CHINA. 



129 



ing purposes, the right to navigate all the inland 

 waters, and the right to protect themselves by 

 force, independently of the Chinese. It was on 

 Sept. 8, 1896, that the Chinese Government entered 

 into an agreement with the Russo-Chinese Bank, an 

 institution that is controlled by the Russian Minis- 

 try of Finance and backed oy % the financial re- 

 sources of the Russian Government for the creation 

 of the Eastern China Railroad Company, practi- 

 cally an agent of the Russian Trans-Siberian Rail- 

 road organization. This branch company under- 

 took to connect the Siberian Railroad from a point 

 near Nertchinsk, in the Trans-Baikal, with the 

 terminal section near Vladivostok by a line car- 

 ried across Manchuria. The route as surveyed is 

 946 miles, running through Hailar, Petuna, Kirin, 

 and Ninguta. The railroad is to be completed be- 

 fore Aug. 28, 1903, and at the end of eighty years is 

 to become the property of the Chinese Government. 

 It is being built with Russian capital by Russian 

 engineers out of Russian material and is guarded 

 by Russian soldiers, who are already recognized as 

 the masters of northern Manchuria. 



By a secret treaty known as the Cassini conven- 

 tion Russia obtained in 1896 the right to carry a 

 branch down through the Leaotong peninsula to a 

 port on the Gulf of Pechili. This right was openly 

 claimed in the agreement of March 21, 1898, for 

 the lease of Talienwan and Port Arthur, which 

 stipulated for a branch line of the Eastern China 

 Railroad to Talienwan, or, if necessary, a branch 

 line to the most suitable point on the coast between 

 Miuchwang and the Yalu river. This stipulation 

 enables Russia to connect the Siberian system with 

 the projected Korean railroad terminating at Wiju, 

 for which a French company has obtained a con- 

 cession, as well as with the north China extension 

 from Shan-Hai-Kwan. 



The route of the railroad down to Talienwan was 

 planned so as to leave Niuchwang, an important 

 entrepot for American cottons and petroleum as 

 well as for English goods, a few miles on one side. 

 A branch was run down to the port to carry the 

 railroad materials. 



The Struggle for Concessions. Although the 

 guaranteed loan had fallen through, Great Britain 

 still pressed for the concessions demanded in the 

 interest of trade. In the end the Chinese Govern- 

 ment consented to the following arrangements : The 

 internal water ways of China would be opened to 

 British and other steamers in the course of June, 

 1898, so that wherever the use of native boats was 

 permitted by treaty foreigners should be allowed to 

 employ steamers or steam launches, whether owned 

 by them or by Chinese ; the post of Inspector-Gen- 

 eral of Maritime Customs shall in the future, as in 

 the past, be held by a British subject so long as 

 British trade with China at the ports continues to 

 exceed that of any other power ; a port will be 

 opened in Hunan within two years. Before negotia- 

 tions were concluded China agreed to open three new 

 treaty ports Chingwing-Peitaiho, situated on the 

 Gulf of Pechili close to the place where the Great 

 Wall of China abuts on the sea ; Funing, on the 

 Sain-Sa inlet of the southeast coast; and Yochau, 

 situated on the Tungting lake, in the province of 

 Hunan. China of her own accord declared Wusung 

 a treaty port, dismantling the forts there. The 

 voluntary opening of new ports was intended to in- 

 duce England to acquiesce in a revision of the 

 tariff in accordance with the Treaty of Tientsin. 

 Sir Robert Hart, on account of the fall in exchange, 

 which was the ground for asking an increase of the 

 general tariff, obtained an increase in the salaries 

 of the customhouse officers, which were doubled 

 for the foreigners and increased 50 per cent, for 

 Chinese employees. 



VOL. xxxvin. 9 A 



The placing of the administration of the likin 

 taxes pledged for the Anglo-German loan under the 

 administration of the maritime customs was re- 

 garded as the opening wedge for a great reform by 

 the British commercial community. A commutation 

 of likin by payment at the port of entry of a 2^-per- 

 cent. ad valorem tax, in addition to the regular im- 

 port duty of 5 per cent., was introduced in the last 

 commercial treaty concluded with England. The 

 importer obtained thereby a certificate of exemption, 

 but the Chinese provincial authorities effectually 

 circumvented it by reviving the obsolete terminal 

 tax called loti shui and imposing various duties on 

 the native purchasers. They laid down the doctrine 

 that the immunity attached only to the foreign im- 

 porter, not to the goods after they had left his 

 hands. Consequently, in southern China at least, 

 the treaty provision proved a dead letter. Baron 

 von Heyking, the German minister, obtained a gen- 

 eral concession with regard to likin which enables 

 the merchant who has paid the commutation duty 

 of 2| per cent, in lieu of likin and cleared goods for 

 a fixed destination to sell them at intermediate 

 points without paying the local likin. The regula- 

 tion and collection of the likin duties by the Mari- 

 time Customs Department, presided over by Sir 

 Robert Hart, is an object for which the British 

 representative has striven for several years. The 

 likin is a 10-per-cent. tax upon all goods in transit, 

 which may become a 20-per-cent. tax, or even more, 

 if they go through more than one province, and 

 may be lessened by bribing the collectors. It is 

 usually levied 2 or 3 per cent, at a time at successive 

 barriers in each province. It is supposed that a 

 third of the money collected is pocketed by the local 

 mandarins and another third consumed in the cost 

 of collection, while the imperial treasury gets the 

 rest. The revenue from the salt monopoly, which 

 is likewise diminished by peculations, is derived 

 from the profit on the sale of the salt by the Gov- 

 ernment to licensed dealers and a tax on their sales 

 to the consumers. 



Considerable correspondence took place over the 

 British demand for a declaration of the non-aliena- 

 tion of the Yangtse region, but the English minister 

 could obtain no more definite assurance than the 

 statement that " it has to observe that the Yangtse re- 

 gion is of the highest importance as concerning the 

 whole position of China, and it is out of the question 

 that territory in it should be mortgaged, leased, or 

 ceded to another power." This was described as a 

 binding engagement by the responsible ministers in 

 England, who claimed this central part of China, 

 the largest, wealthiest, most populous, and richest 

 in undeveloped resources, as tne British " sphere of 

 interest," as contradistinguished from the " spheres 

 of influence " which Russia, Germany, and France 

 sought to set up elsewhere. International lawyers 

 held the Chinese declaration to be nothing but an 

 expression of opinion, carrying no obligation witli 

 it. The Chinese Government early in the year had 

 dismissed many of the German military instructors, 

 and had appointed Col. Woronoff, a Russian, its 

 chief military adviser. When the English took 

 possession of Wei-Hai-Wei permission was asked to 

 place Chinese naval cadets under their tuition, as 

 was already done at Port Arthur. Sir Claude Mac- 

 Donald broached a scheme for the complete reor- 

 ganization of the military forces and the building 

 up of a powerful Chinese army and navy under 

 British officers, stipulating as a condition precedent 

 that these should have full power and control. 

 This proposition was not considered at all. When 

 M. Pavloff asked later that on new Chinese ships 

 Russian instructors be employed exclusively and 

 that all future army and navy instructors should be 

 Russian the Chinese demurred. The Chinese wanted 



