283
i
118
n my opinion, supposes a unity of purpose and action in the administration which it will be long before it can lay claim to. On the other hand, the Government, both central and provincial, does value highly the revenue that it derives both under Tariff and by inland taxation from foreign opium. In 1875 the total of import duties collected, under Tariff, was 3,904,439 taels. Of this foreign opium paid over 1,888,000 taels, or nearly one-half. But as a costly necessary, perhaps the only import that is a necessary, it stands without flinching a heavy burden of taxation in addition to Tariff, and the provincial Governments interested have of late years shown a desire not so to weight it as to drive the trade entirely into the hands of the smuggler. I say of late years, for, when Lord Elgin's Treaty was first on trial, opium was less intelligently dealt with, and the smuggler and the subordinate official benefited accordingly. Even now opium smuggling is not utterly extinct, although the preventive service is more effective than formerly, and the trade is taxed, in my opinion, with greater discernment.
The rate of taxation in some instances rises, but not, I think, beyond what the locality will bear. The Tariff duty is 30 taels per picul. At Tien-tsin, Chefoo, and Newchwang, the three northern ports, it pays in addition 18 taels li-kin. Three years ago, at Chefoo, it paid but 12 taels li-kin, and the rate was probably the same at the other two ports, the foreign commerce of which belong to the same native superinten- dency. At Shanghae it pays 40 taels li-kin; at Foochow 80 taels; but at that port, some time since, it was stated to pay as much as 130 taels.
In the earlier negotiations of 1876, I had at one time myself proposed that the opium li-kin tax should be equalized at all ports; and at Chefoo I was invited to consent first to a uniform rate of 90 taels, which I declined, and subsequently to 90 taels, as a maximum limit at the southern, and 50 taels at the three northern ports. This would have been a considerable advance upon the rates now ruling, and would have added very largely to the Customs revenue. The Grand Secretary Li did not allow that this consideration influenced him in the proposition. The Chinese Government, he said, would not be sorry to see an increase of li-kin act prohibitively against the import of foreign opium.
Whether, if the total to which li-kin at these increased rates would amount could be collected on the opium trade in a lump sum, such a tax would so act, I do not feel sure. Mr. Hart was strongly of opinion that the trade would bear the uniform rate of 90 taels li-kin everywhere. So great an increase of taxation, suddenly imposed, however, would not fail very seriously to interfere with the foreign opium trade at the poorer ports, and where it did so with other branches of foreign trade. Accordingly, I declined to give the encouragement of a stipulation to the proposition suddenly and extensively to increase the rate of li-kin. The Chinese have the right, which they exercise, to impose upon opium what li-kin the authorities of particular localities think expedient. I have preferred to leave the question in this position, conceding, however, recommenda- tion of a new arrangement for the collection of the li-kin levied upon opium, which, while it secures to the Chinese Government revenue that I conceive it entitled to, avoids any possibility of collision between the executive of the li-kin collectorates and the quasi-municipal police in charge of port settlements: an evil to which I have earlier referred.
The stipulation in Article VII, that a Mixed Commission shall consider the estab- lishment of some system that may enable the Chinese Government to protect its revenue without prejudice to the interests of Hong Kong, points more or less in the same direction. There are rights on both sides to be protected, and a clash between the powers exercised on both sides to be averted. I bring in allusion to the Hong Kong question here, because opium has been so largely the cause of the proceedings of which the Colony complains.
But first, as regards the rights of the Chinese Government over opium at the ports. I have stated above (p. 106) the limits of the change that I conceive Lord Elgin contemplated effecting. I give below the exact words of his stipulation affecting
it:-
Opium will henceforth pay 30 taels per picul duty. The importer will sell it only at the port. It will be carried into the interior by Chinese only, and only as Chinese property; the foreign trader will not be allowed to accompany it. The provisions of Article IX of the Treaty of Tien-tsin, by which British subjects are authorized to proceed into the interior with passports to trade, will not extend to it, nor will those of Article XXVIII of the same Treaty, by which the transit dues are regulated; the transit dues on it will be arranged as the Chinese Government see fit; nor in future revisions of the Tariff is the same rule of revision to be applied to opium as to other goods."--(Treaty of Tien-tsin; Tariff; Rule 5.)
The words "the importer shall sell it only at the port," it has been contended, entitle opium to the benefit of a port area, and the exaction of li-kin from the native
119
purchaser within the settlement has been (at Shanghae) protested against, nay more, resisted.
I cannot support this contention. do not allow opium the same right of exemption from taxation in excess of the Tariff duty. Remembering, as it is impossible that I should forget, the position of the opium trade up to the time that the Tariff above quoted was signed, I cannot read the rule otherwise than declaring what I know to be Lord Elgin's intention regarding the trade. He would have it regularized, but he would not protect it like the rest of our import trade. He was, in fact, opposed to its expansion. Had he contemplated a port area within which opium was to have been exempted from taxation, he could have contemplated none but the same as that claimed for other imports, a district more or less considerable at every port, and the freedom of which from the surveillance of the li-kin or other like collectorates would, from the portability of the drug, have exposed the revenue leviable beyond the limits of any such district to enormous loss. For all other imports, as I have argued, we had a right under Treaty to claim the benefit of such an area, and our imports, opium of course excepted, if taxed within it, no matter in whose hands, were taxed in contravention of Treaty. This is the area limitation of which I have recommended that we should concede in exchange for An the increased facilities conceded by the Chinese. For opium 1 claim no area. importer might, without breach of Treaty, open a divan for its consumption upon his own premises, but once it left his premises in native hands I do not admit that, as in the case of other imports, while within the port area, the Treaty would authorize us to come between the Government and the native purchaser.
Considering, therefore, that the collection of li-kin on opium in the port area, whether the larger area to which by Treaty we are entitled, or the more restricted area proposed by myself, is lawful, it follows that I admit the right of Chinese Government Agents to collect it. But as the presence of the native executive employed to this end is, for many reasons, inconvenient, I would render the presence of that executive unnecessary, by transferring its functions to the foreign Customs Inspectorate, through whose bands, at this moment, all foreign opium, unless it be smuggled, must pass. The drug, when brought into port, is to be bouded until it is sold, and when sold the importer is to pay the duty on it, and the purchaser the i-kin.
By this very simple arrangement, I cannot see that the revenue of India is to suffer. The It will not cause an ounce less of Indian opium to be sold than at present.
Where he has been able, as to a importer's profits, to a certain extent, may suffer. certain extent at some ports he has been able, to sell a proportion of his opium li-kin free, he will now not sell it until it shall have paid li-kin. And this would apply even to opium consumed on bis premises, should he open a divan, because no opium would be released from bond except on payment of the li-kin. But then I contend that li-kin, or other like tax, is duly leviable upon all opium brought into China.
I have been asked whether the provincial Governments will not, under these circum- stances, be induced to impose a higher rate of li-kin upon opium than heretofore. In my opinion they will not tax it beyond what it will bear. They really want this revenue, and they now impose, unquestioned, whatever li-kin they believe the local market will endure. I do not see that the far greater security of collecting what they do impose, which its collection by the foreign Inspectorate will afford, should tempt them to suicidal taxation. And I say this without forgetting that the dread of the competing smuggler may possibly be diminished by the efforts of the Commission provided for in Article VII for the protection of Chinese revenue without prejudice to the interests of Hong Kong.
This brings me relevantly to the existing conflict between these interests, of which it will be the function of the Commission to devise an adjustment; a conflict, as I have implied, in which the rights of China to revenue on foreign opium are largely concerned.
All other considerations apart, it is the satisfaction of these that I have felt it my duty, as an international agent, to keep steadily before me.
I have shown, I think, why, without affecting to deprecate the moralist's censure of the abuse of opium-smoking in China, I decline to run tilt at the trade upon moral grounds. To recapitulate: its sudden cessation would entail upon the Government of India an enormuas loss, without, as I believe, any corresponding advantage to China. The Chinese will continue to smoke opium, I will not say as the national sedative (the latest cuphemism), but as we use malt and spirits, some for good, many for evil, until such time as the use or abuse of stimulants is controlled otherwise than by legislative pressure. They will continue to smoke Indian opium as long as opium-smoking prevails So long as in China, provided always that Indian opium is the best they can procure.