The President of the Technical Board (Stevens) to the Secretary of State
Sir: I have the honor to report upon the activities and conditions surrounding the work of the Inter-Allied Technical Board.[Page 759]
The Inter-Allied Technical Board was organized at Vladivostok on March 5, 1919, under the authority of the so-called Inter-Allied Railway Agreement, which agreement was made between Japan and the United States primarily, but to which others of the Allied nations became parties. The conditions and purposes of this agreement were briefly set forth and read as follows:
[Here follows text of the plan for the supervision of the Chinese Eastern and Siberian Railways, printed in Foreign Relations, 1919, Russia, page 239.]
In addition to the agreement and supplementary thereto, the Japanese Minister of Foreign Affairs and the American Ambassador at Tokyo joined in a memorandum which was afterwards communicated to the other powers and which was tacitly, at least, approved by them. This memorandum read as follows:
[Here follows text of memorandum, quoted in telegram of January 9, 1919, from the Ambassador in Japan, printed in Foreign Relations, 1919, Russia, page 236.]
The agreement and the memorandum were the outcome of protracted and somewhat stubborn negotiations carried on between the two initial powers, and the agreement as finally adopted was weak, as was foretold by me. Still, it may have been the best that could have been obtained, but I doubt it. Several times I was urged by the United States representative, who had charge of the negotiations on behalf of the United States, to approve tentative agreements which were much weaker than the one finally adopted, but knowing well their uselessness, I refused to do so, and thereby won several important modifications. It was and is my firm belief that if a little longer time had been allowed for the negotiations, a better and stronger agreement could have been made. But I received the following cablegram from the Department, through Ambassador Morris, dated January 6, 1919:73
“The Department is greatly concerned because of the reports received daily of the distress in Siberia due to the present intolerable conditions of transportation. It would seem that some plan of action must be adopted at once as the position is now such that the responsibility for further delay in attempting to solve this vital problem may be with reason laid upon us, and that therefore unless we are willing to undertake the task in the face of existing differences [difficulties] we should promptly give way to others who will. The Department is eagerly awaiting your decision as to the plan as finally presented to you by Ambassador Morris.”
This cablegram forced my hand, for I knew there were but two other courses open; first, to allow the roads to remain as they were [Page 760]under purely Russian administration, in which case there was grave danger that the lines of communication would be closed; or, second, to allow the roads to pass under the control of a single foreign nation, which for very obvious reasons would have been a great mistake, and which would, in my opinion, have doomed the whole proposition to utter failure. There were too many jealousies and what might be called competitive interests, to permit such an experiment to be undertaken. Only some plan, bearing at least a promise of coordination on the part of the Allies, stood any chance whatever of a reasonable degree of success. And so, therefore, on January 6, 1919, 1 signified my willingness to accept the agreement as it then stood.
I make this explanation to answer the question I have been often asked, “Why was the Inter-Allied Railway Agreement so weak?” Weak it certainly was, as it endowed neither the Inter-Allied Railway Committee nor the Technical Board with any real power to enforce their decrees or orders.
It was not the original intention of the representatives of the two initial nations to have more than one Allied body, that one to be purely technical, but in deference to the sensitive character of the Russians, in other words to save the Russian face, it was finally decided to organize a superior body, known as the Inter-Allied Railway Committee, with the stipulation that a Russian would be its Chairman, ostensibly placing a Russian at the head of the railways under Allied supervision. It was understood, however, that the task of carrying out the practical intent of the agreement lay entirely in the hands of the Technical Board. And so far as the effectiveness of the Committee was concerned, it could easily have been dispensed with, excepting for the fact that without its existence, the whole agreement, including the Technical Board, would have fallen to the ground.
The Technical Board, throughout its life, held 133 regular board meetings, minutes of which are among its files.74 As above stated, it was organized on March 5, 1919, at Vladivostok, at which time the President was elected and a Secretary chosen. Its personnel comprised seven members, representing Great Britain, France, Japan, China, Italy, Russia and the United States, the Russian member representing the Kolchak Government and also the Chinese Eastern Railway. Subsequently, the Government of Czechoslovakia was allowed representation on the Board, thus making in all eight nations so represented. It can be readily understood that a Board so constituted with eight different standards of railway administration and practices, speaking several different languages, [Page 761]and with as yet no common confidence and motives established, was a very unique proposition, and one with limitless opportunities for disagreements which might have and undoubtedly would have, destroyed its entire usefulness. I take pleasure in recording the fact that during the entire existence of the Board no such disagreement arose of sufficient importance to jeopardise its work. Differences of opinion there were, but such differences were easily harmonized so that broadly speaking, the Board uniformly worked as a unit.
English was declared the official language of the Board. The powers of the President of the Board, in regard to all matters of operation of the railways, were declared supreme as far as the Board was concerned, and these powers, so placed in his hands, were never questioned by any member of the Board. On all other matters it was agreed that a majority vote of the members should govern its decision.
The Board held nine meetings at Vladivostok, and on March 19, 1919, it moved to Harbin, where it established its offices in a building provided by the Chinese Eastern Railway, which it occupied until it was destroyed by fire on the night of January 18, 1922, after which date it moved to quarters in the Chinese Eastern Railway general office building, which quarters it occupied until the dissolution of the Board on November 1, 1922.
During the progress of the negotiations which resulted in the making of the Inter-Allied Railway Agreement, it was thoroughly understood that the financial interests of the railways would require an advance of Allied funds, and the Technical Board was called upon by the Inter-Allied Railway Committee to advise it of the amount needed of such funds. As it was impossible, owing to the disordered conditions prevailing on the railways and the urgent necessity in point of time for relief, to make an estimate, a figure of $20,000,000.00 was fixed upon, this amount being merely a guess, as the actual shortage of equipment, supplies and materials was not known, nor was the mileage of the railways which the agreement might cover, known. However, at a subsequent time, two competent, foreign engineers made an estimate from all available data and arrived at the same amount, which was probably about correct as the situation then presented itself. As their shares of the above estimated amount, Japan advanced $4,000,000.00, the United States the same amount, and China $500,000.00. Subsequently, the United States allocated $1,000,000.00 more to this fund. This money was placed in the possession of the President of the Technical Board, to be disbursed by his personal check, with exception of ¥1,300,000.00, which was properly retained by Japan to pay the salaries and expenses of its personnel employed under the agreement. In [Page 762]the case of the Japanese funds, the President’s check was always countersigned by the Japanese member of the Technical Board, for obvious reasons a very wise arrangement. Copies of statements showing disposition of the Japanese and Chinese funds are attached (marked Encl. 1 and 2, respectively).75 A complete statement of the disposition of American funds, including all vouchers and giving full information in regard thereto, together with balance remaining, is submitted separately.75
The continual fluctuation and depreciation of the various kinds of paper roubles which were in circulation, proved a very disturbing factor in the situation. The rate of exchange varying from day to day, together with constant fall in the purchasing value of the currency, made it almost impossible to ascertain correctly what the railways were earning, and several times Allied funds had to be advanced to end and avoid strikes of the railway workmen, occasioned by the use of inferior money to meet payrolls. These advances were absolutely necessary to keep the trains moving.
It was not until after the fall of the Kolchak Government in the latter part of the year 1919, that the Technical Board was able to force the Chinese Eastern Railway to abandon the taking of any Russian money excepting the actual coin of the Russian gold rouble and Chinese currency based on silver. Efforts were made by the Technical Board and the Railway Administration to adjust the tariffs to rates which would meet the falling value of the rouble, but such efforts were only partially successful as there were so many kinds of money in circulation and the fluctuations were so many and so great, that it was impossible to keep pace with them. The Technical Board took an active part in the formulation and adjustment of tariffs as far as the Chinese Eastern and Ussuri railways are concerned.
Generally speaking, the Board worked with a fair degree of harmony with the Railway Administration of the Chinese Eastern until after the agreement which was made between the Russo-Asiatic Bank and the Chinese Government in October, 1920,76 and which covered the administration of the Chinese Eastern Railway. From that time on, gradually growing more acute, differences of judgment between the Technical Board and the Railway Administration began to arise in the matter of tariffs, the Administration insisting upon heavy reductions in tariffs in the face of increasing deficits, which reductions the Technical Board uniformly disapproved, but the lack of real power to enforce its decisions, prevented [Page 763]the Board from making its decisions of value and the decreases went into effect with the result that during the latter part of 1921 and all of 1922 the deficits increased month by month. The railway was forced to borrow money wherever it could by short term notes and on exorbitant terms, and also to sell advance transportation certificates in large amounts.
After the limitation of actual money to be received by the railway, as instituted by the Technical Board in the latter part of 1919, as noted previously, together with improved methods of operation and some economies in administration and operation, such methods being directly attributable to the work of the Technical Board, despite a poor business, the Chinese Eastern Railway, during 1920, began to get on a fairly firm financial ground so far as its actual operation was concerned. The road was not only earning enough real money to meet its payrolls and current expenses, but it began, in a small way it is true, to liquidate some of its past indebtedness. Such improvement, however, ceased gradually after the Russo-Asiatic Bank–Chinese Government agreement of October, 1920, got fairly working and the new management was installed under that agreement and became firmly fixed in power. From then on, it may be fairly said that the usefulness of the Technical Board steadily decreased, its orders and advice being generally ignored. Such a condition of affairs was extremely discouraging, but the Technical Board did not in the least relax its efforts to carry out to the best of its ability the mandate given it by the Inter-Allied Railway Agreement.
The remarks given above in regard to financial matters, especially tariffs, etc., apply only to the Chinese Eastern and Ussuri Railways. As far as the Siberian Railways west of Manchuria were concerned, in the matters of tariffs, economies, etc., the Technical Board did not and could not exercise any control whatever, even during the Kolchak regime. Every effort possible was made by the Kolchak Minister of Railways to make both the Inter-Allied Committee and Technical Board creatures subordinate to his department. This, too, after his apparent hearty approval of the Inter-Allied Agreement.
Failing his purpose as noted above, he either ignored the instructions of the Technical Board entirely, or, as information was subsequently received from some of his subordinates, covered his instructions given by order of the Technical Board with a secret code which entirely destroyed their purpose. As a matter of fact, practically no coordination with the Technical Board was received from the Kolchak Government during the brief tenure of the latter’s existence; quite the contrary, and, of course, after the Soviets took control of these railways, the Technical Board ceased all efforts to work them.[Page 764]
Among the duties assigned to the President of the Technical Board was that of appointing inspectors for service along the lines of the railways, these inspectors to be taken from among the nationals represented in the Inter-Allied Railway Agreement. At first, the only ones available, so designated, were Japanese, British and American. As one of the important improvements needed in operation was the installation of a modern system of train dispatching, and being placed in charge of the operation of the railway, I decided to install a telephone system, the equipment for which, i.e. telephones, selectors, etc., enough to equip the line from Vladivostok to Petrograd, had been purchased previously, through the efforts of the former American Railway Commission to Russia, by the former Russian Government, and was then on hand, and as the telephone train dispatching system is purely an American one and necessitated American experts to install and work, I accordingly appointed the members of the Russian Railway Service Corps as inspectors on the main line from Vladivostok to Omsk. To the Japanese inspectors was assigned the north line of the Ussuri Railway from Nikolsk to Habarovsk, also the entire line of the Amur Railway and the branch line of the Chinese Eastern Railway from Harbin to Changchun. There being but a few British engineers available, and they being on the front, they were assigned as inspectors on the lines west of Omsk as far as the authority of the Kolchak Government might extend. It was confidently predicted at that time that contact would be made between the Kolchak forces and those of the Allies that were operating in the vicinity of Archangel. After the withdrawal of the Russian Railway Service Corps, in May 1920, Chinese engineers were placed on the line of the Chinese Eastern Railway from Pogranichnaya to Manchuria, the American Chief Inspector and several of his staff being retained.
At the time of the Kolchak overthrow, the American inspectors were gradually withdrawn eastward until only a few remained on the Trans-Baikal Railway, and these were withdrawn upon completion of the Czech evacuation. As the Japanese Government decided to withdraw its troops which had been ineffectively guarding the Amur Railway, the Japanese inspectors were withdrawn also, and the same action was taken when the Japanese troops withdrew from the northern section of the Ussuri Railway. The situation as outlined above, as far as the inspectors are concerned, remained in status quo until the dissolution of the Technical Board.
In June, 1919, the Technical Board established at Vladivostok a Purchasing Committee, to which was given the duty of purchasing whatever supplies for the railways which might be obtained outside of Russia and which was to be paid for by Allied funds. This [Page 765]Committee consisted of British, French, Japanese, Chinese, Russian, and American members, the latter being made Chairman. Certain rules were laid down by the Technical Board for the regulation of the activities of the Purchasing Committee, and it functioned successfully during its life.
The Technical Board also appointed a Finance Committee, consisting of representatives on the Technical Board of Great Britain, France, Japan and China, the President of the Board being an ex-officio member. The Chairmanship of this committee was held at different times by the French and British members. The principal duties of this Committee were to consult with, and obtain as accurate statements as possible from, the proper officials of the Railway Administration as to the general financial situation, earnings, payrolls, miscellaneous expenses, etc., also, as a preliminary, to examine all suggested changes in tariffs or any other matters affecting the finances of the railway. The reports of this Committee were made before the full Board, and then became subject for discussion and final disposition.
Both of the above Committees, of course, automatically cease[d] to function when the Technical Board came to an end.
In January, 1919, the heads of the various Allied military missions, having troops in Siberia, met with the proper officials of the Chinese Eastern and Siberian Railways at Vladivostok, and after several days conference agreed upon a tariff which should govern the transport of Allied military troops, war material and supplies over the several railway lines. The transport charges under this tariff were to be billed in terms of gold dollars by the railways to the various military missions, to be paid for by the latter. A copy of this tariff is attached, (encl. 3)77 As the Czecho-Slovaks, and in fact the military of all of the smaller nations having troops in Siberia, were represented at this conference by the then head of the French Military Mission, and as the French were supporting financially such smaller nations in the field, it was the understanding that France assumed the responsibility for the payment of their military transport in accordance with the tariff agreed upon.
As President of the Technical Board, I formally instructed the responsible heads of each railway to promptly prepare and forward their current bills for such transportation to the various heads of the Allied Military Missions, but so far as the railways under the domination of the Kolchak Government were concerned, I never even received an acknowledgment of my instructions and I am in ignorance, even now, as to whether any such bills were ever presented, much less paid. The Chinese Eastern Railway, including the Ussuri [Page 766]Railway (which the former then held under lease), made out its bills with the usual Russian delays, and I know they were handed to the Chiefs of the Military Missions, as, with the exception of the bills against the Japanese, they passed through my hands. A statement, the latest I was able to obtain, is attached showing the status of these payments approximately of the date the Technical Board dissolved, (encl. 4)78 It will be noted that at the date of the statement only Japan, Great Britain, Italy and America had paid anything whatever. With regard to unpaid bills, the Technical Board, individually through its members, at different times, took up with their several governments the question of the liquidation of these bills, but as I was informed by the different members, no response whatever was received in reply to their inquiries.
In January 1920, upon the withdrawal of the Italian troops, the Italian Government also withdrew its representative from the Technical Board, and the Czecho-Slovakian Government withdrew its representative at the time of the final evacuation of its army in June, 1920, thus leaving six members on the Board, instead of eight as previously stated.
On April 22, 1919, all of the members of the Technical Board, with their staffs, excepting myself, left Harbin for an inspection trip over the lines west. They reached Omsk, the seat of the Kolchak Government, and later went on west, across the Urals, over the line through Ekaterinburg as far as Perm, returning to Omsk by way of Chelyabinsk, and I joined them at Omsk on May 31st, the whole Board leaving Omsk on June 3rd, reaching Harbin June 13th. While the Technical Board was at Omsk it held several regular Board meetings, and many conferences were held with members of the cabinet of the Kolchak Government and also the leading railway officials. This trip was made each way by special train in order to afford every member of the Board an opportunity to observe for themselves and to get into personal touch, as far as possible, with the conditions as they existed along the railways and with which I was fairly well acquainted from previous inspections.
Further in regard to the subject of lack of cooperation on the part of the Kolchak Government in the work of the Technical Board, I want to record the fact that in no sense of the word, did the Technical Board, through its inspectors, have any fair opportunity to work effectively on the Tomsk and Omsk Railways, owing to the arbitrary actions of the Kolchak military. The military officers did what they pleased with the railways, regardless of rules or regulations. They commandeered locomotives and cars of every description; [ran] trains where and whenever they liked themselves; occupied [Page 767]thousands of cars, and in every way demoralized transport even to the extent of seizing the telephone train dispatching wires and instruments. As a result, coupled with the actions of the railway department, our inspectors could do little work in the way of improving the service. As a matter of fact, had the Allied inspectors been allowed to really direct the transport, they could have saved several thousands of cars and hundreds of locomotives, the cars mostly loaded with military supplies paid for with Allied money, from falling into the hands of the Bolsheviki at the time of the wild eastern flight of the Kolchak Government.
After the Czecho-Slovak troops had finally forced their way eastward across Siberia in 1918, they were eventually set to guard the railway lines from Irkutsk to Omsk, this territory being assigned to the American inspectors of the Board. I then discovered that the Czecho-Slovakian army had a railway organization working along the same lines, and I was informed by the Czech representative on the Technical Board that their railway men would look after these lines without any reference to the Technical Board or myself, and that the inspectors of the Board, which I had appointed under the mandate of the Allied Agreement, which the government of Czecho-Slovakia had agreed to, would not be allowed to function between Irkutsk and Omsk. This produced a situation which in nowise could be accepted by myself and which for a time looked serious, but I finally managed to tide it over, keeping our inspectors on the line and confining the interference of the Czech inspectors, as far as possible, to the shops and engine houses. I mention this case as one showing the arbitrary actions of these people and how little regard they had for agreements.
During the period of the Kolchak regime, Ataman Semeonoff, who was supposed to be a subordinate to and posed as a supporter of Kolchak, dominated the Trans-Baikal Railway from Manchuli station to Verknieudinsk. He had an army, so-called, of some eight to ten thousand brigands, with headquarters at Chita, His forces completely demoralized the railway, seizing locomotives and cars and taking possession of shops and engine houses. Between the railway facilities that he took and used and those that the Japanese army, to which was given the Allied duty of guarding this line, had in use, it was extremely difficult to move the heavy western military traffic which was required to keep the Kolchak Government going. Not satisfied with this interference, Semeonoff’s officers and men murdered, whipped and otherwise maltreated the railway operators and their families, and the whole railway force became completely terrorized, and all this without the shadow of reason, except apparently native cruelty. An appeal made to the Commander of the [Page 768]Japanese forces on the ground, to put a stop to such brutalities, only met with the reply that it was a matter solely between Russians and that the Japanese could not interfere; in other words, the Japanese were there to protect the railway and not to protect the railway men. At one time Semeonoff’s hostility towards the inspectors of the Technical Board became so marked that I seriously thought of withdrawing them, fearing for their lives. In fact, I gave the inspectors permission to leave or remain, and they remained and all came safely through and only came out when their presence could be of no further value.
I am putting on record some of the major difficulties with which the Technical Board had to contend in Siberia in trying to carry out the mandate given to it by the Inter-Allied railway agreement. In view of these obstructions and many others of a serious nature, it was a source of continual surprise to me that the lines were kept in operation at all.
As may be inferred from the previous statements, the relations of the Technical Board with the administration of the Chinese Eastern Railway, which was in power preceding October, 1920, were fairly satisfactory, and for some time before that date had been steadily improving. Confidence is a plant of slow growth, particularly with the Russians, and any radical change in railway methods, which could be made in the United States in a day, might take months to effect in Russia. To make such changes requires as skillful diplomatic handling as it does with purely technic. Especially in matters of operation, slow but steady improvement was being made, the most marked being in repairs to locomotives and cars, by the introduction of modern train dispatching, by a daily system of train and car reports, whereby the operating officers were placed in close touch with train movement, and especially in the heavier loading of freight trains, so that locomotives were loaded in most cases to their maximum capacity, thus greatly reducing freight train mileage.
The Technical Board was able to have many tariffs properly adjusted and maintained on such planes that when paid for with actual money, the railway had begun to see daylight in its current obligations. The Technical Board was not able to go very far in reducing the number of employees, owing largely to the fact that the so-called Russian “laws”, which are regulations made by the former Czarist Russian Railway Department and which seem to be a fetish with the Russian railway officials, stood in the way. One of the so-called “laws” provided that no railway employee, above a certain class, could be discharged excepting by payment to him of a bonus, equalling one month’s salary for each year of his term of service, and as many of these employees had been in service for years, and as the [Page 769]railway had not funds to pay these bonuses, such employes had to be retained until a more prosperous time. Another of such “laws” ordered that 25% of the track ties must be renewed each year, this regardless of whether their condition required them to be renewed. The Technical Board, after two years argument, succeeded in getting this regulation abrogated and an individual tie inspection made, with the result of a saving in the item of tie renewals in a single year of $100,000.00. I mention this example to indicate that progress, while necessarily slow, was being made prior to October, 1920, but after that time the situation changed constantly for the worse.
A new Board of Directors, which under the terms of the Russo-Asiatic Bank–Chinese Government agreement was to be made up of five Russians and five Chinese, with a Chinese President, was organized. The Russian members were all selected by the bank and the Chinese members by the Chinese Government, and not more than one, or possibly two, of the entire membership of the Board had any actual knowledge or experience in railway matters, and, as a matter of fact, almost without exception, everyone was dependent upon his salary for his daily bread, and consequently took exceedingly good care to express no individual opinion, even if capable of doing so, that might clash with the wishes of their backers. The Board of Directors resolved itself into two factions, along racial lines, with a consequent deadlock on important questions. Meanwhile the Board of Directors retired the old management and appointed a new General Manager, a Russian engineer, never before connected with that particular railway. The Technical Board approved this appointment as a matter of routine, as in any case it could not have prevented it, even if it had cause for so doing. The new Manager’s record was that of a construction engineer, but I was never able to learn that he had ever had any experience in railway administration, finance or operation. He is an aggressive man, arbitrary in his ways, and having the support of the Russo-Asiatic Bank, he soon entirely dominated the Board of Directors, which practically approved all of his acts.
As before noted, the policy of the railway in regard to tariffs, was completely changed, and a constantly progressing plan of reducing them was adopted on the plea that such a plan would increase traffic and that such reductions were to be only temporary and to hold only until a time as a well thought out and properly balanced tariff as a whole could be formulated. The Technical Board at once, and repeatedly thereafter, offered its services, its members being all experienced railway men, to assist in formulating such a tariff. Despite constant urging by the Technical Board, nothing was done by the Administration along tariff lines, excepting to keep on cutting rates until many of them were fixed below the actual cost [Page 770]of the service. No attention was paid to the protests of the Technical Board in this matter, although it repeatedly called attention to the certain effects of such unnecessary reductions upon the revenues of the Company, and the deplorable condition into which the finances of the railway had gotten, when the Technical Board was dissolved, was very largely attributable to the tariff cutting program of the Administration.
Another cause for the financial straits of the Company, was the absolutely reckless and almost wholly unnecessary expenditure of the funds of the Company. Hundreds of thousands of roubles were thrown away by orders of the Manager, engaged by the Board of Directors on so-called improvements in the shape of luxuries, such as a de luxe train, new buildings, plants, etc, none of which was needed and none of which could add a kopeck to the revenue of the Company.
The Board of Directors carried on its payroll last year an average of about 140 names, and its estimated expenditures for Board purposes alone were about Mex. $1,800,000.00, which was probably all and perhaps more spent.
What in railroad parlance is called “overhead” charges, covering cost of administration and higher supervision, but including none of the salaries or expenses of the Board of Directors, ran as high as 28% of the total expenditures of the railway. The cost of similar charges on the Chinese Government Railways, where it is notorious that every possible official that can be is placed on the railway, runs from 12 to 15%. The average in the United States is not more than 3% to 4%. It is perfectly plain why foreign supervision, backed by real power, is the only hope for redemption of the Chinese Eastern Railway. As President of the Technical Board, I protested strongly and constantly against such expenditures, but no attention was paid to my protests, and the result of all this financial mismanagement was exactly what the Technical Board foretold. The Railway Company drifted further and further into debt, and no solution, in my opinion, can be effective, excepting a foreign loan, with absolute control over all of the finances of the railway, including the proceeds of such loan, and all the revenues and expenditures of the railway, in the hands of the foreign parties making the loan.
During the summer of 1922, I was asked unofficially by the representative of the Russo-Asiatic Bank and by the General Manager of the railway, if a foreign loan could be placed and if I would recommend it. To this question I replied that I could not recommend such a loan, excepting upon conditions as above noted. There the matter dropped, but I have understood that the bank has been, [Page 771]and possibly still is, trying to get a foreign loan unhampered by such conditions as I have indicated. Needless to say, no bank, financial institution or government could even consider such a proposition.
The Chinese Eastern Railway suffered seriously, both in property losses by fire and by delays to traffic, especially during the dry season of 1921, from the operations of Chinese bandits, which the Chinese military, to whom had been given the allied duty of guarding the line, seemed almost wholly unable to suppress. The efficiency of the Chinese guard became less and less as time went on, and repeated and constant protests and warnings made to the Chinese commanders by the Technical Board produced nothing but excuses and promises, none of which were of any avail whatever. Finally at a meeting of the Technical Board, No. 125, held on June 29, 1922, a resolution was adopted and copies were transmitted by each member of the Board to his Government, calling attention to the serious situation and asking that better means of protection be provided, but nothing was ever heard in answer to this request so far as I am aware.
During the summer of 1922, an armed force of Chinese, reported to be in the interests of Wu Pei Fu (Chinese General fighting with Chang Tso Lin at Peking), appeared at Pogranichnaya and took possession of the line of the Chinese Eastern Railway as far west as 150 miles east of Harbin. After some days of so-called warfare, the invading forces were routed and driven away from the line. The section of the railway invaded, including, of course, through traffic to Vladivostok, was tied up for a period of about two weeks, but no great amount of damage was done to the railway.
In June, 1922, a traffic conference was held at Changchun between the representatives of the Chinese Eastern Railway and the South Manchuria Railway, to adjust traffic matters as between the two companies. This conference lasted for twelve days, closing on June 27th, and the net result was that the South Manchuria Railway obtained a strong advantage over the Chinese Eastern Railway in the matter of the routing of the latter’s most important products for export. No notice was given either the shippers or the Technical Board of the proposed change in the interline tariffs until three days before they were put into effect on July 1st. The arrangement under which this was brought about gives the South Manchuria Railway power to practically kill Vladivostok as a natural outlet for Chinese Eastern products in favor of Dairen, the port of the South Manchuria Railway. The handling of exports and imports by way of Vladivostok, gives the Chinese Eastern Railway the long haul and consequently the greatest revenue. It was in every way a great [Page 772]blunder, to put it mildly, on the part of the Chinese Eastern Railway officials to submit to such an arrangement.
As soon as the Technical Board was advised of the result of the conference, it lodged a vigorous protest with the Chinese Eastern Administration, requesting that the putting into effect of the new arrangement be delayed a short time until the Technical Board could consider and pass upon it, but no attention was paid to this request and the arrangement was put into effect on July 1st, and is still in effect. Recent advices which have come to me are to the effect that two-thirds of the products for export, originating in purely Chinese Eastern territory, are going out by way of the South Manchuria Railway and Dairen, and only one-third by way of Vladivostok, just about the reverse of what should be the case.
The final evacuation of the Czecho-Slovak army, by way of Vladivostok, began in the month of December, 1919. Owing to the severity of the season, to the lack of equipment on the western lines, occasioned by the loss of same on account of the Kolchak debacle, to the lack of funds to pay railway men and coal miners and the consequent lack of food, and to other causes which should not have come up, the evacuation of these troops, until they reached the Chinese Eastern Railway line, was carried on with delays and difficulties. However, as matters got settled down, and owing to the action of the Technical Board in furnishing funds to help the coal miners to keep the coal mines producing, and the furnishing of food for the starving railway operators, also the sending of a lot of heavy locomotives from the east to the Trans-Baikal, the evacuation finally proceeded in good order, and was completed at Vladivostok in May, 1920.
The movement of the Japanese troops, which were at Chita and along the line of the Trans-Baikal, to the Maritime Provinces, was carried out in the month of August, 1920, and proceeded smoothly and successfully. Semeonoff and his troops immediately preceded the Japanese troops in leaving the Trans-Baikal. They (Semeonoff’s troops) moved over the Chinese Eastern to near Vladivostok, where they were a constant menace until they were gradually starved out and became dispersed in various directions.
The Ussuri Railway passed out of the control of the Chinese Eastern Railway at the time of the formation of the so-called Vladivostok Government. Previous to this time, the remarks before made as to the relations of the Technical Board with the old Chinese Eastern Administration, applied also to its relations with the Administration of the Ussuri Railway, but after the time mentioned the influence of the Technical Board with the Ussuri Railway grew steadily less. While the Board was in some degree able [Page 773]to assist the railway in various matters, it is just to say that it did not have control, nor even an important voice in its management. This is especially true of the years 1921 and 1922, when that section of the country was dominated by the Japanese military forces, which were practically masters of the situation and did whatever they pleased with the railway and with its operation, although it was ostensibly managed by Russian officials appointed by the Vladivostok Government. No serious trouble resulted, but the plain facts are that the Japanese military arrogated to itself powers, which under the Inter-Allied Railway Agreement, properly belonged to the Technical Board, and which state of affairs the Technical Board could only protest in specific instances where forbearance ceased to be a virtue.
The dissolution of the Inter-Allied Technical Board, as a body, was effected on November 1, 1922, at meeting No. 133, by reason of instructions received by the various members from their respective governments, and the official minutes of that meeting, copy attached (encl. 5),79 describes in extenso the formal steps taken to liquidate the Board. No formal action was taken before the final meeting of the Board was held, as to the disposition of its archives. As President of the Board, I had previously verbally advised the several members that I would take the archives to Washington, which advice at that time met with no objection from any member. Subsequent to the dissolution of the Board some question arose in regard to the matter, and I was asked to call a meeting of the Board. I replied that as the Board had gone out of existence, no formal meeting could be held, but that I would be glad to and did meet with all the members unofficially to discuss the matter. At this meeting I gave my reasons for making the disposition of the archives as I proposed, to which, after some discussion, every former member of the Board agreed, with the assurance from myself that inasmuch as every nation interested had an Embassy or a Legation at Washington, and that due inspection could be made of these archives by the representative of any such nation whenever proper request is made. Furthermore, that if any nation wanted copies of documents that it may be especially interested in, such copies would be furnished, it being the intention to furnish these copies to a reasonable extent when it is known just what ones are wanted.
With regard to the possible recovery of part of the funds advanced by the United States by reason of a set-off against the transportation of United States military on the lines west of Manchuria, I can see no other way, excepting to make such funds a charge against a Russian Government which will be recognized by [Page 774]the United States. In the case of the Chinese Eastern Railway, without a foreign loan that railway could practically pay no one, unless a miracle intervenes, and it would certainly be an impossibility to collect anything from the present Moscow Government. In my opinion, the matter of reimbursement for these expended funds must wait the future and be governed by its developments.
It may be asked why I, as President of the Technical Board, entrusted with matters of operation of the railways, did not avail myself of the guarantee as contained in the seventh paragraph of the memorandum agreed upon between the Japanese Minister of Foreign Affairs and the American Ambassador, designed to make my efforts effective. My reply to such a query is that, of my work at least seventy-five per cent was diplomatic, as against twenty-five per cent purely technic. While the paragraph in question was doubtlessly conceived in the right spirit, I was of the opinion from my knowledge of underlying conditions and currents that an appeal such as the paragraph provided for, would be ineffective and that it would probably make matters worse instead of better, and might result in the elimination of the entire Inter-Allied Agreement.
In view of the statements set forth in the preceding pages, it may be readily understood that the work with which the Technical Board was entrusted, was carried on under handicaps which made it impossible for the Board to accomplish all of the results it had hoped for, but individually and as a unit, the members of the Board did not relax their efforts in the least and never forgot the purpose for which the agreement was entered into, as set forth in the sixth paragraph of the memorandum supplementing the agreement.
The Board was able to do a great amount of good during the three years and seven months of its existence, the influence of which, it is believed, will not entirely disappear with time. From a purely sentimental or psychological standard, its status as representing the Allied powers, gave it an influence, while it enabled the Board not only to be effective along lines of improvement, but also enabled it to prevent many wrong actions, which might have occurred were it not for its presence.
There were a number of changes in the personnel of the membership of the Board, the original Russian and American representatives being the only ones to serve continually throughout the life of the Board. Uniformly, the selection of the representatives of the various nations proved wise, and I take great pleasure in saying that the degree of success, which the Board achieved, was due to no one member of the Board, but to all, and each one can fairly claim an equal share with all of the others, that credit to which the Board is entitled for carrying on its work under such difficulties [Page 775]and such unique conditions. The members of the Board parted on its dissolution, not merely as officials, but as friends in the true meaning of the word, and it is believed that the friendships formed during their long association, will assist in the creation of closer ties of common interest between the nations represented, as are so badly needed.
In closing, I cannot forbear giving some words of appreciation to the very excellent work done by the various inspectors of the different nationalities. These men were in every case either technically trained, or had gained an intimate knowledge, by actual experience, of the duties entrusted to them, and the success in matters of operation, with which I was entrusted, is very largely due to their intelligent, zealous and loyal work.
I can also testify to the effective and satisfactory work of the clerical staff of the Board, each member of which was attentive to, active and accurate in his duties, and at all times exhibited an interest in the work, but little less intense than that of the members of the Board themselves.
For myself, and I believe that I voice the feeling of all of the foreign members of the Technical Board, while I do not regret the experience, I certainly would never undertake another such task under similar conditions, without a much stronger agreement than the one which governed the past Inter-Allied Technical Board.
I have [etc.]