It has been known for some time that Russia was very disappointed both with Port Arthur and Dalny (Lalienwan). Port Arthur is too small for a first-class naval station, and it is badly supplied with water. The great mistake of Dalny is that it faces the north; it requires an enormous expenditure of money to make it a good harbour; and, worse than all, the Chinese merchants at Newchwang have shown no disposition to transfer their establishments to the new Ru: port. The Russian hope was to attract to Dalny the trade of Manchuria now transacted at Newchwang, Dalny having the advantage of being open all the year round, while Newchwang is closed by ice in the. winter months. But this is no drawback to the Chinese merchants at Newchwang, whose homes are in South China, and who take advantage of the annual closing of the port to visit their homes. Low water in the Russian exchequer is another reason for suspending work at Dalny; and it was reported some weeks ayo at Nagasaki, on the authority of a high official at Vladivostock, that Russia had offered Port Arthur and Talienwan to Japan, on condition of Japav's withdrawing her opposition to the establishment of a Russian naval station at Masanphd in the south of Corea. here is no doubt that it will involve Russia in very heavy expense to keep open the Manchurian railway in the face of the anarchy that rules in the south of that province, and that it will be more convenient and more economical to make Vladivostock the terminus of the railway; and there will doubtless soon be' steamer lines running from Vladivostock to all the countries bordering on the Pacific. Viadivostock has a harbour which will accommodate this traffic; and the same cannot be said of Port Arthur or Dalny.
No doubt Russia has secured from China a sufficient quid pro quo for her abandonment of her claim to indemnified for her military expenses in China, and for her rendition of Talienwan, and the Port Arthur-Manchurian Railway; and it will be interesting to learn what the terms of the new convention are. There is very little doubt that Russia is trying to get China to surrender to her Chinese Turkestan, and this, as some of the native papers have already pointed out, is very like a menace to our Indian Empire.
Text read from the printed page and cleaned; old type leaves the occasional error.