File No. 893.773/28.

Consul Pontius to the Secretary of State.

No. 39.]

Sir: For the information of the Department, I have the honor to enclose herewith copy of my No. 31, of even date, reporting further to the Legation at Peking concerning the reduction instituted by the South Manchuria Railway covering railway freights on foreign importations, and transmitting clear evidence of discrimination in this regard.

I have [etc.]

Albert W. Pontius.

Consul Pontius to Minister Reinsch.

No. 31.]

Sir: Referring to my No. 28, dated October 3, 1914, reporting on the apparent discrimination in the freight rates of the South Manchuria Railway against shipments from Shanghai destined for interior points in Manchuria, I have the honor to transmit herewith further information which only too clearly shows that a discrimination does exist not only against Newchwang as regards “local freights” but “through” cargo shipped from the United States or Europe as well.* * * Enclosure No. 11 gives the local rates as now in [Page 603] force from Newchwang to interior points in Manchuria as quoted by the stationmaster of the South Manchuria Railway at this port. The said quotation includes also the discriminating statement regarding shipments of through cargo from either the United States or Europe. Enclosure No. 2,1 gives a specimen table of authenticated local railway rates in force from October 1, 1914, which clearly proves that shipments of cargo from Newchwang to interior points are discriminated against.

The 15 per cent reduction in the local freight tariff does not apply to cargo shipped from Newchwang to Mukden, and it will be seen from the table of figures on Enclosure No. 2, that the old rate of gold yen 0.3584 per 100 kin still obtains in this regard, while Dairen receives the reduced rate of gold yen 0.40 for a distance of more than double the mileage. It will be noted also that a 15 per cent reduction has not been extended to goods shipped from Newchwang to Tiehling or Kaiyuan, the discount granted being considerably short of that figure. A perusal of Enclosure No. 2 will show that the 15 per cent reduction is granted only to cargo shipped from Newchwang to Changchun; no discount is given to shipments to Mukden, and a much less figure than the announced 15 per cent reduction is extended to goods shipped to Tiehling or Kaiyuan. The last paragraph of Enclosure No. 1, conclusively shows the discrimination in favor of Japanese shipping:

Only such shipments are to be ranked as “through cargo” as are shipped through to stations on the South Manchuria Railway under Nippon Yusen Kaisha (South Manchuria Railway steamship) through bills of lading.

Merchants in Newchwang in order to secure the announced 30 per cent reduction in shipments of through cargo are compelled to ship their goods from the United States or Europe in steamers of the Nippon Yusen Kaisha line, transshipment from Shanghai to Dairen being also permitted via steamers of the South Manchuria Railway.

The small concessions made by the South Manchuria Railway in the recent reduction in railway freights cannot be considered satisfactory. The port of Newchwang is clearly discriminated against, and the local merchants have just cause for complaint in this more recent act of the railway in according the port of Dairen advantages denied Newchwang. The foreign merchants of both ports, however, suffer alike in the matter of “through” shipments from foreign countries.

I have [etc.]

Albert W. Pontius.
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