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"If, after all, the proposition to collect li-kin with the Tariff duty be not adopted, China may take it upon herself to increase the hi-kin, or to devise some other scheme,” was a simple declaration to the effect that, inasmuch as China cannot but be anxious to promote the security of [her revenue on] opium, if protracted negotiations to that end lead to no result, it will not be in her power to throw [the whole question] aside, and give it no further heed. There was no intention to employ a threat.
The Grand Secretary Li's preference for the simultaneous collection of li-kin aud Tariff duty was entirely in accord with the Yamên's selection of the project which appeared to them most satisfactory in the British Minister's note, and it is hoped that the British Minister will inform the Prince as soon as a reply to his telegram on the subject shall be received, in order that the matter may be taken into consideration as soon as possible.
A necessary reply.
(No. 39.) My Lord,
No. 78.
Sir T. Wade to Earl Granville,(Received August 3.)
Tien-tsin, June 3, 1882 IN the preceding despatch I sketched the slow progress of the discussion, commenced in September 1876, of the question of opium taxation.
Briefly to restate the case which demands a decision at the hands of Her Majesty's Government, in 1876 I proposed at Chefoo that, the fi-kin Collectorates being excluded from the port settlements, within which the Chinese Government was undoubtedly free to levy li-kin on opium, the li-kin which must otherwise be lost to the Chinese by this exclusion of Collectorates should be secured to them by retention of the opium in bond until it was wanted for sale. The foreign Customs Inspectorate was then to collect the -kin from the purchaser of the drug as it passed out of bond. The rates of li-kin being different at the different ports open to trade, I was in favour of the establishment of a uniform rate.
The average of li-kin per picul laid upon opium at the time I had reason to believe was little more than 30 taels. The Grand Secretary Li proposed, as the uniform rate, a li-kin of 90 tacls, at the port, be it remembered; that is to say, independently of any farther taxation that the opium might become liable to in the interior. To this I objected, and his Excellency reduced the rate gradually from 90 taels to 60 taels. But this still appearing to me excessive, I undertook to recommend, in the terms of the Agreement, that the amount of li-kin to be collected should be decided, as heretofore, by the different provincial Governments, according to the circunstances of each.
This recommendation alarmed the Government of India, as exposing opium to a weight of taxation which might seriously interfere with Indian revenue.
It is still my impression that, had my arrangement been allowed to take effect, even for a term of probation, the fears of the Indian Government would have proved unfounded. But I could not say the same at this moment were the Government of India to decide upon adopting the provision of the Chefoo Agreement just as it stands. The alarm has been sounded, and some leading statesmen in China would not improbably attempt the taxation of foreign opium at rates that might endanger the life of the golden goose. When the Agreement was negotiated, I thought myself eftitled to rely on the discrimina- tion I had seen exercised in the treatment of opium at most, if not all, of the open ports. The li-kin was excessive at only two ports. At some but a light weight, a very light weight, was laid upon it. At some, where the native drug was completing, the li-kin rate on the foreign drug was kept purposely low. I would not answer now for the discretion of the authorities at all points, if no uniform rate were prescribed them. They might in due time, no doubt, perhaps in a very short time, discover the error of their ways, but I cannot but suppose that, while they were acquiring the necessary experience, the trade in opium, not to say the general trade--and in this opium plays financially an important
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part-would be suffering in a fashion that the Indian Government might have had occasion to deplore.
It is naturally not without some reluctance that I abandon the arrangement to which I agreed, if, indeed, I did not suggest it, at Cheefoo in 1876. But I conceive it my foremost duty, so far as opium is concerned, to consider by what means, so long as the trade in it lasts, the revenue derivable from it may be best secured on both sides, to China as well as to the Indian Government.
The danger against which precaution is chiefly called for, as much on one side as the other, is, in my opinion, uncertainty of treatment: taxation of opium on the principle of seeing how much it will bear. The echo of the anti-opium movement in England has had, no doubt, a certain influence in this direction. "When you yourselves condemn the trade as immoral," a Chinese will observe, "why not leave us free to tax it as we please." The plea for extraordinary taxation, as urged by such statesmen as the Grand Secretary Tso, is that, by high taxation the trade in foreign opium will be strangled. I am reserving my reply to certain arguments in favour with those who demand the immediate extinction of the trade on moral grounds, for statement elsewhere. Admitting for the moment the sincerity with which the vice of opium-smoking is proscribed by his Excellency and others, that in his case, at all events, the hope of extracting, meanwhile, a large revenue from the trade is for something in his policy, I bold proved by what I have quoted in the foregoing despatch from his own lips. I should be delighted to assist the Chinese Government in obtaining from the opium trade, so long as it lasts, the largest amount of revenue possible, but I am convinced that, under the direction of a man as tenacious and, at the same time, so little acquainted with the conditions of foreign intercourse, the revenue of China would suffer. This was the opinion spontaneously expressed by more than one Chinese official as soon as his famous Memorial appeared last year. Such a rate of duty as he proposes will prove an incentive to smuggling, it was remarked. The very suggestion of such a rate had an immediate effect upon the trade in opium, both native and foreign, to the serious disturbance of other trade. Dealers hastened to accumulate stocks, to the extreme inconvenience of the money market. I should view with the greatest concern any measure that would enable an official, as energetic and self-willed as the Grand Secretary Tso, to dictate his own terms in opium taxation. And he would be more or less in a position to dictate his terms, unless some definite rule were laid down by the Central Government; for, by his recent appointment to the Superintendency of Southern Trade- an appointment usually, as in this instance, conferred on the incumbent of his post, the Governor-Generalship of the Two Kiang-he would exercise, in all that regards foreign commerce, no inconsiderable dominion over the provincial Governments of the south, the provinces which most largely consume foreign opium. The Grand Secretary is personally popular with the large majority whom we should style the ultra-Conservatives of China, and who, his popularity apart, would approve a financial policy such as his. At the same time, a check upon his influence has been removed by the obligatory retirement of his less popular, but far more experienced, rival, the Grand Secretary Li. In the interest of the stability of the opium revenue both of India and China, I am entirely opposed to any arrangement that will commit it to a direction which, I cannot but fear, would be found perilously capricious.
The foremost requirement to be satisfied being, in my opinion, security against distur bance, I earnestly advocate acquiescence in the proposal that a uniform rate of li-kin be levied, and levied under whatsoever system it shall be agreed between the two Powers will satisfactorily secure both against loss.
The decision, I imagine, will be between two methods of collection. Either the Chinese Government will engage the services of an agency, be it native, foreign, or mixed, duly guaranteed, to collect their revenue, in which case the co-operation of the Govern- ments of India and Hong Kong will have to be solicited; or it will entrust the duty to the Foreign Customs Inspectorate, who, so far as its functions on land are concerned, need not increase its staff by a single man; but who would have to add very considerably to its preventive service afloat; this reinforcement being so much off revenue. Any rate named, again, would have to be agreed to by, not only the British Government, but by every Treaty Power, except Russia, America, and Brazil. By a Decree published, I believe, in 1836, the Emperor Nicholas forbade participation in the opium trade. The prohibition has been renewed, with reference to the frontier, in the Russian Treaty signed last year. The United States have engaged neither to trade in, nor to carry opium, in the Treaty negotiated at Peking the year before last. Brazil has accepted the same engagement in its Treaty just ratified.
In both the last instances the Chinese Government proposed the stipulation, not, I am persuaded, in the belief that it was a step towards the extinction of the trade, but
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