Chargé Coolidge to the Secretary of State.

No. 1902.]

Sir: I have the honor to confirm my telegram of May 22 regarding restrictions imposed by the Chinese Government on shipments of coal from Shanghai with a view to prevent the supply of belligerent vessels, and the Department’s reply.

I inclose a translation of the note on which the telegram was based and of the answer which I returned when instructions were received. On receipt of the formal note from the foreign office I wired its substance to Mr. Davidson for his information and later notified him that our government was favorably disposed toward this measure of precaution. The facts seemed to be that there have recently been shipments of foreign coal from Shanghai packed in small sacks, which could be readily handled even at sea, a condition which was unprecedented and is not justified by any requirements of legitimate trade. The conclusion is obvious, and the Japanese, who have taken every precaution to prevent the difficulty of their position from being increased through the rapacity of traders and the weakness of the local government, were probably the instigators of this measure. It would perhaps have been a better solution of the difficulty if it had been decreed that for the present nothing but bunker coal should be exported from Shanghai—that is to say, that steamers might take enough for their own supply in their own bunkers, but that no shipment of coal as cargo would be permitted.

I have, etc.,

John Gardner Coolidge.
[Inclosure 1.]

Prince Ch’ing to Chargé Coolidge.

I have the honor to state that in the war which is still being waged between Japan and Russia China is maintaining a strict neutrality. She must, therefore, adopt strict measures to prevent war junks from keeping up their supply of necessities. Recently there have been some boats shipping coal from Shanghai, and as this coal is of the best quality and is so shipped as to be very conveniently loaded or unloaded, it was thought highly necessary to look into the matter officially, so that nothing might happen which would result in the breaking of China’s neutrality.

It is now proposed to let the matter be dealt with in the same manner as was done in the case of rice and grain; that is, merchants (who wish to ship coal) will be required to write out and put on record at their consulates a bond, and in this bond it must be stipulated that within forty days the Shanghai customs must receive a receipt from the port to which the coal was shipped. In case no such receipt is returned within the time specified a fine of five [Page 145] times the original price of the coal will be collected. All coal boats will be required to follow this rule. This will not injure the regular needs of the merchants, and at the same time it will prevent dishonest people from keeping the belligerents supplied with their needs.

My board telegraphed to the Shanghai customs taot’ai and communicated with the inspector-general of customs directing him to order the Shanghai commissioner of customs to carry out this rule. Besides this it becomes my duty to send this dispatch to your excellency for your information and that you may quickly telegraph to your consul at Shanghai that he may know of the matter and act accordingly. An anwser to this dispatch is requested. I wish to add that this is merely a temporary measure, and when the war is over it will be rescinded. This is clearly understood along with the new plan.

A necessary dispatch.

[Inclosure 2.]

Chargé Coolidge to Prince Ch’ing.

Your Imperial Highness: I have the honor to acknowledge the receipt of your imperial highness’s dispatch of the 21st instant, in which your highness informs me that recently coal has been shipped from Shanghai in a form very convenient for handling, and that your government had decided that in order to maintain strict neutrality and prevent supplies of coal being sent to the belligerents it would be necessary to treat exports of coal in a manner similar to that used with exports of grain—that is, require shippers to deposit at their consulates written guaranties that within forty days after shipment a receipt will reach the Shanghai customs from the port to which the shipments are destined, failing which a fine of five times the value of the coal will be collected. Your imperial highness also requests me to telegraph the American consul-general at Shanghai, informing him of this decision.

In reply, I have the honor to inform your imperial highness that I have already notified the American consul-general at Shanghai by telegraph of your government’s proposed method of dealing with this matter, and that my government is favorably disposed toward China’s efforts to preserve neutrality in the matter of coal for belligerent war vessels.

1 avail myself of the occasion to renew to your imperial highness the assurance of my highest consideration.

John Gardner Coolidge.