File No. 1571/27.

Chargé Fletcher to the Secretary of State.

No. 1301.]

Sir: Continuing my dispatch No. 1288 of the 10th instant on the subject of the Whangpoo conservancy, I have the honor to report that the dredging of the Junk Channel will be resumed about December [Page 90] 1, the contract therefor having been awarded to the Chinese company, which seems to have reached an understanding with the foreign syndicate whereby its plant, employees, etc., will be taken over by the native company.

Fortunately the work has not suffered seriously from the two months’ interruption of dredging work, and the Junk Channel seems to have been kept clear by means of the natural scour of the river. This fact is very encouraging and may make possible a revision of Mr. de Rijke’s estimate for the funds necessary to complete the work.

As will be seen from the circular of the dean (inclosed), the Chinese Government is disposed to hold itself freed from the obligations of the final protocol of 1901 by the agreement of 1905, whereby she assumed the responsibility for this work. The question arose in the meeting of the diplomatic corps of November 1, when the British minister held that in case China failed to carry the work to completion under the agreement of 1905 that the foreign powers would have the right to return to the provisions of the protocol of 1901. I inclose a copy of his indorsement on the circular, stating his position in extenso. I am inclined to agree with him that it was the intention of the powers merely to suspend the provisions of the final protocol by the agreement of 1905, and in case China fails to carry out her agreement the provisions of the 1901 protocol may be enforced. But inasmuch as the natural forces seem to be assisting in the work, which, however, will now be resumed by China, the matter is not one demanding instant decision.

I should, however, be glad to receive the opinion of the department on the point raised by Sir John Jordan, as the question will arise when China has, in her opinion, completed the work. While, as stated above, I agree with Sir John on the main point, I nevertheless believe that it would be imprudent and impracticable to revise the cumbersome and ineffective provisions of the 1901 protocol. But China, with the 1901 protocol in the background, will be far more disposed to carry out effectively the work she has undertaken, and this I think we should insist upon.

I have, etc.,

Henry P. Fletcher.
[Inclosure 1.]

circular.

Dean of diplomatic body to his colleagues.

Carrying into effect the decision reached at the meeting of the diplomatic body on the 1st instant, the dean yesterday went to the Wai-wu Pu to insist that the dredging should be begun again without delay. His excellency, Mr. Liang Tun-yen, promised to telegraph to Shanghai in this sense.

As to the meaning of the last official note from the ministry of foreign affairs of the 26th ultimo, transmitted to the diplomatic body by Circular 141, the discussions had with Mr. Liang Tun-yen permit no doubt to remain but that the Government believes itself freed from the obligations arising from the final protocol with respect to the improvement of the Whangpoo. The said minister of foreign affairs, nevertheless, recognized the necessity, and confirmed the intention of the Chinese Government to continue the work of improvement, but in its own right and in its own way.

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[Inclosure 2—Indorsement of the British minister upon circular of the dean of the diplomatic body to his colleagues.]

I can not assent to the view that the Chinese Government is released from the obligations of the final protocol of 1901 and is at liberty to continue the conservancy work in its own right and in its own way.

The protocol of 1901 and the reglement attached thereto created a mixed conservancy board, with jurisdiction on the Whangpoo River from the lower limit of the Kiangnan arsenal to the Yangtze. The expenses of improving the course of the river were estimated at taels 460,000 a year for the first 20 years, half of which was to be provided by the Chinese Government and half by the foreign interests concerned. It specified the manner in which the revenue for the work was to be raised and provided that if it proved insufficient it could be increased by bringing the respective moieties up to a figure which would be adequate to meet the requirements of the case.

At the special request of the Chinese Government the protocol of 1905 was substituted for the above, and under this China undertook herself to carry out the conservancy work and to bear the whole expense of it.

There is nothing, to my mind, in this protocol or in the correspondence which passed at the time to show that there was any intention of reducing the work to be done, and consequently of diminishing the possible expenditure to be incurred. The work has now come to a standstill for want of funds, and the Chinese Government have officially stated that they expect to have all the work completed in the spring or summer of next year. This means that a large portion of the river included in the protocol of 1901 is regarded as excluded from the 1905 one, and that the Chinese are no longer liable for carrying the work as originally contemplated to completion. I hold that China is bound either to provide the funds for the completion of the improvement of the course of the Whangpoo as indicated in the protocol of 1901 or to revert to the principle laid down in that instrument, in accordance with which one-half of the funds is to be provided by her and the other half by the foreign interests concerned, whose share in the control of the expenditure of the money naturally revives.

(Signed)
J. N. Jordan.