States, propounded to the world his scheme for the neutralization. the Manchurian railways by their sale to China, who was to be financed by the Powers. The scheme, while theoretically simple, ignored the stern realities of the situation in Manchuria. Russia and Japan would have stultified all their efforts of the past decade by accepting it, and consequently Mr. Knox's proposal fell on barren ground. It was followed, however, almost immediately by the announcement that the American Banking Syndicate had been granted by the Chinese Government a concession for a railway from Chinchon on the Gulf of Liaotung to Aigun on the Amur River. A British firm was interested in the undertaking, but the British Government could not lend its support, us it was bound by an agreement 13 with Russia not to press China for
scheme, but contented hereelt by all. Japan did not oj the conceasios north of the Great
pointing out that she would expect to participate in any enterprise so closely connected with her existing interests in Manchuria. Russia on the other hand interposed a direct veto on the construction by others of a railway crossing or meeting the Chinese Eastern Railway, and the concession has not yet materializ~ ed. The incident brought American financial interests prominently into Chinese politics, and the subsequent agreement between the British, American, German and French financial groups provides for participation for the future in all large Chinese enterprises that may be secured by one or other of the syndicates.
Trouble arose between the Chinses Goreme and the Russian authorities regarding navigation on the Sungari River. In epi of previous arrangements the Chinese without reference to Russia issued regulations for Russian vessels plying on this river and started 10 levy taxes on Russian shipping. On April 30 an ultimatum: was presented to the Peking Government to the effect that if the question at issue were not settled by the first day of July, the Russian authorities would adopt their own of action. An agreement was finally reached on August 1 and duly ratified on August 9.
Relations between China and Japan remained friendly durin, the past year. After twelve months intermittent negotiations the Manchurian Postal Convention was signed on February 10, while an agreement was also reached on the Chientao question, mainly in favour of China. With the annexation of Korea, however, which followed in August (the agreement was concluded on August 22 and promulgated on August 29) the Japanese claim that the situation in Chientao has been modified by the transformation of the Korean inhabitants into Japanese subjects.
Text read from the printed page and cleaned; old type leaves the occasional error.