Talien-wan being mainly open to foreign trade, its organization and administration were set on a separate basis from the rest of the Kwan-tung. At the instance of M. Witte, then the Minister of Finance, an Imperial Order was promulgated on July 30 (August 11), 1899, ordering that near Talien-wan a new town named Dalny should be built, which was simultaneously declared a free port under the following conditions, namely, that the importation and exportation of merchandise should be allowed free of customs dues in Dalny within the limits determined, and liable to modification, by the Minister of Finance; but that goods imported into Russia from Dalny should pay the regular import duties in force in the Russian Empire.[254] By the Provisional Regulations already referred to of August 20 (September 1) of the same year, the organization of Dalny was assigned to the Eastern Chinese Railway Company, under the chief direction of the Minister of Finance, and its administration was intrusted to a Prefect, to be appointed and dismissed by Imperial orders and subordinate to the Governor of the Kwan-tung (Articles 99 and 101).[255] It is already well known that Dalny, now covering about 100 square versts in area, was, according to M. Witte’s plan, intended to be the commercial terminus of the great Siberian Railway, and eventually the mercantile outlet on the Pacific of the vast Russian Empire. Before the war, the works at Dalny, including its large docks and piers, had cost already nearly 20,000,000 rubles. Part of this immense expenditure was to have been met by the income of the public sales at auction of land-lots, held three times since 1902, in spite of the fact that the twenty-five year lease of the territory to Russia would hardly justify her in alienating portions of it permanently.[256] ----- Footnote 198: Cf. _China, No. 1 (1898)_, Nos. 1 and 15. China seems to have requested Russia to advise Germany to reconsider her action. Later, Russia is said to have reported that she had failed to change the mind of the Kaiser. Footnote 199: Count Muravieff’s remark to Sir N. O’Conor, the British _Chargé_ at St. Petersburg, on March 28, 1898.—_China, No. 1 (1898)_, No. 125. Footnote 200: Kiao-chau was occupied on November 17, three Russian war-vessels came to Port Arthur on December 18, 1897; the German-Chinese Agreement was concluded on March 5, the formal demand by Russia was presented about the 7th, and granted on the 27th of the same month, 1898. Footnote 201: _Ibid._, pp. 42–43, Nos. 95, 96, 98, 100. It is interesting to note that, on February 4, 1902, when negotiations were in progress between Russia and China, the former supporting large exclusive demands made by the Russo-Chinese Bank in Manchuria, M. Lessar, the Russian Minister, said that his Government was merely asking for privileges similar to those of Germany in Shan-tung.—U. S. 57th Congress, 2d Session, _House Documents_, vol. i. p. 274.