File No. 893.773/36.

Vice Consul Hanson to the Secretary of State .

No. 70.]

Sir: For the information of the Department, I have the honor to transmit a copy of an instruction to this office, dated January 14, [Page 612] 1915, received from the Embassy at Tokyo, and a copy of this office’s despatch in reply thereto, dated January 28, 1915, on the subject of the apparent discrimination in freight rates instituted by the South Manchuria Railway on foreign importations.

I have [etc.]

G. C. Hanson.
[Inclosure 1.]

Ambassador Guthrie to Consul Pontius .

Sir: I beg to acknowledge herewith the receipt of your communication of the 6th instant,5 on the subject of apparent discrimination in freight rates instituted by the South Manchuria Railway on foreign importations.

I have before me a letter written by the British Consul at Dairen to the British Ambassador here, which states as follows:

I asked the railway company if it would be correct to assume that goods shipped along the routes specified in the notification (i. e., the specific local freight charges on goods shipped into the interior of Manchuria from the ports of Antung, Dairen, and Newchwang) but in foreign bottoms and not on Osaka Shosen Kwaisha or Nippon Yusen Kwaisha boats, would not benefit by the new specific through rates but be liable to the specific local rates—which are higher. I am pleased to be able to report that * * * in a letter which I have just received from the railway company, it is stated that the specific through rates are applicable to the specific through goods carried by any steamship line, whether under a foreign flag or the Japanese flag, who have entered into special arrangements with this company concerning the transportation of through goods.

This would seem to contradict the information which you have received upon this point. I shall be glad if you will let me know whether you have had any conversation directly with the railway people touching this particular question.

On page three of your letter, acknowledged above, you speak of the 15% reduction “supposed to apply on ‘local’ shipments.” Does not this 15% reduction in fact apply?

I am, [etc.]

Geo. W. Guthrie.
[Inclosure 2—Extract.]

Vice Consul Hanson to Ambassador Guthrie .

Sir: In reply to the Embassy’s instruction of January 14, 1915, I have the honor to refer the Embassy to this office’s despatch No. 31, dated October 17, 1914, to the Legation in Peking on this subject. A copy of this despatch was forwarded to the Embassy under the same date.

At the bottom of page 1, of this despatch, the statement is made that “The said quotation includes also the discriminating statement regarding shipments of through cargo from either the United States or Europe.” So far as I can learn from the records of this office, the basis for this statement was a letter dated October 14, 1914, written by the local stationmaster of the South Manchuria Railway Company to the local office of the * * * firm * * *; this communication states explicitly that “only such shipments are to be ranked as ‘through cargoes’ as are shipped through to stations on the South Manchuria Railway Company, under the Nippon Yusen Kaisha-South Manchuria Ry. through bills of lading.”

This does not seem to be in accord with the information on this point received by the British Consul in Dairen.

In this connection, there is quoted below a passage from a letter received from the local office of * * *, discussing the phase of the question bearing upon the application of the specific through rates “to the specific through goods carried by any steamship line, whether under a foreign flag or the Japanese [Page 613] flag, who have entered into special arrangements with this Company concerning the transportation of through goods.”

I consider the whole point lies in the meaning of the misleading or ambiguous wording: “* * * who have entered into special arrangements with this company concerning the transportation of through cargo.” In my opinion, what this really amounts to is that the facility would—or could—be applicable to any non-Japanese line which might have entered into special arrangement with S. M. Ry concerning the transportation of through goods, but I am not aware that any non-Japanese line has actually done so, or has ever been made acquainted that it could do so, or that if it were made so acquainted, it would find practicable the conditions which it would most probably be asked to comply with. The Manchuria Daily News of 30th September and 1st October last only mention N. Y. K. and O. S. Kaisha, and no notification to the effect mentioned by H. B. M’s Consul at Dairen, as having been advised to him by letter, has, as far as I am aware, been made public. If not, why not? That is the unsatisfactory point.

As the local stationmaster of the railway company here is a very subordinate officer and must refer questions of importance to the head office in Dairen, it might be advisable for the American Consul in Dairen to apply directly to the South Manchuria Railway Company for information in regard to the nature of the “special arrangements” necessary to be entered into, and endeavor to discover whether or not these “special arrangements” are the same that Japanese steamship lines have entered into with the railway company.

With regard to the application or non-application of the 15% reduction on local shipments from Newchwang, the Embassy is again referred to this office’s dispatch No. 31, of October 17, 1914, to the Legation. Enclosure No. 2, of that dispatch gives a table, based on old rates found in the railway company’s tariff book in operation prior to October 1, 1914, and new rates, effective after October 1, 1914, as quoted by the local stationmaster of the company. Here it is clearly shown that the 15% reduction does not apply in all cases.

I have [etc.]

G. C. Hanson.
  1. Inclosure 2 with Mr. Pontius’ No. 63 of January 6, p. 609.