeting of foreign Representatives mentioned ia my despatch of yester- day, and as stated in my telegram of the 29th October, a despatch was drafted to the Tsung-li Yamen setting forth in detail certain facts which had come to the notice of the Diplomatic Body as to the movement of large bodies of troops in and around Peking, and the disorderly and riotous conduct of a division of these troops com- manded by General Tung Puhsiang. The despatch dated the 27th instant, copy of which I have the honour to inclose, contains a request on the part of the Diplomatic Body to be informed for what reason these movements of troops have been ordered, and why they have been stationed in the neighbourhood of Peking and Tien-tsin and on the lines of railway. The Diplomatic Body further inform the Chinese Govern- ment that the stationing of these bodies of troops, who for the most part have not been paid, and are also without discipline, in the proximity of Europeans, might lead to the most serious complications, which would be very regrettable for everybody, but especially for the Chinese Government. Under these circumstances they advise the Tsung-li Yamen to issue orders to have the troops in question removed immediatelv. On the 29th instant an answer was received from the Tsung-li Yamen, stating that the troops of General Tung had been ordered to be stationed provisionally in the Southern Hunting Park to be reviewed, but that since their arrival they had been guilty of acts of insubordination and lack of discipline which had produced trouble, afld that if they were left any length of time in the neigfhbourhood of Peking, grave 323 disorders might ensue. A conference had therefore heen lield, and it had been decided to send these troops elsewhere soon. I have seen some of my colleagues since the receipt of this answer, and tlie' general opinion is that it is not entirely satisfactory ; and that if the Chinese Govern- ment do not take immediate steps to remove these troops, further and more energetic steps must he taken on the part of the Diplomatic Body. I have, &c. (Signed) CLAUDE M. Mac DONALD. Inclosure in Xo. 422, JJoyen of Diplomatic Body to the Tsung-li Yamen. Pelcin, le 27 Octobre, 1898. A son Altosse le Prince et leurs Excellences les Ministres du Tsung-li Yamen : PAR la decision du Corps Diplomatique, j'ai I'honneur d'exposer en resume a votre Altesse et a vos Excellences certains faits qui sont arrives a sa connaissance, Un nomhre considerable de soldats a et6 stationne entre Taku et Shang-hai-kuan, et des corps de troupes ont ete aussi places entre Tien-tsin et Pekin. On a fait venir du voisinage de Pao-tiug-fu la division du General Tung-fu-hsiang, au nomhre, dit-on, de 15,000 hommes, pour les camper au Pare Imperial du Sud, a 3 milles de distance de la porte meridionale de la ville. Le 20 Octobre, des soldats ont interrbmpu le traffic du chemin de fer a Yang- tsung et saisirent un wagonnet. Quand on le leur feprocha, ils jeterent des pierres au Superintendant Europeen et aux employes Chinois. C'etait un detachement des troupes du General Tung en route pour Pei-tai-ho. Le 23 Octobre, des soldats ont outrage pr^s du pont de Luku-chiao, sur la ligne de Pao-ting-fu, un grovipe compose de Mr. Campbell, de la Legation d'Angleterre, et trois autres Europeens, deux Anglais et un Norvegien. Un de ceux-ci se decida a saisir le meneur en juste defense, quand ils ont vu qu'ils prenaient des pierres, et alors ils furent attaques par quarante soldats, deux des Europeens ayant ete gravement blesses par les pierres. Cet outrage a ^te aussi commis par des soldats du General Tung, qui paraissaient n'avoir aucune discipline, et selon les derni^res nouvelles ils ont enlev6 une partie de la voie entre Lu-ku-chiao et Pao-ting-fu, ayant aussi coupe les fils t^l^graphiques. Le trafic sur cette ligne a ete complfetement interrompu. Ces hommes disent ouverte- ment qu'ils sont venus pour faire disparaitre les etrangers et toutes leurs inventions, chemins de fer, &c. Cette longue serie de faits a du provoquer un ^change de vues parmi mes honorables collegues, et c'est en leur nom que j'ai I'honneur de m'adresser a votre Altesse et vos Excellences pour leur demander quelle est la raison que le Gouverne- ment Chinois a eue pour faire venir tant do troupes et les reunir aux environs de Pekin et a Tien-tsin, sur les lignes des chemins de fer et les lieux habites ou fr^quent^s par des strangers. En attendant la reponse, le Corps Diplomatique accomplit le devoir d'avertir le Tsung-li Yamen que cette agglomeration de soldats indisciplines, sans aucune culture, et qui, en outre, ne sont pas payes, d'apr^s ce qui est officiellement declare dans la " Gazette de Pekin," menace tout le monde dans leurs personnes et dans leurs biens, non seulement les Strangers, mais aussi les Chinois pacifiques. Quant aux etrangers, ces soldats profitent do toute occasion pour les insulter grossierement. et ils proclament a haute voix qu'ils sont A-eniis pour chasser les " diables etrangers " et leurs inventions. On va meme jusqu'a dire et faire circuler dans la capitale, que le chemin de fer de Tien-tsin et le telegraphe seront coupes, aussitdt que les grands froids arriveront, pour supprimer toute communication et nous isoler. Je ne dois pas cacher au Yamen que coci serait d'une gravite tout a fait exccptionnelle, et que les Gouvernements etrangers no perdraient pas de temps pour prendre les raesures necessaires. C'est pour toutes oes raisons que mes honorables collogues me chargent de dire a votre Altesse et k vos Excellences qu'ils ne peuvent pas s'expliquer quel est le but que poursuit leGouvernement Chinois en amenant ces troupes, incapables de donner k'momdre protection, et utiles seulement pour cr^er des dangers et suaciter des conflitsg 324 Mes honorables collogues esp^rent que votre Altesse et vos Excellences y reflechiront inurement, et ils croient qu'il serait tr^s prudent d'ecarter, par I'^loignement immediat de ces troupes, I'occasion de complications qui seraient fort a regretter pour tons, mais principalement pour le Gouvernement Ghinois. En prevenant le Yamen a temps, le Corps Diplomatique accomplit un acte amical et il s'efforce de mettre fin a une situation anormale, qui au lieu de s'apaiser, semblo devenir chaque jour plus delicate et critique. Je profite, &c. (Signe) BERNARDO J. DE COLOGAN. (Translation.) Peking, October 27, 1898. To His Highness the Prince and their Excellencies the Ministers of the Tsung-li Yarain : IN accordance with the decision of the Diplomatic Corps, I have the honour to give your Highness and your Excellencies a short account of certain events which have come to its knowledge. A considerable number of soldiers have been stationed between Taku and Shang-hai kuan, and bodies of troops have also been placed between Tien-tsin and Peking. The division of General Tung-fu-hsiang, numbering, it is said, 15,000 men, has been brought from the neighbourhood of Pao-ting-fu, and encamped in the Southern Imperial Park, three miles from the south gate of the town. , On the 20th October the traffic on the railway was interrupted at Yang-tsung by ; soldiers, who seized a carriage. On being remonstrated with, they threw stones at the European Superintendent and the Chinese employes. It was a detachment of the troops of General Tung on its way t* Pei-tai-ho. On the 23rd October some soldiers insulted near the Luku-chiao bridge, on the Pao-ting-fu line, a party consisting of Mr. Campbell, of the British Legation, and three other Europeans, two Englishmen and a Norwegian. One of tlie latter decided to seize the ringleader in justifiable defence, when they saw them begin to take up stones, and they were then attacked by forty soldiers, and two of the Europeans were severely wounded by stones. This outrage also was committed by General Tung's soldiers, who appeared to be quite undisciplined, and who, according to the last news received, have destroyed part of the line between Lu-ku-chiao and Pao-ting-fu, and have also cut the telegraph-wires. Traffic has been completely stopped on this line. These men say openly that they have come to make the foreigners and all their inventions, railways, &c., disappear. This long series of occurrences has given rise to an exchange of views between my honourable colleagues, and I have the honour to address myself to your Highness and your Excellencies in their name to ask you for what reason the Chinese Government has sent for all these troops and collected them in the neighbourhood of Peking and at Tien-tsin, on the railway-lines, and in places inhabited or frequented by foreigners. While awaiting your reply, it is the duty of the Diplomatic Corps to point out to the Tsung-li Yamen that this concentration of undisciplined soldiers, who are quite uncivilized, and who, moreover, as has been officially stated in the " Peking Gazette," are not paid, is a menace to the person and property of everybody, the peaceable Chinese as well as the foreigners. As regards the foreigners, these soldiers take every opportunity of grossly insulting them, and loudly assert that they are come to drive out the "foreign devils" and their inventions. It is even stated and spread abroad in the capital that the Tien-tsin railway and the telegraph will be interrupted as soon as the cold weather comes in order to prevent all communication and isolate us. I must not conceal from the Yamen that this would be an occurrence of exceptional gravity, and that the foreign Governments would lose no time in taking the necessarys teps. For the above reasons my honourable colleagues charge me to state to your Highness and your Excellencies that they cannot understand what is the object of the Chinese Government in bringing here these troops, who are quite unable to give any protection, and whose presence merely causes danger and gives rise to disturbances. Mv honourable colleagues hope that your Highness and your Excellencies will o-jve careful consideration to the matter, and they think that it would be very prudent to remove by the immediate withdrawal of these troops, a possible cause of complications, which v/ould be much to be regretted for every one, but chiefly for the Chinesfe Government. In warning the Yamen in good time, the Diplomatic Corps is doing a friendly act 325 and it is its object to put an end to an abnormal situation which, instead of improving seems to be becoming more delicate and critical every day. .1 have, &c. (Signed) EEENARDO J. DE COLOGAN. No. 423. Memorandum of Agreement. — [Communicated by Mr. Cameron, December 13, 1898.) Memorandum of Agreement made the day of , 189 , between the British and Chinese Corporation (Limited) hereinafter called the Corporation), a Corporation formed under the laws of Great Britain and Ireland, of the first part, and the American China Development Company (hereinafter called the Development Company), a Corporation formed under the Isms of the State of New Jersey, United States of America, of the second part. WHEREAS the Corporation is organized to obtain Contracts, Decrees, and Concessions, and to construct and maintain railways and other public works and undertakings in the Empire of China ; xind whereas the jDevelopment Company has the same general objects, and both the Corporation and the Development Company are organized in kindred communities which have the same general theories of law, trade, commerce, and justice, and each intend to furnish the necessary capital to exploit the enterprises they may respectively undertake, and to provide for the management of the same ; And whereas having regard to the difficulties in the way of procuring such capital by reason of the fear that Contracts entered into by the Corporation and the Develop- ment Company in China may not enjoy the same inviolability that they receive in Great Britain and Ireland, and in the United States of America, it is desirable to endeavour to procure all protection possible for the upholding of such Contracts ; And whereas it is believed by the Corporation and Development Company that the Governments of their respective countries, by uniting in the assurance of protection of the rights of their respective subjects and citizens on which they have hitherto respectively relied in embarking capital in foreign countries will afford an effectual force for the protection of such enterprises ; And whereas it is believed that such united action by their respective Govern- ments will be promoted if arrangements are made for the co-operation and joint action of their respective subjects and citizens engaged in business in China, and in particular by the joint action of the Corporation and the Development Company : Now this Memorandum witnesseth for the consideration of the mutual covenants herein contained each party hereto agrees with the other as follows : — 1. Each party hereto shall offer to the other a participation of one-half of its own interest in any business hereafter obtained by it in the Empire of China a reasonable time after the same shall have been obtained, and the party to M'hom such participa- tion shall have been offered shall have the option to accept or reject the same within a reasonable time, and shall be under no obligation to accept such participation. Any such offer, if not accepted within a reasonable time, shall be deemed to be rejected. 2. In addition to the business to be hereafter acquired by the respective parties, this Agreement shall apply to the preliminary Contract which the Development Company has already entered into for the construction of a railway from Hankow to Canton, and to the preliminary Contract with Messrs, Jardine, Matheson, and Co., on behalf of the Corporation, have entered into for the construction of a railway from Canton to Kowloon, but this Agreement shall not extend to any of the following Contracts or Concessions which the Corporation has already entered into, or to any extensions or modifications thereof, viz. : — (a.) Preliminary Agreement for finanoing and working of a railway from Shanghae to Nanking, and for the working in conjunction therewith of the existing railway from Shanghae to Woosung. (6.) Preliminary Agreement for financing the construction and working (as extensions of the above lines) of raihvays from Soochow to Hangchow and Ningpo. ' (c.) Agreement for financing the extension of the Northern Eailway of China to Newchang. 326 (d.) Agreement (co-existent with the last Agreement) for mining. This Agree- ment shall not extend to any Contract or Concession in which either party is now interested, and w^hich, by the terms thereof, or by any other Agreement^ already entered into by them, they are prohibited from offering any share or participation therein to the other party. 3 With such offer as aforesaid, full detailed particulars of all preliminary expenses which have been incurred by the party offering the same in and about the obtaining of the business to which such ofl'er relates shall be furnished to the party to whom the participation shall be offered, and one-half of such expenses shall be paid by the other party if they shall accept such participation. 4. Por the purpose of convenience and mutual information, it is understood and agreed that the representative of the Corporation shall receive notice of and be entitled to be present at the meetings of the Managing Body of the Development Company in New York when any business in which the Corporation have accepted a participation is discussed, and that the representatives of the Development Company shall also receive notice of and be entitled to be present at the Board meetings of the Corporation in London when any business in which the Development Company have accepted a participation is discussed. Each party shall, as soon as practicable, appoint a repre- sentative for the purposes aforesaid, and shall give notice of such appointment to the other party. 5. Each party hereto shall use their best endeavours to obtain the support of the G-overnment of their respective countries to the common undertaking of the parties expressed in these presents, and to render all such mutual assistance to each other in the furtherance of their common enterprise in the Empire of China as circumstances may require, it being the intention of these presents that, so far as is practicable and possible, the parties hereto shall act in alliance and together in all undertakings obtained or prosecuted by either or both in the Empire of China, whether both parties shall participate in the business or not. 6. Each party shall only be responsible for themselves and not for the other, and nothing herein contained shall be deemed to constitute a partnership between the parties. 7. This Agreement shall continue in force until determined by either party giving to the other at their chief office six months' notice in writing of their intention to determine same, and at the expiration of that time this Agreement shall cease and determine, except so far as may relate to business in which a participation has been accepted as aforesaid. 8. The address of the Corporation for service of notices and offers is No. 3, -Lombard Street, London, and the address of the Development Company for the same purpose is No. 80, Broadway, New York, United States of America. In witness whereof the Corporation and the Development Company have hereunto caused their common seals to be affixed, the day and year first above written. No. 42'L. The Marquees of Salisbury to Sir C. MacDonald. Sir, Foreign Office, December 14, 1898. WITH reference to my desj)atch of the 16th ultimo, I have to inform you that the Chinese Minister called on me to-day, and that, in the course of conversation, I suggested to him that tlie Chinese Government might like to consult with Mr. Glass, an engineer going out to China on behalf of the Peking Syndicate, as to the measures to be taken for controlling the Yellow Biver. The Chinese Minister said that he would communicate with his Government on the subject. I am, &c. (Signed) SALISBURY. 327 No. 426. The Marquess of Salisbury to Sir C. MacDonald. Sir, Foreign Office, December 14, 1898. THE Chinese Minister informed me to-day that he was instructed to renew the request he had made some weeks ago, that you should be directed to withdraw the British guard of marines) which had been brought to Peking for the protection of Her Majesty's Legation. He said that similar representations were being made a St. Petersburgh and Berlin. I replied that I could not alter the tenour of the answer which i had previously given. With respect both to the necessity of providing for the safety of the Legation, and to the obligations which you had incurred towards your colleagues in the matter, the decision must rest with you, and your discretion must be left entirely unfettered. I am, &c. (Signed) SALISBURY. No. 426. Sir C. MacDonald to the Marquess of Salisbury. — (Received December 15.) (Telegraphic.) Peking, December 15, 1898. THE wives of the foreign Representatives, seven in all, were received in audience by the Dowager-Empress on the 13th instant, on the anniversary of her sixty-fourth birthday. The proceedings were entirely social, and the Emperor, who was also present, shjook hands with all the ladies. The Dowager-Empress made a most favourable impression, both by the personal interest she took in all her guests and by her courteous amiability. No. 427. The Marquess of Salisbury to Sir C. MacDonald. (Telegi'aphic.) Foreign Office, December 16, 1898. INSTRIJGTIONS have been given to Major Bower, now at Hong Kong, to enlist there and at Shanghae men as interpreters, buglers, and non-commissioned^ of&cers, and then to go to Wei-hai Wei to recruit privates within leased territory for service in the battalion which it is proposed to form at that place. No. 428. ^^.-^ Sir C. MacDonald to the Marquess of Salisbury. — (Received December 18.) (Telegraphic.) Peking, December 18, 1898. AN Imperial Decree, stating that no more railway proposals will be for the present entertained by the Chinese Government, has been officially communicated to me by the Yamen. The Chinese Commissioners of Railways are instructed by their Government to enter into negotiations for the construction of the Tien-tsin-Chinkiang line with the Hong Kong and Shanghae Bank and the Deutsch-Asiatische Bank. » No. 429. Sir C. MacDonald to the Marquess of Salisbury. — (Received December 19.) (Telegraphic.) Peking, December 19, 1898. IN repl}' to my request for the immediate opening of Nanning to foreign trade, which I urged upon the Yamen at an interview yesterday, the Prince and Ministers maintained that the Brovince of Kuangsi is still iil too distiubed a state. [25:il 2 X 328 On my strongly objecting to this as a reason for not opening Wanning, they undertook to telegraph to the Governor of Kuangsi, who is away from his post engaged in restoring order in other parts of the province, and consult with him on the subject. I shall take every opportunity of urging the early opening of Nanning on th# Chinese Government. ' • No. 430. Sir C. MacDonald to the Marquess of Salisbury. — {Received December 19.) (Telegraphic.) Peking, December 19, 1898. i HAD an interviciv wiLh the Yamen yesterday respecting the request made by M. Pichon to extend the French Settlement at Shanghae, and I informed them of the advice tendered in your Lordship's telegram of the 9th December. This advice 1 strongly urged them to follow, and they said they were perfectly willing to do so, but they were restrained by fear of the French, who had demanded with threats land in exchange for the cemetery belonging to the Ningpo Guild. I persuaded them to wait for a few days before agreeing to the terms of the French Government, and I informed them that Her Majesty's Government would cot submit to land owned by British subjects being handed over to the control of another Power. The Viceroy at Nanking is receiving moral support in resisting the French Consul's threats from the presence at that place of two of Her Majesty's ships of war. No. 431. Sir C. MacDonald to the Marquess of Salisbury.-- [Received December 20.) (Telegraphic.) Peking, December 20, 1898. MURDER of Mr. Fleming, reported in my telegram of the '20th November. The members of the Mission at Kueiyang inform me that, to obtain the punishment of the guilty parties, it is necessary that Her Majesty's Consul at Chungking should proceed to Kueiyang. Mr. Litton, Her Majesty's Acting Consul at Chungking, has reported that the local authorities are implicated in the murder, and I have authorized him to proceed to Kueiyang to inquire into the ease. No. 132. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, December 20, 1S98. WITH reference tp your telegram of the 18th instant : You should inform the Chinese Government that Her Majesty's Government claim, iu the event of their revoking their present resolve not to entertain any more proposals for railways, priority of consideration by the Chinese Government of all British applications already made. No. 433, The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) ' Foreign Office, December 20, 1898. .-WITH, .reference, to: your telegram of the 19th instant respecting the proposed extension of .the French. , Settlement at Shanghae, we. cannot accept the propo&althat the la,iid sbo.uld.iie handed .over . to . the . French, leaving us to negotiate Avith France. as regards British-owned property tberein. , ■ 329 Inform Yamen that we protest against any cession to France of land owned by British subjects at Shanghae without previous agreement with us, and until we have consented thereto. In maintaining this attitude they will be supported by us, and any departure from it we shall resent. * Would it be impossible for the Chinese Government to expropriate the Ningpo Guild and hand over the cemetery to the Erench ? According to Mr. Brenan's despatch of the 18th September to you, the Erench seem to have some groimd for complaint as regards the nuisance entailed by tlie cemetery. Which are the British-owned blocks, and how do they lie with respect to the rest of the Erench claim ? ^o. 434. The Marquess of Salisbury to 8ir Loh Feny Luh. Sir, Foreign Office, December 20, 1898. WITH reference to the request which you recently made for assistance and advice On the subject of the prevention of floods in the Yellow Biver Valley, I have the honour to inform you that the Viceroy of India, to whom the question was relerred, had reported by telegraph to the Secretary of State for India, that. he will endeavour to lend three engineers to the Chinese Government for the purpose, but befoi-e proceeding to their nomination, information is desired as to the character and scope of the operatioAs proposed, the probable duration of the deputation, the. amount ot I'Umuneration that may be offered to the officer in charge of the party, who would probably be a superintending engineer ov senior executive engineer, and to those who Would accompany him. I should be much obliged if you would give to me the information desii-ed in these points. I have, &c. (Signed) SALISBURY. No. 435. The Marquess of Salisbury to Sir C. MacDonald. Sir, Foreign Office, December 21, 1898. I HAVE received your despatch of the 28th October, reporting an assault on a party of Europeans by Chinese soldiers at Lukon-chiao, and stating that J^ou had addressed a strong protest to the Tsung-li Yamen against the presence of these soldiers near Peking, and demanded an investigation and the punishment of the Offenders. I approve your action in the matter. I am, &c. (Signed) SALISBURY. No. 436. Foreign Office to Admiralty. Sir, Foreign Office, December 21, 1898. I AM directed by the Marquess of Salisbury to transmit to you, to be laid before the Lords Commissioners of the Admiralty, a copy of a despatch addressed to Her Majesty's Minister in China in May last relative to the importance of obtaining further facilities for British trade in the Province of Szechuan.* The main obstacle to foreign commerce penetrating above Chungking is the difficulty of steam navigation on the Yang-tsze between Ichang and Chungkino-, where the current is said to run at a speed, in summer flood, of from 8 to 12 knots between banks of rocks — known as the Yang-tsze gorges. — and Avhere there are numerous rapids. * No. 145. [263] ____; 2X2 330 In his reply,* Sir C. MacDonald observes that so great are the commercial advantages which would result if the Tang-tsze above Ichang were shown to be navigable, at a profit, by steamers that he would recommend that the question whether the expense of a survey might not be partially borne by Her Majesty's Government should be taken into consideration. He suggested that the China Association, or the Shanghae Chamber of Commerce, should be invited to take up the work with a promise of a grant-in-aid. A copy of a Memorandum which has been furnished on the subject by the China Association is inclosed,t to which is appended a statement by Mr. Little, the only person who so far has taken a steamer above Ichang. The China Association suggest that a surveying expedition might be organized under a Commander of Her Majesty's navy experienced in surveying, and they are of opinion that 5,000Z. would more than cover the whole cost of a preliminary survey such as is now proposed. Mr. Little, however, it will be seen, estimates the expenses for the charter of a steamer and the necessary boats, coolies, &c., for three months at 7051. only. I am to inquire whether, having regard to the importance of the British mercantile interests involved, the Lords Commissioners of the Admiralty would sanction the employment on this service of a Commander of Her Majesty's navy, and also of an engineer. In such case, I am to suggest that the Commander-in-chief on the China Station might be instructed to confer on the subject with Sir Claude MacDonald, and at the same time authorized to afford the proposed surveying expedition all the assistance in his power, and to submit, either directly or through Her Majesty's* Minister, an estimate of the cost which under the scheme contemplated would fall on Her Majesty's Government. Application for the sanction of this expenditure could then be made to the Lords Commissioners of the Treasury by this Department. I am to add that Lord Salisbury would be glad to receive any suggestions from the Lords of the Admiralty in regard to the proposal. I am, &c. (Signed) EEANCIS BERTIE. No. 437. Foreign Office to Admiralty. Sir? Foreign Office, December 21, 1898. I AM directed by the Marquess of Salisbury to transmit to you, for the informa- tion of the Lords Commissioners of the Admiralty, copies of telegraphic correspondence with Her Majesty's Minister at Peking, J: relative to the proposed extension of the Erench Settlement at Shanghae. Sir C. MacDonald states that there are two British vessels of war now at Nanking with a view to affording moral support to the Viceroy in resisting the Erench demands'; hue Lord Salisbury desires to suggest, for the consideration of their Lordships, the advisability of sending a third ship of war to that port. I am, &c. (Signed) EEANCIS BERTIE. No. 438. The Marquess of Salisbury to Sir C. MacDonald. ^^^' ^-rmr *■ . 11.1 Foreign Office, December 23, 1898. WITH reference to your despatch of the 31st July, I transmit herewith for vour mtormation, copy of a letter, as marked in the margin, § relative to the imnortanee of obtammg further lacilities for British trade in the Province of Szechuan. I am, &c. (Signed) SAXISBURY. * No. 327. t No. 413. J Ko,. 407, 410, 416, 430, and 433. § No. 4.36 331 No. 439. Sir C. MacDonald to the Marquess of Salisbury. — {Received December 23.) (Telegraphic.) Peking, December 23, 1898. SHAISTGHAE. French demands for extension. Your Lordship's telegram of the 20th December. IN reply to an interview yesterday, at which I laid before the Yamen the substance of the above telegram, I was to-day waited upon by some of the Yamen Ministers, who, in spite of arguments which I strongly pressed upon them, maintained obdurately that it is quite impossible for the Chinese Government to expropriate the Guild. They also said that in August last they had promised the French GovernTnent that they would grant them something in exchange for the Guild cemetery-ground. They concluded by asking whether either of the following arrangements would satisfy Her Majesty's Government, and, if so, whether Her Majesty's Government would give China effective support if she refuses any other terms to the French Government. They propose : — 1. To grant the modified demand of extension France is now making, but not to include any British property which maybe therein. (This extension does not include the Chinese bund or Pootung) ; or 2. To grant this modified extension, including British property which may be therein ; but the Regulations under which the French Government are then to administer it are to be identical with those under which the general foreign Settlement is administered. No. 440. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, December 24, 1898. I HAVE received your telegram of the 23rd instant. Without topographical details, which we have not got, it is difficult to judge of the effect of the modified extension the French now demand. An extension of the International Settlement would, however, secure to the French all that they require commercially. Unless the Chinese are willing to give a similar exclusive settlement to other nations, it is very doubtful whether they have the right to give a new exclusive settlement to the French. The difficulty Avould be avoided by the extension of the International Settlement. No matter under what Begulations, we cannot agree that any British property should be given over to be administered by the French, and in refusing this demand we will support the Chinese materially. No. 441. Sir C, MacDonald to the Marquess of Salisbury. — (Received December 26.) My Lord, Peking, November 10, 1898. WITH reference to my despatch of the 28tli September respecting changes in the personnel of the Tsung-li Yamen, I have the honour to state that Yii Lu did not join the Board officially, as on the 28th September he was appointed Governor- General of Chihli in succession to Jung Lu, who was brought to Peking and gazetted Grand Councillor, General Controller of the Board of War, and Generalissimo of the Northern Forces, On the 8th October the Yamen informed me that Yiian Ch'ang had joined their Board, and on the 6th November that Hsu Ching-ch'eng had also been appointed. Yuan Ch'ang was for several years one of the Chief Secretaries of the Yamen, and has lately held various provincial posts. Hsii Ching-ch'eng is the ex-Minis ter to Germany and Russia. Last night's Gazette contained an Imperial Decree appointing Hu Ya-f^n to the Tsung-li Yamen, giving him the rank of a Vice-President of a Metropolitan Board, and relieving him of the duties of Governor of Peking. 332 Hu Ta-jen is Director-General of the Peking-Shanhaikuan Railway, and has recently negotiated the Agreement with the Hong Kong and Shanghae Bank for the Newchwang extension. I have, &c. (Signed) CLAUDE M. MacDONALD. No, 442. Sir C. MacDonald to the Marquess of Salisbury. — {Received December 26.) My Lord, Peking, November 12, 1898. REFERRING- to my despatch of the 28th October, I have the honour to inform your Lordship that two of the ringleaders in the attack on Mr. Camphell and other Europeans at Lu Kow-chiao were brought into Peking and flogged in Mr. Campbell's presence at the Yamen of the Governor of the city on the 29th October. The men were sentenced to 1,000 blows each, but Mr. Campbell, after eighty blows had been inflicted, begged that the flogging might cease. , It turned out that two other soldiers were struck by bullets from a small revolver,! which was used by one of the railway engineers in self-defence, and, chiefly for this, reason, I did not press for more floggings. I attached more importance to the punishment of the officer in command, who, it appears, had been warned beforehand by the railway authorities to keep his men away from the railway bridge, but had refused to do so. I consider him the person really responsible for what happened, and at an interview on the 31st October I told the Yamin that I should not be satisfied, and the incident would not be closed, until I saw his degradation published in the official Gazette. On the 4th November an Imperial Decree was issued ordering this officer, a Colonel named Chu Wan-jung, to be handed over to the Board of War for punishment. The Ministers inform me that this is likely to mean his degradation. I have, however, again warned their Excellencies that nothing short of this punishment will be satis- factory to Her Majesty's Government. I have, &c. (Signed) CLAUDE M. MacDONALD. No. 443, Sir C. MacDonald to the Marquess of Salisbury. — {Received December 26.) My Lord, Peking, November 13, 1898. WITH reference to my despatch of the i9th October, I have the honour to report that a meeting of the Diplomatic Body was held on the 6th instant to consider the Yamen's answer to the joint note of the 27th October, copy of which was inclosed in the above-mentioned despatch. ' M. Pavloff, the Russian Representative, was unavoidably delayed at Tien-tsin, and M'as not present. As the Chinese Government had, as far as could be ascertained, taken no steps Avhatever for the removal of the Kansu troops or to carry out the promises contained in their letter of the 29th ultimo, it was unanimously decided at this meeting to address another letter to the Chinese Government making certain specific demands regarding these troops. A letter was drafted and approved by all the foreign Representatives, stating that although a week had passed siiice the receipt of the Yamen's note of the 29th ultimo, no steps had been taken to move these troops, which the Yamen themselves acknow- ledged to be in a mutinous condition; on the contrary, the General Officer Com- manding the troops and some of his men had actually entered the city. The Diplomatic Body, therefore, requested the Chinese Government that the Kansu troops should quit the Province of Pechili not later than the 15th November, and, further, that the place to which they were going should be stated. If these requests were not carried out the respective Governments would them- selves consider the necessary measures to be taken to guarantee the safety of foreigners and to keep open the lines of railway and telegraph. 333 I have the honour to inclose copy of this letter ; the result of this meeting I telegraphed the same day to your Lordship and also to Admiral Seymour. I added that it was more than prohahle that the Chinese Government would accede to the request of the foreign Representatives, hut that if they did not, a joint occupation of the Shanhaikuan-Peking line seemed inevitable, A further meeting was held on the 7th instant to allow M. Pavloff to be present, M'hen the despatch was approved by all the foreign Eepresentatives. - At the meeting of the 7th instant the Japanese Minister, Mr. Fumio Yano, put into the hands of the doyen a Prench translation of a statement he had been instructed by his Government to make to the Diplomatic Body. It was to the effect that if the Chinese Government did not accede to the demands made by the Diplomatic Body, Japan would join with the other Powers in compelling them to do so. An ansM'^er was received from the Yamen on the 9th instant, copy of which I have the honour to inclose ; it stated that the Kansu troops would be reviewed on the 10th instant by Prince Ching, on the 11th he would present" his repprt, and an Imperial Decree would then be published sending the troops into garrison. On the 11th instant another meeting was called of the foreign Representatives, when a letter was dispatched to the Yam^n acknowledging the receipt of their note, and stating that the foreign Representatives waited with confidence the appearance of the Imperial Decree, but considered it their duty to draw the attention of the Prince and Ministers to the terms of their note of the 6th instant, especially as regards the date of departure of the troops and the place to M'hich they were to go. I have, &c. (Signed) CLAUDE M, MacDONALD. Inclosure 1 in No. 443. Doyen of Diplomatic Corps to the Tsung-li Yamin. Pekin, le 6 Novembre, 1898. LA note que m'a adressee le Yamen en date du 29 Octobre a confirms pleinement les raisons que le Corps Diplomatique a eues pour me charger d'ecrire celle que j'ai envoy ee le 27. Le Yamen y reconnalt en effet que les troupes du Kang-su a peine arriv6es ici ont manque a la discipline et ont produit des troubles, et qu'il y aurait beaucoup d'inconvenients si ces soldats indisciplines restajent longtemps aus alentours de Pekin. La note terminait avec la promesse d'envoyer bientot ces troupes ailleurs pour eviter des desordres, et le Yamen ne tarda pas a reiterer verbalement cette promesse a plusieurs Representants strangers. TJne semaine s'est deja ^coul^e, et le Corps Diplomatique observe avec autant de surprise que de regret que le Governement Chinois semble ne pas accorder a cette affaire toute i'importance qu'eUe a, puisqu'il ne s'empresse pas de tenir sa parole que le Corps Diplomatique crut s^rieuse et formelle. Loin de la, de nouveaux incidents ont eu lieu, et surtout un certain nombre de ces troupes et leurs chefs sont entr^s dans la capitale et y s^journent. Mes honorables collogues pensent qu'ils n'ont pas k se faire I'^cho des menaces et des propos injurieux que Ton attribue a des membres civils ou militaires du Gouverne- ment Chinois. lis veulent seulement affirmer que ces personnes se tromperaient fort si elles croyaient que leurs paroles pourraient avoir la moindre influence sur les resolutions des Representants etrangers, lesquels s'adressent en cette occasion au Yam^n pour exiger des actes, non pas pour lui offrir des motifs de raisonnements ou d'expositions de vue. ^ En s'inspirant de ces idees, le Corps Diplomatique me charge d'ecrire cette note au Yamen pour demander : — 1. Que ces troupes aient au plus tard le 15 ISIovembre q'uitte la Province du Pe-chih-li. 2. Que la destination qui leur sera donnee soit indiquee. Si ces decisions n'etaient pas prises et notifiees au Corps Diplomatique, ce serait pour les Gouvernements etrangers le cas d'aviser aus mesures necessaires pour garantir la surety des etrangers et pour assurer la circulation sur les chemins de fer et la liberte des communications t^l^graphiques. Je profite &c., (Signe) BERNARDO J. DE COLOGAN. 834 (Translation.) Peking, November 6, 1898. THE note addressed to me by the Yamen on the 29th October has entirely confirmed the reasons which the Diplomatic Corps had for requesting me to write my note of the 27th. The Yamen in their note, in fact, recognize that the Kang-su troops, immediately on their arrival here, showed themselves to be without discipline, and caused disturbances, and that it would be very inconvenient if these undisciplined soldiers w^ere to remain long in the neighbourhood of Peking. The note concluded with the promise that these troops should soon be sent elsewhere in order to prevent dis- turbances, and the Yamen did not fail to repeat this promise verbally to several foreign Representatives. A week has now passed, and the Diplomatic Corps observes with surprise and regret that the Chinese Government does not appear to attach to this matter the importance it really possesses, since it has taken no steps to keep its promise, which the Diplomatic Corps looked upon as serious and formal. On the contrary, fresh incidents have taken place, and in particular a number of these troops, with their leaders, have entered the capital, and are living here. My honourable colleagues do not wish to repeat the threats and insults to which certain civil and military members of the Chinese Government are said to ha/e given vent. They merely wish to state that these persons would be very much mistaken if they believed that their language could have the least influence on the decisions of the foreign Representatives, who are now addressing the Yamen to demand acts, and not to argue or explain. Under these circumstances, I have been charged by the Diplomatic Corps to address this note to the Yamen to demand — 1. That these troops shall leave the Province of Pe-chih-li by the 15th November at latest. 2. That it be stated where they are to be sent to. If these measures are not adopted and notified to the Diplomatic Corps, the foreign Governments will have to take the necessary steps to insure the safety of foreigners, and to protect the traffic on the railways and the freedom of telegraphic communication. I avail, &c. (Signed) BERNARDO J. DE COLOGAN. Inclosure 2 in No. 443. The Tsung'li Yamen to Doyen of Diplomatic Corps. (Traduction.) Pekin, le 9 Novembre, 1898. NOUS accusons reception de la note de votre Excellence en date du 6 courant dont nous avons pris connaissance. Dans ce document il est dit que : " U s'est ecoule d6ja une semaine et on n'a pas tenu aussit6t la parole promise, que tons les Repre- sentants croyaient sAve et formelle." Nous, Prince et Ministres, nous ne pouvons pas nous dispenser d'expliquer les raisons de cette affaire. Les troupes du Kan-sou sont venues ici poui- etre pass6es en revue. Leur nombre est d'environ plus de 10,000 hommes, qu'on a fait camper au Nan-yuan. Les charrettes necessaires pour les marches sont aussi nombreuses et (les troupes) doivent partir en detachements successifs. Ainsi il est diflScile d'ao-ir vite Ce n'est que liier qu'on a annonce que toutes les troupes etaient arrivees au complet' On a re^u un Ordre Imperial qui deleguait moi. Prince, pour passer la revue. J ai fixe pour cela la date du 10 courant. Le 11, je rendrai compte de ma mission au Trone et j'attendrai un Ordre Imperial qui d^tache les troupes a une garnison.' Quand le jour du depart sera fixe, nous en renseignerons immediatement votre Excellence. Nous prions en consequence votre Excellence de vouloir bien communiquer ce nni precede a tons les Representants etrangers pour eviter I'anxiete de I'attente 335 (Trauslatiou.) Peking, ISovemher U, 189S. WE beg to acknowledgtj receipt of your Excellency's note of the 6tli instant. This document states that : " A ucek has now passed and the promise has not been kept, which all the Eepresenlatives considered serious and formal." We, Prince and Ministers, think it our duty to explain this matter. The Kansti troops came here to be reviewed. They are more than 10,000 in number, and were sent into camp at Nan-yiian. A great many carts are required for the niarcli, and the troops must leave gradually in detachments. It is therefore difficult to act quickly. It was not till yesterday that we heard that the full number ox troops had arrived. An Imperial Order was received appointing me, the Prince, to hold the review. I have fixed the 10th instant for the review. On the 1 1th I shall present a Report on my Mission to the Throne, and shall await an Imperial Order assigning the troops to a garrison. When the day for their departure is fixed we will inform your Excellency immediately. We consequently request your Excellency to be s.) good as to communicate the above to all the foreign Representatives to avoid the anxiety of waiting. Inclosure 3 in No. 443. Doyen of Diplomatic Corps to the Tsung-li Yamen. Pe'kin, le 11 Novembre, 1898. J'AI eu I'honneur de recevoir et de soumettre a mes honorables collogues la note du 9 Novembre, oil votre Altesse et vos Excellences me communiquent qiie les troupes du Kang-su devaient etre passees hier en revue, qu'aujourd'hui votre Altesse informerait le Tr6ne de Taccomplissement de sa mission et qu'alors interviendrait un Ordre Imperial qui detacherait les troupes a une garnison. La note ajoute que le Yamen ne tardera pas a me communiquer la date du depart et I'endroit oii les troupes seront dirigees. Le Corps Diplomatique prend acte du fait que le Gouvernement Chinois a ordonne des mesures en conformite avec mes notes precedentes sur cette affaire, et notamment avec celle que j'ai envoyee au Yamen le 6 Novembre. Les Repr6- sentants etrangers attendent avec confiance la communication du Decret Imperial a ce sujet ; mais ils ont en memo temps le devoir de rappeler a votre Altesse et a vos Excellences les termes et conclusions de la dite note du 6 Novembre, specialement en ce qui concerne la date du depart des troupes et I'endroit o\x elles seront envoy6es. Je profite, &c. (Signe) BERNAEDO J. DE COLOGAN. (Translation.) Peking, November 11, 1898. I HAD the honour to receive and to lay before my honourable colleagues the note of the 9th November, in which yom- Highness and your Excellencies informed me that the troops of Kang-su were to be review((d yesterday, that, your Highness would inform the Throne to-day that your Mission had been carried out, and that an Imperial Order would then be issued assigning the troops to a garrison. The note adds that the Yamen will not fail to inform me of the date of departure and the place to which the troops are to be sent. The Diplomatic Corps notes that the Chinese Government has ordered steps to be taken in accordance with my previous notes in regard to this matter, and especially my communication to the Yam^n of the 6th November. s^qq-)s| The foreign Eepresentatives await with confidence the communication of the Imperial Decree on the subject ; but it is at the same time their duty to remind your Highness and your Excellencies of the terms and conclusions of the note ot the 6th November referred to, especially as regards the date of the departure of the troops and the place to which they are to be sent. I avail, &c. (Signed) BERNARDO J. DE COLOGAN. [25 3 J 2 Y 336 No. 441. Sir C. MacDonald to the Marquess of Salisbury. — ( Tieceived December 26.) (Tele2;raphic.) Peking, December 26, 1898. I TELEGRAPHED to Her Majesty's Acting Consul-General at Shanghae the two suggestions contained in your Lordship's telegram of the 24th December. Mr. Brenan re])lies to the effect that in the extension which the Yiceroj appears willing to grant to the French, about forty British-owned lots exist. Administration by the French will not be possible if the above are excluded. In his opinion, the second proposal made by the Yamen is the only feasible one, and the Agreement concluded between the French Consul and himself, and accepted b/ the French Minister, safeguards British interests, although Mr. Brenan thinks that even this extension will be opposed by the Americans, and he adds that the Shanghae Taotai appears uncertain as to how much of the French Hinterland he can grant us, and is, therefore, delaying delimitation. The Agreement referred to by Mr. Brenan is the one stated in my telegram of the 5th December to your Lordship. ^""o. 445. Sir C. MacDonald to the Marquess of Salisbury. — [Received December 26.; (Telegraphic.) Peking, December 26, 1898. FEENCH demands at Shanghae. As soon as I recei\ ed your Lordship's telegrams of the 19th, 20th, and 2'ith December, I repeated them to Her Majesty's Consul-General at Shanghae for his information and guidance. No. 446. Sir C. MacDonald to the Marquess of Salisbury. — {Received December 26.) (Telegraphic.) Peking, December 26, 1898. A REPORT reaches me, through Her Majesty's Consul at Chefoo, of a serious aiiti-foreign rising at Ichou-fu, in the Province of Shantung, as a consequence of which two Roman Catholic missionaries have been murdered apd a great deal of Mission property destroyed. Mr. Hopkins tells me that Lhere are no British missionaries in the affected district, so far as he is aware. No. 447. Acting Consul-General Brenan to the Marquess of Salisbury. — {Received December 27.) My Lord, Shanghae, November 21, 1898. I HAVE the honour to inclose a copy of a Contract for the Hankow-Canton Railway wliich has appeared in one of the local papers. I have every reason to believe ,that it is authentic. I have, &c. (Signed) BYRON BRENAN. Inclosure in No. 447. Newspaper Extract. Hankow-Canton R,ailway. The Carey- yVashbourne Syndicate's Contract. WHEREAS by Imperial Edict His Majesty the Emperor of China lias deputed his Excellency Sheng Tajen to construct a railway from the city of Hankow to Canton and a Chinese Company has been formed under the Tm'perial sanction called the 337 " China Railway Company," of which Sheng Taj^n is Director-General, his Excellency Sheng Tajen, in the above-named capacity, has deputed his Excellency Wu Ting-fang to enter into a Contract with the American Corporation known as the American-China Development Company. The Contract showeth : — 1. That the American-China Development Company hereby agrees to provide -1,000,000/. for the construction and equipment of the road. 2. To secure the loan the Chinese Government will issue Imperial Gold Bonds signed or sealed by the Director-General of the Chinese Railway Company, and countersigned by the Chinese Minister at Washington, United States of America, and they shall carry interest at the rate of 5 per cent, per annum payable semi-annually, said interest, however, not to begin to run except on bonds from proceeds of sale of which moneys in instalments for rights of way, construction, or equipment shall have been required or expended, as to guarantee or otherwise by the American-China Development Company and the Director-General, it being understood that the bonds shall be similar in form to the recent issue of bonds secured by the Imperial Customs, except that they shall be a first mortgage upon the railway and its appurtenances, and not upon the Customs, and they shall he delivered to and taken by the American- China Development Company as above at 90 per cent, of their face value, the total number of the said bonds to be in extent as shall appear to be required in accordance with estimates made by the engineer of the American- China Development Company to cover all items of expense or cost in order to produce at 90 per cent, the net amount needed to complete the entire work in accordance with maps and plans of said Company approved by the Director-General ; and said American-China Development Company hereby agrees to construct the road in accordance with said plans so approved. It is understood and agreed that the Director-General shall have sufficient time for examination by him of all of said plans and specifications submitted for his approval, and that his approval as above shall not be binding until given by him in writing. The American- China Development Company shall be at liberty to sell any or all of these bonds to the public, and any loss or profit shall be borne by the said Company. 3. The American-China Development Company shall build and equip, in accordance with the best modern systems, and operate, as herein provided, the line of railway, wifh all necessary appurtenances, from Hankow to Canton, and from Canton, if thought advisable, shall have the right of ,an extension to the sea and to such other places as may be agreed upon with the Director- General ; it being agreed and hereby understood that the Chinese Railway Company or the Director-General shall secure needed rights, of way and other needed facilities and privileges for the purpose of construction and operation of the said railway system by the American- China Development Company, It is further understood and agreed that the Concession hereby granted and acquired shall include the right to build short branches to insure important available traffic and connections ; all maps and plans for said extensions to be approved by the Director- General. In all questions relating to the taking up and progress of construction, or administration or management by the officials of the American-China Development Company, it is expressly agreed and understood that particular heed shall be paid to the opinions, habits, and ideas of the Chinese people, whether in construction or manao-ement — they shall be consulted and conciliated as far as practicable. Further- more, it is agreed and understood that wherever and whenever practicable, with the approval of the Director-General, Chinese shall be employed by the American-China- Develonment Company in positions of trust and responsibility in connection with construction and administration of the railway system herein contemplated and provided for. In regard to the earthwork, sub-contracts shall be entered into with the- Chinese, under the sanction of the Director-General or his deputy ; said work itself to-; be in accordance with plans and specifications of the Engineer-in-chief of the American-China Development Company, and under his supervision in the progress of ' construction and administration no interference or obstruction of Chinese or foreigners' will be permitted after the plans and specifications have been approved by the-* Director- General, nor shall the work of the survey party be interfered with or obstructed. '■ , - 4. As remuneration for superintendence and services the American- China • Development Company shall receive as compensation 5 per cent, of the entire cost of construction except land and earthworks. It is> agreed that all materials required for the railway shall be purchased in the open market at the lowest price obtainable; Chinese materials are to be • preferred, such as the products of the Hankow Iron [253] '^ 2 Y 2 338 Works, &c., if obtainable on equally reasonable terms and of equally good quality. I\o commission will be allowed to the American-China Development Company on the purchase of materials except as hereinabove provided. 5. After the completion of the line, or as much of the lino as may be in working order, it shall be operated under ofBcials appointed by the American-China Develop- ment Company, who shall be approved by the Director-General, and a bureau or a department analogous to that now existing for the Chinese Imperial Customs shall be formed. The Engineer-in -chief and his staff shall be under the jurisdiction of this department as well as all officials and workmen. Incompetent, disobedient, or neglectful employes shall not be retained in the service. All employes shall obey the orders of Railway Depai'tment herein provided for. 6. It is further agreed that, after paying salaries, wages, and other expenses for operating and maintaining the line and the interest on the loan, the said American- China Development Company shall receive 20 per cent, of the net profits to be represented by and in form of debentures to an amount equal to one-fifth of the cost of the line, which debentures shall be issued in the form agreed to by the Director- General and by the American-China Development Company at the same tinie as the first mortgage bonds herein provided for. The Chinese- American Railway €ompany shall have the right 1o redeem and cancel the debentures at any time at par ; that is to say, 100 dollars shall be paid for a face value of 100 dollars, but the said debentures, if not redeemed, shall expire without payment by limitation after forty-three years from the date of their issue, and shall say so on their face. 7. As soon as possible after ratification of this Agreement the American-China Development Company wall, by its agents, with competent engineers, and with the assistance of the officers of the Chinese Railway Company, proceed at once to make a survey of the above route together with the estimate of the entire cost of constructing the railway with all its necessary appurtenances, equipments, signalling apparatus, &c., and the above line shall be completed by the American- China Development Company within three years from the commencement of the work except for unfore- seen circumstances or delays beyond the control of the said Company. The expenses of the survey herein referred to shall be borne by the Chinese Railway Company as to its own part in the said survey and by the American-China Development Company as to its own part in the said survey. 8. The first mortgage gold bonds hereinabove provided for, and which shall be issued in accordance with this Contract, shall run for fifty years from their date of issue. It is understood and agreed that, in case the Chinese Railway Company shall desire to redeem all or any of said bonds during the first twenty-five years from their date of issue, the said Chinese Railway Company shall have the right to redeem any or all of said bonds at 102i ; that is to say, 102|- shall be paid for a face value of 100 dollars;, but after the period of twenty-five years from the date issue of said bonds shall have expired the Chinese Railway Company shall have the right to redeem all. or any of the said bonds at par; that is to say, 100 dollars shall be paid for a face value of 100 dollars ; all maturity bonds shall be redeemed at par unless extended. 9. After payment of all the bonds as above provided the Chinese Railway Company may, if so disposed, take the management of the line into their own hands exclusively and dispense with any or all foreign engineers and otlier employes nominated by the American-China Development Company. 10. As a guarantee for the performance of this Contract the American-China Development Company will deposit on the demand of the Chinese Minister at Washington the sum of 100,000 dollars as soon as this Contract shall have been duly ratified by the parties hereto ; said sum of 100,000 dollars to be placed in a Bank or Trust Company in JN'ew York or Washington in a form accepted by both parties, to remain so in deposit until the said sum of 100,000 dollars shall have been expended in connection with the work in China by the American-China Development Company or its agents ; and when it shall appear that the said sum shall have been expended by the American-China Development Company or its agents, the said amount in full shall be returned to the American-China Development Company, but it shall be forfeited and paid to the Chinese Minister at Washington, if it shall be shown within six months from date that at least an amount equal to said sum shall not have been "expended by the American- China Development Company or its agents. 11. With a view to enable the Chinese ultimately to construct and operate railways, the American-China Development Company shall establish at their own expense a school of practical instruction in railways, whereat Chinese shall be educated in all matters pertaining to railway construction, operation, and management. 339 '' 12. All materials or apparatus for the construction or operation of the railway- herein provided for shall enter the Chinese Empire free of duty in a manner similar to that adopted in the case of the Chinese Imperial Railways in the north. 13. The railway shall give precedence and right of way to Government troops in case of war or insurrection, and such troops, together with ammunitions and Govern- ment stores, &c., in snch cases shall he carried over the line, at half rates. 14. It is hereby expressly understood and agreed that no action shall at any time he taken by either of the parties to this Agreement in any manner, or to any extent impairing the value of the obligations created by and under this Contract ; nor sliall any such action be permitted cither by the Chinese Eailway Company or the American- China Development Company. 15. It is understood that as regards any details connected with the administration of this Contract not hereinabove mentioned, the same sliall be agreed upon between the chief othcial in China of the American-China Development Company and the Director-General of the Chinese Eailway Company. Witness our hands and seals on the 14th day of April, 1898, City of Washington, United States of America. (Signed) WU TING-FANG, Chinese Minister to the United States of America. Witnesses : (Signed) Tsun Yow-chtjng (Washington, D.C.). Thxjblow Wood Barnes, Member, Managing Committee, and Treasurer, NeiD York City. Addendum. In the month of May, 1897, an Agreement was entered into between his Excel- lency Sheng Tajen, of the one part, and a Belgian Syndicate of the other part, for a certain loan for the construction of the railway from Lukowchiao to Hankow. It is hereby agreed that if such Agreement should be cancelled the Director-General shall authorize the American-China Development Company to undertake, and said Company shall undertake, to provide the sum of 5,000,000/. or more if necessary for the con- struction of the said line, and shall so undertake upon the conditions and stipulations mentioned in the Agreement entered into this day with respect to the loan for the construction of the HankoAV-Canton line (save as to amount), which are in every respect to apply to this loan whenever applicable, and shall bind both parties, it being understood and agreed that the American- China Development Company shall utilize all portions of the Lukowchiao line, whether such work is finished or partly finished, the cost to the American- China Development Company to be the actual expense of con- struction already incurred by the Director-General. Witness our hands and seals this day, the 14th April, 1898, City of Washington, United States of A.merica. (Signed) WU TING-EANG, Chinese Minister to the United States of America. Witnesses : (Signed) Tsun Yow-chung (Washington, D.O.). (American-China Development Com- pany by A. W. Bash, Agent.) Thurlow Wood Barnes, Member, Managing Committee, and Treasurer, Neil) York City. (Signed in duplicate.) No. 448. The Tsung-li Yamen to Sir Loh Feng Luh. — {Communicated by Sir Loh Feng Luh, December 28.) (I'ranslation.) (Telegraphic.) Peking, December 25, 1898, PROPERTIES owned by British subjects being situated within the limits of the land proposed to be leased to Prance at Shanghae, Sir Claude MacDonald, in his 3i0 letter to this Yamen, protested against Britisli-owued j)roperties under Erencli jurisdiction, and stated that the lease could not be granted to Prance without the consent of Great Britain. Please request Lord Salisbury to have the question settled between Great Britain and Prance themselves, so as not to place the Chinese Government in a difficult position, as the Prench Minister is pressing us for settlement of the question, and wire his Lordship's reply. No. 449. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, December 29, 1898. "UNDER instructions from the Tsung-li Yamen, the Chinese Minister called here on the 28th instant, and stated that, as the Prench Minister is pressing the Govern- ment at Peking for a settlement of the question of the land proposed to be leased to Prance at Shanghae, he was to request that the matter might be settled by direct negotiation between England and Prance, so as not to place the Chinese Government in a difficult position. In reply I informed him that his suggestion was not one on which I could uiidertake to act. Purther, he inquired as to what amount of support, in resisting Prench pressure. Her Majesty's Government would give to China. Her Majesty's Government will, I have informed him, support China materially in refusing to give Prance rights over British-owned property. No. 450. The Marquess of Salisbury to Sir C. MacDonald. Sir, Foreign Office, December 29, 1898. I HAVE received your despatch of the 12t]i ultimo, reporting the punish- ment of the ringleaders of the assault on Mr. Campbell and other Europeans at Lu-kow-chiao, and I approve your action in demanding the degradation of the officer in charge of these men. I am, &c. (Signed) SALISBURY. No. 451. Sir C. MacDonald to the Marquess of Salisbury. — [Received January 2.) (Telegraphic.) Peking, January 2, 1899. IT is now proposed by the Chinese Government to grant to the Prench a modified extension of their Settlement, but excluding the property of other foreigners ; thev say this is the only practicable course, and ask for my immediate reply. I reques't your Lordship to instruct me as to the attitude T should take in the matter. No:.152. Acting Consul- General Brenan to the Marquess of Salisbury. — {Received January 3.) (Telegraphic.) Shanghae, January 3, 1899. WITH reference to the telegram sent by the British Minister to the Poreign Office on the 2nd instant, I have sent to British Minister following : — " Impossible to exclude British property from Prench extension. It could be strangled by the Prench." No. 453. Sir C. MacDonald to the Marquess of Salisbury .- -(Received January 3.) (Telegrapliic.) Peking, January 3, 1899. WITH reference to my telegram of 11th December : Her Majesty's Consul at Shashih reports that there is no necessity for a foreign Settlement. The Japanese have no use for theirs. There is practically no land for a foreign Settlement above that belonging to Japan. Definition of a foreign Settlement in places where no foreigners reside serves no purpose, but helps the Chinese to surround place of trade with a li-kin cordon. As a matter of principle, however, he objects to our rights being made the subject of an Agreement between Japan and China. I concur, and suggest informing the Chinese Governmenl that we reserve our Treaty rights in the matter. No. 454. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, January 3, 1899. WITH reference to your telegram of the 2nd instant: I have just received a map showing foreign Settlements. Eor several reasons the present proposal of the Chinese Government is open to strong objection : 1. By this scheme the property of British subjects is practically placed under French Government, leaving them to defend themselves as best they can. 2. By giving the Erench Government a new exclusive jurisdiction, the Chinese Government grant them a favour not accorded to other nations. 3. The proposal is at variance with the undertaking given by the Chinese Govern- ment last summer as to the non-alienation of any territory lying in the Yang-tsze region to another Power. Her Majesty's Government must therefore absolutely decline to consent to the arrangement, and you should warn the Chinese Government that the issue of any such order will be a violation of the rights of this country. It would be well to ask the Admiral to send another ship to Shanghae. No. 455. Sir C. MacDonald to the Marquess of Salisbury. — (Received January 5.) (Telegraphic.) Peking, January 5, 1899. I AM informed by the United States' Minister that yesterday he filed a prote&t, by direction of his Government, against any extension at Shanghae that will bring property owned by Americans under the jurisdiction of France or any other single Power. Ko. 456. London Chamber of Commerce to the Marquess of Salisbury. — {Received January (5.) My Lord, Botolph House, Eastcheap, London, January 4, 1899. I AM requested to inform your Lordship that the state of affairs in China has again occupied the attention of the East India and China Trade Section of this Chamber (which, as previously explained, comprises the leading London merchants interested in trade with China), and was discussed at length at its last meeting. I was then directed, to express to your Lordship the satisfaction of the Section at the action which has for some time been taken by Her Majesty's Government with a view to promoting and protecting British commercial interests in China. The situation, howeverj in the opinion of the Section, still calls for the closest attention j^nd watchfulness. , 1 am specially, desired to urge upon your Lordship the necessity of Her Majesty's 3i2 Government vigorously continuing the course of action which it has recently followed and of adhering firmly to the policy of the " open door " for commerce throughout the entire Chinese Empire, at the same time having due regard to the priority of British rights to the whole valley, wator-shed, and surrounding country of the Yang-tsze River, and at all those Treaty ports and Settlements in Chinese territory where British interests prevail, and where British trade and industries are established. In the opinion of the Section, there is a great necessity for an improvement, for navigable purposes of the Yang-tsze Biver, and for the removal of obstacles and obstructions which prevent the navigation of its iipper waters. I was also directed, in view of the special sphere of interest principle, to express a hope that Her Majesty's Government would oppose the granting' of any railway or other special concessions in the Yang-tsze provinces to other than British subjects. I was, further, specially requested to urge upon Her Majesty's Govei'nraent, through your Lordship, the necessity for the greatest care being taken 1o secure that no rights or privileges hitherto acquired or enjoyed by British traders shall be in any way prejudiced or interfered with by action on the part of other foreign Governments. The Section learn with much satisfaction that the recent case in which the Bank of China was concerned, and in vphich the Taotai of Shanghae had given a decision adverse to the English trader, has been ordered to be reopened, and would call the attention of Her Majesty's Government to the necessity of the negotiation and estab- lishment of a commercial legal code between China and other nations. I am, &c. (Signed) W. KESWICK, Chairman of the East India and China Trade Section. No. 457. China Association to Foreign Office. — (Received January 7.) Sir, 159, Cannon Street, London, January 6, 1899. IN addressing you on the 5th September last, regarding the projected extension of the foreign Settlements at Shanghae, occasion was taken to protest against any concession to the demand of the Erench authorities for exclusive privileges in that respect. It has been inferred with gratification, from the course of events, that these views have the sympathy of Her Majesty's Government, and that the Chinese will be supported in resisting the pressure to w^hich they are exposed. That pressure has evidently been severe. The varying reports which are telegraphed from day to day reflect, no doubt, the ebb and flow of negotiations ; but they indicate also a degree of vacillation in the attitude of the Tsung-li Yamen, which the Association cannot regard without anxiety. The apprehension expressed in the annexed telegram from our Shanghae Branch may have been premature^ but it was clearly justified by this vacillation, and by a conviction of the powerlessness of the Chinese authorities, to resist pressure without support. The Committee feel assured that their anxiety wdll be regarded as natural, and will be held to justify them in reviewing the consideration on which it is based. The Tsung-li Yamen gave Her Majesty's Minister in Eebruary last a distinct assurance that no territory in the Yang-tsze region should " be mortgaged, leased, or ceded to another Power." That promise has been interpreted by public opinion to imply that British inserests w^ould be held industrially superior, and politically unassailable, within a region that has been roughly defined as the " Catchment area " of the Great Biver, which flows out of Thibet, across all China, into the Yellow Sea. It is urged that the extension which Erance now demands is inconsistent with that promise, for the terms on which she assumes to hold her present Concession, imply territorial pretensions which no other Powder has put forward or been willing to admit. Proof is wanting that her position differs in any respect from that of Eno'land and the United States, while the attitude of American, German, and Japanese residents justifies the conviction expressed in a previous letter, that the views of the Association are generally shared. The precise area of the extension is not yet knov/n, but information at the disposal of the Association leads to the belief that it includes land owned by British and other residents. Here would be a breach of comity, therefore, as well as a breach of 343 agreement, for China has no right to place British subjects or British-owned property under the control of another Power, without their consent. What has happened at Hankow may be cited, once again, in illustration of the inconvenience such transfers may cause. The Concessions granted to Russia and France at that port, two years ago, included land owned by British subjects, who protested against being placed under the domination of another Power. Their objection was two-fold. They objected to the pretension of the French and E-ussian authorities to adjudicate upon their titles, and they objected to conceivable interference with their mercantile pursuits. Both apprehensions have been justified. Titles that had been registered in the British Consulate, and generally recognized as valid, for more than thirty years, have been contested. Industries which had been long established on land bought by British subjects before French or Russian concessions were thought of, are required to migrate to another site. China can be held responsible no doubt, and required to- make redress. But the recourse is not satis- factory because the wrong is done under pressure which she cannot resist. The .bearing of the French and Russian authorities at Hankow and Newchwang has been noted by the foreign communities in China, and has lielped to inspire the protests which have been formulated in the present case. Those protests have the sympathy of the Chinese. The Viceroy of Nanking, within whose jurisdiction Shanghae is situated, has opposed any exclusive concession to France, while expressing himself fully willing to enlarge the General Settlement. The French oppose that concession to the general wish, unless their peculiar claim is gratified. Extension of the General Settlements would then follow coincidently with the concession to France. The Association would deprecate such a solution. The two questions stand on different grounds, and nothing but withdrawal of French pretensions can remove the objection to French demands. An important principle is at issue, and the Association trusts that there will be no deviation from the attitude originally taken up. Within the Yang-tsze Valley, at least, the Chinese authorities have a right to expect support in resisting demands that are antagonistic to British interests ; and it is of high moment that that expectation should be confirmed. Proof upon proof has accumulated — from China's breach, under pressure by France, of her engagement to England respecting Kiang-hung ; to her disregard, at the behest of Russia, of our protest against the cession of Port Arthur ; and to her signature, under similar pressure, of a Contract giving rights over a railway projected into the heart of the Yang-tsze Valley, which are refused in the case of one overpassing Shanhaikuan, that she is powerless to resist unless upheld by a promise of -adequate support. The conclusion seems inevitable that we must be prepared to place ourselves alongside China in requiring the fulfilment of conditions that are essential to British interests. It is submitted that the present is such an occasion, and that British prestige, w^hicli has suffered in China from a series of untoward incidents, would be gravely compromised by any failure to render effectual our opposition to French demands. It cannot be too strongly aflSrmed that French commercial interests at Shanghae are insufficient to afford any pretext for exceptional treatment. They are, on the contrary, relatively insignificant. The persistent attempt to establish a territorial footing of a special and exclusive kind is as inconsistent with facts, therefore, as with the undertaking given by the Tsung-li Yamen in February last. Upon every ground, therefore, the Association desires to express an earnest hope that the Chinese authorities will be upheld in the attitude they have taken courage to assume. I have, &c. (Signed) R. S. GUNDRY, Hon. Sec, China Association. Inclosure in No, 457. Shanghae Committee to General Committee. (Telegraphic.) Shanghae, December- 30, 1898. EXTENSION French Settlement granted. It will involve exclusive jurisdiction. Our opinion is that all extension ought to be on the basis of the present General Settlement, where France has equal rights. We strongly urge you to protest against without delay. [253] 2 Z 344 No. 458. Tha Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, January 7, 1899. I CONCUR in view expressed in your telegram No. 3 of the 3rcl January on the suhject of the Shashi foreign Settlements. The reservation of our future rights should be made clear, as well as the fact that tliese rights cannot be made to depend on any Agreement, to which we are not parties, between China and Japan. No. 459. Papers inclosed in Sir C. MacDonald's Private Letter of November 27, 1898 — ^{Received January 8, 1S99.) Sir C. MacDonald to Lord Charles Beresford. Dear Lord Charles, Peking, November 23, 1898. HEREWITH, as requested, the list of Concessions granted to us up to date ; also a list comparing what we have got with what other nations have. We do not seem to have come out second best. I repeat what I said to you when here ; not a single bond fide or approximately practical scheme which has been brought to this Legation has failed to be put through. Every single bond fide complaint from the Treaty ports has been looked into and settled. There are some three or four now being investigated, and I hope for an early settlement. Very sincerely yours, (Signed) CLAUDE M. MacDONALD. P.S. — I will write at greater length later. C. M. MacD. (Inclosure 1.) Summary of Railway Concessions (up to November 23, 1898), 1 Total Nationality. Number. Length of Line represented. Remarks. Miles. British*.. . . • • 9 2,800 Including Hankow - Canton and Yiinnan-Yang-tsze Railways. Russian . . . . . . 3 1,530 Including Manchurian Railway (from Stretensk to Vladivostock). German* . . * . 2 720 Belgian . . . . 1 650 French .. • . • ■ ^ 420 American* . . 1 300 * Half interests are reckoned at half the estimated length of line. (Inclosure 2.) Concessions other than British {up to November 23, 1898), Russian. THE Manchurian Railway Concession dates from 1896. As is well known, it wa6 obtained as recompense for help given in securing the retrocession of Liaotung, 345 From Stretensk on the Shilka, wheie ifc leaves the main Siberian line, this railway will cross the Argan and Hingan Mountains, and reach Kirin via Petuna. The whole length from Stretensk to Vladivostock is estimated at 1,400 miles, of which about 1,000 will pass through Chinese territory. The Concession is purely strategical. The country traversed, though potentially rich, in great part is, and will be for long, sparsely populated, and the line cannot, in the near future at any rate, hope to pay its working expenses. ; 2. The Port Arthur Agreement of March 1398 arranges for the conclusion by Russia pf a branch from the above line to Port Arthur or Talienwan. The length of the railway will be about 400 miles. Commercially, this branch is more promising than the first Concession. 3. The Eusso-Chinese Bank has signed a contract for the construction of a branch line from T-ai-yiian Fu to connect with the Lu-Han trunk lines near Ch^ng-tung. Length, approximately 130 miles. They have, up to date, been unable to raise money for this line. I think it very possible that it will eventually be built by an Anglo-Russian Syndicate. I am trying to arrange this. French. The French possess the right to construct three lines, but beyond acquiring this right they have done nothing. 1. From Tonquin up the Red River Valley to Yunnan Fu, say 200 miles. The impression in French railway circles is that a railway through Yiinnan will not pay expenses, and if any serious attempt is made to carry out the extension of the Tonquin system, it will be merely as a stepping-stone to Ssti'ch'uan. Yet again, any pretensions that a railway from Yunnan to the Yang-tsze may have to rank as a com- mercial project have been pronounced against by every traveller in Central China. 2. Langson-Lungchow-Nanning Railway ; length, about 100 miles. (There appears to be an alternative open to the French of going to Pfee instead of Nanning.) The right to build this line has been conceded, but the idea is growing amongst the French of Tonquin that, instead of diverting traffic from the West. River, a line from Langson to Lungchow and Nanning would prove an additional feeder of the West River route. 3. From Pakhoi inland, presumably to ^fanning ; length, say 120 miles. The Tonquin press have pointed out that this line will benefit English commerce more than French. It will never, in my opinion, be built — by the French. German. 1. Kiao-cbau-Yichow-Tsinan line; length, 420 miles. Nothing has been done towards the construction of this line, which does not promise commercially. 2. Tien-tsin-Chin-kiang line to be built by an Anglo-German Company (see No. 5 of the British Concessions) . Belgimi. The Lu-Han or Peking-Hankow Railway. A Frano-Belgian Syndicate have secured the Concession for thiis, a trunk line of some 650 or 700 miles, passing north and south through Ghihli, Honan, and Hupeh, This railway is an old project born of Chang-Chih-Tung's objection to building lines near the coast, "lest they should facilitate the access of an enemy." Its prospects as a commercial enterprise are not considered so good as those of the rival Tien-tsin-Chinkiang line. ' ' American. '■ The only railway in which America is at present interested is the trunk line projected from Hankow to Canton (see British Concessions, No. 11). [35.^1 2 Z 2 846 (Inclosure 3.) Railway and other Concessions obtained by British Companies recently. I. — Province of Shansi. THE Peking Syndicate have acquired the " sole right to open and work coal and iron mines throughout the districts of Tii Hsien and Ping Ting-chou, and the Prefectures of Lusan Fu, Tsii-chou 'Ea, and Ping Yang-Fu, and also petroleum, wherever found." Under their contract, the Syndicate have also the right to " construct branch railways to connect with main lines or with water navigation, to facilitate transport of Shansi coal." This has been interpreted officially to include the right of connecting the mines with Siang-yang in Hupeh, the nearest head of navigation giving access to the Tang-tsze. This means a railway of 250 miles. As to the value of this Concession, it is not amiss to quote the testimony of Baron von Richthofen, the great authority on the geology of China. He says that, " in proportion to its area, Shansi has probably the largest and most easily workable coal- field of any region on the globe, and the manufacture of iron is capable of almost unlimited extension." II. — Province of Honan. The Peking Syndicate have also acquired rights similar to those obtained in Shansi in that part of Honan north of the Yellow Eiver. III. — Province of Chihli. The Hong Kong and Shanghae Bank are financing and controlling the jS'orth China railways from Peking to Tien-tsin, and thence to Shanhaikuan and Xewchwang. The total length of these lines is about 500 miles, of which 300 miles are completely open to traffic. IV. This bank has also acquired a half-interest in the coal-mines at Isan P'iao, in the Ch'ao-yang district. According to experts, these mines possess the best and richest coal seams in JSTorth China, and they have the immense advantage of being close to a line of railway and the sea. V. — Provinces of Chihli and Kiangsu. The Tsung-li Yamen have undertaken officially that the construction of the Tien- tsin-Chink iang line shall be intrusted to an Anglo-German Syndicate. The British portion of this Syndicate is represented in China by Messrs. Jardine, Matheson, and Co., and the Hong Kong and Shanghae Bank. This will be a trunk line of 600 miles, passing through more populous country than the Lu-Han Railway (the Belgian line), with which it is certain to be able to compete successfully. VI. — Province of Kiangsu. A British Syndicate, represented by Messrs. Jardine, Matheson, and Co., and the Hong Kong and Shanghae Bank, has obtained the Concession to finance and construct the Shanghae-Nanking Railway. There is no more paying district than this for a railway in China. The length of line will be 170 or 180 miles. VII.' — Provinces of Kiangsu, Anhui, and Honan. The same Syndicate has the right to extend the Shanghae -Nanking Railway from P'u-k'ou, opposite Jfanking, to Hsin Yang, in Honan, a distance of 270 miles. 347 VIII. — Provinces of Kiangsu and ChSkiang. The same S;yndicate has the right to constnut a line from Soochow to Hangchow, with a possible extension to Ningpo. This line Mill run through very populous districts for over 200 miles. The last three Concessions all lie within the Vano'-tsze reoion. • = " IX. — Province of Chekiang. The Peking Syndicate have also obtained mining Concessions similar to the Sbansi and Honan in this province. X. — Province of Kuangtung. The Jardine Syndicate has the right to construct a railway from Kowloon to Canton, Tiic length of line will be nearly 100 miles. XI. — Provinces of Hupei, Kiangsi, and Kwangiung, An American Syndicate signed a preliminary Agreement for the construction of a railway from Hankow to Canton in May last. Ifegotiations are now in progress for the amalgamation of this Concession with isTo. 10, Kowloon to Canton, and the working of the whole line from Hankow to Kowloon by an Anglo-American Company. This will be a trunk line of, approximately, 600 miles long, XII. — Provinces of Yunnan, Kueichow, and Ssuchuan^ The right to extend the Burmah system into China as far as the Yang-tsze is admitted, and surveys are now in progress. This involves a possible railway of 700 miles. (See Ecmarks on French Concessions.) No. 460. Sir C. MacDonald to the Marquess of Salisburi/.— (Received January 9, 1899.) My Lord, Peking, November 16, 1898. IN connection with the question of li-kin taxation at Foochow, I have now to report a specific case which has been referred to me by Her Majesty's Consul, and in vt'hich I am glad to- say satisfactory redress has been obtained from the Chinese Government. The inclosed copies of my recent despatches of the 6th September and 3rd November to the Tsung-li Yamen give full diitails of the case. In May last the Li-kin authorities at Foochow claimed li-kin on some bales of Indian yarn belonging to Messrs. Odell and Co. as it was being conveyed from the foreign Settlement to their shop on the northern side of the river, and by their detention of the goods and subsequent intimidation of Chinese customers interfered considerably with their business. The foreign Settlement of Foochow, it must be explained, is on the south bank of the Min River some 2 miles from the city, access to which is gained across a bridge, known as the Long Bridge, and through a long suburb. By my directions Her Majesty's Consul presented a claim for loss of market and other expenses entailed on Messrs. Odell and Co. by the detention of their goods, and as this claim was repudiated by the Li-kin authorities, and the interference Avith the business continued, the claim was increased as time went on. It Was also found necessary, in order to reassure the minds of Chinese customers, for the-Consulto insist on the Li-kin' authorities insuring a certificate clearing Messrs.- Odell and Co. from the imputation of evading the payment of H-/fin. - ' ; ■; . .. , . .. . : On the 7th November I received a telegram^from Her Majesty's' Consul stating that the necessary <;ertificate had been issued, and that '3,000 dollars had been paid, as a settlement of the claim, ' ' ' ■- - . . ■ ,.. 348 I have since received a despatch, dated the 9tli JS^ovember (copy inclosed) from li(.']- .Majesty's Consul reporting thi' closure of the case. " -i^.t'liii I have, &c. (Signed) CLAmJE M. MacDONALU. Inclosure 1» in No. 460. Sir C. MacDonald to the Tsung-Ii Yamen. MM. les Ministres, Peking, September 6, 1898. THE detention of foreign yarn belonging to the British firm of Odell and Co. by the Li-kin autnorities at Poochow was first brought to the Yameu'g notice by my note of the 23rd May. Since then it lias been the subject of discussion at several interviews, in the course of which your Highness and your Excellencies agreed to instruct the provincial authorities to' settle the question amicably and in accordance with Treaty. Some days ago I was informed by a telegram from Her Majesty's Consul that a settlement had, not yet been effected, and, lest there should be any misunderstanding, I have the honour to recall the principal circumstances to the attention of your Highness and your Excellencies. In consequence of a telegram received from Her Majesty's Consul, I wrote a note to the Yamen on tlie 23rd May stating that tenbales of Indian yarn, which were sent by the British firm of Odell and Co. to their godo'wn across the river at Foochow, were illegally seized by the Li-kin authorities on the bridge, and requesting that telegraphic orders' should be issued for their release. On the 27th May ten more bales belonging to the same firm were similarly treated, and it was not till the 30th May that all twenty Avere released. The detention naturally entailed loss of market and other expenses to Odell and Co., and to cover these they preferred a claim of 104 dollars against the Li-kin authorities, which the Consul, under instructions from me, presented in due course. This claim the Li-kin Office refused to entertain, alleging that the yarn was liable to U-kin, and therefore justly detained. At the same time Odell and Go's Chinese employes across the river were threatened with the vengeance of the authorities as soon as they left foreign employ. On the 27th June, yarn and flour belonging to the same firm were detained as before, and were not released until the 1st July. Her Majesty's Consul also reports that on the 30th June four li-kin runners Avere posted outside Odell and Co's godown, Avho watched for purchasers, followed them up, and warned them that the British firm's yariT. had evaded U-kin, and must not be bought. Chinese dealers were thus intimidated, and threw up their purchases, and much injury to Odell and Co.'s business naturally resulted. In consequence of these proceedings, Mr. Eraser, still acting under my instructions, joresented an increased claim, including compensation for loss of business, &c., amounting to 605 dollars. Payment of this was also refused, and for the same reasons as before. As the interference of the Li-kia Office still continues, the damage to Odell and Co.'s business still goes on, and must eventually be compensated. I have explained to your Highness and your Excellencies over and over again, in discussing this and other cases, the Treaty privileges involved, bat as my previous explanations seems to have had little efl^ect, I will repeat them. Article 11 of the Treaty of Nanking states that " His Majesty the Emperor of China. agrees that British subjects, with their families and establishments, shall be allowed to reside, for the purpose of carrying on their mercantile pursuits, without molestation or restraiiit, at the cities and towns of Canton, Amoy, Eoochow, Ningpo, f^nd Shanghae." And it is laid dowTi in Article XI of the Treaty of Tien-tsin that " in addition to the cities and towns of Canton, Amoy, Eoochow, Ningpo, and Shanghae, opened by the Treaty of Nanking, it is agreed that British subjects may frequent the cities and ports of Newchwaug, &c, " They are permitted to carry on trade with whomsoever they please, and to proceed to and fro at pleasure with their vessels and merchandize." At those cities and towns only, the duties permitted by Treaty could be levied on foreign goods, that is to say, the Tariff export and import duties. It is true that Sir T. Wade, by the Chef oo Convention, agreed "to move Her j'lajesty's. Government to allow the ground rented by foreigners (the so-called CoT'eessiouf,) at the different ports to be regarded as the area of exemption from 349 li-Mn ;" but by the Additional Artielt>, signed at London on tlie I8tli July, 18&3, it was agreed that that arrangement should be "reserved for further consideration between the two Governments." It is also true tliat I lately proposed to your Highness and your Excellencies that we should jointly consider some scheme of a li-lcin exemption area at Poochow, in order to put an end to petty cases, but 1 expressly stated that I did so without prejudice to existing Treaty rights, and I also warned the Yamen that, pending the concltision of an arrangement, no interference with those rights could be tolerated. jS'ow, according to Article II oE the Nanking Treaty above quoted, Poochow is one of the cities and towns opened to trade, where only the duties required by Treaty are leviable on foreign goods. These are the import and export duties only. The provincial authorities, however, propose to interpret the city of Foochow into the foreign hongs along the south bank of the river, which are 2 miles from the city gates, and did not exist when the Treaty of Nanking was made. Further, it is clear that the object of British merchants in importing foreign goods is to sell them to Chinese. The framers of the Treaty of course understood this, and they drew up their TariflE accordingly; but the provincial authorities now propose to make the import duty merely a charge enabling goods to be landed in a British hong, which is manifestly inconsistant with the spirit and wording of the Treaty. Again, the provincial authorities hold that British oAvnership is necessary to enable the British Consul to concern himself with British-imported goods. But, as regards this, the Treaty does not speak of British merchants. It says British goods, and it is self-evident that if the Li-hin authorities may surcharge such goods as soon as they pass into Chinese hands with li-kin which cannot be levied while the goods are British property, the Treaty privileges are without value. The facts of this case, and the Treaty provisions bearing on them, are thus put clearly before the Yamen. They prove incontestably that foreign goods imported by a British firm have been detained, that the business of that firm has been practically suspended during the busiest season at Foochow by the action of the Li^kin Office, and the threats of its subordinates, and that all this has been done in defiance of Treaty an"d repeated protests from the Consul and myself. Your Highness and ^our Excellencies must be well aware that it is not the habit of Her Majesty's Government to permit such a flagrant interference with the trade of British subjects. I need scarcely remind you of similar cases which occurred at Canton in 1897, and of the results to the Li-km officials. I have now to request that the Yamen at once issue instructions, by telegraph, to the Viceroy to desist from levying li-kin on British goods in contravention of Treaty, to forbid any further interference whatsoever with Odell and Go.'s business, and to pay immediately to Her Majesty's Consul the sum which he considers necessary to compensate Odell and Co. for the loss they have suffered during the past three months. I have the honour to request the favour of an early reply, and avail myself, &c. (Signed) - - CLAUDE M. MacDONALD. Inclosure 2 in No. 460. Sir C. MacDonald to the Tsung-li Yamen. MM. les Ministres, Peking, hovember 3, 1896. WITH reference to the case of Odell and Co.'s cotton yarn at Foochow, on the 7th October I received your despatch stating that the Viceroy of Fukien had tele- graphed that the Consul had refused to accept the payment of 605 dollars as a settlement of the case. ' _ AL-. On the 2nd November I received your note stating that the Viceroy had again telegraphed to the same effect. On the 6th September I addressed to the Yamen a despatch, narrating in full details the particulars of this case. I therein informed you that Her Majesty's Consul had on the -4th July claimed 605 dollars as compensation for the illegal detention of Messrs. Odell and Co.'s goods and the injury inflicted on their business. I added that, as the interference of the Li-kin Office still continued, the damage to Odell and Co.'s business was still going on, and would have continually to be compensated. I requested the Yamen to issue instructions by telegraph to the Viceroy to desist from leying li-kin on British goods in contravention of. Treaty, to forbid any further interference whatsoever with Messrs. Odell and Co.'s business, 350 and to pay immediately to Her Majesty's Consul the sum Avhicli lie considered necessary to compensate Odell and Co. for the loss they had suffered during the past three months. The claim had naturally increased hetween the Mh July and the 6th September. I now inclose copies of the correspondence which has passed lately between the Consul and the local authorities, by which you will see that the offer to pay 605 dollars was not made to the Consul till the 28th September. Her Majesty's Consul replied that the claim had now increased to 3,72] dollars., I entirely support the Consul in his statement that the longer the delay in settling the claim the greater will be the interest. The interference with Odell nnd Co.'s business still contiues, and will continue, until the Li-kin Office gives the certificate required by Her Majesty's Consul freeing the firm from the imputation of evading li-kin. I have, therefore, to request you to send telegraphic instructions to the Viceroy to settle the case at once by the payment of the amount now demanded by the Consul, and by the issue of the certificate referred to. I avail, &c. (Signed) CLAUDE M. MacDONALD. Inclosure 3 in No. 460. Acting Consul Frascr to Sir C. MacDonald. Sir, Foochow, November 9, 1898. I HAVE the honour to report the settlement of Odell and Co.'s yarn case for 3,000 dollars and a certificate tliat their goods are exempt from li-kin, pending delimitation of the port area. Early in October the Li-kin Taotai induced the Customs Commissioner to sound me privately as to the terms of settlement, and, having ascertained that I would receive him, he called on the 19th October. The Taotai expatiated on the hardship of his having to^ obtain the permission of his superiors before attempting to settle the case — a long process, during which I continued to increase the claim ; he added that payment Avould fall on him and his deputy personally, and asserted that Odell and Co.'s business had for months been as brisk as ever ; finally, he offered 1,000 dollars as fair compensation. In reply, I pointed out that the size of the claim was due to the obstinacy of his Office in maintaining a right to levy li-kin, which the Tsung-li Yamen had disclaimed in July ; tliat the British firm had been boycotted by his runners; and that the claim would, by your orders, groAv luitil the certificate I had frequently asked for in order to reassure Chinese customers was issued. After a long discussion, I cousented, at his earnest entreaty, to compromise the claim for 3,000 dollars, provided that sum was paid promptly. I consented to reduce the claim chiefly because the Indian yarn market had collapsed two or three months ago, and it seemed doubtful whether, in any case, Odell and Co. would have done a large business, but also because Mr. Simpson was leaving for England, and anxious to obtain an immediate settlement. Eurther, I was of opinion that the forced payment of any large sum by the Li-kin Office, known, as it would be, at once among the Chinese officials and merchants, would insure prompt attention to other cases and encourage trade with our merchants. I doubted whether the new Viceroy would prove less stubborn than his predecessor, and there was always the risk that the removal of the Li-kin Taotai might afford an excuse for demurring to any payment at all. On the 24 (Signed) BERNARDO J. DE COLOGAN. No. 463. F&reign O0'ce to China Assonation, Sir, Foreign Dpice, Sanuary 12, 1899. I AM directed by the Marquess of Salisbury to acknowledge the receipt of your letter of the 6th instant, relative to the endeavour of the Erench Goverhriieht to obtain an extension o£ their Settlement at Shanghae. I am to state to you that the elaim advanced by Erance has received the careful consideration of Her Majesty's Government, who have informed the 1?sung-ii Yamen that they cannot consent to any British-owned projierty being handed over to be administered by the Erench authorities, no matter under what Regulation. I'hey have further warned the Chinese Government that any such extension as at present proposed would be a violation of the rights of this country. I am, &c. (Sigiicd) ERANCIS BERTIE. No. 464. Foreign 0^c6 16 the London Chamber of Commerce. Sir, Foreign Ofice, January 12, 1699. I AM dirfeoted by the Mcirquess of Salisbury to ackhowledge the recbipt of your letter of the 4th itiStant, urging the necessity of Ilfei- Majfe&ty's Government vigorously Continuing the course of action reeeiitly followed, with a view to promoting arid pi'otecting British commercial interests in China. I am to say that the opinions expressed in rega,rd to the several matters referred to in your communication will receive the attention of Her Majesty's Government. I am, &c. , (Signed) ERANOIS BERTIE. Na. 46o. The Marquess of SallsbUinj to Sir C. MacDonald. Sir, Foreign Office, January 13, 1899. I HAVE been in communication with the First Commissioner of Her Majesty's Works on the subject of your despatch of the 28th October, 1898, ami I have to inform you that Her Majesty's Government have no objection to the granting of Ifeases in perpetitity to foreigners at present owning ground on the proposed extension of the British Concession at Hankow, on their surrendering their presfelit titles. I concur in the opinion expressed by you as to the tact and ability shown hv Mr. "Warren in bringing these long-standing negotiations to a cbnclilSiOn, and t hate to request you to convey to him my approval of his proceedings. ' I ain, (fee. (Signed) SAtlSBtJRY. S55 No. 466, $if C Macpomld to the Marquess of Salisbury. — {Received January li<.) (Tel^i'a]^ic.) Peldng,, January 14, 1899. WITH reference to my telegram of the 20th December, 1898, on the subject of the wur^er of M^^. Tleming, I have the honour to inform your Lordship that tlie Q0n,sul ipLO.w at Kneiyang reports tl%at the Governor is not willing to arrest tlie Ileadman of the village where the murder occurred ; the latter was a spectator of the murdei;, which -w.^s a result of his gross neglect of duty. The Consul says that the local ?iuthariti^s treat with contempt the authority of the British Minister and also the Imperial Edict. I shall press for this man's arrest, and speak strongly as to conduct ol; local 9fUtkorities at an interview with Prince Ching, for which I have asked. Nq. 467. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic), Woxeign Office, January, 17, 1899. YOU sh,ould apply to, tlpje Chinese G-ovefnuieui.t for the grant of a general Settle- ment at Chefoo, in concert with such of your colleagues as may be willing to j,oin. Yo]UL (jan iijfo^^m the German Minister that it is on account of trade reqnirements that you 4© so. No. 468. The Mnrquess of Salisbury to Sir G, MaQMomtid. ^vs, Foreign Office, Janucunyj 19,, 1899. I HA¥E received your despatch of the 16th.- NoisremSer,. 1898, reporting on Messrs. 0dteM= aad; Go.'s claim, against thje li-kin auithorities at IFoDcliow for detention of their goods on which Li-kin was illegally, claimed, as well as for interference with their business by the intiuiidation of Chinese customers. I have learnt with satisfaction thait adeq/uate Ecdajess has been oMadned from the Chinese Government, and I approve your action in the matter. I am,, &c. (Signed) SALISBUEY. No. 469. Sir C. MacDonald to the Marquess of Salisbury. —{Rec&ived January 23", 1899.) My Lord, Peking, December 3, 1896. I !pi4,VE the hpno^i: tq. f oi^ward a copy of Eesolutions unanimously adopted at a meeting of British residt^nts at the port of Newchwang during the recent visit of Lord Charles Beresford to that port, as well as a copy of certain very useful comments made upon these B.esoluiions. by Mc. E. L. B.. Allen, Her Majesty's Consul at Newchwang. With regard to these Eesolutions, I have the honour to make the following observations : — On several occasions I have addressed the Tsung-li Yamen on the subject of an increase in the British Concession at Newchwang, basing my arguments mainly on the, isfit tj^at a very considerable part of the old Concession had disappeared into the river. The Tsung"li Yajijpu hayc shown no inclination to oppose my demand, hut have Eiiwayjs said that, if the local Chinese authorities saw no difficulties in the Avay, they, the Tsung-li Yamen, Avould not make any. As to the general Settlement at the east end of the town, the Central Government ■woulxj; I" am suire, have no objectibn ; the principal difficulty seems to be in findiug [253] 3 B 2 356 the money to meet tlie expense of policing, lighting, &c. This is, howevei', a purely local question. . , . ,, As to the right of owning land and the right of working mines " in the interior,^ these would undoubtedly proye great and valuable concessions. As your Lordship is aware, the right to own land, except by missionaries, is not permitted. So long as the very important principle of extra-territoriality is admitted by the Chinese, it is diflacult to see how such a demand can be pressed. ^ With regard to the maintenance of our right to inland navigation, Mr. Aliens remarks are very much to the point. The right exists : it is for the merchants to make use of it. I have nothing to add to Mr. Allen's comments on the Resolution that "the rights and property of the Protestant missionaries and their converts _ should be maintained," except to say that I am not aware that these rights are in any way threatened. I have always, however, been in accord with the Chinese Government in then- contention that when a Chinese subject becomes a Protestant, he,_ nevertheless, remains a Chinese subject ; consequently, any rights and property which Protestant converts may possess are due to the fact that they are Chinese subjects, not that they are Protestants. ' A Consular Agent stationed at Eirin would, doubtless, be useful, but in the present short-handed state of the service, it would be impossible to accede to this request without denuding other Consular posts. It would, I think, be more useful to have an assistant stationed at JSTewchwang, who could collect information concerning trade, &c., by travelling through Manchuria. With regard to the Resolution objecting to the right claimed and exercised by the Russians of landing railway material without payment of duty, I brought this supposed differential privilege to the notice of the Imperial Maritime Customs, and have received the following reply : — "With regard to the relations of the Newchwang Customs with the Russian representatives of the Chinese Eastern Railway, the facts are as follows : — " ' The Company is, under the special authority of an Imperial Edict sent to us through the Tsung-li Yamen, entitled to land all its material free of duty. The same privilege is given to the Imperial Chinese Railway for the material it uses on its lines on both sides of Shanhaikuan. As to the Customs manner of dealing with the vessels carrying cargo for the former Company, there have been no instructions issued to treat them differently from the vessels of other people.' " With regard to the establishment of Russian military posts throughout the provinces, Colonel Browne, Military Attach^, tells me that the number of these posts has been greatly exagg'erated. The Russian Charge d'Affaires informs me that these men are not soldiers, but police in the pay of the Railway Administration. However this may be, the right to have such military police has been accorded to the Railway Company by the Chinese Government, and it is difficult to see on what grounds we can now object. Recent events on the railway in the immediate vicinity of Peking, when foreigners were stoned, the line taken up, telegraph wires cut, and traffic interrupted, show that in the future, especially on the long trunk lines, European police will be most necessary. The appointment of a Russian Consul at Ncwchwang would appear to be a matter for the Russian Government to decide. I have, &c. (Signed) CLAUDE M. MacDONALD. Inclosure 1 in No. 469. Consul Allen to Sir C. MacDonald. Sii% Newchwang, November 12,. 1898, I HAVE the honour to report that Lord Charles Beresford having arrived at Newchwang on the night of the 4th instant, a meeting of British residents was held on the 7th, at which they laid before his Lordship their views as to local British interests. The Chairman of the meeting, Mr. Bandinel, subsequently sent me a copy of the 357 Resolutions passed thereat, with a xequest that I should forward it to yourself. 1 have accordingly the honour to inclose the same, together with a copy of Mr. Bandinel's covering letter, for your information. I should, perhaps, note that the following words in paragraph 4, " where Chinese or other foreigner" (which appear to me aml)iguous), are intended to mean, "where Chinese or foreigners other that British." In order not to delay their transmission I have deferred commenting on these Resolutions (as suggssted hy Mr. Bandinel) until I have heen ahle to consider more fully the remarks I should wish to suhmit for your consideration. I have, &c. (Signed) E. L. B. ALLEN. Inclosure 2 in No. 469. Mr. J. J. F. Bandinel to Consul Allen. Sir, Newchwang, November 7, 1898. I HAVE great pleasure in handing you herewith copy of a series of Resolutions passed unanimously, after full and free discussion, at a meeting of British residents this morning, and in requesting you to be good enough to forward the same to Her Majesty's Minister at Peking, with such comments as you may consider advisable. I am, &c. (Signed) J. J, E. BANDINEL, Chairman of the Meeting, Inclosure 3 in No. 469. Resolutions unanimously adopted at a Meeting of British Residents at the Port of Newchwang, North China, on November 7, 1898. WE advocate — 1. Obtaining a British Concession on the north bank of the river, that is to Sayj on the side opposite to the present town. 2. Forming the east end of the town, within the walls, into a foreign (not neces- sarily British) settlement. 3. The right of owning land in the interior, and establishing there filatures and other similar enterprises worked by foreign machinery. 4. The right of working mines in any part of the three provinces where Chinese or other foreigners may or do work them, and on equally favourable terms. 5. The maintenance of our right to inland navigation, with power to stop at any town or village on the bank equally with those ieDJoyed on any river in China. 6. That the rights and property of the Protestant missionaries and their converts should be maintained intact, as heretofore, according to the rights existing by the Treaty of Tien-tsin and the Edict of 1891. 7. That a British Consular Agent be permanently stationed in Kirin, as formerly in Chungking. 8. We deprecate most strongly the annexation of this port and of any of the three provinces by any foreign Power, and we rely on the British Government to maintain the " open door." 9. We object to the right claimed and exercised by the Russians of landing rail- way rnaterial without examination or payment of duty, especially as this diminishes the security on which money has been loaned by British subjects to the Chinese Government. 10. We view with apprehension the establishment of Russian military posts throughout the provinces, as at Kirin. 11. That the Russian Government should be requested to appoint a Consul at this port, in View of the large and increasing Russian interests, and the possibility of complications arising which would demand immediate conference between Consular officials on the spot. 12. That a copy of these Resolutions be sent by the Chairman to Lord Charles 358 Beres|o];d, also aii,o,th?]: copy witli the request that he will coni^nu^iGate the same tQ Lord Salisbury, and that another copy be sent to Her Majesty's ]^inister a,t Pelting. fSisned) J. J. P. BAI^PINEL, (Signed) J. J. V. B^I^PJIvEL, C/iOiipmn of tJ^. I^teetin,g. Inclosure 4 in No- 469. ConsMl Allen to Sir C. MacDonald. Sir, Newckwang, November 21, 1898. I HAVE the honour to submit the following comments on the set of Resolutions adopted at a meeting of !N"ewchwang British residents on the occasion of Lord Charles Beresford's recent visit, of which I had the honour to transmit a copy in my despatch of the 12th instant : — No. 1. — I trust to obtain, for the purposes of a supplementary British Concession, the ground on the north bank of the river here referred to. The Taotai has given nji# to understajid that the only reason foi; delay has been the necessity of f aitijjig until th^ yearly crop of reeds h&.d been ciit, in order to measure the ground, aad the reed. cutting iS: now going on. The ground being Chinese Governnjent property, w difficulty could ai;ise unless the Chines^ Qovernn^ent w;ished tp m^Ll^e one. No. 2. — I consider it to be most desirable on all grounds that this should be effected, and I believe the piore practical course to be the request for a general foreign Settlement i;a,tht. N,q^. 3 apd J^-— I b|?lipve tj^e 4skt^ l^ert' g,dyocated wou^tj. pi-ove yaluahle ones, especially as regards mining enterprise. Thp B,i;ssi|^ns, ar^ l^eenly alive to tlip importanc(? of getting a Ipqal co^l, supply, especially of steajqi coal^ ijitp their h^nds, amd I consider it propor,t.iopately. iflappijt^ijjt that they syh.puld not hfive a ijjpjy^pply pf it. ' • ^ s ■ Certain British merchants here have, jointly with Chinese, a consideraijlg, iuteii^qisl in.qqal-mip^s.near Liaoyapg and tp t^f) nprth-east of l^oul^den, ij^ar thp bpr^pr qt the Kirin Province. No. 5.— I con^i4§r thi^, right to be pf peculiar irftport^p.fie ip, thip. region. I believe that stgam, tra% on the Li^O River and the Moukden i^iver (thft Hup-Jjp), i^ euergetically d^v.elopqd, would do much to keep the tr^de of tl^s grjE^fe allHviaLtrftu^. of Southern Manchuria in its present channel, and to confirm Newcliwauc'- ij^ |£ existing Hp^jtion as^tjig igain outlet and iplet fpr tl^^, trade of all. three ppyinpes. But it appears to me that the urgently important thing to this end is, that 359 British merchants should lose no time in taking advantage of the rights that have already been granted to them, since I believe that by the prompt establishment of an ' efficient system of steam towage for junks they could pr^ictically capture the bean trade, and for a long time at any rate keep it out of the hands of railway rivals. This ^yill pt'oba.bly be an important matter when the river opens next spring ; meantime, I do not know of any energetic venture in this direction being in preparation by British fiSfrhs. It appears to me that the onus is with them. No. 6. — The Protestant (chiefly Scotch and Irish Presbyterian) missionary iiitefe'st in Manchuria is a large one, and is represented as far as I have seen, by a very superior body of men. They constitute a Considerable factor of British influence with the Chinese popuUtion. The Prench Roman Catholic Missions are very jealous of them as rivals. The Chinese are prone to look upon the two religions, or rather these t^'o branches of Christianity, as off'ering them camps of refuge whence they may better resist the pressvire of their own officials. Speaking broadly, I should say that this notion was discouraged by the Protestant and encouraged by the Catholic liiiSBionafiBs ; and I so far sympathise With this BBs'olution that I consider the former to represent a more legitimately civilizing influence, and to stand in greater need of support as to Treaty rights than their rivals. No. 7. — This idea appears to me a very good one. I imagine that Kirin in now a most important post of observation for us ; and I look upon the suggestion as, in partj also connected With the subject of NOc 6, for I think that a Consular Kesident at Kirin, who could also travel periodically in the two northern provinces; wbiilti be able to deal far more adequately with a number Of missionary cases tlxan is possiblie for a Coasiil resident at this port. I have been so much impressed during the past year by the advantages that might result from the appointment of a Consular officer specially authorized to travel in these three provinces, that I had already meditated asking you. Sir, whether you cculd consider the qu.estion of appointing a Vice-Consul for the purpose. However, I imagine that, after his sojouim in that region. Colonel Browne would probably prove a rnore qualified judge oh the point than myself. No. 8. — It Avould perhaps be an impertinence in rhe to cbinmerit much on this clause, with the spirit of which I cordially agree, I will only allow mysisll: /td say, firstly, that I think such annexation on the part of Bussia would lead to a Russian predominance in the whole of China, in the presence of which our commercial position would exist on suiferance,* unless and until reinstated by force of arms; and secondly, that I consider the present Russian proceedings in Manchuria to be plainly and steadily directed towards an effective occupation, leading up to annexation. No. 9. — I think the objection here taken is a fair one. I presume that the privileges enjoyed by the Russians in this respect depend theoretically on the fact, that their railway is, by political fiction, a partially Chinese undertaking. And to render this fiction respectable some Russian guarantee would, as it seems to me, be requisite, which is not now forthcoming. No. 10. — After what I have said under No. 8, I need hardly say that I think this apprehension well founded. No. 11. — I am inclined to think that the appointment of a Russian Consul here would put ordinary things on a more satisfactory footing. But until the test of experience is applied it would, I think, be guess-work to say whether our interests would gain by it or not. I trust that I have not gone to an undue length in the foregoing remarks, and asking your indulgence for their crudity, I have, &c. (Signed) E. L. B. ALLEN. No. 470. Sir C. MacDonaid to the Marquess of SuKsbury. — (Received January 30.) (Telegraphic) Peking, January 30, 1899. ON the 25th January a British missionra-y named Parsons narrowly escaped being captured by local militia about 27 miles from Chungking. He jumped into the river and was saved by a Chinese gan-boat, but two members of his escort and his Christian servant were carried off. 860 No. 471. Sir C. MacDonald to the Marquess of Salisbury.— {Received February 2.) (Telegraphic.) v Peking, February 2, 1899. MURDERS of Pleming and Chinese follower. The Consul telegraphs that the two murderers have heen executed ; a reward has heen offered for the capture of the Headman, and his property confiscated ; several^ oificials who were guilty of neglect of duty have been severely punished ; 30,000 dollars are to be paid for the loot of Mission and indemnity for murders.^ The case awaits the capture of the Headman for final settlement. This is satisfactoiy, provided the Headman is detected and soon arrested. I may have to accuse the Governor of attempting to screen the offenders. I am awaiting the receipt of despatches from the Consu.1. No. 472. Sir C. MacDonald to the Marquess of Salisbury. — {Received February 3.) (Telegraphic.) Peking, February 3, 1899. NANNING has been declared an open port by Imperial Decree. No. 473. , The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, February 3, 1899. I HAVE received your telegram of the 3rd Eebruary reporting the opening of Nanning. I congratulate you on this result, which is very satisfactory. CHINA. No. 2 .(1899). CORRESPONDENCE BETWEEN HER MAJESTY'S GOVERNMENT AND THE RUSSIAN GOVERNMENT WITH BEGAED TO THEIR RESPECTIVE RAILWAY INTERESTS IN CHINA. Presented-to both Houses of Parliament by Command of Her Majesty. June 1899. LONDON: PBINTED FOR HER MAJESTY'S STATIONERY OFFICE BY HARRISON AND SONS, ST. MARTIN'S LANE, PEISTTBES IN OBBINABT TO HEE MAJESTY. And to be purchased, either directly or through any Bookseller, from EYRE AND SPOTTISWOODE, East HAEDiNa Stebbt, Fleet Steb«t, E.G., and 32, ABiNGfroN Steeet, Wbsiminstee, S.W.J ok JOHN MENZIES & Co., 12, Hanotee Steeei, Edinbueoh; and 90, West Nile Stebbt, GI-lasqowj oe HOD&ES, FlOaiS, & Co., Limited, 104, Gbapton Stbret Dubi^ih. [C— 9329.] Price 9id. TABLE OE CONTENTS. Nn. 1 10 11 12 '?i3 Name Sir N. O'Conor Sir C. MacDonald .. To Sir C. Mac Donald Sir C. MacDonald ., To Sir C. MacDonald Sir C. MacDonald . . To Sir C. MacDonald Sir C. MacDonald .. j» )> • • >j >j • . To Sir C. Monald Sir C. MacDonald . To Sir C.Scott Telegrapliici Telegraphic Teleg^raphic Telegraphic Telegraphic Telegraphic Date. 14 5T )y 15 To Sir C. Mac 16 To Sir C. Scott 17 Sir C. Scott 18 To Sir C. Scott Telegraphic Telegraphic Telegraphic Felegraphic Telegraphic Telegraphic Telegraphic [322J Feb. 1-2, 1898 Mar. 18, May 7, .June 15, July 8, 10, 24, Aug. I, 6, June 23, Aug-. 8, 10, 12, 13, 13, 17, 18, 1», Subject. Has communicated to Russian Government conditions on which Her Majesty's (Govern- ment have agreed to make a loan lo China. . Interviews with Yamen and Russian Charge d'Affaires in regard to Mr. Kinder and the railway north of Shanhaikuan Approves language as reported in No. 2 Peking and Newchwang Railway. . Preliminary Agreement signed with Hong Kong and Shanghae Bank Rumour of threat used by Russian Charge d'Affaires in regard to Northern Extension Railway Refers to above. No such threat used Hong Kong and Shanghae Bank state that if mortgage of Northern Extension is prohi- hibited, security for Joan is insufficient Reuter's agent has telegraphed that Russian opposition has caused Chinese Government to abandon loan from Hong Kong and Shanghae Bank . . ' . . Northern Extension Loan. Yamen state they cannot allow European control or mortgage of line to be part of Agreement . . Copy of preliminary Agreement, for loan from Hong Kong and Shanghae Bank. Account of negotiations Newchwang Railway, Has 'informed Chinese Minister that Russia has no right to object to a mortgage loan by the Hong Kong and Shanghae Bank Northern Extension Railway Loan. Proposed language to Yamfen Railways in China. Interview with M. Lessar, who suggested agreement between Great Britain and Russia Northern Extension Railway Loan. To address i strong remonstrance to Yamen . . . . ' I I Northern Extension Railway Loan. Interview with M. Lessar on 12th August .. .J Newchwang Railway. To call attention of, Russian Government to action of Russian Chargg d'Affaires at Peking .. _ ' Refers to above. Reply of Count Mouravieff to representatiolu " . . i Refers to No. Ifi. Russian Minister in error in supposing that Russo-Chinese Agreement preceded interest , which Hong Kong and Shanghae Bank lake in Newchwang Kail- way. Observations on Russian suggestion fpr settlement of question Pai TABLE OP pONTENiTS, lU 19 20 Niime. 23 24 26 30 32 33 34 35 36 38 35 .Sir G. Scott Sir C. MacDonald . . To Sir C. Scott Sir C. Scntt » »i To Sir C ecolt Telegraphic Telegraphic Telecrr.iphic Telegiaphic Date. To Sir C. Scott Sir C. Scott Sir C. MacDonald . . Sir C. Scott Sir C. MacDonald . . Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic I'elegraphic Telegraphic Telegraphic Telegraphic Sir C. Scott To Sir C. Scott To Sir C. MacDonald Sir C. Scott To Sir O.Scott Sir C. Scott Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Aug.,21, n 21, £6, I 27, IS, 21, Sept. 2, 2, •2, 3, 5, 7, 7, 10, 10, 10, 10, 6, ,14, 16., Subject. Replies toi^ttoVP- , Russian [proposal for agree- ment! Language held by Count Mouravieff Siianhaikqan-Newchwana' Railway. Observa- tions on questionof control Newchwaiig Railway. To point out that fresh -obstacles -may be^ thrown in way of satisfac- tory settlement of difiicuUies Refers to above. Difficulty caused by absence of Count Mouravieff Shanhaikuan-Newchwaug Railway. Interview with Count Mouravijeff . Further interview with Count Mouravieff. His observations on M. Lessar's suggestion for agi^pemeiit between Grpat Britain and Russia . . • ■ • • • ' Proposed , Agreement between Great Britain and Russia. The jEmperor approves sug- , gestio!! ; Pasre Proposed Agreement. Mouravieff Refers to No. 25. Suggests addition Observations of Count Proposed Agreeinent. Proposed ,Agr(!ement. Count Mouravieff sug- gests friendly form .. .. ^. Reported, Agreement between Great Britain , and Russia. Russo-Chinese Bank offering terms which make competition impossible for any bank not supported by its Government. . Will try to get explanation as to attitude of, Russian Government towards Russo-Ohinese Bank Has called Count Mouravieff's attention to reported attitude of Russo-Chinese Bank . . Refers to' No. 30. Describes line existing to the west of the Great Wall Northern Extension Railway. Russo-Chinese Bank seems to have dropped out of compe- tition . . . . .J I Count Mquravieff says the Russo-Chinese Bank has no j intention of competing for loan for Newchwang line. Minister of Finance in javour of written Agreement between the two Governments Russo-Chinose Bank appears to have dropped out of competition for railway to N'ewchwang Preferential rates should be provided against ,in agreement with Russia in regard to rail- way Concessions in Manchuria and Yang-tsze region Account of negotiations with Count Mouravieff Refers to No. 34. To report when Count Mouravieff's proposal is approved by the Emperbr • ,. . . . ., , . . Refers to above. Course proposed by Count Mouravieff , . iv TABLE OF CONTENTS. No. Name. Date. Subject. Page 40 Sir C. MacDonald .. Telegraphic Sept. 19, 1898 Northern Extension Eailway Loan. Agree- ment to be signed with Hong Kong and Shanghae Bank 18 41 Sir C.Scott Telegraphic 19, Agreement with Russia. The Emperor approves proposal for written Asreeraent . . 19 42 To Sir C. Scott Telegraphic 20, Authorizes him to discuss wording of a written Agreement with Count Lamsdorff 19 43 J» 99 • • • * 20, Board of Trade suggest that provision to guard against preferential railway rates should be inserted in any Agreement with Russia re- garding railways in China .. ■ .. 19 44 Sir C. Scott Telegraphic 21, Negotiations with Count Lamsdorff in regard to form cf proposed Agreement 20 45 To Sir C. Scott Telegraphic 22, Refers to above. Approves action . . 20 46 S? )» • • Telegraphic 24, Question of definition of Yang-tsze region and Manchuria 20 47 J7 99 • • Telegraphic 24, Proposed Agreement. Essential to have arrangement with Russia as regards pre- ferential rates,. 20 4S Sir C. Scolt • • 22, Proposed Agreement. Negotiations with the Russian Government . . 21 49 To Sir C. MacDonald • • 27, Loan for railway from Shanhaikuan to New- chwang. Assurance which Her Majesty's Government ars ready to give to the Hong Kong and Shanghae Bank 24 50 Sir C. Scott Telegraphic Oct. 4, Railways in China. No progress can be made in negotiations till return of M. de Witte 24 51 » )j •• • • Sept. 30, Proposed Agreement. Progress of negotia- tions 24 52 Sir C. MacDonald .. Telegraphic Oct. 11, Final Agreement for Northern Extension Rail- way Loan signed yesterday 26 53 Sir C. Scott •• Nov. 2, Proposed Agreement. Conversation with M. de Witte 26 54 >> )j •• Telegraphic 8, Proposed Agreement. Count Lamsdorff wishes negotiations to be delaved till return of Count Mouravieff ., 27 55 To Sir C. Scott •• 10, Refers to No. 53. Approves his language . . 27 5C Sir C. Scott • • 8, Proposed Agreement. Conversation with Count Lamsdorff 27 57 Hong Kong and Shanghae Banking Corporation o • 23, Shanhaikuan-Newchwang Railway Loan. Re- quest Her Majesty'.s Government to give promised assurance 28 58 Sir C. MacDonald . , •• Oct. 11, Northern Railways Loan. Account of nego- tiations - " - " a . 37 59 »9 7> • • « • 12, Copy of Agreement relative to Nanp'iao mines 39 60 To Sir C. MacDonald ■ • Dec. 8, Refers to No. 58. Approves action 42 61 Sir C. MacDonald . . Telegraphic 10. Agreements for Northern Railway and coal mines ratified • • • » 42 62 To Sir C.Scott Telegraphic 14, Proposed Agreement with Russia. Has Minis- ter for Foreign Affairs submitted draft ? 42 TABLE OE CONTENTS. No. 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 80 81 82 83 84 Name. Sir C. Scott To Sir C. MacDonald Sir C. MacDonald .. To Hong Kong and Shanghae Bank To Sir C.Scott Sir C. Scolt 5? >» )> )t Sir C. MacDonald Hong Kong and Shanghae Bank Sir C. MacDonald .. To Hong Kong and Shangliae Bank To Sir C. MacDonald Sir C. Scott Hong Kong and Shanghae Bank Hir C. Scott To Sir C. MacDonald To Sir C. Scott » » To M. de Staal Sir C. MacDonald . . To M. de Staal Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Date Dec. 15, 1898 27, 28, 29, Jan. 1, 1899 Dec. 29, 1898 Jan. 11, 5, 1899 Dec. 10, 1898 Jan. 24, 1899 Telegraphic Telegraphic Telegraphic Telegraphic 26, 26, 28, 25, 31, 31, Feb. 2, 2, 3, 6, 9, 12, Subject. Proposed Agreement. Count Mouravieff awaits return of Emperor Newchwang Railway Loan. Has he received pledge respecting non-alienation from Chinese Government ?, . . . . ■ •• Replies to above. Pledge received . , Informs of above Proposed Agreement with Russia, Any fur- tiier information ? Proposed Agreement. Count Mouravieff will now submit draft to Emperor Proposed .Agreement. Emperor's Council deferred owing to illness of M. de Wilte . . Proposed Agreement. Conversation with Count Mouravieff Ratification of Agreements with Hong Kong and Shanghae Bank for Newchwang Railway and Nanp'iao mines Draft prospectus of loan . . Imperial Edict issued dismissing Hii from all railwavs . . . . Her Majesty's Government consent to take note of assurance of Yamen in regard to non-alienation of railways named in contract for loan as binding on the Chinese Govern- ment Refers to No. 71. Approves his proceedings . Proposed Agreement with Russia. Count Mouravieff and M. de Witte will see the , Emperor .. .. .. Acknowledges No. 74 .. .. Proposed Agreement. Reported action at Newchwang by British Legation hostile to Russian interests Newchwang. Has he made any demand likely to exasperate Russia ? .. .. Page Refers to No. 78. referred to Has no iiiea what is Newchwang. Inquiry of Russian Ambassador as to reported action of British Legation at Peking hostile to Russia Newchwang. Sir C. MacDonald cannot under- stand what hostile action is referred to Newchwang. Has never supported to the Yanieu any application for extension of British Settlement Railways beyond the Great Wall. Fear of Russian Government that control might pass out of Chinese hands. Is communicatinnf with Hcng Kong and Shanghae Bank 4-2 43 43 43 43 44 44- 44- 44- 45 5.3^. 54> 54 54- 54 ■)^. 55- 56 £& 56 VI .TA?LE 05 CONTENTS. No. 86 87 88 Name. Sir C.Scott :■■•> 1) ij 89 ! British and Chinese ; Corporation 90 To Sir C. Scolt 91 32 93 94 95 •96 •97 98 99 100 101 102 ,103 104 105 106 Date. Feb. 2, 1899 6, To M. de Staal To Sir C. MacDoiialcl To Sir C. Scott ., Sir C. MacDonald . . Sir C. Scott To Sir C. Mac Donald To Sir C. Scott Sir C. Mac Donald .. 1' V • • To Sir C. Mac Donald Sir C. Scott To Sir C. Scott 6, 13, 1-^ 14, Felegraphic; 19, Sir C. Scott )' 5T Telen-raphic Telegraphic Telegraphic Telegraphic Telegraphic Telegraphic Telegranhic Telegraphic Telegraphic Felegraphic Telegrapliic £2, 24, 25, 27, 28, 28, 28, -Mar. 2, 8, 10, 2, 9. SuBJtECT. i'arfe Proposed '• Apresmeat.' . , Rumour ;■ of I Jiostilt; action of British Legation at Newchwang. Conversation with Count Mouravieff Newchwatig. lliimoured action hostile to Kussia. Conversation with Count Laras- dorff .. .. Proposed Agrerment. M. de Witte . . Conversation with Russian proposals for Agreement .. Do not flaim any right to take possession of lines beyond Shanhaikuan Railways beyond the Great "Wall. Fear of Russian (Jovernment that control may pass out of Chinese hands. Assurance given by the British and Chinese Corporation Copy of No. 89.. Northern Hallways Loan. British and Chinese Corporatio" anxious for precautions to pre- vent misapplication of proceeds .. Refers to No. P8. Her .Majesty's Grovernment regret scanty dimensions of proposed Agree- ment .. Directorate of Northern Railways. Chang to be in charge . . Eefers to No. 93. Has informed Count Mou- ravieff that Her Majesty's Grovernment are ready to accept Agreement ., ,. Eeport that Russian Minister has lodged pro- test against Eailway Loan prospectus Proposed Agreement. Acknowledges No. 88. Observations .. Yamen have given assurance that Hsii will remain Chief Director . . Ohjections of Eussian Chargg d'Affaires to Northern Railways Agreement .. Eefers to No. 96. Grounds of Eussian objec tion to Northern Eailway Loan prospectus prospectus . . Understanding between Kussia and England superseded the Russo-Chinese Agreement Russian objections to Newchwana Railway Contract. Instructions sent to Russian Charge d'Affaires at Peking Any ol)jection to announcement of above in House of Commons? .. * " . . Refers to above. Official communication from M. de Staal may be announced in the House. Proposed Agreement with Russia. Conver- sations with Count Mouravieff and Count l.anisdorff • • • . • . Proposed, Agreement. Refers to No. 97. Conversation with Count Mouravieff. Note' to him 57 58 59 59 62 62 63 63 63 63 64 64 64 65 65 66 66 f6 67 67 67 68 TABLE or CONTENTS. vu No. Name. ■ Date. Subject. Pape- 107 To Sir C. Scott . , -•• Mar. 15, 1899 Newchwang iJailwav .Contract. Action of Russian , Charge d'Affaires at Peking. Con- .versation with M. de Staal 71 108 Sir C. Scott Telegraphic 15. Proposed Agreement. Russian Government agree 10 extension of scope ■ '. . 71 109 •To Sir C. Scott Telegraphic • ■■; 16, Refers to above. , , Obseirvations 71 110 Sir C. Scott •• 11, Newchwang Railwav Contract. Action of Russian iChargg d'Affaires at Peking, Con- versation with Count .Mouravieff .. 72 111 To Sir C. Scott Telegra))hic 18, Newchwang Railway ^Contract. Question of appointipent of British engineer and Eurp- peau accoutant 1 •• •• ••' 73 112 ■ fj JJ • • Telegraphic 19, Agreeuieiiit with Russia, . To express apprecia- tion of jCouht Mouiiavieff 's conciliatory and friendly spirit.. .. ., 73 113 Sir C. Scott •' 17, Agreement with Russia. Note from Count Mouravjieff .. .. .. .. 7a lU ))■'■»> • • relegraphic 22, Refers t » • • •• 17, Agreement with Russia. Refers ^o No. 113. Observations . . 75 117 s> >j • • •• 22, Newchwang Railway Contract. Question of foreign engineer and accountant. Conversa- tion with Count Mouravieff . . , . 76- 118 » J> Telegraphic 29, Russian Government do not object to British enjiineer and European accountant. Count Mouravieff calls attention to mention of a line to Sin-Minting 78 119 To Sir C.Scott Telegiapliic Apr. 7, Refers to above. Proposals iu regard to line to Sin-Minting 78 120 » 77 • • •• 7. Refers to No. 1 17. Approves language to Count Mouravieff' 78 121 Sir C.Scott •• Mar. 31, Communications with Rnssi.in Government in regard to question of foreign engineer and accountant, and line to Sin-Minting 79' 122 J5 )> • • Telegraphic Apr. 10, Rpfers to No. 119. Has communicated pro- posals of Her Majesty's Government to Count Mouravieff 81 123 JJ JI Telegrapliic 12, Refers to above. Reply of Russian Govern- ment to proposals of Her Jlajesty's Govern- ment 82 124 British and Chinese Corporation •• 14, Line to Sin-Minting. Acceptance of arrange- ment as satisfactory 82 125 To Sir C. Scott Telegraphic 15. Refers to No. 123. British and Chinese Corporation accept Russian reservation 8.3-- 126 Sir C. Scott . . . •• IS, Sin-Minting bi-anch. Memoranda exchanged with Russian Government b'3 127 >, » • • Telegraphic 17, Agreement with Russia. Count Mouravieff proposes exchange of notes 84 Till TABLE or CONTENTS. No. Name. Date. Subject. Page 128 To Sir C. Scott • • Apr. 18, 1899 Refers to No. 121. Approves his language .. 85 i29 Sir C. Scott Telegraphic 19, Text of identic notes proposed by Count iMouravieff .. 85 120 To Sir C. Scott Telea;raphic 22, Eefers to above. Proposes alteration 86 131 Sir C. Is'cott • • 18, Eefers to No. 125. Count Mouravieff pro- poses exchange of notes 86 13'.> 'J )) • • • • 18, Sin-Minting branch. Eeservations of Eussian Grovernment in regard to lines running south- west from Manchurian line 87 133 »» W • • 20, Text of identic notes proposed by Count Mouravieff .. .. .. 87 134 )' 5) • • Telegraphic 28, Notes signed and exchanged 88 135 To Sir C. Scott Telegraphic 29, Congratulates him on success of negotiations . . 88 .136 »» jf • • Telegraphic 30, Has authorized Her Majesty's Chargg d'Affaires to concert with his Russian colleague for communication of General Agreement tO the Chinese Government 89 -]37 To Mr. Bax-Ironside Telegraphic 30, Substance of Agreement arrived at. To con- cert with his Russian colleague for communi- cation of General Agreement to the Chinese Government . . 89 138 Sir C. Scott •• 29, Text of notes exchanged . . 89 Corre.spondence between Her Majesty's Government and tie Russian Government with regard to their respective Kailway Interests in China. Xo. 1. Sir N O'Conor to the Marquess of Salisbury. — {Received February 16.) (Extract.) St. Petersburgh, February 12, 1898. I COMMUNICATED to Count LamsdorfF yesterday in the absence of Count MouraviefF the conditions on which Her Majesty's Government agreed to make a loan to China, and Count LamsdorfF informed me of" the conditions alleged by the Chinese Government to have been preferred. These conditions did not differ from those I had stated except that they included certain mining and railway privileges in Pechili. Count Lamsdorff was not able to speak officially but he did not seem to think that there was any serious obstacle as far as Russia was concerned to the loan with the exception of the clause relative to the opening of Talienwan. He hinted, however, that the Russian Government would try to profit by the conclusion of the loan to obtain the fulfilment of certain promises made to them by China, but I could not extract from him their exact nature. He again repeated his assurance that the Russian Government would be quite willing, as soon as they had come to an arrangement with China, to open Talienwan to foreign trade and that they had no idea of attempting to impose higher Tariffs at this port or throughout the north of China than was authorized by existing Treaties between China and Foreign Powers. No. 2. Sir C. MacDonald to the Marquess of Salisbury. -^{Ueceived May 1.) (Extract.) Peking, March 18, 1898. HAVING heard that M. PavlofT, the Russian Charg-6 d'Aff'aires, has again addressed the Yamin on the subject of the removal of Mr. Kinder from' his position as Superintendent of the railway lines north of Tien-tsin, I had an interview with the YamSn, and asked them whether this was the case. They replied in the affirmative, and said that the Russian Charge d'Aff'aires had both written and spoken very strongly on this point, and had in a recent despatch requested the removal of Mr. Kinder from the line of Tien-tsin to Shan- hai-Kuan, and his replacement by a Russian, and had also stated that the line north of Shan-hai-Kuan should be constructed by Russian engineers and with Russian capital. The Tsung-li Yam6n added that M. Pavloff was very persistent, and used very strong language with regard to this question, and was pressing very strongly for the removal of Mr. Kinder, but that they had made no promises. At an interview I had with M. PavlofF yesterday I mentioned that the Tsung-li Yam&n had denied that they had ever given him any promises with regard to the employment of Russian engineers or Russian capital on the line north of Shan-hal- Kiian. M. Pavloff replied that their statement was absolutely untrue, and added that at the interview which he had with them last December he again brought up this question, and they assented to the employment of Russian capital and Russian engineers only on the line from Shan-hai-Kuan towards the Russian frontier. The [322J B ^ same day he wrote a despatch to the Yanien, placing the above on record, and expressing his satisfaction at their acquiescence. To this despatch he had received no answer, and he therefore considered that the matter had been settled, and had informed his Government in that sense. I said I did not know what policy Her Majesty's Government would take with regard to the line north of Shan-hai-Kuan, but the removal of Mr. Kinder from lines which had been constructed under his superintendence, and of which he was now in charge, against the wishes of the Chinese Government and at the demand of Russia, would, I was sure, be looked upon as a most unfriendly act by my Government. M. PavlofF said that there was no intention or desire on the part of his Government to have Mr. Kinder removed from the lines he had constructed, and of which he was now in charge. I said I was very glad to hear from him in so formal a manner that his Government hid no intention of asking for the removal of Mr. Kinder, or of interfering with him in the position he at present held. M. PavlofF repeated his assurance. No. 3. The Marquess of Salisbury to Sir C. MacDonald. Sir, Foreign Office, May 7, 1898. I APPEOVE the language which, as reported in your .despatch of the, 18th, March, you used in speaking to the Tsung-Ii Yam^n and to the Russian Charge d' Affaires on the subject of Mr. Kinder's employment in the construction and maintenance of the railways north of Tien-tsin. I am, &c. (Signed) SALISBURY. No. 4. Sir C. MacDonald to the Marquess of Salisbury .— {Received June. 15.) (Telegraphic.) Peking, June 15, 1898. PEKING and Newchvvang; Railway. A preliminary Agreement was signed to-day between the Director-General of Railways and the Hong Kong and Shanghae Bank. No. 5. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Ofce, July 8, 1898. ACCORDING to a Reuter telegram published in to-day's " Times," the Russian Oharg^ d Affaires, M. Pavloff, has informed Yam6n that if the Northern Extension Railway is persisted with, the Russian Government may be obliged to seize as compen- sation the Province of Hi or Kuldja. Report as to the truth of above. No. 6. , - Sir C. MacDonald to the Marquess of Salisbury .—.{Received July 10.) (Telegraphic ) p^^^g^ j.j^y ^q, i898. m such threat as that reported by Reuter has been made use of bv the Russian Charge dAffaires to the Yam^n. No. 7. The Marquess of Salisbury to Sir C Mac Donald. (Telegraphic.) Foreign Office, July 24, 1898. BANK state that " if mortgage of the Northern Extension Railway is prohibited in deference to Eussian demands, the security now offered for the loan is insufficient." They hope, however, that the conditions will not be allowed. No. 8. Sir C. MacDonald to the Marquesn of Salisbury. — {Received August 1.) (Telegraphic.) Peking, August I, 1898. KEIJTEE'S agent here telegraphed home yesterday that Eussian opposition had caused the Chinese Government to determine to abandon the loan from the Hong Kong and Shanghae Bank for the Northern Extension Line. Above is at present without foundation. No. 9. Sir C. MacDonald to the Marquess of Salisbury. — (Received. August 6.) fTelegraphic.) Peking, August 6, 1898. NOETHERN Extension Eailway Loan. I have received a despatch from the Chinese Government informing me that they can allow no European control and no mortgage of the line to be part of the loan Agree- ment, as such terms would be an infringement of an Agreement they have already entered into with M. Pavloff'. This, according tO' the agent of the Hongkong and Shanghae Bank here, makes it impossible for the Bank to float the loan as a commercial enterprise. The Emperor has, however, already granted power of signing the definite lo^n Agreement to Hu Yu-fen, the Director- General of Northern Railways. I have an interview with the Yamen this afternoon, at which I propose informing the Ministers that I have referred the matter to your Lordship, and that meanwhile I do not assent to the terms of their despatch. No. 10. Sir C. MacDonald to the Marquess of Salisbury. — {Received August 8.) My Lord, Peking, June 23, 1898. I HAVE the honour to inclose a copy of the preliminary Agreement for a loan recently signed here by the agent of the Hong Kong and Shanghae Banking Corporation and bv Hu Ta-jen on behalf of the North China Eailway Administration. ' The negotiations began in April, much opposition was encountered, but this was overcome by Mr. Hillier, agent of the Hong Kong and Shanghae Bank here, and the terms of a preliminary Agreement were Verbally arranged during the first week of this month. On the 14th June I was informed that there was considerable danger of the transaction falling through in consequence of a strong objection which was laid against it at the YamSn by the Eussian Charg^ d'Affaires. The signature oi the preliminary Agreement was reported to your Lordship by my telegram of the 15th June. At an interview on the 16th June the Ministers confirmed the report of M. Pavlow's objection, which they much resented. _ , It was based, they said, on a Russian interpretation of a Treaty recently signed at St. Petersburgh. According to their view, on the other hand, the terms of the very section appealed to expressly reserve fall liberty to China to extend tlie Shan-hai-Kuan Eailway without Eussian interference, and the Chinese Representative at St. Petersburgh had been instructed to poirit tiiis out to the Russian Government. f322j ' B 2 4 Both at this interview, and again on- Monday the 20th, strong protests were lodged by me against any interference from the Eussian Charge d'Affaires in the private biisiness transaction of a British bank. The negotiations between Hu Ta-jen and the Hong Kong and Shanghae Bank, of which I was aware, but without which, up till then, I had studiously avoided sajing anything officially for or against, had no political colour whatever, and were simply directed to supplying the railway administration with funds from the open market. If such a transaction were labelled as political, hardly anything could escape the imputa- tion, and the result would be intolerable to a nation possessing Great Britain's trade interests in China, I have, &c. (Signed) CLAUDE M. MacDONALD. Inclosure in No. 10. Preliminary Agreement between Hong Kong Bank and Director-General Hu respecting Pehing-Newchwang Railway Loan. THIS is a preliminary Agreement made between His Excellency Hu, Governor of Peking and Administrator-General of the Imperial Eailways of North China within and without the Great Wall, hereinafter called the Administrator-General, of the one part ; and the Hong Kong and Shanghae Banking Corporation representing a British Syndicate hereinafter called the Syndicate, of the other part. 1. The Syndicate is hereby authorized by the Administrator-General to make arrangements to float and issue, on behalf of the Eailway administration on the best terms obtainable on the market, a sterling loan for the equivalent of about (16,000,000 taels), for the construction of a railway-line from Chung-hou-sou to Hsin Ming-tien, and a branch line to Ying-tsou, and for the redemption of existing loans to the Tien-tsin- Shan-hai-kuan and Tien-tsin-Su-kou-chiao lines. 2. The security for the loan shall be the permanent way, rolling-stock, and entire property, together with the freight and earnings of the existing lines between Peking, Tien-tsin, Tang-ku, and Chung-hou-sou, and also of the proposed new lines when constructed, in addition to the rights of mining coal and iron, which will be Retained by the Eailway administration on each side of the proposed new lines, for a distance to be determined. In the event of default or arrears in payment of interest or repayments of principal, the said railway lines and mines shall be handed over to representatives deputed by the Syndicate, to manage them on their behalf, until principal and interest of the loan are redeemed in full, when the management will revert to the Eailway Administration. It will, however, be provided that if such arrears are for a small sum, and it appears desirable to the Syndicate to extend the due date of their payment for a term not exceeding three months, it shall be open to the Syndicate to do so. In the event of any special circumstances arising necessitating the introduction of important changes by the management aforesaid, these changes shall be effected in consultation with the Administrator-General, and in the best interests of the railway. In the case of war or famine, troops and grain will be transported over the lines on terms to be arranged hereafter. No further loan, charge, or mortgage shall be charged on the security named above until this loan is redeemed. 3. During the currency of their loan, the principal members of the railway staff shall be capable and experienced Europeans who shall be, as at present, appointed by the Administrator-General of the Eailway, and may be, in the event of their misconduct or incompetency, dismissed, after consultation with the Chief Engineer. If there are Chinese with sufficient engineering or traffic experience, they may be appointed as well as Europeans. Should it be necessary to appoint a new Chief Engineer, such appoint- ment shall be made in consultation with the Sjmdicate. In addition to above, a capable and experienced European railway accountant shall be appointed to inspect all the accounts of the railways. All receipts and earnings of the lines herein specified shall be paid into the credit of the Eailway Administration with the Hong Kong and Shanghae Banking Corporation Tien-tsin, together with 50,000 taels annually payable under the Board of Eevenue's arrangement, approved by the Throne, by each f the Provinces of Shansi Sheu«i Ilonan, and Annul for railway purposes for ten years. ' " ' All expenses of repairing and maintaining lines will.be paid from this account, the remainder of which shall then be charged with the service of this loan. 4. The rate of interest, price, term of years, and other particulars whall be left to the Sj^ndicate to arrange on the best terms" possible on the market when the mviinent appears favourable for floating the loan. Instalments of proceeds will be arranged as far as possible to suit the progress of construction and the requirements of the Adminis- trator-General, interest being calculated from the date of such payments. The Loan will be redeemable by annual drawings to be scheduled in the final Agreement. Besides the drawings so scheduled, the Administrator-General may from time to time, on giving due notification to the Syndicate, call for extra drawings to be held, bonds so drawn being redeemed by the Eailway Administration at 20 per cent, premium on their par value. 6. If it should be found that the Loan cannot be floated without the introduction of some special attraction, the Administrator-General shall memorialize the Throne, recommending that a Concession of mining rights be granted to the Syndicate at a point or points on the lines, and on terms to be arranged with the Syndicate on the basis of the mining Eegulations newly established by the Tsung-li Yamen. The requests of the Syndicate will be confined to mines within a distance of 5 U of the railway. 6. The date of issue of this loan shall be left to the discretion of the Syndicate, to be fixed in accordance with the state of the market, but should it be found impossible to issue it before the 1st day of October next, the Syndicate will arrange to advance to the Administrator-General on or about that date, an instalment of about 2,000,000 taels on account of, and repayable out of the proceeds of the loan when floated. The terms of this advance shall be left to the arrangement of the Syndicate on the best terms obtainable, interest not to exceed the rate of 5^ per cent, per annum, and the Syndicate shall be authorized to issue temporary bonds for the amount if required. 7. For the satisfaction of the investing public who are unacquainted with China, a satisfactory report will be required from District Engineer, Mr. J. Ginnell, as lo the condition and earning power of the old lines, and as to the route, prospects, and mineral wealth of the new lines to be constructed, and Mr. Ginnell shall be instructed by the Administrator-General to proceed to London as soon as possible after the signing of this preliminary Agreement, to confer with the Syndicate on these matters. 8. The terms of this preliminary Agreement will, immediately after signature, be submitted by the Administrator-General to the Throne for sanction by Imperial Edict, which shall be officially communicated by the Tsung-li Yam^n to the British Minister in Peking. 9. Three months from the date of signature of this preliminary Agreement shall be allowed to the Syndicate to accept or decline its terms. Upon their confirmation by the Syndicate, this preliminary Agreement shall be replaced by a definitive Agreement, providing for all details. Signed at Peking, this 7th day of June, 1898, being the 19th day of the 4th moon of the 24th year of the Emperor Kuang Hsii. (Seal of Administrator-General of Eailways within and without the Shan-hai-kuan boundary.) For the Hong Kong and Shanghae Banking Corporation, (Signed) E. G. HILLIEE, Agent No. 11. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) . Foreign, fee, Augtist 8, iSd?,. THIS afternoon I saw the Chinese Minister. I informed him that Eussia had no ri"-ht whatever to object to a mortgage loan being made by the Hong Kong and Shanghae Bank to . the JSTewchwang Eailway, and that I strongly advised China to pay no regard to the Eussian Government's objection. No. 12. Sir C. Mac Donald to the Marquess of Salisbury. — {Received August 11.) (Telegraphic.) Peking, August 10, 1898. NORTHERlSr Extension Eailway Loan. See my preceding telegram. At my interview with the Yamen four days ago, I told them, ' with regard to their agreement with M. Pavloff, that I had referred the matter to your Lordship on accouiit of its gravity. I beg to suggest that at a suitable occasion — which I conjecture may not be far distant — -I should inform the Yamen that the assent of the Cliinese Governmeilt to the interference of Eussia in an agreement of a simply commercial character is ' looked upon by Her Majesty's Government as a mark of extreme unfriendliness to Great Britain, and that the Yamen, having had a previous knowledge of the preliminary :' Agreement between the Syndicate and the Director-General of Northern Railways, Her Majesty's Government cannot recognise any understanding which is at variance ■with that Agreement. ' ,■ ■ '., No. 13. ; Mr. Balfour to ^ir C, Scott. Sir, _ ■ Foreign Qjffice, August 12, 1828.^ ,' , THE Russian^ Charge d'Affaires called on me, to-day at my irequest., After expressing my regret, that our, first' meeting should 'be in order to discuss difficulties ■between our respective countries, which I feared were assuming serious propprtipns. I went on to complain of the recent incidents wlilch had occurred in connection witii tjie proposed railway to, Newchwang. I. told him that according to the information yhich had reached us from Sir 0. MacDonald, a purely commercial enterprise the concession for which had, with the knowledge of the Emperor of China, been granted by Chinese officials to an English banking house, had been stopped by the remonstrances of the Russian Charge d'Affaires. M. Pavloff had apparently informed the Chinese Government that no loan could be permitted on the security of the line ,to be constructed between Shan-hai-kwan and Newchwanw, nor could conditions be allowed which would hand over its management to persons appointed by the mortgagees. I pointed out to M. Lessar that this was in manifest contradiction to the Treaty of Tien-tsin, to which Russia, herself had given her assent, and that the active- participation of the Russian Government in this violation of our riahts must .lead to consequences of great gravity. ° , . M. Lessar expressed his great i-egret that there should be any difficulties between 'the two countries, but observed that the course taken by his Governmeni involved no breach- of. Treaty greater than that which had been committed by Great Britain in connection with the question of Sir Robert Hart's successor. The Treaty of Tien-tsin provided for the equal treatment of all nations and undoubtedly in his view the engagement entered into by the Chinese Government that all Controllers of the Customs were, for ah indefinite future, to be Englishrae was inconsistent with the equality of privilege secured by Treaty to other countrie^' He further stated, that Russia was most anxious that British capital should be inve d in Manchuria, that she had no jealousy of British trade, but that British control of a important line of communication which might mean rivalry with the Man -h Railway could not be admitted by his Government. ^' ""^^ I replied that this was the first time that it had ever been suggested that th arrangement for the control of the customs was a violation of the Treaty of Ti f No such contention had been raised either at the time or since, and I could not^ d ^'^' that there was any analogy between the appointment of a customs officer undei I^^' Chinese Government and the refusal to allow a commercial undertaking in a nart 1 province of the Chinese Empire. If his argument were pressed to its logical concfn^''^'^ the Treaty would require the Chinese Government to appoint among Si? Robert H ?^ subordinates an equal proportion of Frenchmen, Germans, Russians, and others ^ M. Lessar suggested that the difficulties of the situation might perhaps be bourn 1)indiiiglierselfin'asirailar-manner with regard to the mucli'"Hchir Ind Ttio^p io^ ?^'^* distri'^t of the Yano-tsze. popui ^. -^^^^^. ^^QQ^^.^^ ...^. ...^ ^xi^v.i^ii.ic.-> ui uue suuation mignt perhaps be met htr arrangement between Russia and Great Britain, by which the latter should be bonV7 ^^ to mterest herself m railwav or mimng concessions in 'Mp,r^nV,,^■r;., •d,,^ „• '^^V™'^ ^°* railway, or mining concessions in Manchuria, Russia on her ous I said that for my own part I had always felt that great advantages would ensue if all the nations concerned could come to an arrangement on the basis of spheres of interest as regards railway and mining concessions, or of even leaving the whole country equally open to the commerce of the world. But there were manifest diflSculties in comiiig to a common agreement upon so thorny a subject, and an arrangement confined to two nations would be of far less value, especially if, as he informed me, Rus-^ia had nt>t the resources which would in any case enable her to take an active part in railway construction in Central China. M. Lessar stated incidentall}- that though the bankers of the Peking-Hankow line were the Eusso-Chinese Bank, the great bulk of the capital was; supplied by Belgians. There might be some French money in it, but there was no Eussian, as the Eussians found it difficult enough to, finance the Siberian and other railways which they already had in hand. As I understood M. Lessar, he, hoped that an arrangement might be come to with regard to the Newchwang Eailway if, in exchange for the concession on our part with reference to the mortgage on the line and its future management, Eussia were to assist, should that be necessary, in finding other adequate security for the Banks (such as that of Chinese revenues), were to engage to throw no obstacle in the way of the construction of the line, and were to undertake not to ask for, or assist in, working concessions in the Yang-tsze Vallej', provided We gave a similar undertaking with regard to Manchuria. I did hot indicate' any acceptance of this view, but again emphasized the gravity of the position into which both countries had been forced by M. Payloff's proceedings. I am, &c. (Signed) A. J. BALFOUE. No. 14. Mr. Balfour to Sir C. Scott. (Telegraphic.) , . Foreign Office, August 13, 1898. YESTEEDAY I had an interview with the Eussian Charge d'Afi'aires. I pointed out to' him the very grave position into which ' the two Grovernments had been brought by M. Favlofi"s action in connection with the Newchwang Eailway. An undoubted breach of our Treaty rights with China was. involved therein, rights \vhich Eussia had promisee! to respect (see Sir'N. O'Cbnor's telegram of the 16 th March). M. Lessar said that the objection oT Eussia was not to the construction of the railway, but only to the control of it being secured to British officials by the terms of the' contract with China, and to the fact of its being mortgaged to a British bank. M. Lessar did not deny that what was contemplated constituted a breach of the Treaty of Tien-tsin, but said that it was not a more serious breach than our arrangement in regard to the successors of Sir Eobert ,Hart. He suggested, , as far . as I understood him, that a satisfactory arrangement might be come to if England, while refraining from insisting that the line .should be. mortgaged to t!^e_Hong Kong, and Shanghae Bank, consented to adequate security being provided from other sources, for the bank's advance, Eussia to withdravy all objection , to the coijstruction of , the line, and to agree to abstain from taking any share in obtaining, or working couc.essions in the region of the Yang-tsze,, a similar arrangement being raade by us in regard to Manchuria. I gave ho indication that such an arrangement would be regarded by us as a satisfactory solution of the grave difficulties in which the two countries have been placed by M. Pavloff's action. ■ No. 15. Mr. Balfour to Sir C. MacDonald. (Telegraphic.) Foreign Office, August 13, 1898. WITH reference to your telegrams of the 6th and 10th instant and my telegram to St. Fetersburgh of the 13th, repeated to you today, you should remonstrate with Yam§n in strongest way on lines proposed in the secpnd paragraph of your telegram of the. 10th. No. 16. Mr.- Balfour to Sir C. Scott. (Telecfraphic.) Foreign Office, August 17, 1898. I HAVE to request you to call the attention of Count Mouravieff to M. Pavloff's action in connection with the Railway to Newchwang. It should be pointed out to him that it is inconsistent with the Treaty rights conceded by China to this country, and with the pledges of Russia that these Treaty rights shall be respected. Her Majesty's Government cannot possibly acquiesce in an arrangement which leaves all China open to the railway enterprises of llussia while excluding England from her share in the railway enterprises of Manchuria. If persisted in, such a pretension must inevitably produce international diflS.culties of the most serious kind. A feeling of great exasperation has already been aroused by it in this country. No. 17. Sir C. Scott to Mr. Balfour.— (Received August 18.) (Telegraphic.) St. Petersburgh, August 18, 1898. WITH reference to your telegram of yesterday : I went to see Count Mouravieff, and in the course of a long interview I spoke seriously to his Excellency in the exact sense of your telegram referred to above, and pointed out that the enterprise which was being blocked by M. Pavloff's action was of a purely commercial character. / Count Mouravieff, in reply, disclaimed any intention or desire on the part of Eussia to block British enterprise anywhere in China. He wished that concihatory articles, inspired by a real conception of Russia's action, might allay the public alarm in England which the exaggerated reports in the press had aroused. As regarded this particular line to Newchwang, which was so close to the Russian lease, and to the Hne which formed the outlet of the Siberian railway, it had been the subject of a special Agreement _ between Russia and China, and before the ^ Hong Kong Bank became mterested in it, the Chinese Government undertook not to let this particular line be mortgaged or fall under the control of foreigners, and not to construct it except with their own money. By Chinese money, as was subsequently explained to China, might be meant money borrowed on any other guarantee excepting the control of or mortcao-e on the line in question. i/r t7^^!^ ^* "^^^ ^°"^^ ^^'^^ *^^^ engagement of the YamSn was being violated, M. Tavloff was bound to remind them of it. • ff ^ ^^ engagement infringes our most favoured treatment rights Count Moura- viett denies for by the term foreigners, all non-Chinese, even Russians, are included, tor Russia has no wish or intention to obtain possession of the line, nor does she desire to raise obstacles to, or compete with, British railway enterprise in other parts ot Uiina— above all, m those m our particular sphere of interest. lo.T,^'^"^^''^^^??^ showed me a telegram which he had sent in this sense on the iUttiinstant to M. Lessar for his guidance when speaking on this subject to you. in conclusion. Count Mouravieff expressed a strong desire of the Emperor and of ■Russia that an understanding might be come to-satisfactory to the interests of both England and Eussia. No. 18. Mr. Balfour to Sir C. Scolt. ^""^^^ wTa^ff ^'^ . . , Foreign Office, August 19, 1898. Enroil Aff ^'^-^^^^^^^ '^« '^y telegram of the ITth instant, Russian Minister for nhmTrv/ u'"' ^^''~S'% '"^ ^'^ '" '''°' ^" ^upposin^ft that Russo-Chinesc Agreement tiles in T'p?^ Eaihvay preceded interest which Hong Kong and Shanghae Bank •Afh A^, 1 A^^ ''^^' ^^ Chinese Dircctor-Geneial to latter was made ^before the -pin iipiij, and the consequeiit negotiations were in progress before M. Pavloff sioned lus Agreement with the Tsung^h Yamen. ' viuu m^ulu Am I right in understanding Count MouravieflP to suggest as a way out of the present ditfiiculty : 1. That the building of the Newchwang Railway should be proceeded with, and, if need be, by lueans of a loan from the Hong Kong and Shanghae Bank ; but that the line should be Chinese under Chinese control, and should not be mortgaged to any Company of non-Chinese nationality ? 2. That Russia should engage not to take part iu or to press for railway Concessions in the Yang-tszc" basin, nor to throw obstacles in the way of such Concessions being obtained by England, England entering as regards Manchuria into a corres))oiiding agreement P If so, I think perhaps this might be made the basis of a settlement. No. 19. Sir C. Scott to Mr. Balfour. — {Received August 21.) (Telegraphic.) St. Petersburgh, August 21, 1898; WITH reference to your telegram of the 19th instant : Count Mouravieff, though careful not to be understood as making any definite suggestion before he had referred to the Emperor yesterday, distinctly said and repeated relative to the personal suggestion made by M. Lessar mentioned in your telegram of the ISth instant, that he was sure that a binding engagement between England and llussia, based upon that suggestion, would be perfectly satisfactory to the interests of both countries. For the present, I confined myself to saying that I was ready to submit for the consideration of Her Majesty's Government any definite suggestion he might make in this sense. No. 20. Sir C. MacDonald to Mr. Balfour. — {Received August 21.) (Telegrapliic.> • Peking, August 21, 1898.^ SHANHAIKUAN-NEWCHWANG Railway. Your telegram of the 19th instant to Sir C. Scott. I would draw attention to the fact that the Hong Kong and Shanghae Bank do not desire immediate control of the line, and have not asked for it, but that they have, on the other hand, stated repeatedly that it would be impossible to raise the loan in Europe- without the right of control in case of default. They have accepted a half share in the coal-mine in lieu of the mortgage on the railway. After the Director of Northern Railways had signed the preliminary igreement,- M. Pavloff protested against the grant of control in case of default. The only means of making the Chinese manage their railways properly and of insuring their paying is this threat of taking over control in case of default; all other agreements for railways contain a clause giving this right except the contract for the Peking-Hankow line, which goes much further, immediate control of the line beinc in this case granted to the concessionnaires. Should Her Majesty's Government come to a reciprocal agreement with Russia in regard to railways in the Yang-tsze region and in Manchuria, it should be clearly under- stood that Russia binds herself neither on her own behalf nor on behalf of any other Power to take part in, nor press for, nor throw any obstacles in the way of the acquisition by British subjects of railway concessions in the former district. No. 21. Mr. Balfour to Sir C. Scott. (Telegraphic.) Foreign Office, Auqust 26, 189S. EROM your telegram^ of the 21st instant, I understood that Count MouravieflF Avould make some suggestion as to railway Concessions in China after reference to [322] C 10 the Emperor. JSo such, suggestion has reached me. Meanwhile negotiations between the Hong Kong and Shanghae Bank and the Chinese Director- General of Railways have continued, and their result may be that fresh obstacles will be thrown in the way of a satisfactory solution of the difficulties which have been so unfortunately "created between the two Governments by the action of M. Pavloff. Point this out at once to the Russian Minister for Foreign Affairs. No. 22. Sir C. Scott to Mr. Balfour. — {Received August 27.) (Telegraphic.) St. Petersburgh, August 27, 1S98. I MAY find diOBculty in communicating confidentially with' Count Mouravieff on the subject of your telegram of yesterday, as both he and Count Lamsdorff have accompanied the Emperor to Moscow, and will be away five days. After my last interview with his Excellency on the 24th, the position was as follows : — It was better, he thought, to leave M. Lessar's personal suggestion as a germ capable of being developed, and not to make any definite suggestion for the present. In the absence of further instructions, I refrained from putting forward the suggestion contained in your telegram of the 19th instant, as I was doubtful as to whether it would prove to be entirely acceptable unless control by default and mining concessions in Manchuria were expressly excluded by it. Is it your desire that I should, without waiting further, make the suggestion in your above-mentioned telegram ? It is possible that M. de Staal may have instructions; he has just left for London. So. 23. Sir C. Scott to the Marquess of Salisbury. — {Received August 29.) (Extract.) _ St. Petersburgh, August 18, 1898. ON receipt this morning of Mr. Balfour's telegram of yesterday instructing me to call Count Mouravieff's serious attention to M. Pavlofl^'s action in opposing the contract for a mortgage loan from the Hong Kong and Shanghae Bank for the con- struction of the Shanhaikuan and Newchwang Railway, I at once sought an interview with Count Mouravieff, and notwithstanding the day being a strict religious and official holiday, readily obtained it. I began by saying that the importance of a telegram which I had just received must be my excuse for interrupting his Excellency's holiday, and as I had not yet had sufficient time since my arrival in St. Petersburgh to acquaint myself with all the earlier details of the serious question to which it referred, I thought it would make matters clearer if I read him the telegram myself, which 1 prooeeded to do. I then dwelt on the purely commercial character of the private enterprise which M. Pavloff had been exerting himself to block, namely, a loan for the construction of a Chinese railway to be secured in the manner customary in such cases, by a morto-ao-e, and I pointed out the inconsistency of this obstruction with the Treaty rights conceded to Great Britain by China which the Russian Government had repeatedly promised to respect. Count Mouravieff listened with serious attention to the words of the telegram, and then replied that it was evident that a grave misapprehension of the real nature of M. Pavloff's action in this matter existed in England, and it was most desirable to dissipate false impressions of the policy and attitude of the Russian Government which had been encouraged by exaggerated reports in the press. Upon this he proceeded at some length to explain to me the attitude of Russia towards railway enterprise in China, prefacing his remarks by observino- that a clear distinction must be made between the case of the particular railway to which my communication referred, and that of other projected lines to the south of Pekino- 'J^akmg up a map of North China, he drew my attention to the projected line for the Northern Extension Railway to Newchwang, and the close propinquity of the 11 northern terminus to the line which was to serve as outlet for the trade, of the Eussian Trans-Siberian Railway. TT 11 lie had concluded and siojned an Agreement with the Chinese Government by which China engaged that if this northern extension Avas made, the line should only be constructed Avith China's own money and always remain in Chinese hands and Tinder Chinese control. ITe begged your Lordship to note that this Agreement Avas concluded, signed, and confirmed by both Emperors before there Avas any indication of an interest taken in this particular line by the Hong Kong Bank ; he could not remember the precise date on Avhich he had signed the Agreement, but he thought it was in the month of April last. This Agreeraent was not directed against the interests of England or of any other Povyer; the limitation being general in its character, applying to all non-Chinese nationalities, Russians included, could not be regarded as infringing the Treaty rights of most favoured nations. The Agreement itselO was one which two independent Powers Avere clearly entitled to conclude. In reply to a subsequent inquiry by the Chinese Government as to Avhat was to be understood by the terms " China's own money," ho had explained that these terms Avould not, in the opinion of the Russian Government, prevent China from obtaining- money for the construction by means of a foreign loan, provided that the security given Avas not a mortgage on the railway, or any condition which might entail the eventual transfer of the line or its control to non-Chinese hands. As soon as M. PavlofE found that the Chinese Government were in negotiation for a mortgage loan for this line with the Hong Kong Bank, he was in duty bound to- call, in as forcible a manner as he could, the attention of the Yamen to this gr^ve breach of their formal engagement to Russia. As regarded raihvay enterprises to the south of Peking in Central and Southern China, neither the Russian Government nor Russian enterprise had any interest Avhatever, and all the persistent rumours to the effect that the Russian Government or Russian money had any share or interest in the Belgian Railway Concession scheme, A^ere quite unfounded. All that the Russian Government, if I rightly understood his Excellency, has done in this matter, has been at the personal request of the King of the Belgians to use their good offices at Peking, and to obtain certain banking facilities for the Belgian. Syndicate. He repeated that so far from desiring to place obstacles in the waj of British trade or railway enterprise in Central and Southern China, and especially in the Yang-tsze provinces, understood to be our special sphere of interests, Russia understood her own obligation to recognize and respect the Treaty engagements of China to foreign PoAvers. The suspicion fomented in the English press that Russia Avas aiming, either single-handed or in combination Avitli others, at driving back British commerce and enterprise in China, was as absurd as it was unfounded. He Avould remind me that since the Russian acquisition, by lease, of Talienwan and Port Arthur, England had obtained many large and very valuable concessions, among others that of Wei-hai Wei, an acquisition which, whether of value or not, was apparently aimed against Russia, and yet the Russian Government had not uttered a single word of objection or offered any opposition to our doing so. The fact was, he went on to say, that the interests of our tw^o countries in China were distinct in character : Russia's was more political and confined to the north of Pekinf, and especially to Manchuria, for the protection of her Trans-Siberian outlet,. AA^hile England's interest in China was chiefly commercial and more especially concerned Avith Central China ard the basin of the Yang-tsze. He was convinced that the two Governments were sincerely desirous of arriving: at an understanding in strict accordance with friendly relations, and that they were beinc- loyally served by their Representatives at Peking, Avho had to contend with influences in the press and elsewhere Avhich seemed to be using every effort to sow distrust and suspicion between them. Count Mouravieff then read me a telegram wdiich he had sent M. de Lessar a few days before for his guidance, in case your Lordship or Mr. Balfour spoke to him on this subject. This telegram contained a summary of most of the views and sentiments AA'hic'h his Excellency had just expressed to me. I said that I had received by telegram a report of a conversation which Mr Balfour had had A^dth M. de Lessar on the 12th instant, and that I had observed [322] 2 12 that the latten had seemed to iadicate a possible basis for a friendly settlement of this serious difference. I had, however, no means of judj^jing how far it could be regarded as satisfactory by Her Majesty's Government. Count Mouravieff said that M. de Lessar's suggestion, the nature of Avhich I described to him, must have been a personal one, but it seemed to accord with the spirit of his instructions. I promised to lose no time in acquainting your Lordship ^'ith the tenour of Count Mouravieff's explanations and conciliatory language. Xo. 24. Sir C. Scott to the Marquess of Salisbury. — (Received August 29.) My Lord, St. Petershurgh, August 21, 3 898. ON receipt yesterday of Mr. Balfour's further telegram of the 19th instant, I called on Count Mouravieff, and, as far as I was able to do so from memory, repeated to him the substance of my report to your Lordship of his Excellency's remarks in our conversation on the 1 8tli instant, and of his explanation in reply to the serious repre- sentations which I had been instructed to make to him on tlie subject of M. Pavloff' s action in obstructing the loan from the Shanghae and blong Kong Bank for the construction of the line to Newchwang. Count Mouravieff thanked me for having accurately reported his views and observations. I then said that it had occurred to me that your Lordship might very naturally gather from my report that his Excellency indorsed the suggestion which M. deLessar had seemed to indicate, in his conversation with Mr- Balfour, that a basis for a friendly understanding between the Governments on this question might be found, if llussia engaged to place no hindrance in the way of the northern extension line being built, if necessary, by means of a loan from the British Bank, provided tliat no mortgage on the line was given as security, and that the line itself remained in Chinese hands and under Chinese control, and, further, that E-ussia would engage not to press for, or take part in, any interest in railway concessions in the basin of the Yang-tsze, or place obstacles in the way of our obtaining the same, if England took a similar engagement in regard to concessions in Manchuria. I asked if I had rightly understood his Excellency to make this suggestion, for, although I could naturally not say how far this suggestion would be acceptable to my Government, I would be prepared to submit it for your Lordship's serious examination if made to me in a definite form. His Excellency replied that he must carefully guard himself against beino" under- stood as making any definite suggestion without reference to the Emperor, that M. de Lessar's suggestion was a purely personal one, but that he did not mind tellino- me, in confidence, that he was convinced that if we had a binding engagement between the two Governments, such as I had indicated, it would entirely satisfy Russia's require- ments and interests. He thought it better, for the present, to understand that no definite su"-gestion had been made in any quarter, but the idea might remain as a germ awaitino" development. I have, &e. (Signed) CHAELES S. SCOTT. No. 25. Sir C. Scott to Mr. Balfour. — (Received September 2.) '(Telegraphic.) St. Petersburg)!, September 2, 1898 I SAW Count Mouravieff yesterday evening. He informed me that the Emperor had expressed his entire approval of Count Mouravieff's suggestion, that an cn"-ao-e- ment between our Governments might satisfactorily settle the difficulty. Such 'an engagement to be — 1. That the Newchw^ang line should be built, and, if necessary, by means of a loan from the Hong Kong and Shanghae Bank, but that the line should'be a Chinese one, under Chinese control, and not to be mortgaged to a non- Chinese Company. 13 2. Russia would bind herself not to press for, or take part in any Railway Concessions in the basin of the Yang-tzse, provided that England undertakes the same engagement in regard to Manchuria. I informed Count Mouravieff that I undertook to transmit this suggestion to Her Majesty's Government for their consideration. Ko. 26. Sir C. Scott to Mr. Balfour. — [Received September 2.) (Telegraphic.) St. Petersburgh, September 2, 1898. MT telegram of to-day. The words " and not to throw obstacles in the way of Great Britain obtaining the same" do not appear in the suggestion which Count Mouravieff was authorized to make as a basis of settlement ; his Excellency's idea being that His Imperial Majesty might take very natural exception to this phrase, which coald possibly be misunderstood, and held to imply the power or intention of either, of the two Governments to throw obstacles in the way of the other in its recognized sphere of interest, and in general to imply a want of confidence in the sincerity of the engagement. If, in our opinion, a stronger form of engagement Avere considered necessary, one might be suggested by us couched in terms differing slightly from these. Count Mouravieff went on to say, that in the event of this suggestion being accepted as a basis of settlement, he considered that, before concluding the engagement in would be necessary to know what are exactly the limits of the district described as the basin of the Yang-tsze, and also to find out how far private banks and private enterprise would be bound by the engagement. No. 27. Mr. Balfour to Sir C. Scott. (Telegraphic.) Foreign Office, September 2, 1898. WITH reference to your telegram of the 2nd instant. Count Mouravieff's proposals would, I think, be satisfactory, provided the words " or to throw obstacles in the way of Great Britain obtaining them '" were added after the word " Yang-tsze " in clause 2. Of course, there is no objection to the loan from the Hong Kong and Shanghae Bank bein" secured on the line west of the Great Wall already in existence. No. 28. Sir C. Scott to Mr. Balfour. — {Received September 3.) (Teleo-raphio.) ^^' Petersburgh, September 3, 1893. COUNT MOUE.AVIEEE expressed to me his gratitude for the friendly disposition shown to his proposal by you in your telegram of yesterday. With reference to the words which you would desire to add at the end of the second clause. Count Mouravieff is ready to accept the engagement which they convey as beino- implied in the previous wording of the clause, and as necessarily following from it'!' His Excellency, however, for the reasons submitted by me in my telegram of yesterday, would wish that, in any written Agreement that may be drawn up, the en4gement'should be recorded in a more friendly form. ° He told me that before expressing an opinion on the question of a security for the Bank on a portion of the line now existing, west of the Great Wall, he would have to refer to the Ministry of Finance. 14 No. 29. Sir C. MacDonald to the Marquess of Salisbury. — {Received September 5.) (Telegraphic.) Peking, September 5, 1898. THE London Syndicate for the Northern Extension Railway Loan have telegraphed to the Agent of the Hong Kong and Shanghae Bank here that an Anglo- Russian Agreement provides that the railway cannot be given as security, nor can it be mortgaged. The telegram further la;ys down certain financial terms whicb the bank agent is authorised to offer. The Russo-Chinese Bank are offering terms making competition impossible for any bank which is not supported by its Government. If the above-mentioned Agreement exists, does it contain a proviso that the Russo-Chinese Bank shall withdraw from competition ? No. 30. Sir C. Scott to the Marquess of Salisbury. — (Received September 6.) (Telegraphic.) St. Petersburgh, September 6, 1898.- WITH reference to your telegram of the 5th instant,* I shall go to see Count Mouravieff to-morrow, and will try to get from his Excellency a clear explanation as to what the present attitude of the Russian Government is towards the Russian Bank in this question. In the meantime, to my mind it is perfectly clear that the proposed Agreement; will equally prevent the Russian Bank, as well as the English Bank, from acquiring either a direct or indirect control of the management of the projected line or a. mortgage on it as a security. It is desirable that I should have at as early a date as possible a more clear description of the line Avhich was referred to by Mr. Balfour in his telegram No. 243^ as already existing west of the Great Wall. If a security were given on that line would any indirect control on the projected extension line be thereby acquired by the lender ? No. 31. Sir C. Scott to the Marquess of Salisbury. — (Received September 7.) (Telegraphic.) St. Petersburgh, September 7, 1898. ' HAYING had occasion to see Count Mouravieff subsequently to the receipt of Sir C. MacDonald's telegram of the 5th instant, I called his Excellency's attention to the reported attitude of the Russo-Chinese Bank, and to the danger of its prejudicing the practical valxle of the suggested Agreement between our two Governments as a settlement, satisfactory to the interests of both countries, was to be the main object of that Agreement. ' This danger was quite apparent to Count Mouravieff; he promised to ascertain the real relations of the Russo-Chinese Bank to the Newchwang line and loan by ' immediate inquiries at the Ministry of Finance, for his impression had always been tliat the bank did not desire an interest in either. His Excellency said, further that' he would inform me of the result of his inquiries after he had sent in his report to the Emperor, and he also confirmed the view which I had the honour of expressing to your Lordship yesterday in my telegram, to the effect that Russian banks as well as English ones would be debarred from obtaining a mortgage on, or a control over, the railway line in question when once the Agreement was completed. Kepeating No. 29. 15 No. 32. The Marquess of Salisbury to Sir C. Scott. (Telegraphic.) Foreign Office, September 7, 1898. WITH reference to your telegram of the 6th instant, the line referr^3d to is the one actually built which extends to the junction of the Great Wall with the sea at Shanhaikuan. By a mortgage on it, no control need be given over the extension from Shanhaikuan to Newchwang. No. 33. Sir C. MacDonald to the Marquess uf Salisbury. — (Received September 10.) (Telegraphic.) Peking, September 10, 1898. NORTHERN Extension Railway. The Russo-Chinese Bank seems to have dropped out of the competition. No. 34. Sir C. Scott to the Marquess of Salisbury. — (Received September 10.) (Telegraphic.) St. Petersburgh, September 10, 1898. THE following confidential communication was made to me to-day by Count Mouravieff. He had conferred with the Acting Minister of Finance, and had been satisfied by him that there was no intention on the part of the Russo-Chinese Bank to compete for a loan for the Newchwang line, His Excellency had, moreover, found him disposed to regard with favour the following proposal, which he requested me to consider ■confidential until it had received the Emperor's approval. That what he has suggested to me in his conversations as the basis should be embodied in an Agreement in writing, by which the two Governments should be bound. That as information of an accurate nature respecting all the projects and engagements of the Hong Kong and Russo-Chinese Banks could not be obtained in either London or St. Petersburgh, our respective Representatives in China should receive instructions to bring about a friendly communication between the two banks, and to use their best endeavours to reconcile their interests, and to obtain their con- formity with the Agreement between our two countries. Count Mouravieff said he would promise me beforehand that instructions should be sent to M. Pavloff to do so with every regard for the Treaty rights and interests of Great Britain. No. 35. 7'he Marquess of Salisbury to Sir C. Scolt. (Telegraphic.) Foreign Office, September 10, 1898. ACCORDING to a telegram from Sir C. MacDonald, the Russo-Chinese Bank appear to have withdrawn from competition for the railway to Newchwang. No. 36. The Marquess of Salisbury to Sir 0. MacDonald. (Telegraphic.) Foreign Office, September 10, 1898. PREFERENTIAL railway rates or differential treatment sljould, of course, be provided against in Agreement with Russia in regard to railway concessions in Manchuria and Yang-tsze region. 16 No. 37. Sir C. Scott to the Marquess of Salisbury. — (Received September 12.) (Extract.) St. Petersburgh, September 6, 1898. COUNT MOURAVIEFE and Count Lamsdorff having both left St. Petersburgh for Moscow on the 2Gth ultimo to attend on the Emperor at the ceremony of inaugurating the memorial of the Emperor Alexander TI, I was unable to communicate confidentially with Count MouraviefF on the subject of Mr. Balfour's telegram of the same evening until an opportunity offered on the 29th of sending his Excellency a private letter by the Russian Eoreign Office messenger. Your Lordship will perceive from the inclosed copy of this letter that, in addition to pointing out, as directed by Mr. Balfour, the possible danger from delay in making the suggestion for a base of settlement betM^een the Grovernments of the grave difficulties created by M. Pavloff's action in regard to the Newchwang Railway loan, I sent a private message from myself to Count Mouravieff, indicating as far as possible in his own words the sort of suggestion which his language to me, and M. Lessar's to Mr. Balfour, had led me to believe would be made by him after receiving the Emperor's authority to do so. I said that I should, if this was the case, feel myself authorized to submit such a suggestion for your Lordship's serious^ consideration, but that he would easily understand that I could not make any suggestion that I was not convinced was acceptable to the Russian Government, and I begged hira, if I had in any ^vav misunderstood his language, to treat my private message as "non avenu," and confine his attention to what I had been desired by Mr. Balfour to say to him about the risk of delay. On the 31st I received a telegram from his Excellency, announcing his return to St. Petersburgh for the following day, begging me to come and see him in the evening, and adding that he thought he saw his way to a satisfactory understanding. I found Count Mouravieff just arrived at the Eoreign Office, and waiting to receive me. He at once thanked me for my private letter, which, he said, had helped him to a discussion of the whole difficulty with the Emperor, to whom he had shown it. He had repeated to His Majesty the substance of our recent confidential conversation, and the Emperor had entirely approved Count Mouravieff 's language to me, and authorized him to make the suggestion in the form used by me in my letter. I expressed my readiness to at once submit it for your Lordship's consideration,, and then said that if he would only add to the second clause of the suggestion, which I had carefully worded in his own terms, the additional engagement after "basin of the Yang-tsze," and " to throw no obstacles in the way of England's obtaining the same," I would go even a step further and say that I would submit it, with good hope of its being accepted as a basis for a satisfactory settlement. Count MouraviefF, after consideration, said that this addition almost seemed to him unnecessary, as such an engagement naturally followed from the preceding words- of the clause, if the engagement was sincerely entered into by both Governments, but if I liked to make the suggestion, he would have to submit it to the Emperor, who had already approved of the clause as it stood. When I returned to this subject on a subsequent occasion, after receivino^ Mr. Balfour's telegram of the 2nd instant. Count Mouravieff said that he thought we might regard the ba?e of settlement as attained, as he was prepared to accept Mr. Balfour's suggestion in principle, and only desired that a more friendly form should be given to the additional engagement when committed to writing, and he seemed to indicate some such phrase as this : " It naturally follows, from the essence of the friendly spirit in which this engagement is concluded, that neither Government will use any influence to impede the acquisition by the other." Having arrived so far on the way to a satisfactory settlement of this difficulty which Count Mouravieff was pleased to say was in great measure due to the friendly and confidential manner in which Mr. Balfour had authorized me to approach him and for which he begged me to express his thanks, his Excellency went on to say that we must take every precaution not to allow the sincerity of the intentions of the two Governments to be compromised by any action of private enterprise. Eor this end, he thought it would be very necessary to have an exact definition of the limits which are regarded as those of the Yang-tsze Basin, and also for himself to 17 ascertain clearly what was the actual position of the Russo-Chinese Bank as regards railway concessions. This private bank had, he understood, in its Statutes, which had been approved by the Imperial Government, one empowering it to take railway concessions in any part of China, but, as a matter of fact, he had been always assured that they had no interest in any railway enterprise south of Peking. It would also be very necessary to ascertain what control the two Governments could legally exercise on these private banks and enterprises to make them conform to the proposed engagement, as it was evident that if they were able to evade it the Governments would always be exposed to the suspicion, by the public at large, of secretly supporting them. After this conversation, I was not a little disconcerted at receiving this morning a copy of Sir C. MacDonald's telegram of the 5tli instant, from which I gathered that the Russo-Chinese Bank, on the first symptom of the Hong Kong Bank's disposition to exchange the security offered to them for one which would be more in conformity with the suggested Agreement, had stepped in, and was endeavouring to secure the loan for its own account, on terms which it could only offer with the support of its Government. I regarded this as a significant confirmation of Count Mouravieff's fears, and therefore, without loss of time, called on his Excellency, and brought the report to his serious attention. Count MouraviefE at once appreciated the danger, and said he would make immediate inquiries at the Ministry of Finance, as the details of the question were in that Department ; but he thought the matter so important that he would delay the report he was sending in to the Emperor on the question of the Agreement until he could supplemeat it by the result of his inquiries respecting the position and attitude of the Russian Bank. Meanwhile, his Excellency seemed to consider that it might be safer to defer the completion of the engagement, or any action on it, until we were quite satisfied in regard to the points which he had mentioned — the limits of the Yang-tsze Basin and the power of control over private Companies and enterprise ; otherwise, we might find ourselves landed in equally grave difficulties by the action of these private interests. I made his Excellency clearly understand that until this engagement is concluded, Her Majesty's Government cannot be understood to recognize the right of Russia tc oppose the ratification of the preliminary Contract signed by the Hong Kong Bank, which gives it the security of a mortgage and control by default on the line. Inclosure in No. 37. Sir C. Scott to Count Mouravieff. My dear Count Mouravieff, St. Peiershurgh, August 16 (28), 1898. MR. BALFOUR seems to have gathered from my reports of our recent con- versation that your Excellency would, after taking the orders of the Emperor, be probably prepared to make some definite suggestion jn regard to railway Concessions in China which might form the basis of a satisfactory solution of the difficulties which have so unfortunately been caused between our Governments by M. Pavloff's opposition to the terms of the Loan Contract with the Shanghae and Hone Kong Bank for the construction of the line to Newchwang. As no suggestion has yet been made, he wishes me to point out to you that, in the meantime, there is the danger that the negotiations which are still going on between the Chinese Director-General of Eailways and the Bank might result in puttin"- fresh obstacles in the way of the two Governments arriving at a satisfactory settlement of these difficulties. May I add to the message a private one from myself ? I am ^ convinced that my Government, equally with yours, desires such a settlement in strict accordance with friendly relations ; but this can only be possible by reconciling our interests on this thornv question. Your language to me, and M. do Lessar's to Mr. Balfour, seemed to indicate a suggestion for a settlement on the following terms :— 1. An eno-ao-ement between our Go-vernments that the Newchwang line is to be built, "and, if nec°essary, by means of money borrowed from the Hong Kong Bank, b.it that it is to be a Chinese line, under Chinese control, and not to be mortgaged to any non-Chinese Company, [322] ^ 18 2. That Russia should engage not to press for or take any part in railway concessions in the basin of the Yang-tsze, provided that England undertakes a similar engagement as regards Manchuria. If I have correctly understood your Excellency's language and views, and you Were to feel yourself authorized to make a definite suggestion in this sense, I would be prepared to submit it for the consideration of my Grovernment as a possible basis fbr an understanding, but you will naturally understand that I could not possibly do this if I had any doubts of its being acceptable to your Government. If I have misunderstood your views or language, then please consider this private message of mine as " non avenu," and confine your attention to the hint which Mr. Balfour has desired me to give y ou respecting the risk of delay. I have, &c. (Signed) CHAHLES S. SCOTT. No. 38. The Marquess of Salisbury to Sir C. Scott. (Telegraphic.) Foreign Office, September 14, 1898. YO IJH telegram of the 10th September. You should let me know when the proposal of Count Mouravieff has been approved by the Emperor of Eussia. It seems to me quite acceptable so far as it goes, but, of course, Until I have seen the exact words of the Agreement, I cannot say whether I should approve it. No. 39. Sir C. Scott to the Marquess of Salisbury. — {Received September 17.) (Telegraphic.) St. Petersburgh, September 16, 1898. I SAW Count Lamsdorff to-day with reference to the inquiry made in your Lord- ship's telegram dated the 14th instant, on the subject of the proposed settlement of the difficulty in connection with the Newchwang Railway. His Excellency hopes to be in a position on the 1 8th to inform me that the proposal made by Count Mouravieff has received the Emperor's sanction. It is quite clear to him that it is impossible for your Lordship to signify your approval of the Agreement until the exact wording of it is submitted to you"; he suggests, however, that as soon as the Emperor has given his approval, I should receive authority to join with Irs Excellency in putting on record, in writing, the substance of the communications which have passed between Count Mouravieff and myself verbally, and that in this way we should draw up for approval a draft of an Agreement between the two Governments which should be completed by an exchange of notes. Should this course meet with your Lordship's approval, I should be glad if some indication could be furnished to me as to the exact wording of the second clause of the suggested Agreement, which would prove acceptable to Her Majesty's Government. No. 40. Sir C. MacDonald to the Marquess of Salisbury.— (Received September 19.) (Telegraphic.) Peking, September 19, 1898. NEGOTIATIONS for Northern Extension Railway Loan : I advised tue Yarnen to lecommeiid the Director-General of Northern Railways to close with the best offer made by the Hong Kong and Shanghae Bank, and the said Bank has now come to terms with the Director-General ; the signature of an Agreement will probably take place this week. The negotiations had been previously suspended owing to a difficulty with regard to the price of issue of the loan. 19 No. 41. Sir C. Scott to the Marquess of Salisbury. — (Received September 19.) (Telegraphic.) St. Petersburgh, September 19, 1898. I HAVE the honour to report, Avith reference to the telegram I addressed to your Lordship on the 16th instant, that His Imperial Majesty has signified his approval of the suggestion made by Count Mouravietr to the efi'ect that the proposed basis of settlement should be embodied in an Agreement in writing between the British and Russian Governments, and that the Representatives of the two countries at Peking should receive instructions to seek to reconcile the interests of the Russo-Chinese and Hong Kong and Shanghae Banks in compliance with it ; also that no objection will be offered by the Imperial Government to the existing portion of the line — to the west ot' the Great Wall— being the security for the loan. The next messengei* to the Emperor leaves on the 21st, and Count Lamsdorff would wish, if possible, to send by him to His Imperial Majesty a draft Agreement of some sort, which could also be submitted for approval or correction to your Lordship. Have I your Lordship's authority to join Count Lamsdorff in drawing up this draft of Agreeni'^nt, nnd. in that case, could the exact delimitation of the Yang-tsze ' district, and of Manchuria stand over for examination at a subsequent date ? No. 42. The Marquess of Salisbury to Sir C. Scott. (Telegraphic.) Foreign Office, September 20, 1898. YOU are authorized to discuss personal^ with Count Lamsdorfl:" the wording of a draft Agreement in regard to railway, concessions in China for submission to the Emperor and myself in accordance with the suggestion contained in your telegram of the 19th instant. The second clause of the Agreement might preferably be divided into two. By the first, the Russian Government would (mgage not to attempt to acquire for them- selves or Russian subjects concessions or shares in concessions for railways in Yang- tsze region, nor to oppose, directly or indirectly, applications for such concessions supported by Her Majesty's Government. By the second, this country would make a similar engagement as regards Manchuria. It would be advisable to insert a general clause providing against preferential railway rates or differential treatment. There seems no objection to your reserving precise definition of Manchuria and Yang-tsze region. No. 43. The Marquess of •Salisbury to Sir C. Scott. Si,- Foreign Office, September 20, 189S. WITH reference to your telegram of the 2nd instant and to Mr. Balfour's reply of the same date relative to the proposed iVgreement with Russia on the subject of railway concessions in China, I have received from the President of the Board of Trade a suggestion tiiat in any Agreement between the two Governments- a provision should be inserted to guard against preferential railway rates or differential treatment by either Power in favour of its own nationals. You should endeavour to obtain Count Mouravieff's consent to the insertion of such a clause. I am, &c. (Signed) SALISBURY. 3221 D 2 20 No. 44. Sir C. Scott to the Marquess of Salisbury. — {Received September 2].) (Telegraphic.) St. Petersburgh, September 21, 1898. T CONSULTED to-day with Count LamsdorflF on a form of draft whicli would embod}' first clause in Agreement with wording of Count Mouravieff's original sug^^estion ; second clause in accordance with your wording, and divided as you suggested. Further, a general clause providing against preferential rates or diflferential treatment on any lines conceded. He thought this draft would be acceptable, but, as a precaution, proposed to confer finally with Department before sending it to Emperor. It would then go forward on Saturday, and the Emperor's approval could be telegraphed from Livadia. I demurred to a suggestion to draft an Agreement embodying only first clause respecting Newchwang Eailway, leaving second clause for a separate and later Agree- ment. No. 45. The Marquess of Salisbury to Sir C. Scott. (Telegraphic.) Foreign Office, September 22, 1898. CHINA E-ailways Agreement. You were quite right in declining to draft an Agreement confined to clause 1 relative to Newxhwang line, as reported in your telegram of yesterday. No. 46. The Marquess of Salisbury to Sir C. Scott. (Telegraphic.) Foreign Office, September 24, 1898. "WITH reference to my telegram of the 22nd instant: draft Agreement about Chinese railways. The definition of the Yang-tsze region might run as follows : " The provinces adjoining the Yang-tsze River and Honan and Ohekiang." We are informed that Manchuria is a clearly defined region, consistino- of the three Provinces of Kirin, Moukden, and Tsitsihar. ' '^ No. 47. The Marquess of Salisbury to Sir C. Scott. (Telegraphic.) jroreign Office, September 24, 1898. 11 IS, 1 thmk, essential that we should have a direct arrangement with Russia as regards preferential rates or differential treatment. But in the event of your being unable to obtain its insertion in draft now under discussion, I have no objection to its being recorded in a separate exchange of The Agreement should contain a clause stating that it is understood on either side that no provisions for preferential rates or differential treatment of passen-ers 7u!St ttem " "'^ "'^"'"^ concessions in favour of tile co'ntiy My telegram of to-day contains a definition of the Yang-tsze re-ion. 21 No. 48. 8ir C. Scott to the Marquess of SaMslury. — (Received September 26.) My Lord, St. Peter shurgh, September 22, 189S. WHEN taking leave of Count Mouravieff on the lltli instant on his departure from St. Petersburgh, his Excellency said that he hoped we might now regard the difficulty in connection with the Newchwang Railway as practically solved. We had conferred with the Acting Minister of Finance, and ascertained from him that the Russo-Chinese Bank had no intention of competing for the loan witli the Hong Kong Bank ; also that no objection would be made to the latter bank acquiring a security on the- existing part of line between Tien-tsin and Shanhaikuan. He had made inquiries in the same quarter as to the power of control possessed by the Imperial Government over the transactions of the Russian Bank with a view to ascertaining how they could be brought into conformity with any Agreement concluded between the two Governments. We learnt that the bank's Statutes, which had received the Imperial sanction, empowered it to take Concessions in any part of China, but that it was under no obligation to give notice to the Russian Government for any Concessions that it might be acquiring under these Statutes. He presumed that the same would be the case with the Hong Kong liank, and that, therefore, it would be almost impossible either at St. Petersburgh or in London to obtain an accurate statement of all their present and contemplated interests and Concessions, and we should only get into difficulties if we attempted to deal with these private interests in an Agreement between the Governments. He had therefore, decided, with the approval of the Ministry of Einance, to suggest that an Agreement should be concluded binding the action of the two Governments in regard to the Newchwang Railway Loan, and to Railway Concessions in China in general, on the base indicated in the suggestion which he had authorized me to make to Her Majesty's Government, and in the verbal communication which I had made to him in reply, and that the two Governments should then agree to communicate this Agreement to their Representatives at Peking, and instruct them to bring the Russo-Chinese Bank and the Hong Kong Bank into communication, and to use their best efforts in inducing them to reconcile their respective private interests so as to bring them into conformity with this Governmental Agreement. He was submitting this suggestion for the Emperor's approval, and Count Lams- dorff would acquaint me with His Imperial Majesty's decision as soon as it arrived from Livadia, and in the meantime he begged me to regard it as a confidential and personal suggestion. I hastened to inform your Lordship by telegraph of this proposal, and your reply enabled me, on the 14th instant, to inform Count Lamsdorff that I thought that the proposal would be regarded as a satisfactory one by your Lordship, but that, of course, your Lordship could not say whether you could approve of the Agreement itself until you had seen the exact wording. His Excellency said he quite understood this, and that the Emperor's approval would also be subject to this necessary condition. He hoped to have the answer from Livadia on the 18th instant, and in the meantime he said it would be very useful to him if I could prepare a short historical summary of the verbal negotiations which I had carried on with Count Mouravieff with a view to this settlement — as when the two Governments had formally accepted the principle of the Agreement, it would, he thought, be advisable for us to prepare, in concert, a draft of notes to be exchanged recording it, and to submit it for the Emperor's approval as well as your Lordship's. I have ventured to do this in the form of a pro-memorid, giving the chief details of my communications with Count Mouravieff, as I had reported them to your Lordship, and I have the honour to inclose a copy herewith of this paper, which I read to Count Lamsdorff", and left with him, who said that it seemed to correspond very exactly with the verbal account given him by Count Mouravieff of our conversations. On the 19th instant Count Lamsdorff informed me that the Emperor had approved of Count Mouravieft''s last suggestion to me, and he was therefore anxious to send His Imperial Majesty, if possible by the courier leaving for Livadia yesterday, a draft of A"-reement for approval, and he asked if I considered myself authorized to join with him in preparing one. Having received authority to make suggestions for such a draft, I did so yesterday 22 in conversation with Count Lamsdorff, and placed them on paper, in the form of which I also inclose a copy — Count Lamsdorff engaging to regard this paper, and also my former pro-memorid, as verhal communications, to assist him in the preparation of a draft. As regards my suggestions for the Agreement, his Excellency said that as far as he could judge, th'ey seemed acceptable, but the additional general clause which 'I had desired to insert respecting the exclusion of preferential railway rates and differential treatment, although not, he presumed, open to objection, would have to be lirst submitted to the Ministry of Einance, whose Department such questions concerned, and he therefore thought it safer to avoid all risk of contention or uncertainty by delaying reference to the Emperor until he could do so with a clear knowledge of the views of the Einance Department. The delay would be unimportant, as when the Emperor had the whole matter clearly put before him. His Imperial Majesty's decision might be given by telegraph. I did not feel myself authorized to accept an alternative suggestion of his Excel- lency that we might first prepare a draft of Agreement embodying only the first clause of the proposed Agreement, which dealt exclusively with the NeAvchwang Kailway, reserving the second clause respecting railway concessions in Manchuria and, the Yang-tsze basin for a later and separate Agreement. I understood your Lordship's desire to be that the two clauses should form parts of the same Agreement, and I regarded the acceptance of the second clause to consti- tute the necessary equivalent for any modification of our attitude in regard to the original terms of the loan for the construction of the Newchwang E,ailway. I hope to learn from Count Lamsdorff by the 24ith instant the views of the Ministry of Einance. I have, &c. (Signed) CHARLES S. SCOTT. Inclosure 1 in No. 48. Pro-memorid. ON the 6th (18th) August, by direction of Mr. Balfour, I called Count Mouravieff's serious attention to the action taken by M. Pavloff in strenuously opposing at Peking the completion of a Contract entered into with the Chinese Railway Department by the Shanghae and Hong Kong Bank for a loan for the construction of a railway from Shanhaikuan to Newchwang. I pointed out to his Excellency that this was a purely commercial private enterprise strictly in accordance with the rights secured by Treaty with China to British subjects, and that M. Favloff's opposition to its completion seemed inconsistent with the promises given by the Russian Government to respect those rights. I was desired to add that it was impos^^ible for Her Majesty's Government to acquiesce in any arrangement which, while leaving all China open 'to Russian railway enterprise, would exclude England from her share in the railway enterprises of Manchuria, and that any such pretension would, if persisted in, inevitably lead to very serious international difficulties. Count Mouravieff, in reply, disclaimed any such pretension on the part of the Eussian Government, which was prepared to respect all Treaty engagements taken bv China with foreign Governments, and said that the nature of M. Pavlofl's action had evidently been gravely misunderstood in England. His Excellency drew a distinction between railway enterprise in the north of China and in the provinces south of Peking ; the interests of Russia were, he explained mainly political, and confined to the north of Peking, while those of England were understood to be mainly commercial in the centre and south of China, and especially in the basin of the Yang-tsze. The Russian Government were prepared to recognize and respect those interests, and had no desire or intention to hinder or compete°with our railway enterprise in those districts. As regards the projected railway from Shanhaikuan to NewchM-ang, he said that this particular line had formed the subject of a special Agreement between the Russian and Chinese Governments, concluded before the Russian Government had any idea of an interest being taken in this line by the British Bank. Accordino- to this arrangement, China had engaged that this line should be constructed with^'her own 23 money, and that as a necessary consequence it should remain a Chinese line under Chinese control, and not be mortgaged to any non-Chinese Company. When M. Pavloff found that this eneagement was being violated by the terms of the Contract negotiated with the Houg Kong Bank, he was bound to forcibly remind the Chinese Government of their prior engagement with "Russia. The outcome of several verbal communications with Count Mouravieff on this question was that his Excellency authorised me to suggest to Her Majesty's Govern- ment as a possible base for a satisfactory settlement of this difficulty for which both our Governments were equally desirous — 1. An engagement between our Governments that the Shanliaikuan-Nevrchwang line should be built, and, if necessary, by means of a loan obtained from the Hong Kong Bank, provided that it is to be a Chinese line, under Chinese control, and that it is not to be mortgaged to any non-Chinese Company. 2. That Russia would engage not to press for obtaining or to take part in working railway Concessions in the basin of the Yang-tsze, if England would undertake a similar engagement as regards Manchuria. To this suggestion I was enabled to reply that, if Count Mouravieff would consent to add the words " nor to throw obstacles in the way of England obtaining such Con- cessions " after the words " basins of the Yang-tsze," Mr. Balfour thought that his Excellency's suggestion might form a possible base for a satisfacto.rv solution Count Moui'avieff seemed to regard this addition in the particular wording suggested liable to misinterpretation, and unnecessary, as the friendly nature of the proposed Agreement naturally implied that neither Government would throw impedi- ments in the wav of the other obtaiuino' tlie Concessions which it has as^reed not to acquire for its own account. He was, however, prepared, if we thought it necessary, to accept the engagement in principle, in another wording more in accordance with this friendly understanding. As it appeared advisable before proceeding further in this matter to ascertain how far our two Governments had the necessary legal powers to impose the obligations of such an engagement between them on the private enterprise of their subjects, and also what were the precise geographical limits of the terms "iang-tsze Basin and Manchuria, wj agreed to make the necessary inquiries ; and Count Mouravielf subsequently informed me tbat, with regard to the "^rst point, the possibility of bringing the rtussian and British Banks into conformity with the proposed Agreement, he was taking the Emperor's pleasure with regard to a further suggestion of which he gave me in confidence the leading idea. I understand that your Excellency is now in a position to communicate to me His Imperial Majesty's decision in regard to this further suggestion, and I have ascertained that, as far as Lord Salisbury is able to judge of it from Count Mouravietf's confidential communication to me, he considers it an acceptable one, although he is naturally unable to say whether he could approve of the proposed Agreement, until he sees a draft of it in writing. St. Petersburgh, September 7 (19), 1898. Inclosure 2 in No. 48. Draft of Agreement. ANIMATED by a sincere desire to arrive at a friendly settlement of all questions raised between them in connection with the proposed construction of a line of railway between Shanhaikuan and Newchwang, the two Governments have agreed as follows :— i. That the line Shanhaikuan-Newchwang shall be built, and, if necessary, by means of a loan from the Shanghae and Hong Kong Bank, but that the line in question is to remain a Chinese line, under Chinese control, and not to be mortgaged to any non-Chinese Company. 2. The two Governments have also agreed with regard to the general question of railwiv Concessions in China. (a.) That the Russian Government engages not to seek to obtain for its own account or for Russian subjects any Concessions or sliares in Concessions for railways in the reo-ion of the Yang-tsze, n .r to offer any direct or indirect opposition to applica- tions supported by the British Government for such Concessions. (b.) The British Government engages not to seek to obtain for itself or for 24 British subjects Concessions or shares in Concessions for railways in Manchuria, nor to oppose directly or indirectly applications supported by the Imperial Government for svch Concessions. It is further agreed between the two Governments that no preferential railway rates or differential treatment are to be established on lines in the aforesaid regions for which they may obtain Concessions. The definition of the geographical limits of the two regions as understood in this Agreement, to be fixed on further examination by a later Agreement. Agreement to communicate this Agreement when concluded between the Government to their Representatives at Peking, and to instruct t ; ::." to bring the British and Russian Banks or Syndicates interested in these Concessions into communication, and to use their best efforts in inducing them to reconcile their interests and enterprises in strict conformity with the Agreement between the two Governments. St. Petersburgh, September 9 (21), 1898. No. 49. The Marquess of Salishury to Sir C. MacDonald. Sir, Foreign Office, September 27, 1898. MK. CAMERON, of the Hong Kong and Shanghae Bank, called at this Office to-day, and was informed that if the bank required some special assurance in order no make the loan for the railway from Shan-hai-kwan to Newchwang acceptable to investors, and if they obtained from the Chinese Government a pledge to Her Majesty's Legation at Peking, that the railway from Peking to Shan-hai-kwan, on which the loan was to be secured, should not be alienated to anyone else, I was prepared to have a letter written to the bank to be published with the prospectus, Htating that in the special circumstances of the case Her Majesty's Government had consented to take note of this promise as a binding engagement on the part of the Chinese Government. Mr. Cameron said he thought this might be sufficient, but asked that no letter should be written till the bank knew exactly the form which the arrangement for the loan would take. I am, &c. (Signed) SALISBURY. No. 50. Sir C. Scott to the Marquess of Salisbury. — {Received October 4.) (Telegraphic.) St. Petersburgh, October 4, 1S9S. RAILWAYS in China. M. de Witte is expected to come back to St. Petersburgh in a few days, and it is impossible to make any progress in the negotiations for a general settlement until his return. No. 51. Sir C. Scotl to the Marquess of Salisbury. — {Received October 10.) My I^oi'fJ' St. Petersburgh, September 30, 1898. SINCE the date of my despatch of the 22nd instant, I have had several further interviews with Count Lamsdorff on the subject of the proposed Agreement with regard to railway Concessions in China, with a result not very satisfactory to the prospect of its speedy conclusion. I was enabled, by your Lordship's telegram of the 24th ultimo, to give Count Lamsdorff a geographical definition of the region which was to be regarded as that of the Yang-tsze referred to m my suggestions for a draft Agreement, viz., the provinces bordermg the Yang-tsze River and the Provinces of lionan and Chekiano-. As regards the definition of Manchuria, I said that I understood it to be a clearly deflued region 25 but that I awaited an intimation from bis Excellency of the definition which the Russian Government desired to insert in the Agreement. i made a note in his Excellency's presence of this verbal communication, and left it with him for his use in communicating with the Finance Department. I also informed him that it ought to be clearly understood that the precise definition of the regions referred to in the Agreement should be inserted beforo its signature, and I received his permission to substitute a new text of tbe Memorandum of my suggestions for a draft Agreement containing this correction, and also a wording of the proposed general clause providing against preferential rates and differential treatment more in accordance with your Lordship's suggestion. Count Lamsdorff then asked me if be bad rightly understood that I was not authorized to suggest a draft of a separate Agreement dealing only with tbe first clause relating to tbe Newchwang Railway, as tbe most pressing case, and to leave the other clauses for more thorough examination later on. I said that T was not authorized to do this, and repeated my reasons for con- sidering that the general settlement was indispensable to a satisfactory agreement on the base suggested by Count Mouravieff and authorized by the Emperor. His Excellency said that he feared there must have been some misunder- standing in regard to the last suggestion submitted to the Emperor by Count Mouravieff", as he inferred that both His Imperial Majesty and his Excellency were of opinion that the difficulty with regard to the loan might be satisfactorily settled by the Hong Kong Bank taking the necessary security on the working line west of the Great Wall. I said that I could not account for this misunderstanding, as this question had only been raised by me in connection with the alternative security that might be offered to the bank to induce it to conform with any general agreement arrived at between our Governments, and that Count Mouravieff had, at our last interview, distinctly impressed on me that tbe base of the Governmental Agreement must be taken to be tbe one referred to in tbe private letter which I bad written to him to Moscow, and which tbe Emperor bad seen and had authorized him to suggest. Count Lamsdorff said that he did not see how we could make satisfactory progress in drafting a. general Agreement in tbe absence of Count Mouravieff, who was not within reach of confidential communication ; the Under-Secretary who had been in charge of tj^e Ministry of Finance, and with whom Count Mouravieff had conferred,^ had just gone on leave, and his colleague who had returned to take his place required time to study tbe details of the question, which were new to him, and he was, therefore, not yet able to give me the confidential statement for which I had asked of the counter-suggestions or remarks of the Financial Department, in whose special province the question chiefly lay, on my proposals for the wording of an Agreement. Count Lamsdorff added that M. de Witte was expected to return to St. Peters- burgh in a few days, and he would then ask me to talk the whole matter over with him, and concluded by observing that any time lost now in preparing a draft would be amply repaid if we could eventually arrive at a perfectly clear and satisfactory settlement on the main principle involved in the suggested base for an Agreement. I admitted tbe impossibility of making any further progress until I had seen in writing the views or suggestions of tbe Finance Department, but I trusted that when I saw them I should not find that they contemplated any departure from tbe base of settlement which Count Mouravieff bad authorized me to suggest with the Emperor's approval, for in that case we should find ourselves in exactly the same position as when I made the serious representations to Count Mouravieff on M. Pavloff's action, in regard to tbe loan. I gathered from Count Lamsdorff's remarks, in reply, that he in no way intends to question the fact of this base having been approved by the Emperor and Count Mouravieff, but only considered that tbe wording of the general clauses required moro fcme for consideration. I have, &c. (Signed) CHARLES S. SCOTT. [322] E 26 ■'■'"■ ■ ]s^o. 52.. r. . ■ Sir C. MacDonald to the Marquess of Salishnry.^{lieceived October 11.) ■(Telegraphic.) Peking, October 11, 189S. THIS morning the oSadal seals of th^ Director-General of Northern Railways were affixed to the'^final Agreement for the Northern Extension Railway Loan, which was signed yesterday. I shall press for its ratification at the earliest possible moment. The Concession of coal mine at Nanpiao is included in above Agreement. No. 53. Sir C. Scott to the Marquess of Salisbury. — {Received November 7.) (Extract.) St. Petersburgh, November 2, 1898. ■ I HAVE had the first opportunity of conversation with M. de Witte, who was good enough to call on me yesterday. ■ I told his Excellency that both Count Mouravieff and Count Lamsdorff had expressed a wish that I should have an early opportunity of learning from himself his views of the proposed base of Agreement between our Governments on the question ;of ^railway concessions in China, as, the details of this question more particularly .concerned his Department as Einance Minister, and that they had encouraged me to speak frankly and openly with him on this subject. ., ; I said that his Excellency was already aware that the sole aim of Her Majesty's ^Government in this question was to retain, for our trade and enterprise in China, ■equal opportunities, with a fair field and no .favour, and that the object of the proposed Agreement was to prevent the development of the commerce and enterprise of both .countries being blocked by the exercise of foreign diplomatic influence at Poking, in opposing the grant of railway concessions or loans for their construction, or by the creation of; artificial barriers such as differential treatment or preferential railway rates in favour of any particular nation. The idea, as I understand it, being that it was quite possible to reconcile the respective interests of the private enterprise of both countries which seemed to be mainly concerned with separate geographical spheres of action by mutual agreement and. concessions, without the necessity of making their rival schemes the subject of irritating diplomatic questions between the two Governments. M. de Witte said he entirely shared this view, and he desired to assure me, as he ,had often assured Sir Nicholas 0' Conor, that there was nothing he had more at heart that the establishment of a thoroughly sincere and satisfactory understanding, ^nd of frank and friendly relations between Russia and Great Britain on this and on all other questions. These views were not merely platonic or disinterested personal views — these were piosG firmly impressed on him in his position as Russian Minister of Einance ; he had ■absolute need of a good and frank understanding between Russia and England, the greatest commercial nation in the world, and the continuance of any unsatisfactory p.'elations or misunderstandings between the two countries or their Governments was a positive injury to the real interests of Russia, and a grievous impediment in his way as Minister of Einance. <, "We must also remember," he said, "that we are not alone in seeking railway poncessLons in China, and the delimitation of spheres of interest, unless part of a general international agreement, might give rise to difficulties, as our respective banks might lend their assistance to foreign enterprises, and while keeping ostensibly to tlie letter violate the spirit of the Agreement between the Governments, and even in the event of strained rdations between the two nations in other parts of the world, some loophole might be found in the wording of this Agreement to take advantage of,' and exercise, counter-pressure." 27 Xo. 54 ' ' '■^; , '^ ' Sir C.Scott id the Marquess of 'Sali'sbuiy. — {Received November 8.) ' •' (TelegrapMc.) ' ' ' St. Peiersburgh, November 8, 1808. RAILWAYS in China. I hare the honour to report to your Lordship that Count Lamsdorff is anxious that the confidential negotiations for an Agreement should not be resumed before Count Mouravieff returns to St. Petersburgh next weeli. >■• m3^\ • _ Personally, Count Lamsdorff would favour a general Agreement between Great Britain and Russia, the basis of which would be the maintenance of the integrity of China, and the conviction that British and Russian interests there are not in any way antagonistic, but are capable of being reconciled in each case as it arises by discussing the matter frankly, and by co-operation in bringing together the private interests of the banks and Syndicates concerned. Count Lamsdorff repeated the statement made to me by the Minister of Pinance that the Russian G-overnment entertain the idea of making Talienwan a free port; but his Excellency begged me not to take this as an assurance, but to consider it as a strictly confidential remark. No. 55. « The Marquess of Salisbury to Sir C. Scott. Sir, Foreign Office, November 10, 1898. I HAVE received your Excellency's despatch of the 2nd November, reporting a conversation with M. de Witte relative to the proposed Agreement on the question. of railway concessions in China. I approve the language which you held to his Excellency on the subject. I am, &c. (Signed) SALISBURY- No. 56. Sir C. Scott to the Marquess, of Salisbury. -r-{Received November 14.) (Extract.) St. Petersburgh, November 8, 1898. I HAVE repeated to Count Lamsdorff the substance of my conversation with M. de Witte, and I have not concealed from him my concern at learning that the terms of the suggested Agreement in regard to Railway Concessions in China, which had resulted from my confidential negotiations with Count Mouravieff, did not appear to commend themselves to the Minister of Pinance as offering an entirely satisfactory base of settlement, inasmuch as it would be difficult, in his Excellency's opinion, to make these terms binding in practice on the private banks and Syndicates interested in Railway Concessions in China. I was glad, however, I said, to find that M. Witte sincerely desired a settlement on this question, which should prove permanently satisfactory to the interests of both our countries, and that he had expressed a strong conviction that these interests could easily be reconciled by means of frank discussion and friendly co-operation between the two Governments. I had been hoping, I added, that now that Count Mouravieff had reached Livadia, and M. Witte had returned to St. Petersburgh, Count Lamsdorff would be able to clear up any misunderstanding with regard to the precise bearing of Count Mouravieff's latest suggestion to me, and favour me with his counter-suggestions on the draft Agreement which I had confidentially submitted to him. Count Lamsdorff said that he was very glad that I had had this confidential conversation with M. Witte, which would have explained to me the difficulties which had prevented his proceeding further in this matter while Count Mouravieff and M. Witte were both absent. Count Lamsdorfi:' expressed the same conviction as M. Witte had done, that there [322] E 2 28 was no real antagonism between the aims and interests of our two countries in China, and that tliey could easily be reconciled by an Agreement between their Governments, based on the recognition of this fact, and of their equally firm intention to respect the integrity of the Chinese Empire, The principle of such an Agreement might then, he personally thought, be. usefully applied to each case as it arose, in frank and sincere negotiations, and efforts made to bring the respectiye private banks and Syndicates into Agreement as to an equal distribution of the opportunities offered to them, which would probably be found to lie in different geographical spheres. Count Tiamsdorff said that M. Witte was quite sincere in asserting that_ Eussia had no desire to expand her present sphere of interests, and that such expansion was highly detrimental to her financial interests, and that there was no desire to block or hinder in any way the development of British trade and enterprise in China, and he had been quite correct in stating that the Imperial Government were anxious to grant what they understood to be the desire of Her Majesty's Government and make Talienwan a free port, but as there had been in the past misunderstandings on this subject, he earnestly begged me to regard this, for the present, as a strictly confi- dential and private statement, and not to treat it in any way as an assurance. As regards the resumption of confidential negotiations on the base of the suggested draft of Agreement which I had left with him, and the clearing up of any misunderstanding of Count Mouravieff's language, he begged me to wait until the return of his Excellency to St. Petersburgh, which would probably take place next week, as he was leaving Livadia to-morrow, and would either come here direct or after attending the ceremony of inaugurating a statue to his grandfather at Wilna on the 21st instant. No. 57. Hong Kong and Shan ghae Banking Corporation to Foreign Office. — {Received November 24.) Sir, 31, Lombard Street, London, November 2.3, 1898. IjS September last I had the honour to inform you that, in order to enable the bank to raise the funds required for the extension of the Peking and Shan-hai-Kuan Eailway to T^ewchwang, it would be necessary to have some assurance from Her Majesty's Government that our contract would be upheld. In reply, you were so good as to inform me that Her Majesty's Government would t)e prepared to state that they made a note of the contract as a binding agreement upon the Chinese Government. At that time, I wns not without hope that a communication in those terms would be sufficient. Since then, however, so much has happened in China that capitalists naturally hesitate to invest money in that country without some assurance that their security will not be interfered with. I am, therefore, reluctantly compelled to ask Her Majesty's Government to go the length of giving an assurance that our contract will be upheld, otherwise it will not be possible to carry out the transaction. I have the honour to inclose a Seport upon railways forming our security, from which you will notice the proposed advance is amply covered, and consequently such an assurance as I am asking for is not likely to carry with it any pecuniary oblio'ation. I furthex- inclose a copy of our Agreement with the Chinese Hallway Administra- tion, under which the Chinese Government guarantee the loan. I further have the honour to send you a chart showing the railway lines already constructed and hypothecated to the bank, and also the proposed extensions. I need not point out how important it is that the railway enterino- into China from Manchuria should be under British control, and that the important trade of ]S"ewchwang shall not be diverted to Port Arthur or Talienwan. I have, &c. (Signed) EWEN CAMERON. 29 Inclosure 1 in No. 57. Agreement. This Agreement is made between his Excellency Hii, Governor of Peking, as Administrator-General of the Railways of North China within and without Shan-hai-Kuan, acting under the authority of the Imperial Chinese Government, hereinafter called the " Administrator- General," of the one part, and the Hong Kong and Shanghae Banking Corporation, for themselves and on behalf of the British firm of Jardine, Matheson, and Co., representing as joint agents the British and Chinese Corporation (Limited), hereinafter called the " Corporation," of the other part : WHEREAS, on the 7th day of June, 1898, being the 19th day of the 4th month of the 24th year of the Emperor Kuang-Hsii, a preliminary Agreement was signed at Peking between the Administrator-General and the Hong Kong and Shanghae Banking Corporation, representing a British Syndicate, for a sterling loan for the equivalent of about 16,000,000 taels for the construction of a railway line from Chung-hou-so to Hsin-ming-t'ing and a branch line to Ying-tsu, and for the redemption of existing loans made to the Tien-tsin-Shan-hai-Kuan and Tien-tsin-Lucouchiao Railway lines ; and Whereas in terms of the preliminary Agreement a period of three months from its date was allowed to the Syndicate to accept or decline its conditions ; and Whereas the Hong Kong and Shanghae Banking Corporation, before the expiration of the period named, duly notified the Administrator-General that it is prepared, with certain modifications, to arrange the issue of the loan upon the conditions named in the preliminary Agreement : It is now agreed as follows : — 1. The Corporation agrees to issue on behalf of the Administrator- General a sterling loan for the amount of 2,300,000/., the proceeds of which are to be applied in the order following : — (1.) To the redemption forthwith or at maturity of the loans and advances specified in the statement attached to this Agreement which have been made by foreign banks to the Tien-tsin-Shan-hai-Kuan and the Tien-tsin-Lucouchiao Railway lines. The Administrator- General hereby certifies that the total amount of the liabilities due by the lines named does not exceed the sum of 3,000,000 taels. (2.) To the cari'ying out within a period of three years from tne date of this Agreement of certain improvements and additions to rolling-stock on the existing lines between Peking and Shan-hai-Kuan, recommended by the European Chief Engineer, and estimated by him to cost about 1,500,000 taels. (3.) To the construction of a railway line from Chung-hou-so to Hsin-ming-t'ing, and one from a point on that line near Shih-san-chan to Ying-tzu, and of a branch line .from Nu-erh-ho to the collieries of Nanp'iao. The Administrator-General engages that the construction of the new lines here specified shall be completed within a period of three years from the date of this Agreement. 2. In the event of the proceeds of this loan being insuflScient for the completion of the new lines here specified, the Administrator- General will provide or will arrange with the Imperial Government of China to provide funds from other sources sufiicient to complete their construction. 3. This loan shall be a first charge upon the security of the permanent Avay, rolling-stock, and entire property, with the freight and earnings of the existing lines between Peking and Shan-hai-Kuan, and on the freights and earnings of the new lines when constructed. The Administrator-General shall, during the continuance of this loan, maintain the railway buildings, works, rolling-stock, and dependencies in good order and condition, and shall increase the rolling-stock from time to time to such extent as shall be necessary for the requirements of the traffic. Should it be decided hereafter to construct branch lines or extensions connecting with the lines herein named, their construction shall be undertaken by the Railway Administration, and should the funds of the Railway Administration be insuflicient for that purpose, it shall apply to the Corporation for the same. 4. The principal and interest of this loan are guaranteed by the Imperial Govern- ment of China, and in the event of default in payment of interest or repayment of principal at due date, the Corporation shall immediately notify the Imperial Govern- 80 ment of China tl:ereof, and the Imperial Gdvpfnmentlof China will thereupon provide the funds necessary to meet such payment in sterling in London. In the event of the Imperial Government of China heing unable to provide the funds necessary to meet a payment of interest or principal when called upon by the Corporation to do so in terms of this clause, the said railway lines and entire propei^ty shall i thereupon, be; hamded over to representatives deputed by the Corporation 'to mttnap, on their behalf,\.uutil principal and interest of the loan have been- -redeemed in full, when the management will revert to the Railway ' Administration. It is pi'ovided thdt should arrears of interest or principal be for a small sum, and it stppear desirable' to the Corporation to' extend the due date of their payment for a terto^ not exceeding three months; it shall be open to the Corporation to do so. • , ) ''"" ' ' This arrangement, which differs from other contracts in that the Administrator- General retains control of the railway lines so long as the principal and interest of this, loan are regularly paid, hjts been agreed^ to in' consequence of the friendly relations which have long existed between the Gonitracting Parties. ■ '' 5. No further loan shall be charged upon the security; named above, cxeept through the! Corpora;tion, until this loan is redeemed^ i and the; Tsung4i Yamto; will hand to the British Minister in Peking a written undertaking on behalf of the Imperial Governmerit of China that the railway lines 'named in this Agreement' shall never be alienated or parted withk , ■ 6. During the currency of this loan the Chief Engineer of the railways shall; be a British subject. The principal members of the railway staff shall be capable and experienced Europeans, who shall be, as at present, appointed by the Administrator- General of the Hallways, and may be, in the event of their misconduct or incom- petency, dismissed after consultation with the Chief Engineer. ' If there are Chinese with sufficient' engineering or traffic experience ithey maybe appointed as well as Europeans. Should it be necessary to appoint a new Chief Engineer, such appointment shall be made in consultation with the Corporation. ' In addition to the above, a capable and efficient European Railway Accountant shall be appointed, with full powers to organize and direct the keeping of the railway accoimts, and to act with the Administrator- General and the Chief 'Engineer (it the railway in the supervision of receipts and expenditure. ; 7. The railway lines named in this Agreement being Imperial Chinese Government lines, in the event of Avar or famine, Chinese Government troops and grain maybe transported over the lines free. 8. All receipts and earnings of the lines herein specified shall be paid into the credit of the Railway Administration with the Hong Kong and Shanghae Banking Corporation, Tien-tsin, together with 50,000 taels annually, payable under the Board of Revenue's arrangement approved by the Throne, by each of the Provinces of Shansi, Sliensi, Honan, and Anhui, for railway purposes for ten years. i All expenses of working and maintaining the lines Avill be paid from their reecsipts and earnings, the remainder of which, together vidth the provincial funds above named, shall then be charged Avith the service of this loan. Payments of interest and repay- ments of principal shall be made in equal monthly instalments, and in accordance with the amounts and dates of a yearly Schedule, Avhich will be furnished to the Administrator-General by the Bank. These payments shall be made by the Administrator-General to the Hong Kong and Shanghae Banking Corporation, Tien-tsin, in Hongp'ing sycee sufficient to provide the sterling amount due to the bondholders in terms of the prospectus of the loan, the rate of exchange for these payments being fixed by that Bank as each such payment becomes due. In. reimbursement of expenses incurred in connection with the distribution of the service to the bondholders of the principal and interest of the loan, the Hong Kong and Shanghae Banking Corporation, Tien-tsin, shall receive from the Railway Administra- tion a commission of |- per cent, on the annual loan service, which will be included in the yearly Schedule for the same. 0. T1m> term of the loan shall be forty-five years, and, subject to the modification mentioned hereinafter, repayment of principal shall be made, so far as regards the bondliolders, in forty equal annual instalments, commencing with the sixth year. 10. Interest on the loan shall be charged at the rate of 5 per cent, per annum on the nominal principal, and shall be calculated on the balance of such principal at any time outstanding, payments of interest being made by the Administrator- General in accordance with tlie amounts and dates specified in the yearly Schedule to be provided. 11. The loan will be redeemed by annual drawings ^ in London as provided, for in the prospectus. • Besides the drawings as providedf or.'the Administrator-Greneral may,, on giving three months' notice to the Corporation, call for extra drawings to be held, for any amount. .Bonds, so drawn to be redeemed by the Railway Administration at 20 per cent, premium on their par value. Any such extra drawingsmu'it take place on the date of the ordinary drawing ])rovided by the prospectus. ■ ^ In the event of such extra drawings taking place, subsequent paym-ents. oi' interest will be adjusted in the yearly Schedule to be provided, but repayments of principal shall continue unaltered in terms of clause 9 of this Agreement until the loan is redeefmed. The Imperial Government of China hereby engages that this loan shall not be redeemed or converted otherwise than as hereiri provided. 12. The price agreed upon for this loan is 90 per cent, net of the nominal principal, but should an unfavourable state of the market prevail at the time of issuing the prospectus, the Corporation is hereby authorized to reduce the price of the loan, at its own discretion, to not less than 8S per cent, net to the Railway Adminis- tration. 13. The Corporation are hereby authorized to issue to subscribers to the loan bonds for the total amount of the loan in pounds sterling, in sucli form and for such amounts as shall appear desirable to the Corporation, and the Minister for China in London will seal all such bonds Avith his official seal, as evidence, that the Imperial Government of China is bound thereby. Each such bond shall bear the following ■clause : — " The Imperial Government of China, pursuant to an Imperial Edict, dated , unconditionally guarantees and declares* itself responsible for the payment of the principal moneys and interest hereby secured, and i n faith thereof it has specially authorized the Cliinese Minister in London to seal this bond withhis official seal." 14. All bonds and coupons and payments made and received in connection with this loan shall be exempt from Chinese taxes and imposts for ever. 15. All details necessary for the prospectus and connected with the service to the bondholders of the interest and repayment of principal of this loan, not herein explicitly provided for, shall be left to the arrangement of the Corporation, Avho. are hereby authorized to issue a prospectas of the loan as soon as possible after the signing of this Agreement. The Tsung-li Yamen -ndll instruct the Chinese Minister in London to co-operate with the Corporation in any matters requiring conjoint action. 16. The loan shall be issued to the public as soon as possible after the signing of this Agreement, and shall date from the first day of the month of its issue. .- .Payment of the entire proceeds will be made in London to the order of the . Administrator- General not later than the 31st day of March, 1899 ; of the above proceeds, the Cor- poration will advance to the order of the Administrator-General in London, on or before the 31st day of October next, the sum of 250,000/. ; this advance will bear interest at the rate of 5^ per cent, per annum until such time as the first instalment of the loan proceeds shall be available, when it shall be deducted from those proceeds by' the Corporation. 17. In the event of an unfavourable state of the market rendering the issue of this loan, and the payment of its proceeds to the • -Railway Administration impossible, on the terms named without loss to the Corporation, the Corporation shall be granted such extension of time for the performance of its contract with the Administrator ■ General as the circumstances demand, any advances or instalments of proceeds already made to the Railway Administration ■ being in that case treated. as- regards, payment of interest, repayment of principal, security, and Imperial Chinese Government -guarantee in terms of this present Agreement, and as forming part of the principal amount of this loan. Similar' extension 'of time for the issue of this loan and payment of its proceeds shall also be granted in the. evenit of the Deutsoh-Asiatische Bank^ Berlin, obiecting to its issue before the month of April next, in accordance with the terms of clause 9 of the Agreement for the Chinese Imperial Government 4^ per Cent. Sterling Loan of 1898. 18. Immediately after the signature of this Agreement, and before the issue of the prospectus of the loan to the public, the Administrator rGijneral will memorialize the Throne and-obtain an Imperial Edict confirming! aaid-saiB/Gtionimg the pijovisions of. this Agreement, the Imperial Edict so, received being the& conimunicated officially and without delay by the Tsuhg-li Ya'men to the British Miiiisfer iii Peking. 32 19. The Corporation may, subject to all its obligations, transfer or delegate all or any of its rights, powers, and discretions to any British Company, Directors, or Agents, in consultation with the Administrator-General, with or without power of further transfer and sub-delegation. 20. This Agreement is executed in quadruplicate in English and Chinese, one copy to be retained by the Administrator-General, one by the Tsung-li Yamen, one by the British Minister in Peking, and one by the Corporation, Should any doubt arise as to the interpretation of the contract, the English text shall be accepted as the standard. Signed at Peking by the Contracting Parties this 25th day of the eighth month, of the twenty-fourth year of the Emperor Kuang-Hsii, being the 10th day of October, 1898, Western Calendar. Statement of Loans and Advance.? by Foreign Banks to the Imperial Kailways Administration to be redeemed in terms of this Contract. By the Hong Kong and Shanghae Banking Corporation : — 2nd November, 1894, to Shan-hai-Kiian Section 23rd October, 1896. to Lucouchiao Section 8tli June, 1897, to Lucouchiao Section . . 8th June, 1897, to Railway Bonds 3rd December, 1897, to Peking Section. . Hongp'ing taels 200,000 400,000 Kuping taels 300,000 140,000 200,000 By the Busso-Chinese Bank : — One due January 1900 ,, Oue repayable by monthly instalraen';s of 10,000 taels, commencing 1898 Hongp'ing taels 200,000 „ 400,000 By the Deutsch-Asiatische Bank : — One due spring 1899, 90,000/. say Hongp'ing taels 700,000 Inolosure 2 in ^o. 57. Official Statement, describing the Imperial Railways of North China, and indicating generally their Resources and Value as a security for the Loan negotiated by the British and Chinese Corporation {Limited). Imperial Bailwaxs of North China. Gentlemen, ' London, October 8, 1898. IN pursuance of instructions from the Imperial Chinese Railway Administration through their Engineer-in-chief, Mr. C. W. Kinder, I have made preliminary surveys- and investigations for the proposed extension railways in Southern Manchuria, and have also looked into the construction and working and the traffic prospects generally of the railways now in operation, in order to convey vivd voce to your' Board official engineering information as to the value of the property to be offered as security for the loan under consideration, and I have now the honour to submit the following statement for your guidance : — The railways to be mortgaged to you for the loan are all of standard English gauge, and consist of the following sections, as shown upon the accompanying diagram — Peking to Tien-tsin — A double track line laid with 85-lb. steel rails, and including a short spur to the west from the Peking Junction in commence- ment of the Hankow system Tien-tsin to Tan^ Ku — A single track line laid with 70-lb. rails ,', Tang Ku to Shan-hai-Kuan — A single track line laid with 60-lb, rails .'. '.'. Total length of lines to be mortgaged . . MUes. 83| 27 146| 257^ 33 ' ^ There is a further section of 40 miles in operation outside the Great "Wall (Shan- hai-Kuan to Ohung-hou-so), the earnings of which, together with those of the 258 miles of extensions proposed to be built out of the proceeds of this loan, are to be pledged as additional security. The value of the lines to be mortsiased may be gathered from the following details : — Permanent Way. _ The permanent way is substantially laid, and is maintained under a staff of British engineers and superintendents. The country through which the lines pass is generally an alluvial plain, consequently the grades are very moderate and the principal curves good, the water- ways forming the chief items of engineering difficulty and expense. Bridges. The double track bridges- from Peking to Tien-tsin make an aggregate length of 7,140 feet, and consist of steel girders resting on masonry or concrete piers and abut- ments sunk by compressed air to a proper foundation. The single track bridges aggregate 17,147 feet of similar construction, with the exception of 800 feet of steel girders on timber piers, and this is about being brought into substantial conformity with the remainder of the line. The largest viaduct is that over the deep gorge of the Lan Ho, and is 2,200 feet face to face. Station, Shops, 8fc. There is a fine station building almost completed at the Peking terminus, and an elaborately designed station yard capable of accommodating a large passenger and goods traffic. Prom the terminus to Peking city a heavy rail tramway has been laid, and is being equipped for electrical working. At Pengtai, 5 miles south of the terminus, is the junction with the Hankow system, which is destined in the process of railway development to become a very important centre, and is a fi.xed point on this western route owing to its proximity to the heavy viaduct across the Hun Ho at Lu Kia Chiao city, from whence the line as far as Pao Ting Pu is being constructed departmentally. At this junction extensive provision has been made for handling heavy traffic, and sheds, stores, shops, &c., have been erected of a substantial and commodious character. The other stations, station accommodation, water supply, turn-tables, shops, sheds, stores, &c., are generally in keeping with the character of the line and suited to the requirements of traffic and of efficient working. The sidings on the line to be mortgaged make an additional aggregate length of 30^ miles. Wharves. 3> Hsin Ho T'ang Ku av e a river frontage of 600 feet. jj an area of . , 180 acres 3J a river frontage of . 2,750 feet. }> an area of . . 150 acres }> a water frontage of 3,300 feet. 35 a timber wharf of 720 jy )> an area of . . 83 acres » sidings of . . H miles T'ang-Ku, on the Pei Ho, a few miles up stream from the Ta Ku forts, is the port of Peking and of the contiguous districts of North China. There is a large and growing export and import trade, as may be gathered from the Customs Eeports, and, owing to the silting up of the Pei Ho (Tien-tsin River), steamers, instead of going up to Tien-tsin, discharge at T'ang-Ku, and a large and increasing percentage of this cargo goes up to Tien-tsin by rail and a decreasing quantity by boat. The value of the property at T'ang-Ku is now estimated at fully 500,000 taels, although the original cost was trifling. [322] F 34 At T'angslian are situate the principal workshops, where there are 2,000 men employed in carriage and waggon building and general repairs to rolling-stock, the output from wiiich last year was 400 vehicles of various denominations. At T'angshan and vicinity are situate the Kaiping Coal Company's mines, which form an important source of traffic. The mines are working as a Chinese concern exclusively, and employ about 6,000 men with an output of 2,500 tons per day. At Shan-hai-Kuan are situate the shops for girder building in full working order, where appliances and hands are employed capable of turning out about 0,000 tons of girder work per annum. The value of the principal workshops, including machinery, stores, and spare parts, is estimated by Mr. Kinder as under : — Tiiels. Fcnjitai — Repair shops for rolliap; stock . . . . . . value 60,000 'l"aiigshan — For coQStruotion and repairs . . . . . . ,, 400,000 Shan-hai-Kuan — For sjirder buildiiiu; .. .. .. ,, 200,000 Total value . . . . 660,000 Rolling Stock. The rolling stock is built somewhat after the best American types, and designed by the Engineer-in-chief with a boldness of conception unhampered by the settled conservatism of the home railways. Particularly in the freight trains is the contrast so remarkable between the North China trains of 40 to 50 30-ton cars, and the freight trains on the home lines of a fifth or sixth of this capacity. The heavy freight and passenger locomotives number 34, and the lighter types for auxiliary work 22. The vehicles of all denominations number 1,545. The passenger cars consist of two classes, with the exception of mail trains (Peking- Tien-tsin), on which there is extra first-class accommodation provided aboard the postal cars. The passenger coaches are buUt on the American principle, having through passage and end platforms. They are 60 feet long, carried on bogies, the second class accommodating 90 passengers each. In the freight stock the 30-ton capacity long-frame bogey cars are a special feature, and are availed of to the utmost. Westinghouse air-brakes are on all express trains, and hand-brakes on the freight cars. Imperial State Car. It may be mentioned incidentally, as a sample of Tiangshan work, that the principal Imperial State car is 75 feet long, 10 feet wide, and 15 feet high from rails, carried on two bogies, each resting on six 42-inch wheels, electric light from axlei Stone's patent steam-heating, Westinghouse air brakes, and the general desio-n, work- manship, and finish are of the highest order. The locomotive engineers, inspectors, and passenger drivers are British, as are also the traffic manager and principal conductors. The Secretarial Department, Directorate, and such accountancy as exists are exclusively Chinese. The privilege of appointing an English accountant of your choice, and to be, in effect, under your control, is to be made a condition of vour Agreement, and this lact, in itself, enabling you, as it will, to publish certified periodical traffic Returns, should be regarded with satisfaction, and I may add that it is indicative of the bond fide action, spirit of liberality, and business-like' capacities which characterize the present heads of the Imperial Raihyay Department. Capital Cost of Line. .r. J^^x^'^x?*,^^ ?°'*' ?^^^^ ^f'^^t^ ""^^^^'^5^ property, including the 40 miles outside the Great Wall, is put down by Mr. Kinder at 16,000,000 taels. Owing to the Chinese method of book-keeping this amount cannot be subdivided or apportioned. At present the Engineer-in-chief requires a considerable sum for renewals and 35 repairs, and to develop still further the efficiency of the line, but it is well, at the same time, to point out the enormously, enhanced value of the wharf and land property. Neiij Extensions. The new extensions proposed to be built out of the proceeds of this loan extend from Chung-hou-so to Ying Kau, with branch to Sin-min-ting, and make a total length of 2."-8 miles in all, of which you ai-e to have an unalienable interest collateral with the mortgage. Tor 90 miles of these extensions beyond Chung-hou-so the line has been partially constructed ; and the earthworks and bridges, particularly for a length of 70 miles to Kinchou city, are in a forward state. The remainder of the extensions to Ying-Kau and Sin-min-tin£r, which are untouched, save in respect of my preliminary surveys, traverse principally an alluvial plain, and although involving heavy waterways and flood openings, offer no very serious engineering difficulties. The plain is exclusively agricultural, and is thickly peopled with a settled and prosperous peasantry, The soil is rich, free to work, and very productive. No actual figures can be given as to the rural population or area under cultivation. The country is thickly studded over Avith large villages and market towns, and is plentifully intersected by highways, and for the greater part of the route few countries outside China can compare with it in^the extent to which its available surface is tilled. Sin-min-ting, the northern objective point, is a large native settlement, and the centre of a very extensive grain trade, principally supplied from the western water- shed of the Liao-ho. The cart traffic through all these districts is very heavy, and there can be no. doubt that in a country yielding such a volume of road traffic, a railway offering the facilities of a speedier and cheaper transit will, as on the lines in operation, be availed of to the utmost. Traffic generally. The railway accounts being in the hands of Chinese olBcials, and kept according to Chinese ideas, it is impossible to obtain figures to establish a definite traffic Eetum of the usual kind, and even if any figures were obtainable it would obviously be more satisfactory to rely upon personal observation and the experience of those who have been connected with the railways from their commencement, and who have watched, during their career, the development of every phase of their existence. In addition to actual knowledge of the heavy traffic carried over the line, I have the statement of Mr. Kinder, who, as the founder of the railways, and under whose guidance and initiative the lines have been built and worked, and than whom no European knows more about the railway and other commercial resources of North China. Mr. Kinder states that for the lines in operation, including the 40 miles outside Wall, " the annual receipts will average 2,000,000 taels, and the working expenses, 1,200,000 taels." This, at the present rate of exchange, means, in round figures : — Taelf. £ Annual receipts . . .. .. .. .. 2,000,000 = 266,666 Working expenses .. .. .. .. 1,200,000 = 160,000 Balance— Net receipts . . .. 800,000 = 106,666 This balance would yield a clear o^ per cent, on a loan of 2,000,000/., and it may be remarked that this result is obtained notwithstanding the fact that the line stops short 40 miles outside the Great Wall at a merely insignificant place en route for the objective points of Ying Kau and the centres of grain trade in the North — so that as at present working at least 100 miles of the line cannot be said to be earning anything •like what it should command if its objective points had been reached. A knowledge of the volume of passenger and goods traffic carried over the lines is quite sufficient to convince any one accustomed to the working of railways that wiih proper management the foregoing is a moderate estimate of the earning power of the line. The port of T'ang Ku with the very important distributing centres of Tien-tsin [322] F 2 36 and Peking — the coal mines of T'angslian, the military forts and encampments at Taku and Lutai ; the rising watering place and sanitorium for foreign settlers at Pei-tai-ho so extensively patronised, together with the facts of the people being everywhere anxious to avail themselves of the facilities of transit afforded them, the vast population to be served, and the general resources of the country to be dealt with, offer on the whole the best possible guarantee for the remunerativeness of judicious expenditure on railway accommodation. It may be of interest to remark that the climate of Manchuria is thoroughly healthy — our nearest home parallel being Canada: a rainless winter, cold but delightfully dry, bright and brisk ; very little snow — the spring and fall of the year being exceptionally temperate, and only a short period of summer forming the rainy season in which the heat is at all oppressive. With regard to the prospects of traflfiic on the extensions (in which your Board is to have a collateral interest), it may be said that they are at least quite as good as on the lines in operation. The country north-east of the city of Kin-chou, forming the lower watershed of the Ta-ling Ho and Liao Ho, is an immense fertile plain all under cultivation, and producing largely in excess of its local requirements. The trend of trade in this extensive agricultural district bounded on the north by the waters of the Liao Ho is all towards Ying Kau and inside Wall. In addition to the ordinary sources of railway traffic in the country, there is in prospect the development of a very large coal traffic frofti the Nan Piao Coal Mines, situate some 30 miles north-west of our extension line from Kiao-chau. It is intended to connect these with our line by a branch, later on, and to work them as a separate undertaking; but as you are at present only interested in these to the extent of their value as a source of railway traffic, it will suffice to quote Mr. Kinder on these and extension traffic generally where he says : — " I am confident that the opening up of the (Nan Piao) mines and- others near to will have a splended future, as the demand for this fuel is rapidly increasing all along the China coast, while a large native consumption is assured when a cheaper means of transport will be provided by the railway. Sin-min-ting is the centre of an important grain trade, most of which will go west by rail or to Ying Kau for shipment to Japan and the China coast. I have, therefore, no doubt at all that these (extension) lines can, when once in full working order, say, two years after opening for traffic, pay 4 per cent, interest on the outlay incurred." I may remark that the earning power of these extensions is estimated by Mr. Kinder with a large margin of reserve or high factor of safety, so very com- mendable in dealing with a railway in its infancy in a new country and constituting a new enterprize, in spite of all the evidence that exists to warrant the presumption of a more liberal return. The produce and requirements of this country to the south and west of the Liao Ho form an important factor in the trade of Ying Kau, and when the coal of Nan-Piao Xwhich there is nothing in North China to equal in quality and in facility of access) will be secured, a very large trade may be anticipated. In view of the extensive requirements of traffic to the sea-port, a very fine site of 1,000 acres with deep water frontage for wharves, &c., has been obtamed on the western bank of the Liao Ho at Ying Kau. I may add, in conclusion, a resume of the points affecting the security for the loan : — The security to be offered for the loan now under negotiation is— 1. A mortgage of 257^ miles of railway (plus the earnings of a further 40 miles) all m operation, and mcludmg rolling-stock and all appurtenances belono-ino- to a rail way system m a sound and thriAing condition, and with an estimated earning power more than sufficient to pay interest on the loan. The capital sterlino- cost of this part of the security alone is considerably in excess of the amount of the loan required -'._ The loan novv sought is to be applied to the building of 268 miles of new extensions, and to the improvement of portions of the existing line, additional workshops and wharfage, accommodation, &c., and the profits ar^sino- from all this expenditure-the distribution of which is secured under British control and manaffel ment— are estimated to amount to at least another 4 per cent., forming on the whole an aggregate security of over 9 per cent, on the amount of your loan, accrJins from a property upon which over 4,000,000/. will have been expended 37 Should you want information upon any other phase of the subject, I shall be most happy to supply it before my return to China. I have, &c. (Signed) JAMES GINNELL, Disfrict Engineer, ■ Imperial Chinese Railways. lo the Chairman and Directors, British and Chinese Corporation, Limited, 3, Lombard Street, London, B.C. No. 58. Sir C. MacDonald to the Marquens of Salisbury. — {Received November 28.) (Extract.) Peking, October 11, 1898. I HAD the honour to report to your Lordship in my telegram of to-day's date the signing of a definitive contract, under which the Hong Kong and Shanghae Banl, 1898. PROPOSED Agreement with Russia respecting railway concessions in China. Has Minister for Eoreign Affairs submitted to you a draft Agreement, which I ujiderstood he was to draw up according to his ideas as recently expressed ? No. 63. Sir C. Scott to the Marquess of Salisbury .—(Received December 15.) (Tele^apMc.) t . i • , . , ^^' P'ter.sburgK December 15, 1898. WITH reference to your Lordship's telegram of yesterday, I have the honour to report fhat the Emperor is expected back in St, Petersburgli on or about the ii 24th instant, and Count Mouravieff is waiting till then so that the draft Agt^ement k^ will submit to me will be with authority. The engagement, his Excellency assumes, is clearly understood to be of a reci- procal character, aTfid' t understand 'that he will eoffimiUnicate to us clearly what are the. precise rights in Manchuria which have been ceded to Russia by Treaty. Tiie Marquess of tSulisbury. to Sir C. MacDonald. (Telegraphic.) Foreign Office, December 27, 1S98. HAVE ^fo'ri iVft-Gitcd from Cliinese Or^^eimitfeffi pl'fed^fe? msp&titmg tfto-alienation of line on which the loan for the Newclwvang Eailway is to be secured in accordance FJtfe eknm § of the ^tgre^^melit of the Hong Kong and Shanghae Bank ? ■^■~' '^ ' '^' " ■■ - - --■-■-■1-;-^- - ■ -- - II I -iimi I III ■■ ■•"■ -.-■ : M... ^ :.■- . -.-..vi ^■-r---?--Ziwt-i-:."--^ S"o. 65. Sir C. MacDonald to the Marquess of Salisbury.— (Received December 28.) (Telegraphic^ Peking, December 28, 1898. I received on the 24th December the pledge of non-alienation mentioned, in your Lo**yiiapt''s teJ€»gram ©f fmttf&f. No. 6^. Foreign Office to Hong Kong and ShangJ'me Bank^ Sir, Foteign Office, necmber 20, 18-9a WITH reference to my MteP of the 2nd instant, and to your iflqui-ry on the 27th iBs-tant, on tbe subject of the prepoeed loaB from the British Chinese Corporation fof tb^ «fs4:ensi«n of the railway from ShaithaikU'an ta Newchwang, 1 am^ directed by the :Marqueh9 of Salisbury to informr you- that Her Majesty's Minister at Eekiaig has jepo^ted by telegraph that he received on tte %Hh lastant, Irom the Tsung-li Yan^n,- the assurance in regard to the non-alienation of the' lines on whieh the loan is- to be secured in conformity with Article V of the Corporation's Contract. I am^ &e. (Signed) ERANCIS- BEETIE. m. 67. The Marquess of SaUnbunj m Hir C. Scott. (Teregraphic.) " Foreign Office, January I, 18004 HAS any further information reached you with regard to the Agreement respecting railway concessions in China which you have been discussing with the Eussi^* ^^veftnaas&jast? iiiiil T ii -mr-n- "-" ^— "'-.vw««-ir;-arjf- i r < i l i i-ir ^-"""•■Tliiii'iiiTiT iiff^^itnTniH'Trr~'aiTrfM"ii"TiiiririiT im^ir [322] • & '2 44 No. 68. 8ii- C. Scott to the Marquess of Salisbury. — {Received January 2, 1899.) (Extract.) St. Petersburgh, December 29, 1898. 1 UNDERSTAND from Count MouraviefF that, now that the Emperor has returned to his capital, his Excellency will take the first opportunity of submitting to His Majesty the form which he is prepared to suggest tor an agreement with Her Majesty with regard to the respective interests of the two countries in China. No. 69. Sir C. Scott to the Marquess of Salisbury. — (Received January 11.) (Telegraphic.) St. Petersburgh, January 11, 1899. THE Council which the Emperor desires to hold with Count MouraviefF and M. Witte on the question of the proposed agreement between England and Russia in China had to be deferred, as although Count MouraviefF saw His Majesty yesterday, M. Witte is suffering from a rather severe illness, and until his recovery the meeting cannot take place. No. 70. Sir C. Scott to the Marquess of Salisbury. ^^{IBeceived January 16.) (Extract.) St. Petersburgh, January b, 1899. I ASKED Count MouraviefF yesterday whether he had had an opportunity since the Emperor's return to St. Petersburgh of taking His Majesty's commands as to the com- munication which his Excellency had proposed to make to me after Christmas on the subject of a form of Agreement which he thought would meet the views of both our Governments as to their respective interests and policies in China, and tend satisfactorily to dissipate apprehensions and suspicions in both countries. His Excellency said, however, that he would be received by His Majesty on the 10th instant (Tuesday next), and would then tell him that I had been again inquiring when 1 might expect to hear more about the proposed draft Agreement. I said that I had no desire to press for a communication until he felt liimself able to make me one officially in a perfectly definite form. I would only remind him that at present I had simply been able to communicate to your Lordship the confidential expression of his own views, and those of M. Witte respecting the engagements which the Russian Government would be prepared to exchange with Her Majesty's Government, and that he had particularly requested me not to regard him as officially bound by them' at this stage of our confidential negotiations. The pubhc in England. I ventured to add, were meanwhile following with keen interest the course of events in China, and I did not feel altogether reassured by the latest reports T had seen from Shanghae, as the pressure of any foreign claims likelv to interfere with our interests in the Yang-tsze district would be sure to cause trouble. Count Mouraviefi" said that it was quite clear that something more tangible than a confidential exchange of friendly assurances was necessary to dispel suspicions and apprehensions in regard to the aims and policy of the two countries in China, and he hoped, as soon as the Christmas and New Year festivities were over, we should be able to come to an understanding on the subject of a satisfactory written Agreement. No. 71. Sir C. MacDonald to the Marquess of Salisbury. -^(R^cmed Januai'n 23 1899 ) (Extract ) i , ■■ , ,, Peking, December 10, 1898. Wirn reference to my despatches of the 11th and 12th October, forwarding copies ot tbe^ Agreements signed by the Hong Kong and Shanghae Bank for the Zsewchwang-Shanhaikuan Railway and the Nanp'iao Coal Mines I have now the honour to report the ratification of both these Agreements by the throne. on., t ^"^t f ^«^^iP<^ ratifying the llailway Agreement Was issued on the 27th November and communicated to me by the Tsung-li Yamen in a despatch dated the same day, translation of which I have the honou? to inclose. TheMming Agreement was ratified on the 6th December, and the Imperial Rescript communicated to me by the Tsung-li Yam^n by a despatch dated the 9th December, translation of which I have the honour to inclose. On the 8th instant an Imperial Decree was issued appointing Chang Yen-mow Assistant to Hu Yu-±en in the control of all his railways. Inclosure 1 in No. 71. The Tsung-li Yamen to Sir C. MacDonald. (Translation.) ^ Peking, November 27, 1898. THE Yamen reported to the throne on the 27th November on the Memorial of his Excellency Hu Ytl-fen, Administrator- General of the Railways within and beyond Shanhaikuan, communicating the conclusion of an Agreement with the Hong Kong and Shanghae Bank for a foreign loan for the construction of the railway beyond Shanhaikuan, and on the same day received the following Imperial Decree : " Let it be as proposed." It is the Yamen's duty to reverently transcribe this Decree and communicate it to Sir 0. MacDonald, for his information, and to request him to instruct the bank to pay over the instalments of the loan at the stated dates, in accordance with the Agreement. (Seal of Yamen.) Inclosure 2 in No. 71. The Tsung-li Yamen to Sir C. MacDonald. (Translation.) Sir, Peking, December 9, 1898. WE have the honour to inform you that on the 8th December we received a letter from his Excellency Hu, Director-General of the Railways on both sides of Shanhai' kuan, stating that on the 6th December he had addressed a supplementary Memorial to the throne with respect to working mines at Nan-p'iao, in the Chao-yang district, and the same day received the ]!mperial Rescript : " Let it be as proposed." His Excellency sent to us a copy of his Memorial and of the Agreement. We find that the 15th Article of the said Agreement reads : — " Immediately after the signature of this Agreement the Administrator- General mil, through the medium of the Tsung-li Yamen, officially communicate the Imperial Edict to the British Minister at Peking, that he may take the usual steps with regard to commercial undertakings." We have therefore the honour to reverently transcribe the Imperial Edict, and to communicate it by this official despatch to your Excellency, that you may take the necessary steps. (Seal of Yamen.) No. 72, Hong Kong and Shdnghde Banking Corporation to Foreign O0ce.~--{ReceiDed January 24.) gif 31, Lombard Street, London, January 24, 1899. I HAVE now the honour to hand you a draft prospectus of the proposed loan to the Chinese Imperial Railway Administration for 2,300,000/. You will notice I have mentioned the fact that the Contract was made with the knowledge of Her Majesty's G^vernmerltj and I have now thfe honour to request you will be so good as to address a letter to the Bank to that effect. At the same time may I ask you to confirm the arrangement already come to, and inform the bank officially that Her Majesty's Government have taken note of the commu* nication addressed to Her Britannic Majesty's Minister at Peking by th6 Tsung-li 40 Yamen as constituting a binding engagement on the part of the Chinese Imperial Goverti* ment. It is uncferstood we will be allowed to incorp"or?tte youf despateh irt the pi-ospectus. I tave, &c. (Signed) E'WEN CAMEttON. Inclosui^e 1 in ^o. 7?. Draft Prospectus, Chinese Imperial Railway 5 per Cent. Gold Loan {[laperial Railways of North China) for 2,300,000/. sterling, ofered for Public Suhscriptian in London. — Authorized by Imperial Edict. .Principal and interest u'nconditionally guaranteed by, the Imperial Governmi^ -O'f Cfftlna, and specially secured upon the Railways,. KolHng-stock, I'reights, Md E&tmngs specified herein. Eceem0 from all present artd future Chinese Taxes. THIS loan has been arranged with the knowledge of Her Majes>ty's Got'fetttttieftt, ahd all JtssttMHce" t«r the Chinese Government that Hone of the raiiways na'Bied in the Cofitract tor the loatr miM be alienated to any foreign Power has been officially comtlitmicated" ro Her firftantiic Majesty's Minister in Peking by the Tsung-li Yamen. Ssf Ma|es%^s Government have consented to take note of the same as constituting a binding gngagfefherit on the part of the Chinese Government. In bonds to bearer at W(Jt. each, with half-yeafly coupons attached, for interest at the rate of 5 per cent, per annum, payable on the 1st August and the 1st February. The tirst coupon will be at the fiill rate of 5 per cent, per annum for six months, payable the 1st August, 1899. Principal and interest payable in London in sterling. Subscription Price, 97 per cent. The Hong Kong and Shan^hae Banking Corporation, 31, Lonjbard Steeefc,, Lond©*^, as agents for the British and Chinese Corporation (Limited),^ th* Contrs8et€«?& few the kmny iiivi-te sttbscriptions for 2,300^000/. sterling bonds of the above loan.. The &vie& of sub- scription is 9? per eent., payable as follows :-- 5 per cent, on application. 20 „ allotmetit. 26 2nd- Miirch. 25 4th April. 09 J5 4th Max. 97 The bonds will bear interest at 5 per cent, per annum ii-om the 1st Pe&ruary, 1^^, Paymewtia fia-lJ may be made on allotment under discount at the rate of 2 per cent, per annum. The loan is for fbrty-ffve years, and is redeemable at 100/. per bond by forty annual drawings of equal amount, comrnencin-sf in 1905. The Chinese Imperial Rail way Administration, however, may increase the amount of anv drawings by o-ivins three months' nolice, and in tliat case the extra bonds so drawn are to be lid-pprW At 1207. p5T bortcl. e^ee-cp,^ The drawings wil in &hanghae Bank; following, after which date interest on the bonds so drawn will'cease. The Chinese Imperial Railway Administration undertake to pa;y to the Hona Kmxa and Shanghae Banking Corporation, by monthly instalments, the amounts necessarv^S cover the service of this loan, ■^ The conclusion of the lean has been authorized by Imperial Edkt dated the 2?tkv November, 1898, which has been officially communicated to Her Britannic lifaiestv'* 47 Mmkttr in Peking by the Tsung-li Yam^n, and principal and inteiest are unconditionally guaranteed by tlie Imperial Government of China. The loan is exempt from all present and future Chinese taxes. • ; Besides being unconditionally guaranteed by the Imperial Government of Chiaa, the loafl is secui-ed as a first charge upon the permanent way, rolliiag-stock, and entire property, with the freight and earnings of the existing railway lines between Peking and Sbao- haikuan. It will also be secured by a first charge on the earnings of the railway line from Sbanhaikuan to Sin-Minting, now partly constructed or in course of construction, and from a point on that line near Chih-san-chau to the port of Xewchwang, and of a branch line from Nu.erh-ho to the collieries of Nanp'iao. No further loan may be charged upon the railways hypothecated except through the British and Chinese Corporation. The existing lines between Peking and Sbanhaikuan, charged as security for this loan, and which are now in operation, are as follows:— Peking to Tientsin (double lino) .. ,. .. ,. .. 83, Tientsin to Tangku (single line) ., ., .. ,. .. 27 ' Tangku to Shanhaikuan (single line) .. ,. ., .. .. 146| Total (exclusive of sidings) . , . . , . . . 257^ The lines partly constructed, or in course of construction, upon the earnings only of which this loan will have a first charge, are as follows : — Miles. Shanhaikuan to Chunghouso (already in operation) . . . . . . 40 ChuBgliouso to Sin-Minting (of which 90 miles to Kin Chow are pai-tiaHy constructed) and the Port of Newchwaug . . . . . . . . 258 Total .. .. .. .. .. ..298 thus constituting, when finished, a continuous and complete railway system of 555|- miles from Peking to Sin- Minting and Newchwang. The Chinese Imperial Railway Administration undertake to maintain the railway and rolling-stock in good order and condition, and to increase the rolling-stock from tithe to time to meet the requirements of the traffic. In the accompanying Report and map by Mr. James Ginnell, District Engineer of the- Imperial railways of ^orth China, fall information will be found respecting construction, equipment, and traffic of the lines. Mr. Kinder, the Chief Engineer, under whose supervision the railways liave been constructed, puts down the capital cost of the existing railway property upon which the! loan is charged at 13,800,000 taeis = 1,8^0,OOOZ. To this must be added the cost of th^ forty miles constructed between Shanhaiknan and Chunghouso, estimated by Mr. Kindei* at 2,200,000 taels = 293,333?., and the proceeds of the present issue (subject to the Redemption of certain advances not exceeding in the aggregate 3,000,000 taels = 400,000/.), which will be devoted to the cost of the extension from Chunghouso to Sin-Minting and the port of Newchwang, together with improvements to the existing lines and additions to their rolling-stock recommended by the Chief Engineer. This brings the cost of the complete system to upwards of 4,000,000/. 'No credit is taken therein for the greatly enhanced value of the considerable wharf and land property belonging to the railway at various points. The Contract provides that the Chinese Imperial Railway Administration shall com- plete the above extension from Shanhaikuan to Sin-Minting and Newchwang within three years. ... ' In the event of the proceeds of this loan being insufficient for such extension and improvements, the Contract stipulates that the Chinese Imperial Railway Administration are to provide funds from other sources to meet the deficiency. All receipts and earnings are to be regularly paid in to the credit of the Railway Administration with the Hong Kong and Shanghae Banking Corporation. Concerning revenue, Mr. Ginnell writes : — " In addition to actual knowledge of the heavy traffic carried over the line, I have the statement of Mr. Kinder, who, as the founder of the railways, and under, whose guidance and initiative the lines have been built and worked, and than whom no European knows more about the railway and other commercial resources of North China. c ^■ ■ " Mr. Kinder states that for the lines m operation, including the 40 miles outside Wall, the annual receipts will average 2,000,000 taels, and the working expenses 1,200,000 taels. 48 "A knowledge of the volume of passenger and goods traffic carried over the lines is quite sufficient to convince any one accustomed to the working of railways that, with Droper management, the foregoing is a moderate estimate of the earning power of the line." The Provinces of Shansi, Shensi, Honan, and Anhui are to contribute to the Railway Administration for railway purposes annually for ten years 50,000 taels each, and these contributions are, by the terms of the Contract, to be paid to the credit of the Railway Administration with'the Hong Kong and Shanghae Banking Corporation. Taels. £ On the Mbovo estimate the net revenue of the existing railways may be taken at 800,000 = 106,666 The contributions to be made by the four provinces amount to . . 200,000 26,666 Making together .. .. .. .. 1.000,000 133,332 Mr. Kinder estimates that the net revenue of the lines to be built beyond Chunghouso should, in 1905, amount to 720,000 taels = 96,000Z., thus bringing up the estimated net revenue of the whole railway system to 202,000L This is apart from the ten years' contributions of the provinces. The Commissioner of Customs, in his Annual Report on the trade of Tien-tsin for 1897, writes as follows : — " It is astonishing how speedily Chinese, despite their reputed conservatism, adapt themselves to a new environment and make the most of increased transport facilities offered them. Already Peking fiuit is sent direct to Tangku for shipment south, and Peking is similarly supplied with southern fruit, and traffic generally developed so rapidly that it soon became necessary to double the line." The districts which are and will be served by the railway and the projected extensions are for the most part agricultural, and well populated. In Tien-tsin at the west, and port of Tsewchwang at the east, the railway will possess the advantage of a shipping Treaty port at either end of its system. The population of Tien-tsin is estimated to be about 1,000,000, and the port of rJ^ewchwang about 60,000. The trade of these two ports, according to the latest Customs Returns, amounted to 8,O0O,000Z. and 4,000,000Z. respectively, and no doubt will be largely increased when the railway system is completed. Sin-Minting, one of the projected termini of the extension eastward, is of great importance, being the grain centre of the district. The railway from Tien-tsin to Shanhaikuan serves the well known Kaiping collieries (the output of which, according to Mr. Ginnell's Report, is 2,500 tons per day), and the extension in course of construction to Sin-Minting is to be coimected by a branch with the collieries of Nanp'iao, in which the British and Chinese Corporation (Limited) are interested, and from which a large traffic is anticipated. The railways are now being operated by the Chinese Imperial Railway Administra- tion, but it is provided in the Contract that during the currency of the loan the Chief Engineer of the railways shall be a British subject; that the principal members of the staff are to be Europeans ; and that a European Railway Accountant shall be appointed with full powers to organize and direct the keeping of' the railway accounts, and to act with the Administrator-General and the Chief Engineer in the supeVvision of receipts and expenses. The Chief Engineer is now Mr. Kinder, the founder of the railways in North China, and the Contract provides that in the event of another Chief Engineer having to be appointed, such appointment shall be made in consultation with the British and Chinese Corporation (Limited). In the event of any default in the service of the loan, it is provided that the railway lines between Peking and Shanhaikuan, and entire property appertaining thereto, shall be handed over to the representatives appointed by the British and Chinese Corporation (Limited),_ to manage on their behalf until the principal and interest of the loan have been redeemed in full. The representatives in China of the British and Chinese Corporation (Limited) are the Hong Kong and Shanghae Banking Corporation and Messrs. Jardine, Matheson and Co. ' The Tsung-li Yanien have handed to Her Britannic Miijesty's Minister at, Pekiucr on behalf of the Chinese Imperial Government, an assurance that none of the railwavTines named in the Contract for tiie loan shall be alienated to any foreio'n Power, 49 1 x^ "^i^^ ^°"^ Kong and Shanghae Banking Corporation have received the following letter from Her Majesty's Government :— Applications for the loan will be received bv the Hong Kong and Shanghae Banking Corporation, 31, Lombard Street, London, E.G. If no allotment is made, the deposit will be returned in full, and if only a portion of the amount applied for is allotted, the balance of the deposit will be applied towards payment of the amount due on allotment. Default in payment of any instalment at due date will render previous payments liable to forfeiture. Scrip certificates to bearer will be issued against allotment letters ; and bonds to bearer sealed by his Excellency the Minister for China in London will, when readv, be exchanged for fully-paid scrip certificates. Prospectuses and forms of application may be obtained from the Hong Kong and Shanghae Banking Corporation, 31, Lombard Street, London, E.G., from the British and Chinese Corporation (Limited), 3, Lombard Street, E.G., and from Messrs. Panmure Gordon, Hill, and Co., Hatton Court, London, E.C. 3, Lombard Street, London, 1899. Inclosure 2 in No. 72. Official Statement, describing the Imperial Bailways of North China, and indicating generally their resources and value as a security for the Loan negotiated by the British and Chinese Corporation (Limited). Imperial Railways op Nobth China, To the Chairman and Directors, British and Chinese Corporation (Limited), 3, Lombard Street, London, E.G. Gentlemen, London, October 8, 1898. IN pursuance of instructions from the Imperial Chinese Railway Administration through their Engineer-in-chief, Mr, C. W. Kinder, I have made preliminary surveys and investigations for the proposed extension railways in Southern Manchuria, and have also looked into the construction and working and the traffic prospects generally of the railways now in operation, in order to convey, viva voce to your Board, official engineering information as to the value of the property to be offered as security for the loan under consideration. And I have now the honour to submit the following statement for your guidance : — The railways to be mortgaged to you for the loan are all of standard English gauge, and consist of the following sections, as shown upon the accompanying dia- gram : — Peking to Tieii-tsin — Miles. A double track line laid with 85-lb. steel rails, and including a short spur to the -west from the Peking Junction in commencement of the Han Kau system .. •> .. .. .. .. .. 83 j- Tien-tsin to Tangku — A single track line laid with 70-lb. rails .. .. .. ..27 Tangku to Shanhaikuan — A single track line laid with 60-lb. rails .. .. ., ., 146| Total length of lines to be mortgaged . . . . . . 257^ There is a further section of 40 miles in operation outside the Great Wall (Shan- haikuan to Chunghouso), the earnings of which, together witli those of the 258 miles of extensions proposed to be built out of the proceeds of this loan are to be pledged as a Iditional security. The valu^ pf the lines tp he mortgaged may be gfithered from the following details : — [322] H 50 Permanent Way. — The permanent way is substantially laid, and is maintained under a stafp of British engineers and superintendents. The country through which the lines pass is generally an alluvial plain, consequently the grades are very moderate and the principal curves good, the waterways forming the chief items of engineering difficulty and expense. Bridges.— Hhe double track bridges from Peking to Tien-tsin make an aggregate length of 7,140 feet, and consist of steel girders resting on masonry or concrete piers and abutments sunk by compressed air to a proper foundation, The single track bridges aggregate 17,147 feet of similar construction with the exception of SQO feet of steel girders on timber piers, and this is about being brought into substantial conformity with the remainder of the line. The largest viaduct is that over the deep gorge of the Lan Ho, and is 2,200 feet face to face. Station, Shops, &je. — Ther6 is a fine station building almost completed at the Peking terminus, and an elaborately designed station yard capable of accommodating a large passenger and goods traffic. From the terminus to Peking city a heavy rail tramway haa been laid, and is being equipped for electrical working. At Fengtai (5 miles south of the terminus) is the junction with the Han Kau system — which is destined, in the process of railway development, to become a very important centre — and is a fixed point on this western route owing to its proximity to the he^vy viaduct across the Hun Ho at Lu Kia Chiao city (from whence the line as far as Pao Ting Fu is being constructed departraentally). At this junction extensive provision has been made for handling heavy traffic, and sheds, stores, shops, &e.j have been erected of a substantial and commodious character. The other stations, station accommodation, water supply, turn-tables, shops, sheds, stores, &c,, are generally in keeping with the character ot the line, and suited to the requirements of trafBc and of efficient working. The sidings on the line to be mortgaged make an additional aggregate length of 30|^ miles. Wharves — The wharves at Tien-tsin have a river frontage of „ , „ an area of , , „ Hsin Ho have a river frontage of ,1 „ an gtvea of ... „ T'ang Ku have a water frontage of » . „ „ a timber wharf of „ „ area of . . . . , . , „ „ sidings of T'ang-Ku, on the Pei Ho, a few miles up stream from the Ta Ku forts, is the port of Peking and of the contiguous districts of North China. There is a large and growing export and import trade, as may be gathered from the Customs Reports, and owing to the silting up of the Pei Ho (Tien-tsin River), steamers, instead of going up to Tien-tsin, discharge at T'ang-Ku, and a large and increasing percentage of this cargo goes up to Tien-tsin by rail, and a decreasing quantity by boat. The value of the property at T'ang-Ku is now estimated at fully 500,000 taels, although the original cost was trifling. At T'angshan are situate the principal workshops, where there are 2,000 men employed in carriage and waggon building, and general repairs to rolling-stock — the output from which last year was 400 vehicles of various denominations. At T'angshan and vicinity are situate the Kaiping Coal Company's mines which form an important source of traffic. The mines are working as a Chinese concern exclusively and employ about 6,000 men, with an output of 2,500 tons per day. At SLnnliaikuan are situate the shops for girder building in full working order, where appliances and hands are employed capable of turning out about 6,000 tons of girder work per annum. The value of the p4-incipal workshops, including machinery, stores, and spare parts is estimated by Mr. Kinder as under :— Fengtai — 600 feet. 180 acres. 2,750 feet. 150 acres. 3,300 feet. 720 „ 83 acres. 5^ miles. -^ . , r. -ii- 1 Taels. Repair shops for rolling-stock , . . . . , ^ _ . . 60 000 T'angshan — For construction and repairs . . . . , . _ _ ^ ^ ^qq qqq Shanhaikuan — For girder building .. .. .. .. ., _ 200,000 To^'^1 ^^'^"'^ ~66o"^ 51 koiling-stock. — The rolling-stock is built somewhat after the best American types, and designed by the Engineer-in-chief with a boldness of conception unhampered by the settled conservatism of the home railways. Particularly in the freight trains is the contrast so remarkable between the North China trains of forty to fifty, 30-ton cars, and freight trains on the home lines of a fifth or sixth of this capacity. The heavy freight and passenger locomotives number thirty-four and the lighter types for auxiliary work twenty-two. The vehicles of all denominations number 1,515. The passenger cars consist of two classes with the exception of mail trains (Peking- Tien-tsin) on which there is extra first-class accommodation provided aboard the postal cars. The passenger coaches are built on the American principle, having through passage and end platforms. They are 60 feet long carried on bogies ; the second-class accommo-' dating ninety passengers each. In the freight stock the 30-ton capacity long frame bogey cars are a special feature and are availed of to the utmost. Westinghouse air-brakes are on all express trains and hand brakes on the freight cars. Imperial State Car. — ^It may be mentioned incidetitally as a sample of T'angshan work that the principal Imperial State Car is 75 feet long, 10 feet wide and 15 feet high from rails carried on two bogies, each resting on six 42-inch wheels, electric light from axle. Stone's patent steam heating, Westinghouse air-brakes, and the general design, workmanship, and finish are of the highest order. The locomotive engineers, inspectors, and passenger drivers are British, as are also the traffic manager and principal conductors. The Secretarial Department, Directorate and such accountancy as exists are exclusiN'ely Chinese. The privilege of appointing an English accountant of your choice and to be in effect under your control, is to be made a condition of your Agreement and this fact in itself enabling you as it will, to publish certified periodical Traffic Returns should be regarded with satisfaction, and I may add that it is indicative of the bond fide action, spirit of liberality and business-like capacities which characterize the present heads of the Imperial Railway Department. Capital Cost of Line. — The capital cost of the existing railway property, including the 40 miles outside the Great Wall, is put down by Mr. Kinder at 16,000,000 taels. Owing to the Chinese method of book-keeping, this amount cannot be subdivided or apportioned. At present the Engineer-in-chief requires a considerable sum for renewals and repairs, and to develop still further the efficiency of the line, but it is well at the same time to point out the enormously enhanced value of the wharf and land properly. New Extensions. — The new extensions proposed to be built out of the proceeds of this loan extend from Chung-hou-so to Ying Kau,* with branch to Sin-Minting, and make a total length of 258 miles in all, of which you are to have an unalienable interest collateral with the mortgage. For 90 miles of these extensions beyond Chung-hou-so the line has been partially constructed, and the earthworks and bridges, particularly for a length of 70 miles to Kinchou city, are in a forward state. The remainder of the extensions to Ying Kau and Sin-Minting', which are untouched save in respect of my preliminary survej'-s, travei-se principally an alluvial plain, and although involving heavy waterways and flood openings, offer no very serious engineering difficulties. The plain is exclusively agricultural, and is thickly peopled with a settled and prdsperous peasantry. The soil is rich, free to work, and very productive. No actual figures can be given as to the rural population or area under cultivation. The country is thickly studded over with large villages and market towns, and is plentifully intersected by highways, and for the greater part of the route few countries outside China can compare with it in the extent to which its available surface is tilled. , Sin-Minting, the northern objective point, is a large native settlement, and the centre of a very extensive grain trade, principally supplied from the western watershed of the T ' J-J- The cart traffic through all these districts is very heavy, and there can be no doubt that in a country yielding such a volume of road traffic a railway offering the facilities of a speedier and cheaper transit will, as on the lines in the operation, be availed of to the Traffic generally. — The railway accounts being' in the hands of Chinese officialStand • Ying Kau is the port of Newchwang. [322] H 2 52 kept according to Chinese ideas, it is impossible to obtain figures to establish a definite traffic return of the usual kind, and even if any figures were obtainable, it would obviously be more satisfactory to rely upon personal observation and the experience of those who have been connected with the railways from their commencement, and who have watched during their career the development of every phase of their existence. In addition to actual knowledge of the heavy traffic carried over the line, I have the statement of Mr. Kinder, who, as the founder of the railways, and under whose guidance and initiative the fines have been built and worked, and than whom no European knows more about the railway and other commercial resources of North China. Mr. Kinder states that for the lines in operation, including the 40 miles outside "Wall, " the annual receipts will average 2,000,000 taels, and the working expenses 1,200,000 taels." This at the present rate of exchange means in round figures : — Taels. £ Annual receipts .. .. .. .. .. 2,000,000 = 266,666 Working expenses .. .. ,, .. .. 1,200,000 160,000 Balance, net receipts ». .. .. .. 800,000 106,666 This balance would yield a clear 5^ per cent, on a loan of 2,000,000Z., and it may be remarked that this result is obtained notwithstanding the fact that the line stops short 40 miles outside the Great Wall at a merely insignificant place en route for the objective points of Ying Kau and the centres of grain trade in the north, so that, as at present working, at least 100 miles of the line cannot be said to be earning anything like what it should command if its objective points had been reached. A knowledge of the volume of passenger and goods traffic carried over the lines is quite sufficient to convince any one accustomed to the working of railways that, with proper management, the foregoing is a moderate estimate of the earning power of the line. The port of T'ang Ku, with the very important distributing centres of Tien-tsin and Peking, the coal mines of T'angshan, the military forts and encampments at Taku and Lutai; the rising watering-place and sanitorium for foreign settlers at Pei-tai-ho so extensively patronized, together with the facts of the people being everywhere anxious to avail themselves of the facilities of transit aff'orded them, the vast population to be served, and the general resources of the country to be dealt with, offer on the whole the best possible guarantee for the remunerativeness of judicious expenditure on railway accommodation. It may be of interest to remark that the climate of Manchuria is thoroughly healthy, our nearest home parallel being Canada : a rainless winter, cold, but delightfully dry, bright and brisk; very little snow, the spring and fall of the year being exceptionallv temperate, and only a short period of summer forming the rainy season in which the heat is at all oppressive. With regard to the prospects of traffic on the extensions (in which your Board is to have a collateral interest), it may be said that they are at least quite as good as on the lines in operation. The country nortii-east of the city of Kin-chou terming the lower watershed of the Ta-ling_Ho and Liao Ho is an immense fertile plain all under cultivation, and producing largely in excess of its local requirements. ° The trend of trade in this extensive agricultural district, bounded on the north bv the waters of the Liao Ho, is all towards Ying Kau and inside Wall. In addition to the ordinary sources of railway traffic in the country there is in prospect the development of a very large coal traffic from the Nan Piao coal-mines situate some 30 miles north-west oi our extension line from Kao-chau. It is intended to connect these with our line by a branch later on, and to work them as a separate undertaking but as you are at present only mterested in these to the extent of their value as a source of railway traffic, it will suffice to quote Mr. Kinder on these and extension traffic eeneraliv where he says : — ° '""js " I am confident that the opening up of the (Nan Piao) mines and others near to will have a splendid future, as the demand for this fuel is rapidly increasin"- all alone the China coast, while a large native consumption is assured when a cheaper means of transoort will be provided by tl.e railway. Sin-Mmtmg is the centre of an important grain trade urost of which will go west by rail or to Ying Kau for shipment to Japan a^d the ChTna coast I have, therefore, no doubt at all that these (extension) lines can when nice m full working order, say, two years after opening for traffic, pay 4 per cent inteLf n^ the outlay incurred." » F ^ •* per cent, interest on 53 I may remark that the earning power of these extensions Is estimated by Mr. Kinder with a large margin of reserve or high factor of safety, so very commendable in dealing with a railway in its infancy in a new country, and constituting a new enterprise, in spite of ail the evidence that exists to warrant the presumption of a more liberal return. The produce and requirements of this country to the south and west of the Liao Ho form an important factor in the trade of Ying Kau, and when the coal of Nan Piao (which there is nothing in Korth China to equal in quality and in facility of access) will be secured, a very large trade may be anticipated. In view of the extensive requirements of traffic to the seaport, a very fine site of 1,000 acres, with deep water frontage for wharves, &c., has been obtained on the western bank of the Liao Ho at Ying Kau. I may add, in conclusion, a rdsumd of the points effecting the security for the loan : — The security to be offered for the loan now under negotiation is — 1. A mortgage of 257^ miles of railway (plus the earnings of a further 40 miles), all in operation, and including rolling-stock and all appurtenances belonging to a railway system in a sound and thriving condition, and with an estimated earning power more than sufficient to pay interest on the loan. The capital sterling cost of this part of the security alone is considerably in excess of the amount of the loan required. 2. The loan now sought is to be apphed to the building of 258 miles of new extensions, and to the improvement of portions of the existing Hne, additional workshops, and wharfage accommodation, &c., and the profits arising from all this expenditure, the distribution of which is secured under British control and management, are estimated to amount to at least another 4 per cent., forming on the whole an aggregate security of over 9 per cent, on the amount of your loan, accruing from a property upon which over 4,000,OOUZ. will have been expended. 3. To the foregoing is to be added an Imperial guarantee for the payment of interest and repayment of principal. Should you want information upon any other phase of the subject, I shall be most happy to supply it before my return to China. I have, &c. (Signed) JAMES GINNELL, District Engineer, Imperial Chinese Railways. Inclosure 3 in No. 72. Diagram showing the Imperial JRaihvays of North China, and proposed Extensions. [Not printed.] No. 73. Sir C. MacDonnId to the Marquess of Salisbury .—-{Received January 26.) ! ' (Telegraphic.) . Peking, January 26, 18994 DIRECTORATE of Northern Railways. The late Minister to Eossia and Germany, Hsii Ching-ch'eng, is appointed Chief Director in place of Hu, who is dismissed by Imperial Decree. Chang retains the post of Assistant Director, and has impeached Hii on the ground of fraudulent practices; Prince Ching and two members of the Tsung-li Yamen are appointed as a Commission to try him. No. 74. Foreign Office to Hong Kong and Shanghae Bank, ^fr^ Foreign Office^ January 26, 1899. ON the 29th December, 1898, you were informed by this Department that HeT* Majesty*^ Minister at Peking had received on the 24th December from the Tsung-li Yajucu the assurance that none of the railway lines named in the contract for the loaii to be made by the British and Chinese Corporation to the Chinese Imperial Railway Administration shall be alienated to any foreign Power. I am now directed by the Marquess of Salisbury to inform you that in the special circumstances of the case, Her Majesty's Government _ consent to take note of this promise as a binding engagement on the part of the Chinese Government. I am further to state that you are authorized to announce in the prospectus of the loan that the loan has been arranged with the knowledge of Her Majesty's Government. I am, &c. (Signed) T. H. SANDERSON. No. 75. The Marquess of Salisbury to Sir C. MacDonald. Sir, Foreign Office, January 28, 1899. I HAVE received your despatch of the 10th ultimo, reporting the ratification of the Agreements signed by the Hong Kong and Shanghae Bank for the Newchwang- Shanhaikuan Railway and the Nanp'iao Coal Mines, and inclosing copies of the notes addressed to you by the Tsung-li T'amen on the subject. Your proceedmgs in the matter are approved by Her Majesty's Government. I am, &c. (Signed) SALISBURY. No. 76. Sir C. Scott to the Marquess of Salisbury,— (deceived January 30.) My Lord, St. Petersburgh, January 25, 1899. COUNT MOURAVIBFP informed me to-day that M. Wittewas now sufficiently recovered from his recent illness to be able again to attend to business, and that they would both have an opportunity on Friday of seeing the Emperor on the subject of the proposed agreement respecting- China. He regretted the delay which had taken place in making me the promised communi- cation of a formula for an agreement which he thought would be satisfactory to your Lordship, but he could tell me, in confidence, that he had had a very satisfactory Conference with M. de Witte and General Kuropatkin, and had found that they were all in agreement on the point. He also told me that the Emperor had approved of the proposal to make Talienwan a free port, and that a Commission had been appointed, of which he was himself a member, to consider the necessary administrative regulations, as this was a point which wpuld have to be settled before the decision was officially announced. I have, &c. (Signed) CHARLES S. SCOTT. No. 77. l^orig Kong and Shanghae Banking Corporation to Foreign Office, ■^—{R^ceived February I.) Sir, 81, Lombard Street, London, January 31; 1899; I HAVE the honour to acknowledge and thank you for your despatch of the '26th instant, stating that Her Majesty's Minister at Peking received an assurance from the Tsung-li Yair.en to the effect that the railway lines mentioned in the contract shall not be alienated to any foreign Power, and that in the special circumstances of the case Her Majesty's Government consent to take note of the promise as a binding engagement on the part of the Chinese Government. 55 You are a\m so good as to inform me that we are at liberty to state in the prospectus that ihe loan was arranged with the knowledge of Her Majesty's Govern- ment. I have, &c. (Signed) EWEN CAMERON. No. 78. Sir C. 8cott to the Marquess of Salisbury. — (Received February 1.) (Telegraphic.) gt. Petersburgh, February 1, 1899. COUNT MOURAVIEFF, who on Monday had held out hopes to me of being- in a position to communicate to me a formula of Agreement respecting China to-day, went down yesterday to see the Emperor again on the subject. While there a telegram was received from China reporting that our Legation at Peking had taken some strong action connected with some claim at Newchwang hostile to the interests of Russia in the Manchuria Railway line. This action, at a moment when our negotiations were approaching a satisfactory conclusion, greatly disturbed and surprised the Emperor, "who ordered Count Mouravieff not to go any farther with the negotiations until par- ticulars and explanations had been obtained through the Russian Ambassador in London and myself. I replied that I had no knowledge of any claim being pressed at Newchwang, and that I was at a loss to understand what action was alluded to, but that inquiries would at otice be made. In Count MouraviefT's opinion the claim was evidently a very serious one, and he said that the information was official, and came apparently from the Tsuhg-li Yamen. He could not tell me whether explanations had been sought from Sir Claude MacDonald by the Russian Minister at Peking. No. 79. The Marquess of Salisbury to Sir C. MacDonald. (Telegraphic.) Foreign Office, February 2, 1899. CAN you explain what is referred to in Sir C. Scott's telegram of the 1st February, repeated to you ? Have you made any demand of the Tsung-li Yamen within the last three weeks connected with Newchwang which is likely to exasperate the Russians ? Please let me have a full report on the matter; No. 80. The Marquess of Salisbury to Sir C. Scott. (Telegraphic.) Foreign Office, February 2, 1899, WITH reference to your telegram of yesterday : We have no idea what the Russian Mmister at Peking refers to. No. 8L The Marquess of Salisbury to Sir C. Scott. Sir Foreign Office, February 3, 1899. THE Russian Ambassador, in conversation yesterday, asked me as to the supposed action hostile to Russia, which the Russian Minister for Foreign Affairs had assigned as a reason for interrupting the negotiations between thp English and Russian Governments. 56 I replied that I did not believe that Sir C. MacDonald had taken any steps of the kind. The only representation he had made to the Tsung-li YamSn even distantly affecting the Newchwang Railway was a request that it might have a fair trial. I am, &c, (Signed) SALISBURY. No. 82. The Marquess of Salisbury to M. de Staal. .Dear Ambassador, Foreign Office, February 6, 1899. I HAVE received from our Minister at Peking a reply to the inquiry I made of him after our conversation on Thursday as to the action he was said to have taken hostile to Russian interests at Newchwang. Sir Claude MacDonald states that he cannot in any way understand how the report can have arisen, as he has made no demands on the Tsung-li Yamen of any kind connected ■with Newchwang since August last, when he had occasion to speak to the Chinese Ministers with respect to the action of the local authorities in regard to the purchase of land by British subjects at the port. I have, &c. (Signed) SALISBURY. No. 83. Sir C. MacDonald to the Marquess of Salisbury. — (Received February 9.) (Telegraphic.) Peking, February 9, 1899, NEWCHWANG. 1 have never, either verbally or in writing, supported to the Tsung-li Yam&n any claim for an extension of our Settlement at the above port. Had my intervention been necessary, however, I should not, of course, have hesitated to press the claim on the Chinese Government. The extension obtained by Her Majesty's Consul contains no Russian-owned lots, and does not in any way interfere with the Russian railway. The former fact is more than the Russians can say with regard to British-owned property in their Concession at Hankow, and of this Count Mouravieff is aware. The history of our extension is that the gradual washing away by the river of much of the old Settlement led to Her Majesty's Consul to ask last June for *an extension, which the Chinese authorities granted in December. The negotiations were carried through without any necessity arising for reference to me in the matter. Simultaneously with our extension the .Japanese obtained a Settlement which adjoins it. No. 84. Foreign Office to M. de Staal. Dear Ambassador, Foreign Office, February 12, 1899. I LOST no time in submitting to the Marquess of Salisbury the communication which you made to Sir Thomas Sanderson on the 10th instant, and which was to the following effect : — Your Excellency had received a telegram from the Russian Government, who had just heard that the Hong Kong and Shanghae Bank had opened subscriptions for a loan of 2,300,000/., guaranteed on the railways from Peking to Sin-Minting and Newchwanz. The Russian Government referred to the communications which had passed witTi Mr. Balfour through Her Majesty's Ambassador at St. Petersburgh, and the understanding^ which had been arrived at that the loan could only be secured on the Hue west of the Great Wall. The Russian Government hoped that Her Majesty's Government would secure the abandonment of that part of the arrangement which comprised the branch to Newchwang. They were the more desirous of this in view of the negotiations now proceeding for an arrangement between the two Governments. 57' Your Excellency said that on exainining the prospectus of the loan you had found that the railways to Sin-Minting and Newchwang were not mortgaged, but that the earnings of those railways were so, and that your Excellency supposed that this would imply the possible establishment of a control over the working of the new lines and their receipts, which would be contrary to the engagement which the Chinese Government had given to Russia not to allow any foreiirn Company or individuals other than Russians to establish such control over railways in Manchuria. Lord Salisbury desires me to say, with reference to the engagement given by the Chinese Government mentioned by your Excellency, that you must have been mis- informed as to its exact purport, for Count Mouravieff stated to Her Majesty's Ambassador in August last that the engagement given was that if the northern extension of the railways in question were made, the line should always remain in Chinese hands and under Chinese control. His Excellency said that the Agreement with China was not directed against the interests of England or of any other Power ; the limitation being general in its character, applying to all non-Chinese nationalities, Russians included, could not, Count Mouravieff observed, be regarded as infringing the Treaty rights of most favoui'ed nations. Your Excellency has satisfied yourself from an examination of the prospectus of the loan that there is no foundation for the apprehension of the Russian Government, that the loan is secured by mortgage of the railways constructed, or to be constructed, beyond the Great Wall. It is, therefore, not necessary that Lord Salisbury should say anything on that point, but with regard to your Excellency's fear that in the event of default in the service of the loan the control over the lines outside the Great Wall might pass out of Chinese hands, his , Lordship desires me to say that on referring to the prospectus he finds that though the loan is partly secured by a first charge on the earnings of the railway line from Shanhaikuan to Sia-Mintiag, and from a point on that line near Chih-san-chau to the port of Newchwang, and of a branch from Nu-erh-ho to the collieries of Nanp'iao, there is no stipulation that those lines shall pass out of the hands of the Chinese in the event of default on the loan, Lord Salisbury has, however, informed the Hong Kong and Shanghae Bank, who are agents for the British and Chinese Corpora- tion, the contractors for the loan, of the point raised by your Excellency, and as soon as hio Lordship receives a reply from them he will communicate further with you on the subject. I have, &c. (Signed) PRANCIS BERTIE. No. So. Sir C. Scott to the Marquess of Salisbury. — {Received February 13.) (Extract.) St. Petersburg}), February 2, 1899. COUNT MOURAVIEFF, who dined at the Embassy on Monday last, told me that he hoped at last to be able to submit to me his promised draft of an Agreement with regard to our interests in China. He was going down to Tsarkoe Selo, he said, the next morning with the draft which the Emperor had ordered him to bring for His Majesty's approval, and he hoped to be able to communicate it to me the following day, if I would come to his reception at the Foreign Office. His Excellency did not give ine any further particulars as to the contents of this draft, except tliat he thought it would be found in accordance with the result of our confidential conversations, and that as regarded the question of rival railway enterprise, the Agreement recognized the existence of the separate spheres in which our respective interests were to be held preponderant, and were not to be interfered with by the other Governments. On my calling at the Foreign Office yesterday to learn the result of his Excellency's audience at Tsarskoe, I learnt from him with considerable surprise and concern that a tele<^ram had been received on the preceding day from China to the effect that Her Majesty's Minister at Peking was taking very strong action there in support of a British claim at Newchwang, which his Excellency vaguely described as directed against the interests of the Russian railway line in Manchuria, and that the Emperor had been so disconcerted bv this report that His Majesty felt himself unable to authorize Count Mouravieff to proceed any further with the proposed Agreement until his Excellency had seen me, and also telegraphed to M. de Staal and received explanations. The Emperor had desired Count Mouravieff to sjvv tQ roe th^t he bad been pain- \;m\ ■ ■ ■ ' I 58 fully surprised by this report at a moment when our confidential negotiations for an Agreement, which contemplated a frank exchange of communications on all claims likely to interfere with our respective interests, were in progress and approaching a satisfactory conclusion. Count Mouravieff pointed out to me that Newchwang was in Manchuria, and in close proximity to the Eussian line of railway to Talienwan, and asked me whether Her Majesty's Government would not have been equally surprised had a similar report reached them of Russian action with regard to a claim in the sphere where our interests were preponderant. I expressed myself at a loss to understand to what claim the report could possibly refer, I had not received any information whatever giving the slightest clue to the raysteryi Newchwang, I said, as his Excellency must be well aware, was a Treaty port at which there was an important foreign trading settlement, principally British and partly American, but nothing in the recent reports which I had read from China indicated any existence of an unsettled British claim in that district. I promised to lose no time in telegraphing for infornmtion, but 1 asked his Excellency whether he could not give me some more precise information to found my inquiry on. Did the telegram, I asked, which had so disturbed the Emperor, not state the exact nature of the claim, or of the action taken by Her Majesty's Legation at Peking — from what quarter did the Russian Legation acquire its information ; and had it not sought explanations from Sir C. MacDonald on the subject ? Might not, I added, the report in question have heen based on inaccurate information, and possibly be traced to influences interested in sowing distrust between our two Governments and in delaying the conclusion of a satisfactory Agreement ? Count Mouravieff answered that the telegram was official, the report although some- what vague as to details was positively worded, and the information apparently confirmed on the authority of the Tsung-li Yam^n. The action taken in support of the claim was said to have been of an unusually serious character, and the claim itself directly hostile to Russian interests. No. 86. Sir C. Scott to the Marquess of Salisbury/. — (Received February 13.) My Lord, St. Petersburgh, February 6, 1899, IN continuation of my despatch of the 2nd instant, I have the honour to report that on the receipt of your Lordship's telegram yesterday I at once called at the Foreign Office, and, in the absence of Count Mouravieff, saw Count Lamsdorflf', and informed him that your Lordship was at a loss to understand what claim or action of Her Majesty's Minister at Peking the report concerning which the Emperor desired explanations could possibly refer, as the only demand even remotely connected with Newchwang which Sir C. MacDonald, to your knowledge, was pressing on the Tsunc-li Yamen was for a fair trial for the late Director of Chinese Railways. I begged that this information might be conveyed to His Majesty with the least possible delay; and I related to his Excellency the substance of Count Mouravieffs serious communication to me on Wednesday last. Count LamsdorlF informed me that the Russian Ambassador in London had already telegraphed the result of the inquiry which he had been instructed to address to your Lordship, and that it was identical in substance with the reply which I had received and he promised me that the information would be at once sent to' the Emperor at Tsarslioe who would no doubt find it entirely satisfactory. I did not conceal from Count Lamsdorff that Count Mouravieff's communication to me, based, as it had apparently been, on an official report from Peking of an unverified rumour, had caused me considerable surprise, which your Lordship would have probably shared, as it was represented to me by his Excellency as justifying a further delay in making to me the promised communication with regard to the proposed A"-reement between our Governments. " " * I reminded his Excellency that nearly six months had elapsed since the suo'ffestion of a base for this Agreement had been made in a conversation of M. Lessar" with Mr Balfour, and that the result of the confidential conference which I had had with Count Mouravieff and M, Witte in November last had undoubtedly led your Lordship to believe that Count Mouravieflf would find no difficulty in formulating the proposals which he iiad promised to seek the Emperor's authority to submit to me in writing.' Count Lamsdorff said that a succession of unfortunate interruptions, which no one regretted more than Count Mouravieff, had delayed this communication, and he knew that his Excellency was bitterly disappointed at not having been enabled to communicate the promised note to me on Wednesday. He added that the Emperor was expected to take up his residence in St. Petersburgh the next day, and that I should, in all probability, receive the promised note very shortly. As regarded the clause which I had desired in the proposed Agreement respecting the inadmissibility of preferential railway rates, he must confess to me that, in liis own personal opinion, the insertion of a clause dealing prematurely with such a complicated matter of technical detail would be inadvisable in a preliminary Agreement based on a broad principle. The railways in questions would not be completed for many years to come, some of them, perhaps, not at all, and there would be ample time, he' thought, to come to a satisfactory settlement of the question of rates on the broad principle contemplated in the Agreement when once it had been firmly established between the two Governments, I have, &c. (Signed) CHAELES S. SCOTT. No. 87. Sir G. Scott to the Marquess of Salisbury. "^(Reeewed Pebruary 13.) (Extract.) St. Petersburgh, February 6, 1899. I GALLED on M. Witte on Saturday, and gathered from his remarks that the question of rates was too technical a one to be prematurely inserted in a preliminary Agreement, but that it was one which might be left to be settled between the two Governments in the spirit of such an Agreement when the time came for its necessary consideration. Having the same evening received your Lordship's telegram sending me Sir Claude MacDonald's reply to the inquiry respecting the alleged demand in connection with Newchwang, I communicated it in a private letter to Count Mouravieff, and added • that now that he must have satisfied himself that the rumour was entirely unfounded, I trusted there would be no further delay in submitting to me the promised proposals for an Agreement, as I could not conceal from him that your Lordship was entirely at a loss to account for this delay, and I reminded him again that six months had elapsed since the idea was first broached by M. Lessar in a conversation with Mr. Balfour. No.- 88. Sir C. Scott to the Marquess of SaUgbury.'—(Kifeived February 13.) My Lord, /8^. petersburgh, February 8, 1899. I HAVE the honour to inclose herevvith to your \Lordship copy of an oflRcial note which I received last night from Count Mouravieff, submitting, in the name of the Imperial Government, proposals for concluding an Agreement with Her Majesty's Govern- ment, with the aim of removing the causess of conflict which for some time past have been created by the competition of their respective subjects in the economic affairs of China, which have acquired additional importance by the decision of the Government of Peking to favour the construction of railways on their vast territory. The Russian Government, after careful examination of the proposals submitted to them with this object in view last year by Her Majesty's Government, are unable to formulate precise and definite proposals on questions of so complicated a nature, but are anxious without ftirther delay to proceed to establish, an Agreement in principle which would record the firm decision of Great Britain and Russia to avoid all antagonism, by working in a spirit of })eace and conciliation, for the development of their industrial and commercial interests in China. If Her Majesty's Government concur in this opinion. Count Mouravieff thinks it [322] I 2 60 would be possible, without prematurely touching special questions or points of detail which might be successively settled as the occasion for doing so arose, to lay down at once the main lines of an Agreement on the basis of a partition of the preponderance of interests in the spheres of economic or geographical gravitation of each of the two Powers. And as the qaestions relating to the construction and working of railways in China are those which at the present moment occupy the chief attention of the two Cabinets, it would be only natural, the note says, to begin by an Agreement on the subject. As a preliminary it might be agreed: — 1. That Russia will not place obstacles in the way of the railway enterprises of Great Britain in the Yang-tsze Basin ; and 2. That Great Britain, on her part, will not place obstacles in the way of Russian enterprises of the same nature to the north of the Great Wall. The Russian Government considers that it would be easy to establish an Agreement on this base, which appears to keep within the Hues of the proposals made twelve months ago by Her Majesty's Government, and to conform to the idea of a delimitation of spheres of interests, which your Lordship seemed to favour in recent confidential negotiations. Count Mouravieff concludes by observing that it is well understood that the two Contracting Parties, having no intention -whatever of infringing in any way the sovereign rights of China, or existing Treaties, will not fail to communicate to the Chinese Govern- ment the present arrangement which, by removing all cause of complications between them, is by its nature calculated to consolidate the peace of the Far East, and serve the primordial interests of China herself. The Imperial Government awaits a reply from me on the part of Her Majesty's Government to this note, and I have already had the honour of telegraphing a summary of its contents to your Lordship last night. I have, &c. (Signed) CHARLES S. SCOTT. Inclosure in No. 88. Count Mouravieff to Sir C. Scott. Ministere des Affaires Etrangeres, Saint-Petersbourg, M. TAmbassadeur, le 26 Janvier (7 Fevrier), 1899. LE Ministere Imperial n'a pas manque de soumettre a un examen approfondi les propositions que le Gouverncment Britannique lui avait adressees d^s I'annee derniere en vue d'etablir entie les deux Puissances un accord destine a ecarter les causes de oonflits que faisaient naltre depuis quelque temps les competitions de leurs sujets respectifs dans les affaires ^conomiques dc la Chine, devenues si importantes depuis que le Gouverncment de Pekin s'esl decide a tavoriser la construction de chemins de fer sur son vastc territoire. La nature raeme dcs questions si compliquees soumises a cet examen ne nous a pas permis de formuier des propositions precises et definies, pouvant repondre pleine- ment au but de conciliation qui avait motive de part et d'autre les n(5gociations dont il s'agit. Desirant toutefois ne pas retarder I'etablissement d'un accord de principe qui constaterait la ferme decision de la Russie et de la Grande-Bretagne d'^viter tout antagonisme, en travaillant, dans un esprit de paix et de conciliation, au de'veloppement de leurs interets industrieis et commerciaux en Chine, le Gouvernement Imperial est d'avis qu'on ne saurait pour le moment mieux faire que de s'arreter. en ce qui concerne les affaires de I'Extrerae-Orient, aux propositions preoitees. Si le Gouvernement de Sa Majesty la Reine partageait cet avis, il serait possible sans toucher prcmaturement ^ des questions sp^ciales et de detail, qui pourrait ^tre' r^gl^es au fur et a mesure que la necessite' s'en presenterait, d'etablir' dk auiourd'hui les gi-andes hgnes d'un accord sur la base de la repartition de la preponderance d'interets dans les spheres de gravitation ^conomique ou geograpbique de chacune des deux Puissances. Et p>nsque ce sont surtout les questions relatives k la construction et a 1 exploitation de chemins defer en Chine qui occupent dans le moment actuel les Cabinets de Saint-Petersbourg et de Londres, il serait naturel de commencer par s'entendre a ce BUJGt* 61 On pourrait ainsi coiivenir tout d'abord : — ■ 1. Que la Russie ne contrecarrerait pas les entreprises de chemins de fer de la Grande-' Bretagne dans le bassin du Yan-Tze ; et 2. Que la G-rande-Bretagne de son cote ne contrecarrerait pas les entreprises de la merae nature de la Russia au nord du Grand Mur de Chine. Une entente sur cette base semblerait d'autant plus facile ^ etablir, qu'elle rentrerait dans les cadres des propositions qui nous avaient ete faites par le Gouvernement Britannique il y a un an, et qu'elle rdpondrait a I'idde de la delimitation des spheres d'int6rets, id^e que le Marquis de Salisbury regrettait re'cemment de ne pas voir servir de base aux negociations engagees. 11 va de sol que les deux Parties Contractantes, n'ayant nulleraent en vue de porter une atteinte quelconque aux droits souverains de la Chine, ainsi qu'aux Traites existants, ne manqueront pas de faire part au Gouvernement Chinois du present Arrangement qui, en ecartaut toute cause de complication entre elles, est de nature a consolider la paix dans I'Extrgme-Orient et il servir aux interets primordiaux de la Chine elle-mSme. En attendant la reponse que votre Excellence voudra bien me donner au nom de son Gouvernement, je la prie, &c. (Signe) Comte MOURAVIEPE. (Translation.) M. I'Ambassadeur, THE Imperial Ministry has not failed to submit to a thorough examination the proposals made to it last year by the British Government with a view to establish between the two Powers an Agreement intended to remove the causes of conflict which have lately arisen from the competition of their respective subjects in Chinese economic matters, which have become so important since the Peking Government has decided to favour the construction of railways in its vast territory. The very nature of the complicated questions examined has not allowed us to draw up precise and definite proposals such as would fully satisfy the conciliatory aims which have been the motive on both sides for the negotiations in question. Desiring, however, not to delay the conclusion of an Agreement in principle which would record the firm decision of Russia and Great Britain to avoid all antagonism while working, in a spirit of peace and conciliation, at the development of their industrial and commercial interests in China, the Imperial Government is of opinion that for the moment the best course, with regard to the affairs of the Ear East, would be to adopt the above-mentioned proposals. If the Government of Her Majesty the Q.ueen shared thfc opinion it would be possible, without prematurely touching on special questions and questi que les termes de raccord conclu ne povtevont pas atteinte aux droits^ acquis par la Banque Shanghai-Hong Kong au nam de la "British and Chinese Corporation" par I'arrangement qa'elle a conclu. au sujet de la, dite ligne, mais que, bieni entendu, ccs arrangements ne constitueraient pas un droit de propriete ou de contTdle etranger sur la ligne du chemin de fer en question. La redaction ci-dessus repondant en tous points aux idees emises par le Gouvernement B'ritannique, j'aime a esperer que cette proposition sera accueillie par lui comme un Eloquent temoignage du desir sincere de la Russie d'etablir dans les affaires de I'Extreme. Orient un arrangement pratique avec I'Angleterre. Dans I'attente de la r^ponse qoe votre Excellence, voudra bien me faire parvenir, je paisjs, &c, (Sign^) Comte MOURAVIEI^F, (Translation.) Sir, St. Petersburgh, March 3 (15), 1899. IN your note of the 6th instant your Excellency has been good enough to point o«<3, that the understanding, the bases of which I had had the honour of proposing to you ili my note of the. 2.6,th January (o. s.,), with a view to re,gu,lating. certain questions, respecting railways in China, would seem to have a much narrower scope than the agreement aimed at by the negotiations at the outset, in accordance with the proposals of the British Government. I beg to inform your Excellency that, wishing to offer the Cabinet of London a new proof of its conciliatory attitude, the Imperial Government would not object to give at once- a wider scope to the understanding already agreed upon, in accordance moreover with the spirit of the said note of the 26th January. We could thus complete the Agreement proposed in the latter note by adopting the terms suggested by your Excellency on the 16th (28th) September, on the basis of the former proposals of the British Government with regard to railway Concessions in China. The arrangement to be concluded might be in the following terms : — 1 . Russia engages not to claim for herself, or in favour of Russian subjects, any railway Concessions in the Yang-tsze Valley, and not to obstruct, directly or indirectly, in that region the demands for railway Concessions supported by the British Government. 2. England engages on her side not to claim for herself, or in favour of British subjects, railway Concessions north of the Great Wall of China, and not to obstruct, directly or indirectly, in that region, demands for railway Concessions supported by the Russian Government. As regards the railway from Shanhaikuan to Newchwang, the Imperial Government might consent to recognize, in the event of the understanding being arrived at, that the terms of the Agreement concluded will not injure the rights obtained by the Hong Kong and Shanghae Bank in the name of the "British and Chinese Corporation" by the arrangement concluded by it on the subject of the said line, but that, of course, these arrangements would not constitute a right of ownership or of foreign control over the railway in question. The above version agreeing in all respects with the ideas put forward bv the British Government, I venture to hope that this proposal will be welcomed by them as an eloquent testimony to the sincere desire of Russia to establish a practical arrangement with Enaland in regard to matters in the Far East, Awaiting the reply which I request your Excellency to be so good as to send me I avail myself, &c. ' (Signed) Comte MOURAVIEFF. No. 114. Sir C. Scott to the Marquess of Salislury, — (Received March 22.) (TelegraphicO t . i • . . . ^*' P'tershurgh, March 22, 1899. ..Jr^ p'f'^''^ ^^""^ Lordship's telegram of the 18th instant on the subject 01 the China Kajlways agreement. j*- " 75 Although Count Mouim-ieff has never stated that in his opinion a control will noi be constituted by the appointment of a foreign engineer and accountant his Excellency made no protest, but said that the question might be regarded as settled, Avhen I made an assertion to the above effect. Couilt Mouravieff, on my repeating this assertion to-day in connection with the wording of his note, qxioted in your J.ordship's telegram of the 16th instant, said ihat he did not see how it could be admitted by the Eussian Grovernment that acontrol in the sense of the agreement is not constituted by the functions of these authorities. Your Lordship's message, however, appreciating the conciliatory spirit of the proposals contained in his last note, greatly gratified him, and he said that if I would Avrite to bim to this effect, alnd also lay the disputed point before him in the same light as I had represented it to him, .is not inconsistent with the assurances which had been given to the Russian Ambassador in London, he would see what could be done lo surmount the difiSeulty after talking Avith TVl. Witte and taking the Emperor's •pleasure. 'I am complying to-day with Count Mouravieff's requist. -No. 115. Sir C. Scott to the Marquessof Salisbury.— (Received^ Mar ch^-22,) (Telegraphic.) St. Petersburgh, March 22, 1899. COUNT MOURAVIEFF showed the private letter whicli I wrote to him yesterday to the Emperor. His Majesty directed him to see the Minister of Finance, andto try to obtain his acceptance of the view that a foreign control, in the sense of our agreement, was not constituted by the employment of a British engineer and European accountant, which I said we were unable to give up. His Excellency appears confident that he will be able to settle the matter in a satisfactory manner. I have made the suggestion that either this view should be accepted, or that for the words "foreign control" in his note be substituted "foreign mana-gement." No, 116. Sir C. Sbott to the' Marquess 'of Salisbury. — {Received March 27.) My Lord, St. Petersburgh, March 17, 1899. WHEN I'a^ttended Count Mouravieff's weekly reception atithe Foreign Office on the 15th instaint, his Excellency 'at once placed in my hands a further note which he had addressed to me on the- subject of the proposed Agreement in regard to railway Concessions in China, and' expressed a hope that these last proposals which had been franied with a desire to give the Agreement the wider scope which Her Majesty's Government had desired, andto give it the form contemplated at the outset of our confidential negotiations, would be accepted by your Lordship as an earnest ^ dt the sincere desire of the Imperial Government to arrive at a satisfactory working under- standing with Her Majesty's Government on all questions of conflicting interests itothe Far East. ■I had' the honour to' telegraph the same evening to your Lordship a summary of this note, and'I am forwarding the full text by post to-night in another despatch. Count Mouravieff's latest proposals respecting raihvay Concessions in Manchuria and the Yalig'-tsze Basin respectively correspond with the wording of the draft Agree- ment which I submitted to Count Lamsdorff on 'the 21*st September, and the only observation which- r made to his Excellency on -reading this^ part of the note -was in the foim of a suggestion that the words "or of others " might, perhaps, be' suitably substi- tuted for "or of 'British subjects," and "or of Russian subjects "after the words "on its own 'account." His Excellency saw the force of this suggestion, but said that he would, prefer for the present to make no alteration in the text which the Emperor; had seen and approved. With regard 'to the reference to the Newchwang Railway Loan, which your Lordship had wished to 'be inserted in the- Agreement, Count Mouravieff >gaid that he hoped that this: passage in his note would -meet your views, 'as it was in conformity [.'^2-?] L 2 76 with the understanding at which we had also arrived in September, and with the first clause of my draft Agreement. I had already at my previous interview with his Excellency been careful to make him understand that Her Majesty's Government was pledged to msist on the Chinese Government strictly keeping to the terms of the Agreement on which the loan in question had been made, and that the employment of a British engineer and of an European accountant were a necessary part of the security, in order to insure that the money would be expended for the purpose for which it was lent, and the line properly constructed, and that the argument which had been advaneed, that the appointment of these functionaries by the Chinese Government and the pledging as security of the working receipts of the line constituted a foreign control or mortgage, was quite unreasonable. Count MouraviefF on that occasion made no further remark on this point than to say that he regarded the question as settled by the communication which he had made to me and through M. de Staal, and to repeat that the remonstrances which had been made by M. de Gieis had not been directed against the British loan, but a,gainst the tendency of the Chinese Government not to keep its engagements with Russia. I thought it safer not to allude to this point again on Wednesday, but confined myself to assming Count Mouravieff that I would lose no time in submitting his notp to your Lordship, and felt assured that this friendly and conciliatory spirit in which his proposals had been made would be warmly appreciated by you. I llELVG &C (Signed) ' CHARLES S. SCOTT. No. 117. Sir C. Scott to the Marquess of Salisbury,'— (Receked March 27.) (Extract.) St. Petersburgh, March 22, 1899. IN further reference to the Newchwang Eailway Loan Agreement, Count Mouravieff has never actually made any statement to me to the effect that he shares the view that the employment of a foreign engineer and accountant does not constitute foreign control, but he did not protest against my asserting this, and confined himself to repeating that he considered this question settled. I have, however, realized the extreme importance of obtaining some more positive assurance from the Eussian Government on this essential point, if the proposed Agreement is to have the desired effect at which it aims, of averting all causes of future conflict between us, and, accordingly, as soon as I received the friendly message with which your Lordship had charged me for Count Mouravieff, expressing the high appreciation of Her Majesty's Government of the conciliatory spirit which animated the last proposals of the Russian Government, and your hope that this would lead to a complete agreement on the question which had so long occupied the attention of the tAvo Governments, I waited on his Excellency and delivered the message, which produced an excellent effect. I then said that, having now reached this satisfactory stage, it was essential that it should not be prejudiced by leaving any loophole for future misunderstanding as to its effect. Tour Lordship had, I said, understood that I had made it quite clear to him that the terms of the Loan Agreement, which provided for the employment by the Chinese management of the Newchwang Line of a British engineer and of a foreign accountant could not be abandoned by us, as they were part of the security on which the money had been raised, and their employment could not be regarded as constituting a " foreign control " of the line in the sense of his note. It was important for me, I said, to be assured of his acquiescence in this view. Count Mouravieff was somewhat disturbed by my pressing him on this point, and frankly told me that he feared it would be very difficult for him to make this admission, but he clearly saw the importance of leaving no room for a misunderstanding on this point. He then referred to some notes which had evidently been just prepared for him and began to argue that the terms which the Bank had obtained from the Chinese Government— and he did not for a moment question their right to obtain them but the right of the Chinese Governraont, in view of their prior engagements to Russia, to give them— constituted a very decided control and share in the management of the 77 line, and he thought we slioulcl consider it so, if it were the case of a Russian bank and ot a railway in the Yang-tsze Valley. I pointed out to his Excellency that he was quite mistaken in his view of the effect I!\ 1 ft •/" r^u" '^*^^ '^''"^^ ^^^^ "^^ S'^^^- *h^ management of the line into foreign hands, Dut lett It a Chinese hne under Chinese control in accordance with our understanding, ami remmded him that the Bank had voluntarily given up the security which they had originally obtained under the authority of an '^Imperial Decree from the Chinese ^^overnment, and which had given them a mortgage on the line, and a control by AT ■ V,^"^the.way of a final Agreement on railway questions in China. The reserves formulated in the Russian Memorandum have, 1 understand, reference to the desire of the Eussian Government to have free hands to arransje with the Chinese Government for the projection of lines in Manchuria to connect tbeir northern system of railways with the Russian Ime through Siberia to Port Arthur and Talienwan. This colossal undertaking, which, it is contemplated, will, when completed, have cost the Russian Government no less a sum than 70,000,000/., will eventually place St. Petersburgh and Eui'ope in direct railway communication with Peking and Northern China, and the advantages anticipated therefrom to the commerce of the whole world count for a great deal in the sanguine expectations of the Siberian Railway Committee that the line will in time amply .repay the cost of its undertaking. ■■ The difficulties—now, it is to be hoped, satisfactorily surmounted— which were raised «n the ground of the Corporation's Loan Contract stipulating for the employment of a British engineer on the construction of the lines north of the Great Wall, originated, I -suspect, in an apprehension that the projection of the northern extension on plans designed exclusively by a British engineer would be carried out with the sole object of making the liee a paying one as quickly as possible, and leave Russia no voice in the direction it should take to form a connection with the Russian line. The Agreement which has now been reached by the two Governments will, it is to be . hoped, render such apprehensions unnecessary, and enable the British and China' Corpora- , tion to protect their interests without coming into conflict with the legitimate interests of the Russian Railway Company and of the Russo-Chinese Bank. No. 133. Sir C. Scott to the Marquess of Salisbury. — (Received April 24.) My Lord, _ St. Petersburgh, April 20, 1899. • 1 HAVE the honour to transmit to your Lordship herewith a copy of the text submitted to me by Count Mouravieff of the identic notes which his Excellency ■proposes should be exchanged between Her Majesty's Government and the Imperial -Gcivernment relative to the proposed Agreement respecting railway Concessions in China, and to the loan which has been contracted by the Chinese Government with the "British and Chinese Corporation" for the construction of the Shanhaikuan-Newchwan"- Railway. I have, &c. (Signed) CHARLES S. SCOTT. , V „.,, . ,' , Tnclosure 1 in No. 133. Text of Identic Note. '"" tE Soussigne, Ministre des Affaires Btrangeres de Russie, clument autoris^ a cet effet, a I'horneur de faire a son Excellence Sir Charles Scott, Ambassadeur Rritannique, la declaration suivaote : — La Russie et la Grande-Pretagne, animees du sincere desjr d'eviter en Chine toute cause de conflits dans I'es questions ou leUrs inter^ts se rencontrent et prenant en conside'- ration la. gravitation economique et ge'ographique de certaines parties de cet Empire,, sont convenues dece qui suit : — ', , p,.l,.- La Russie s'engage a ne pas reclamer, pour $on compte ou en faveur de sujets Russes, des Coricessioris'quelconques de chemins de fer dans le Bassiti du Yano-.tsze et a ne 88 pas contrecarrer directement ou indirectetnent dans cette region les deniandes de Con- cessions de chemins de fer appuyees par le Gouvernement Britannique. 2. La Grande-Breta?;ne de son c6(e, s'engage k ne pas reclamer pour son compte ou en faveur de sujets TBritanniques des Concessions dc chemins de fer au nord du Grand Murde Chine et a ne pas contrecarrer directement ou indirectement dans cette region les demandes de Concessions de chemins de fer, appuyees par le Gouvernement Russe. Les deux Parties Contractantes, n'ayant nullement en vue de porter une atteinte- quelconque aux droits souverains de la Chine, ainsi qu'aux Traites existants, ne nianqueront pas de faire part au Gouvernement Chinois du present arrangement qui, en ecartant toute cause de complication eutre elles, est de nature a consolider la paix dans rExtreme-Orieht et h servir aux interets primordiaux de la Chine elle-ni6me. Inclosure 2 in No. 133. Text of Additional Identic Note. POJJR completer les notes echangees aujourd'hui concernant la repartition des spheres de Concession et d'exploitation des chemins de fer eu Chine, il a et4 convenu de consigner dans la presente note additionnelle I'accord survenu au sujet de la ligne Shanghaikuan- Newchuang pour la construction de laquelle un emprunt a deja ete coutracte par le Gouvernement Chinois a la Banque de Shanghae-Hong Kong, agissant au nom de la "British and Chinese Corporation." L'arrangement general, etabli par les notes precitees, ne portera aucune atteinte aux droits acquis en vertu du combat de I'emprunt susdit, et il sera loisible au Gouvernement Chinois de nommer tant un ingenieur Anglais qu'un comptable Europeen pour surveiller la construction de la ligne de cherain de fer en question et la depense des sommes y affect^es. Mais il res'.e hien entendu que ce fait ne saurait constituer un droit de propriete ou de controle etranger et que la ligne en question doit rester Chinoise, soumise au contrdle du Gouvernement Chinois, et ne pourra etre engagee ou alienee a une Compagnie non Chinoise. Pour ce qui est de I'emhranchement, se dirigeant de Siaoheichan k Sinminting, outre les restrictions susdites, il a et^ convenu qu'il sera construit par la Chine elle- meme, qui pourra admettre des ingenieurs Europeans, pas necessairement Anglais, pour I'inspecter periodiquement, verifier et certifier que les travaux sont dument ex6cut6s. Le present accord speciar ne saurait, naturellement, entraver d'aucuue fagon le droit du Gouvei'nement , Russe d'appuyer — s'il le juge opportun — des demandes de sujets ou etablissements Russes relatives^ des Concessions de chemins de fer, qui, partant de la ligne principale de Mandchourie et se dirigeant au sud-ouest, traver- seraient la region, oh sera construite la ligne Chinoise aboutissant k Sinminting et Newchuang. No. 134. Sir C. Scott to the Marquess of Salisbury. — {Received April 28.) (Telegraphic.) _ _ St. Petersiurgh, April 28, 1899. WITH reference to my immediately preceding telegram, I have the honour to inform your Lordship that the notes have just been signed and exchanged by Count MouraviefF and me. No. 135. The Marquess of Salisbury to Sir C. Scott. (Telegraphic.) Foreign Office, April 29, 1899». CHINA Railways Agreement. I congratulate you heartily on the successful issue of these protracted negotiations. S9 No. 136. The Marquess of Salisbury to Sir C. Scott. (Telegraphic.) Foreign Office, April 30, 1899. 1 HAVE telegraphed to Her Majesty's Charge d'AiFaires at Peking purport of notea exchanged, and T have authorized him to concert with his Russian colleague for the communication to the Chinese Government of the general Agreement. No. 137. The Marquess of Salisbury to Mr. Bax-Ironside. (Telegraphic.) _ Foreign Office, April 30, 1899, NOTES were signed and exchanged yesterday by Her Majesty's Ambassador at St. Petersburgh and Russian Minister for Foreign Affairs, recording Agreement arrived at in regard to railways in China. Arrangement is, in substance, as follows : — 1. Russia engages not to seek for herself or on behalf of Russian subjects or others railway Concessions in Yang-tsze Basin, and not to place obstacles either directly or indirectly in the way of railway enterprises in that region supported by the British Government. 2. Similar engagement, mutatis mutandis, by Great Britain with regard to railway Concessions north of the Great Wall. 3. The two Powers, having no intention of infringing in any way the sovereign rights of China or existing Treaties, agree to communicate to the Chinese Government the present Arrangement, which, by averting all cause of complications between them, is of a nature to serve the interests of China herself. You should concert with your Prussian colleague for communicating- the above general Agreement to the Chinese Government. Supplementary notes were also exchanged providing that the above general Arrange- ment is not to infringe in any way the rights acquired by tiie British and Chinese Corporation under their Loan Contract in regard to the Shanhaikuan-Newchwang line and that the Chinese Government may appoint an English engineer and an European accountant to supervise the construction of the line and the expenditure of the money appropriated to it. It remains uiiderstood that this fact does not constitute a right of property or foreign control, and that the line in question remains a Chinese line under Chinese control, and cannot be alienated to a non-Chinese Company. As regards the extension to Sinminting from the point where the line branches off to Newchwang, it is further agreed that it is to be constructed by China, who may permit European, not necessarily British, engineers to periodically inspect it and certify that the work is being properly executed. No. 138. Sir C. Scott to the Marquess of Salisbury. — [Received May 2.) My Lord, _ ^'?'^- Petersburgh, April 29, 1899. I HAVE the honour to forward herewith to your Lordship, in copy and translation,. th-e full text of the notes which I exchanged yesterday with Count Mouravjetf, recording the Agreement arrived at on the question of the respective railway interests of the two counti'ies in China, and of the Loan Contract for the construction of the railway from Shanhaikuan to Sinminting and Newchwang. I have retained the original signed Russian text of his Excellency's notes for trans- mission by the Queen's Messenger. It has been carefully examined by Mr. Michell, Translator to Her Majesty's Embassy, and found to correspond with the terras of the text of the English notes. The wording of Articles 1 and 2 of the Declaration in the first notes, " engages not to seek for its own account, or on behalf of Russian (British) subjects, or of others," corre- sponds exactly in both the Enghsh and Russian texts, the mention of subjects bein:?; held bv Count Mouravietf to be advisable in both text;;, in order that the term "of others" [322] N 90 should, in the Russitin as well as in the English text, apply equally to individuals and Governments. I have, &c. (Signed) CHAE,LES S. SCOTT. Inclosure 1 in No. 138. Sir C. Scott to Count Mouravief. THE Undersigned, British Ambassador, duly authorized to that effect, has the honour to make the following declaration to his Excellency Count MouraviefJ', Russian Minister for Foreign Affairs : — Great Britain and Russia, animated by a sincere desire to avoid in China all cause of conHict on questions where their interests meet, and taking into^ consideration the economic and geographical gravitation of certain parts of that Empire, have agreed as follows: — 1. Great Britain engages not to seek for her own account, or on behalf of British subjects or of others, any railway Concessions to the north of the[Great Wall of China, and not to obstruct, directly or indirectly, applications for railway [Concessions in that region, supported by the Russian Governnjent. 2. Russia, on her part, engages tiot to seek for her own account, or on behalf of Russian subjects or of others, any railway Concessions in the basin of the Yang-tsze, and not to obstruct, directly or indirectly, applications for railway Concessions in that region supported by the British Government. The two Contracting Parties having nowise in view to infringe in any way the sovereign rights of China or existing Treaties, will not fail to communicate to the Chinese Government the present Arrangement, which, by averting all cause of complications between them, is of a nature to consolidate peace in the Far East, and to serve the primordial inteiests of China herselt. (Signed) CHARLES S. SCOTT. St. Petersbiirgh, April 28, 1899. Inclosure 2 in ]N'o. 138. Sir C. Scott to Count Mouravieff. IN order to complete the notes exchanged this day respecting the partition of spheres for Concessions for the construction and working of railways in China, it has been agreed to record in the present Additional Note the arrangement arrived at with regard to the line Shanhaikuan-Newchwang, for the construction of which a loan has been already con- tracted by the Chinese Government with the Shanghae-Hong Kong Bank, acting on behalf of the British and Chinese Coi'poration. The general arrangement established by the above-mentioned notes is not to infringe in any way the rights acquired under the said i^oan Contract, and the Chinese Government may appoint both an English engineer and an European accountant to supervise the construction of the line in question, and the expenditure of the money appro- priated to it. But it remains understood that this fact cannot be taken as constituting a right of property or foreign control, and that the line in question is to remain a Chinese line, under the control of the Chinese Government, and cannot be mortgaged or alienated to a non- Chinese Company. As regards the branch line from Siaoheichan to Sinminting, in addition to the afore- said restrictions, it has been agreed that it is to be constructed by China herself, who may peimit European — not necessarily British — engineers to periodically inspect it, and to verify and certify that the work is being properly executed. The present special Agreement is naturally not to interfere in any way with the right of the Russian Government to support, if it thinks fit, applications of Russian subjects or establishments for Concessions for railways, which, starting from the main Manchuriaa line in a south-westerly direction, would traverse the region in which the Chinese line terminating at Sinminting and Newchwang is to be constructed. (Signed) CHARLES S. SCOTT. St. Peleraburgh, April 28, 1899. 91 Inclosure 3 in No. 138. Count Mouravief to Sir C. Scott. (Traduction.) LE Soussigne, Ministre des Affaires Btrangferes de Russie, dAment atl,ons^ a cet effet, a I'honneur de faire a son Excellence Sir Charles Scott, Ambassadeur Britannique, la declaration suivante : — La Russie et la Grande-Bretagne, animees du sincere desir d'eviter en Chine toute cause de conflits dans les questions oil leurs int^rSts se rencontrent et prenant en cousidd- ration la gravitation economique et geographique de certaines parties de cet Empire, sont convenues de ce qui suit : — 1. La Russie s'engage a ne pas reclamer pour son compte et en faveur de sujets Eusses ou autres des Concessions quelconques de chemins de fer dans le Bassin du Yang-tsze et a ne pas contrecarrer directement ou indireclement dans cette region les demandes de Concessions de chemins de fer, appuyees par le Gouvernement Britan- nique. 2. La Grande-Bretagne, de son cote, s'engage a ne pas reclamer pour son compte et en faveur de sujets Britanniques ou autres des Concessions quelconques de chemins de fer au nord du Grand Mur de Chine et h ne pas contrecarrer directement ou indirectement dans cette region les demandes de Concessions de chemins de fer, appuyees par le Gouvernement Russe. Les deux Parties Contractantes, n'ayant nullement en vue de porter une atteinte quelconque aux droits souverains de la Chine, ainsi qu'aux Traites existants, ne man- queront pas de faire part au Gouvernement Chinois du present arrangement qui, en dcartant toule cause de complication entre elles, est de nature a consolider la paix dans I'Extreme-Orient et a servir aux interets primordiaux de la Chine elle-meme. Le Soussigne, &c. (Signe) Comte MOURAYIEEF. Saint-Petersbourg, le 16 (28) Avril, 1899. Inclosure 4 in No. 138. Count Mouravief^ to Sir C. Scott. (Traduction.) POUR completer les noter dchangees aujourd'hui concernant la repartition des spheres de Concessions et d'exploitation des chemins de fer en Chine, il a 6te convenue de consigner dans la presente note additionnelle I'Accord survenu au sujet de la ligne Shanghaikuan-Xewchwang, pour la construction de laquelle un emprunt a deja ete contracte par le Gouvernement Chinois a la Banque de Shang-Hai-Hong Kong, agissant au noin de la "British and Chinese Corporation." L'arrangement general, etabli par les notes precitees, ne portera aucune atteinte aux droits acquis en vertu du Contract de I'emprunt susdit, et il sera loisible au Gouvernement Chinois de nommer tant un ingenieur Anglais qu'un comptable European pour surveiller ia construction de la ligne de chemin de fer en question et la depense des sommes y affectees. Mais il reste bien entendu que C3 fait ne saurait constituer un droit de propriete ou de controle etranger et que la ligne en question doit rester Chinoise, soumise . au contrdle du Gouvernetricnt Chinois, et ne pourra 6tre engagde ou alienee a une Compagnie non Chinoise. Pour ce qui est de I'embranchement, se dirigeant de Siaohe'ichan a Sinminting outre les restrictions susdites, il a ite convenu qa'il sera construit par la Chine elle-mfime, qui pourra admette des ingenieurs Europeens, pas necessairement Anglais, pour I'inspecter periodiquement, verifier et certifier que les travaux sont dument executes. Le present Accord special ne saurait, naturellement, entraver d'aucune facon le droit du Gouvernement Russe d'appuyer, s'il le juge opportun, des demandes de sujets ou etablissements Russes, relatives a des Coiicessions de chemins de fer qui, partant de la li"ne T)rincipale de Mandchourie et se dirigeant au sud-ouest, tra verse raieut la region ou sera construite la ligne Chinoise aboutissant a Sinminting et Newchwang. Le Soussigne, &c. (Sign6) Comte MOITRAVIEFF. Saint-Petersbourg, le 16 (28) Avril, 1899. ►0 So a i-S IS o u I? > sa i-t CD o SI )> d QQ o z o a o o a s. ~v a- o ^ &5 s^ ^ tq tiW o ^ c^ ^ ct i^i* Co 'Sk 5= s ^ D o fD O — ns ~ •■' ?= £ o a < CD — ffl 2 3 S p o p to 00 CO Q