Mr. Conger to Mr. Hay.

No. 1175.]

Sir: I have the honor to confirm my telegram of the 16th instant concerning the proposed establishment of a customs service under Russian control at Dalny (Talienwan) and other ports in Manchuria.

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The completion of the Manchurian railway and the creation of an open commercial port at Dalny, its terminus, make additional customs facilities necessary in that corner of the Empire.

I have been unable to get exact details, because the arrangement is not yet completed, but it will provide a principal custom-house at Dalny, where goods to be used in Dalny and the Russian-leased territory immediately surrounding will be free. Those to be consumed in Manchuria will pay the regular Chinese import duties; those going into Russia the Russian tariff, all being collected at one office. Another station will be located where the railway crosses the border between Manchuria and Siberia, and others where necessary.

It is proposed to establish post-offices where they have not yet been established by the maritime customs, and I understand they are to await the Russian evacuation of the second portion of the territory which should take place April 8, next. The customs service, however, is to go into effect as soon as an agreed arrangement can be arrived at.

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I have, etc.,

E. H. Conger.