File No. 893.773/32.

Consul Pontius to the Secretary of State .

No. 52.]

Sir: For the information of the Department, I have the honor to transmit herewith copy of my No. 44, of even date, reporting further to the Legation at Peking concerning the question of rate discrimination in connection with the reduction instituted by the South Manchuria Railway covering railway freights on foreign importations.

I have [etc.]

Albert Pontius.

Consul Pontius to Minister Reinsch .

No. 44.]

Sir: Referring to my No. 38, dated November 7, 1914, with reference to the South Manchuria Railway rate discrimination against the port of Newchwang, I have the honor to transmit herewith additional information which may be of value to the Legation or the Embassy at Tokyo in arriving at a satisfactory settlement of this vexatious question.

It would seem advisable to emphasize the necessity of insisting, for the protection of Newchwang trade, that the same treatment—viz 30% rail rate reduction [Page 608] instead of only 15%—be conceded goods landed at Manchnrian ports and afterwards railed to inland points, as is accorded “through” goods coming in from overseas to inland points, under through bills of lading which enjoy the 30% reduction.

Assuming that the through bill of lading facilities were made available to all steamship lines instead of only to Japanese lines as at present, the discrimination against non-Japanese ocean shipping would become eliminated; but the difference between 15% on “local” and 30% on “through” cargo, would still militate against import goods to Newchwang, stored there temporarily until sold, and then railed to an inland point. Considerable stress should be laid on the importance of the principle of equal treatment to goods, whether billed “through” from over seas, or only railed “locally” from the Manchurian port of import. In all cases where goods are railed to interior points from Newchwang, a practical arrangement would be for the South Manchuria Railway to accept a copy of the steamship bill of lading covering ocean shipment of the goods in question, as bona fide evidence that the goods are entitled to the 30% reduction extended to “through” cargo, a fair time limit being allowed for local storage.

I have [etc.]

Albert W. Pontius.