September 30, 1899.]
to emphasize the restrictions of foreign steam traffic in Inland Waters.-We have the honour to be, sir, your most obedient servants,
(Here follow signatures.)
To R. W. Mansfield, Esq.,
H. B. M's Consul, Canton
THE STEAMER COMPANIES TO H. B. M.
MINISTER.
Hongkong, 28th March, 1899. Sir, We have the honour to enclose copies of certain correspondence relating to the opening of the inland waters of China to steam naviga tion, from which it will be seen that in addition to an evasive policy with regard to the publica. tion of the Rules to be in fores at the various lekin barriers promised in clause 8 of the Sap- plementary Rules the Chinese Government seek to impose such restrictions on the opening of these waters as will render the whole concession valueless.
Before any advantage can be taken of the opening of these waters by foreign steamers we are of the unanimous opinion that:-
1st. The prompt publication of the Rules and Regulations promised in Rule 7 of the Inland Regulations and Clause 8 of the Sup- plementary Rules and also of the appointment of the provincial officer referred to in Clause 9 of the latter;
2nd. The rescinding of the Inspector-Geu- eral's decision that inter-treaty port steamers shall not also be registered for inland naviga-
tion;
3rd-The strict enforcement of Clause 5 of the Supplementary Rules must be insisted on.
As explanatory of this letter we attach a a memorandum dealing fully with the subject.
-We have the honour to be,
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CHINA OVERLAND TRADE REPORT.
time admit that there are considerable difficul- ties in the way and that probably the only effective way of meeting them would be to open Kongmoon or some other place situated at the mouth of the river as a treaty port, whence and also from Samshni and Wuchow. after pay. ment of duties, goods would be free to find their. way inland carried either by the importing or other steamer as was found most convenient.
So far we have only dealt with the effect the opening of waters has had on the direct trade with Hongkong, the craft engaged in which come under the heading of vessels engaged in trade with ports outside Chinese jurisdiction and a are therefore excluded from any direct participation in the benefits which should resul therefrom. There still, however, remains the Canton-Wnchow trade, the steamers on which, being vessels engaged in inter-treaty-port trade, are also, by the Inspector-General's ruling, debarred from inland water privileges. It is to this decision as affecting this class of vessel that we would beg your most earnest attention, as we are of the unanimous opinion that if on- forced it will as we have already stated, render the whole concession valueless.
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From the beginning our vessels on the Can- ton-Wachow line have been subjected to such restrictions that it seemed quite hopeless for them to attempt to compete with their more favoured Chinese rivals who by means of specially constructed lighters towed by steam- launches secure the great bulk of the cargo and, until recently, of the passengers. The system adopted at the treaty ports is for these lighters and their cargoes to come under the lekin ad. ministration, and the steam launch, which is merely the means of propulsion and carries no cargo, comes under the I.M. Customs, a dual system of control which gives the advantage of (Hear follow signatures.)
the quickness of steam transit and an elastic To His Excellency Sir Claude Macdonald tariff for the payment of duty on the cargo car- K.C.M.G., K.C.B. H.B.M's Minister in China.ried on the lighters. Nor is it so much the fact that the lekin collected on this cargo is less than the one and a half duty which would be levied by the I.M. Customs if it were carried in our steamers, as it is if so carried, lekin taxes before shipment and after discharge would be payable in addition to the Customs duty and a half. The foregoing facts are only too well known and have been frequently commented on, notably by H.B.M. Consul at Canton in his trade report for 1897; but if further proof be needed it is abundantly supplied by the fact that the only domestic trade of which we secure the carriage is a few piculs of goods between Samahni and Wuchow, whereas the merchants refuse to ship the same goods by our vessels between Wuchow and Canton even although the freight charged be the same in both cases! being equal for both distances they will ship by That is to say, taxation and cost of transport
refuse to do so over the longer one! The ex- our vessels over the shorter one but steadily planation of this is simple. At Samshui by vigorous protests made at the opening of the port the native goods carried in foreign vessels are to a certain extant exempt from lekin taxes before shipment and after discharge, while at Canton the reverse is the case, and as the bulk of the domestic trade of the West River districts is destined for or comes from Canton as being the great centre or mart of trade the natural result of this differential taxation is that our Chinese rivals secure the carriage of the whole of it. Nor does the evil stop at this, for know- ing that our earnings must be made out of the carriage of foreign goods, into which, as far as When the inland waters of China were first goes, the question of taxation does not enter
the carrying in steamers between treaty ports declared to be open a good deal of doubt existed they can either conform to our rates of freight as to the conditions under which the navigation and compete against us or by lowering them of them would be allowed, and with a view to slightly get the monopoly of the carriage of gaining information on this important point—these as they do of the domestic trade. important to us, not only from the expansion of trade that would result but also that it might seriously modify the plans of vessels we were then contracting to have built-we applied to the Imperial Maritime Customs at Samshui to register the steamer Kongpak for inland navigation. After reference to Peking this was refused by the Inspector-General of Customs, whose decision on the matter is given in the Samshni · Commissioner's | traffic. letter, copy of which is attached. While we still think that the privileges asked for might be accorded without danger to the safety
MEMORANDUM RE INLAND NAVIGATION.
In order that the nature and meaning of these restrictious may be fully understood it is necessary to enter into somewhat lengthy details, but the importance of the stake at issue will, we think, form ample apology for doing so. At the opening of the West River to foreign trade two lines of steamers were started by us to engage in the carrying trade of it-one for the direct trade between Hongkong and Wuchow via Samshui and the "ports of call"; the other between Canton and Wuchow also via Samshui and the "ports of call." On the direct route the advantage accruing to merchants from the payment of a fixed sum for import duty and transit dues which franked their goods through to the remote parts of Yunnan and Kweichow caused a considerable rush of imports to find their way in frou Hongkong by water carriage instead of via the Pakhoi overland ronte, etc., etc., which they had followed previous to the opening of the river. The lekin authorities have from time to time held out threats of reducing their import duty on goods, thus diverting them from foreign to native oraft, but although the Canton provincial authorities have adopted these tactics with the success which usually characterizes their actions of this sort, there has been, up to date, no systematic attempt to extend them throughout the length of the West River, so that to a large extent the competition we encounter although keen is but the natural result of rivalry in trade.
of the revenue of China we must at the same
is the disadvantages under which we suffer as Although the subject of this representation British Shipping Companies engaged in the carrying trade of China we will for the moment waive this question and look at it from the broader standpoint of trade in general. From the foregoing, it might be argued that al- though we as individual concerns suffer, the great circulation of goods is facilitated by steam
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encroach on the monopoly thus secured, either on the part of Chinese or Foreign steamers, is rendered nugatory by differential duties in the manner we have shown.
find compensation for our losses in the general Were such the case we might well prosperity that would result, but it is only to the privileged few that permission is given to ran this class of vessel and any attempt to
Again, with the passenger traffic the Chinese vessels had the option of using all routes con- necting Canton with the West River, whereas we were confined to one only, laid down by the Customs, entailing an increase in the distance traversed of some thirty miles. They were also privileged to stop at any and all places en route for the embarking and disembarking of passen- gers or cargo while we were confined to the four ports of call (See Canton Commissioner's Trade Report, 1897, pars. 4 and 7).
The question of opening the shorter routes to foreign vessels was made the subject of re- presentation to H.M. Consul at Canton, but so scandalous had the disabilities under which we laboured become and so heavy the losses in- ourred in running steamers practically empty that the question of withdrawing them alto- gether from the trade was being seriously con- sidered when the throwing open of the inland waters gave the IM. Customs the chance, of which they gladly availed themselves, of attempt- ing to place us on terms of equality with our opponents. This equality in respect to the carriage of passengers we now enjoy and we were not without hopes that, by Clause 5 of the Suplementary Rules under Inland Steam Navi- gation Regulations, goods, carried in native boats towed by steamers would come under the same rules for duty payment as goods carried in our vessels, but up to date there is no sign of any attempt being made to bring this about, and moreover by the Inspector General's deci sion it would appear that instead of a further step being taken to secure equality of taxation for all goods no matter how carried a retrogade movement is contemp_ated which will place as in the disastrousl position we occupied at the opening of the trade.
If this decision hold good the utter impos- sibility of any steamer securing the carriage of goods under inland navigation rules can per- haps be best shown by an illustration. Certain foreign goods are imported into Samshui, where they pay import duty and transit dues, being destined for some place (nota "port of call situated between Samshui and Canton. We as British Shipping Companies compete with the Chinese referred to throughout this memoran- dum for the carriage of them. If we wish to to run from Samshui to the place in question secure them we must provide a special steamer
although our inter-treaty-port steamers pass it en route every day and are for the reasons already given practically empty. The Chinese Companies not being under any such restrictions ers, which are also free to engage in inter-treaty. will be at liberty to carry them in their light-
port trade! We have endeavoured to show that as long as the tax of one duty and half on cargo carried in steamers between two treaty ports is euforced, while it is permitted to other craft coming under the native administration to com. pound for a less sum, the domestic trade will surely be diverted to vessels so privileged and that the monopoly so gained can be and will be used to secure the carriage of foreign goods from one port to the other or to any point lying between them soning it can be shown that in the event of
So by an analogous res->
inland navigation rules to run beyond the our attempting to start any steamers under precincts of the last treaty port, so surely will this differential treatment be extended to the goods carried in them,
short of the abolition of the dual system of We are only too well aware that nothing custom houses in vogue in China will provide an effectual remedy for the evils we complain of We are not so sanguine as to entertain the belief that a workable tariff will ever be pub. lished by the provincial oficials, but by in- sisting on the measures suggested in our cover. ing letter the hand of the Chinese Government will be so forced that it must ultimately result in the I. M. Customs being called upon to under- take the compilation of a general tariff applie- able to the whole of the internal taxation of China, the maximum basis of which might be the 71 per cent (duty and a half) now charged ports and which it is evident that the Inspector on goods steamer borne between two treaty General's ruling is intended to protect.
Hongkong, 29th March, 1899.