Minister Calhoun to the Secretary of State.

No. 60.]

Sir: Referring to my dispatch No. 43 of June 23 last, I have the honor to inclose for the information of the department the copies of memoranda1 on the Whangpoo conservancy work by Mr. de Kijke, the engineer in charge of the works; by Mr. Merrill, an American in the customs service, who has been a director of the conservancy board, and also a memorial1 of the viceroys of Nanking and Wuchang on the same subject.

It is now unnecessary to enter into the history of this work. The department remembers the circumstances which induced the Chinese Government to take it on itself and provide the necessary funds for such purpose. The amount originally estimated was so provided and has been actually spent. But it is more doubtful if the work is satisfactorily completed and if, without further efforts, the channel will not again be silted up. According to the opinion expressed by Mr. Merrill, which may be called the native view of the case, the Chinese Government has amply fulfilled its pledges and the work has been carried to a satisfactory conclusion. A further sum, it is true, [Page 358] estimated by him at 300,000 taels, will annually be required to keep open the channel. But its maintenance is not incumbent on the Imperial Government, and in his view it is proper that local shipping and commerce should be taxed for the upkeep of the same.

The other opinion, representing the foreign interests at Shanghai, is that as the Chinese Government assumed the responsibility for the necessary improvements, it must be held to the strict terms of the protocol of 1900, which provided for the completion of the work. The engineer in charge, Mr. de Rijke, estimated that as much more money will be necessary as has already been spent, approximately 10,000,000 taels, and it rests with the Imperial Government to carry the work to a satisfactory termination.

The matter has reached the diplomatic body, but its proper consideration here, in the absence of competent engineering advice, is diffcult, nor are means at its disposal to obtain the same. The British Chamber of Commerce, it is true, has sent the measurements of the recent works to a consulting engineer in London and something may perhaps be expected from his report. But in the meantime the situation remains confused and complicated. If I have written about it at this juncture it is rather with a view to an expression of the policy the department desires me to follow with my colleagues in considering this matter.

Apart from its technical aspects, the present question resolves itself into a contention between the Chinese Government and the foreign commercial interests at Shanghai as represented here by their respective legations; and, as in most disputes, there is apparently a measure of justice on both sides. But whatever may be the outcome it is apparent that further expenditure will be necessary, whether for the completion or for the maintenance of the work. This money will probably be raised in whole or in part from a tax on foreign commerce and shipping at Shanghai (vide the department’s instruction No. 658), and the outlay will be supervised in all likelihood by a board on which at least one foreigner will be represented.

While I understand that there is a general disposition on the part of the interested powers to accept some form of local taxation for the projected improvements which still remain to be effected, the point is as to how far the Imperial Government ought to contribute thereto. Even though the benefit would ultimately be common to the Empire, it is doubtful if this is appreciated by native opinion and any pressure brought to bear on the Chinese to secure fresh revenue might easily provoke further expressions of antiforeign feeling. This would not necessarily be a deterrent, but it remains to be considered in connection with the stand we should take, either in accepting or refusing local taxation as well as in other incidental affairs. The question, therefore, presents itself as to what should be our attitude in these matters, as they will come up for consideration before the diplomatic body.

I would greatly appreciate an expression of the department’s views as to the policy in this and in analogous matters which it desires me to pursue.

I have, etc.,

W. J. Calhoun.
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