File No. 893.773/35.

Ambassador Guthrie to the Secretary of State .

No. 184.]

Sir: I have the honor herewith to acknowledge the receipt of the Department’s instruction No. 76 of November 19 last, relating to the subject of apparent discrimination in the freight rates of the South Manchuria Railway against shipments from Shanghai.

I have recently had several consultations on this subject with Sir Conyngham Greene, the British Ambassador here. On December 29 he told me that he had received no complaints or instructions in this matter since his receipt, on July 20 last, of a note from Baron Kato, a portion of which he later gave me in the shape of the memorandum enclosed in my despatch of October 8. He said that some time ago he had transmitted to his Foreign Office a complaint from Newchwang reciting that that port was being discriminated against, and in reply had been advised that the Board of Trade did not consider the amount involved sufficient to justify further action at that time, and that he had, therefore, taken no further steps in the premises; he had understood, too, that the British Minister at Peking had made some representations to London, but he himself knew no particulars.

I explained the attitude of our own Consul, calling his attention to the reports of the Chinese customs authorities on the trade of [Page 611] Newchwang, Canton, and Dairen, pointing out that the Consul’s representations were not so much on account of discrimination against Newchwang as on account of interference with established lines of trade through Shanghai; his idea being that, under the present regulations, trade coming through Shanghai was greatly discriminated against in violation of the policy of the “open door” in China, and that if this discrimination continued, not only American trade but British trade also through Shanghai would be driven out of North China.

Sir Conyngham asked me to give him in written form a résumé of the points I had touched upon, and two days later, on the occasion of his last call upon me, I handed him the memorandum, a copy of which is enclosed herewith.

He said he would write immediately to the British Minister at Peking asking him to communicate with the British Consuls at Shanghai and Newchwang, requesting that they, after consultation with the American Consuls at their respective ports, send him a report; if they took the same view of the situation as our Consul at the latter port, he would take the matter up with the Foreign Office at London, and if authorized to do so would very gladly join with me in a representation to the Japanese Government in an effort to secure favorable action.

I have [etc.]

George W. Guthrie.
[Inclosure.]

memorandum.

It is the opinion of the American Consul at Newchwang that American commerce is injuriously affected by four facts, as follows:

1.
That the order made in pursuance of the assurance given by Baron Kato on July 20 last to the British Ambassador that through shipments to Newchwang from “foreign” ports would be given the same rates as shipments from Japanese ports, has not been construed to apply to Shanghai, which is not a foreign port as regards Newchwang, both being Chinese;
2.
That the order extending to shipments from Shanghai to Newchwang by vessels of the Nippon Yusen Kaisha the benefit of the 30% reduction to points north of Mukden, constitutes a discrimination against all other lines of shipping;
3.
That the restriction of the reduction of 30% to goods from Shanghai consigned directly to points north of Mukden puts such goods, destined to points south of Mukden, even when they are shipped from Shanghai by Nippon Yusen Kaisha vessels, at a disadvantage as compared with goods shipped from Japanese points to points south of Mukden;
4.
That goods landed at Newchwang and temporarily stored there before being forwarded are not given the same discount as goods consigned directly to points beyond. It is urged that the same discount could easily and safely be granted in this case, as the bills of lading would have to be produced as proof of the origin of the consignment.