Mr. Denby to Mr. Gresham.

No. 1692.]

Sir: Mr. W. N. Pethick, our vice-consul at Tientsin, has resigned his position as manager of the Chinese railways and has gone to the United States. His departure has brought about several changes in the personnel of the railways. Chang Chin-chung, a grandson of Li Hung-chang, has been appointed director-general of the Imperial Railway. This line commences at a place called Kuyen, which is about 90 miles from Tien-tsin, and extends to Shan-hai-kuan and past the Great Wall into Manchuria.

Chang Yen-mou, who is chief manager of the Tungshan colliery at Kaiping, has been appointed director-general of the Commercial Railway, which commences at Tien-Tsin and goes through to Kuyen. The assistant director-general of the Imperial Railway is also a clansman of the viceroy. The assistant director-general of both Imperial and Commercial railways is Wu Ting-fang, better known as Ng Choy, who is a lawyer by profession and speaks English perfectly.

It will thus be seen that the two lines of railway are practically combined in one.

The portion between Tientsin and Kuyen is owned by the China Railway Company, a private concern. The balance of the line, as far as it may be extended, is owned by the Imperial Government. Two million taels a year are appropriated for its construction. Li Hung-chang has supreme control as far as Shan-hai-kuan; beyond that point the road is controlled by the governor general of the province of Shingking.

The road has nearly approached Shan-hai-kuan. It has often been described in my dispatches, but it may not be out of place to indicate here its general direction. It may appropriately be said to start at Tien-tsin, to run thence down the bank of the Peiho River to Tunghu, a place about a mile from the Taku forts, which are near the mouth of the river.

From Tunghu it goes to the Tang-shan coal mines, and thence to Lanchow, a town on the Lan River. The distance completed is now 120 miles. A bridge is being built over the river Lan, which will require a year or more for completion. The line is being constructed beyond the Lan River toward Shan-hai-kuan. It is said that the viceroy forced the engineers to lay this part of the line out farther inland than they proposed in order to avoid attacks from the Gulf.

New-chwang, the most northerly treaty port in China, will not be on the main line to Moukden, but a branch will be built from a point 30 miles from New-chwang. It is said that this branch will be extended to Port Arthur, which is the great naval station of China.

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Eventually this line will go to Kirin, a large town situated on the hank of the Sungari. This road was devised as a military line, in order to enable China to protect her frontier against Russian invasion; but the vast resources of Manchuria, if developed, would afford a great trade and commerce.

I have, etc.,

Charles Denby.