File No. 893.77/1570
Minister Reinsch to the Secretary of State
Peking, October 31, 1916.
Sir: I have the honor to report concerning the protest made by the Russian Minister, Prince Koudacheff, against the construction, with the aid of American engineers and capital, of a railway line from Fengchen to Ninghsia, as reported in my telegrams of October 19 and 26.
While the Russian Minister had several conversations with the Chinese Foreign Office on various dates in August and September, he did not mention the matter of the railway to me until October 16, upon the occasion of a call which I made at the Russian Legation. Prince Koudacheff stated that he had for some time desired to speak quite frankly to me regarding the proposed railway. He stated that he had received instructions from his Government to make preliminary inquiries and to call attention to existing rights of the Russian Government, but that he was at the time awaiting for instructions as to whether to make a formal protest.
Prince Koudacheff expressed himself very fully and frankly in explanation of the Russian policy to treat Mongolia as a natural barrier against Chinese colonization movements in the direction of the Russian dominions. He stated that the status quo in Mongolia, by which is meant the permanence of that country in a pastoral state with sparse population, was essential to the feeling of security of his country; therefore, his Government could not look with indifference upon any enterprise which would induce the development of Chinese colonization northward in Mongolia. He stated that these considerations constituted the background of the Russian policy of trying to exclude foreign capital from railways in the region affected.
The Russian Minister thereupon spoke of the exchange of notes effected between the Chinese and the Russian Government in 1899, concerning railways northward from Peking, the net result of which, he stated, was interpreted by his Government as giving them a right [Page 200] to insist that no foreign capital shall be employed on any railway line in this region.
I stated to Prince Koudacheff that the American interests had always been careful to respect the known treaty rights of the Russian Government in this region. Though at various times approached by the Chinese with a proposal to assist in direct or indirect ways in the construction of the Kalgan-Urga Railway, Americans had always declined to do so. I stated that I was not fully informed as to the correspondence which had passed between the Russian and Chinese Governments on these matters, as represented by the Minister, but that our information did not extend beyond the fact that the Russian Government had the promise that no foreign capital should be employed in railways proceeding from Peking to the north or to the northeast towards the Russian border.
As to the railway in question, I stated that it appeared to me that it infringed neither the specifically granted rights of Russia, nor even the general policy of Russia with respect to Mongolia, as explained by Prince Koudacheff, implying that as to the rights of other nations, such a general policy could become effective only if reduced to specific conventional form. The line in question does not pass northward from Peking towards the Russian border, but passes in a westerly direction to a Chinese interior province. As to the matter of colonization, I pointed out that natural limits had been set to such a movement, as it was only the immediate banks of the Huang Ho (Yellow River) that would attract agricultural colonists because there alone water was available for intensive cultivation. In the nature of things, this could not be the starting point for a series of waves of colonization northward, because the region to the north of the Huang Ho is permanently and suitable only for grazing over wide areas; it could therefore not become a field for agricultural colonization or an area of appreciably denser population than it supports now.
The whole matter was discussed between the Russian Minister and myself in the spirit of greatest frankness and friendliness, without argumentation; he stated that his action was naturally entirely dependent upon the view which his Government would take and upon its impending instructions.
I saw Prince Koudacheff again on October 19, when he immediately informed me that he had now received definitive instructions to lodge with the Chinese Government a protest against the Fengchen-Ninghsia line. I stated to him that since our last interview, I had examined the documents which had been mentioned by him and that I felt more strongly than ever that Americans were not infringing upon any Russian rights: I based this opinion upon the fact that in all the documents in question the term, “towards the Russian border” is used. The proposed railway could not be considered a prolongation of the Kalgan Railway, because the Chinese are proposing themselves, with their own means, to extend the Kalgan Railway northward, with Urga as its eventual terminal; nor could the railway be considered a branch line, because it was to be given an entirely distinct management and, while connecting with the Kalgan Railway, would operate independently in connecting Kansu with northern Shansi. I also stated that a preliminary survey would probably be made without delay for the purpose of determining the [Page 201] commercial prospects of the line, the construction of which would of course not be undertaken unless its commercial soundness were assured. The Minister appeared to take the making of the preliminary survey as a matter of course, but stated, smiling, “We may still hope that it may not be commercially profitable.”
I did not mention to the Russian Minister the fact that I considered that the Russian Government, through its proposal made in the year 1910 that the Kalgan Railway should be assigned to American capitalists as a reparation for the fact of American railway enterprise being excluded from northern Manchuria, contained an admission that the Russian Government felt under obligation to facilitate such compensation to American interests, and that the Russian Government had itself indicated that the Kalgan Railway should be used to compensate American setbacks. For this reason, it would appear that objection to a railway far more remotely, if at all, connected with Russian political interests, would not be fair play.
In the course of both of the above interviews, Prince Koudacheff spoke of a suggestion, which he had understood from an expression used in a conversation with him by Mr. Carey, that the latter would be very glad to build railways for the Russian Government, as well as for the Chinese. The Russian Minister understood this as an intimation of a desire to cooperate with Russia on this line, although it was not made in this sense by Mr. Carey. Prince Koudacheff was very favorable to this suggestion, and said that he hoped that such a plan would appeal to his Government. In the second conversation, however, he stated that his Government did not desire to entertain any proposal for cooperation, because it was opposed in principle to the building of the line.
I have the honor to enclose herewith copies of the following documents and reports:
Note from Tsungli Yamen (Chinese Foreign Office) to the Russian Legation, June 1, 1899.
Note from Russian Minister to the Tsungli Yamen, June 17, 1899.
Note from Russian Minister to the Tsungli Yamen, December 10, 1899.
Note from Tsungli Yamen to the Russian Legation, December 14, 1899.
Memorandum presented by the Russian Minister to the Wai Wu Pu (Chinese Foreign Office), during February or March, 1910.
Account of two interviews between the Russian Minister and the Acting Minister for Foreign Affairs, on August 7 and 16, respectively, 1916.2
Account of an interview between Mr. Wang Ting-chang, of the Chinese Foreign Office, and the Russian Minister, on August 17, 1916.2
Memorandum addressed by the Chinese Foreign Office to the Russian Minister under date of October 7, 1916.2
The following points seem to the Legation to be established through the correspondence between the Chinese and the Russian Governments, and the circumstances attendant thereon:
1st: The correspondence of 1899 arose out of a desire of the Russian Government to prevent a railway being built by non-Russian capital [Page 202] from Peking to the north, towards the Russian border, which would tap the region served by the Siberian Railway. Considerations of the control of communications, and not the question of colonization, inspired the action of the Russian Government at this time.
2d: In 1899, the Chinese Government quite distinctly stated that the agreement arrived at referred to railways built to the north and northeast of Peking toward the Russian frontier.
3d: Though in the Russian Legation’s answer of June 17, 1899, the phrase, “no matter in what direction” is inserted, it is subsidiary to the determination made in the note of the Chinese Foreign Office which is repeated; namely, “from Peking to the north or to the northeast towards the Russian border, no matter in what direction.” “No matter in what direction” can therefore only refer to incidental and local changes in the direction of the course of railways leading from Peking northward to the Russian border.
4th: In 1910, when the Russian Government was vetoing the activity of American railway enterprise in northern Manchuria, it recognized both to the Chinese Government and to the American Government its moral obligation to assist in offering a reparation for such a limiting of the sphere for legitimate American enterprise through advancing the suggestion that the railway from Kalgan to the north, the very line to which the correspondence of 1899 mainly related, should be turned over to American enterprise.19
5th: By this action, the Russian Government admitted, eleven years after the correspondence of 1899, that the interests to be safeguarded by that correspondence permitted of the construction of a through line from Kalgan to Urga with the assistance of American capital.
6th: The railway from Ninghsia to Fengchen could be considered a branch of the Kalgan Railway only, under any accepted use of the term, if it were to be placed under the same management and run as a subsidiary part of that railway line. This is manifestly not the case. The railway neither proceeds towards the Russian boundary nor can it be justly considered a branch of the Kalgan Railway; it cannot therefore be regarded as embraced in the promises contained in the correspondence of 1899.
7th: The Russian protest could be upheld only if it were to be admitted by the Chinese Government that Russia had been given a general and exclusive preference in all railway enterprises north of the Great Wall. It is not admissible that so broad a construction, so inimical to the rights of China and to the rights of American enterprise, should be founded upon language so specific as that contained in the correspondence of 1899.
This matter is not one that concerns the grantees of the present contract alone; even should they be so disposed, it is not in their power to waive rights which belong to American enterprise in general. To admit that American enterprise can be excluded through one-sided interpretations, and through vague deductions, rather than through the precise language of the documents relied upon, would be to jeopardize the freedom of American enterprise in all parts of China, because the competitors of America and those desirous of [Page 203] having American interests active elsewhere would be only too ready to take advantage of any weakness on the part of American interests, to the end of interpreting specific concessions or preferences in certain areas as carrying with them exclusive general rights.
With respect to the relation of this contract to the exclusion of American enterprise from northern Manchuria, it would seem that eventually a strong position might be taken to the effect that in return for forbearance on the part of the United States toward the demands of Russian railway policy in that region, the United States has the right to insist that no similar obstruction be practiced against American enterprise in regions remote from the Russian border.
I have [etc.]
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- For. Rel. 1910, p. 261.↩