File No. 893.773/12.

Consul Pontius to the Secretary of State.

Sir: I have the honor to transmit herewith copy of my No. 5, with enclosures, reporting to the Legation at Peking concerning the reduction in railway freights instituted by the South Manchuria Railway on importations from Japan through the port of Dairen.

I have [etc.]

Albert W. Pontius.

Consul Pontius to Minister Reinsch.

Sir: For the information of the Legation, I have the honor to report that the South Manchuria Railway announced in a recent issue of its official gazette published in Dairen, that a reduction would be made on specific through shipments from Japan over its railway to interior points in Manchuria. The new rates are to take effect on the first proximo, and in a recent issue of a Dairen newspaper direct mention is made of the fact that the reduction in railway freights does not apply to Newchwang, the import route via that port being [Page 596] entirely left out of account. The article also mentioned that the new rates were limited to the Mukden-Antung line and the import route through Dairen. The schedule of the new rates is quoted herewith as table No. 1, and the rates previously existing as table No. 2.

A careful examination of the two tables1 will show that the reduction applies chiefly to cotton goods, the decrease in freight rates to distributing points such as Mukden, Tiehling and Changchun amounting to about 30%. Cotton goods is one of the chief staple articles of Japanese importation into Manchuria, and this new move on the part of the Japanese concerned appears a clever device to discriminate against shipments of foreign manufactured piece goods into Manchuria from Shanghai, through either the port of Dairen or Newchwang. This fact seems self-evident when it is realized that large quantities of American and European manufactured piece goods are continually imported by Japanese firms from Japan through the ports of Dairen and Antung.

What with the favorable treatment now accorded importations of foreign goods from Japan through the port of Antung in the shape of import tariff reduction of one-third duty, and the present preferential freight rates extended to goods shipped to interior points in Manchuria through Dairen, foreign firms interested in the import trade in Manchuria apparently have every reason to complain at the discrimination it is proposed to exercise against them. The purpose of the South Manchuria Railway is seemingly to hamper and obstruct further importations from Shanghai through Dairen, and confine the commercial possibilities of Newchwang to a still narrower sphere of activity.

In spite of the many efforts in the past to cripple the future trade possibilities of Newchwang by those interested in the diverting of commerce to Dairen, the former port has so far succeeded in holding a fair share of the trade of this region, and the renewed activity of those at present concerned in the additional tactics of discrimination make it imperative that the Liao River conservancy project, when means so much for the future welfare of the port, be instituted without unnecessary delay.

I have [etc.]

Albert Pontius.
  1. Not printed.