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should pay all inland dues and charges on its way to the Treaty port but should be entitled to the return of any amount that might have been paid over and above the Treaty Transit due (2½ per cent.), provided it were exported to a foreign port within twelve months.
Art. V excluded Chinese produce shipped from Hongkong to a Treaty port from the benefit of the Transit due privileges; China, "on the other part, agreeing to issue to native produce shipped by British merchants from Treaty ports to Hongkong, the ordinary duty proofs, and to collect on such produce, on arrival at a second Treaty port, the ordinary coast trade (2½ per cent.) duty."
Ratification of this Convention was refused by the British Government, at the instance of the merchants concerned, who had no confidence that the provisions of Clause III would be observed. The arrangement, therefore, did not become operative.
Complaint that the stipulations of Art. 28 of the Treaty of Tientsin regarding transit privileges were ignored by the Provincial Authorities, continued to be rife. Mr. Canny notably collected a mass of evidence of their violation by the local authorities of Kiangsu. The matter was made, by Mr. Medhurst, an incidental feature of his negotiations with the Viceroy of Nanking regarding the anti-missionary riot at Yangchow; and in November, 1868, Tseng Kwo-fan issued, in his capacity as Superintendent of Trade for the southern ports, a Note laying down that Chinese as well as foreigners have the right to take foreign imports inland on payment of the fixed Transit due, in the following terms :-
"I, Tseng Kwo-fan, &c., acting Superintendent of Trade, received a communication from the Tsung-li yamen stating that the first Article of the Regulations which were established in the 11th year of Hienfung demand that Foreign merchandise entering the interior shall pay duty at the Customs barriers, &c.
"Notwithstanding that this article has this language, it stands in force only when the merchant is unable to produce a certificate from some one of the various Custom Houses showing that he has paid the regular duty and the half-duty (Transit due). If he is unable to produce his duty certificate, that is proof that he has not paid duty. In that case this rule should be enforced.
By carefully examining and comparing the 28th Art. of the English Treaty with the 7th Art. of the Supplementary Treaty you will find that after foreign goods enter at the sea port, and pay the regular duty and half-duty, the merchant has only to exhibit his certificate of having so paid duty to be allowed to proceed to any distance without further demand.
"As to Chinese merchants purchasing foreign goods for an interior market, the 10th Art. of the Nanking Treaty and the 28th Art. of the Tientsin Treaty clearly show that all foreign goods, after they have paid the regular duty, may, at the pleasure of Chinese merchants, be carried to the ends of the Earth (i.e., to any part of the Chinese Empire).
"Again, in regard to duty on foreign merchandise in the interior, if the goods have paid the Transit duty at the seaport, and a certificate of the fact is given, no further evidence or fraction thereof (i.e., of any other kind) shall be demanded at any other station.
Thus it
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is evident that foreign goods entering the interior, whether in the hands of Chinese or foreign merchants, if they hold a certificate showing that the Transit duty has been paid, then no further duty or likin shall be demanded.
But it may be urged that if native merchants purchase foreign goods and hold a certificate of having paid the Transit duty, and do not pay the Likin, that will be defrauding the Government, &c. This is a regulation of the Likin stations. There is no such treaty stipulation. In the 46th Art. of the English Treaty it is stated that the Superintendents of Customs at the various ports shall have the right to devise any means they may think desirable to prevent smuggling. The intent of this article points to the regulation deemed necessary for collecting the regular duty and Transit duty once, and has no reference to establishing Likin regulations.
"In regard to Transit certificates. When the Customs half-duty shall have been paid, then the Customs will issue the Transit Pass.
"In regard to the proclamation issued by the English Minister Bruce in the second year of Tungchih, twelfth moon (January, 1864), with reference to foreign merchants purchasing foreign goods for an interior market, the gist of it consists in two points; if the foreign merchant is not inclined to pay the half-duty at the seaport, then he can pay it and the Likin at the interior stations. If he is unwilling to pay the demand in the interior, then he must pay the Transit duty in advance. In this matter he can have his choice.
It is imperative that the Treaty stipulation be observed, and under no circumstances the Likin be made to violate the existing treaties and provoke constant disputes with the Consuls."
The effect of these instructions seems to have been still slight, except in the precise district (Tsing-kiang-pu) to which Mr. Medhurst's remonstrance pointedly applied. The local officials generally continued their old habits, until the question was raised and strenuously fought by Mr. Markham in 1871. It is not, in fact, till 1871 that Foreigners became aware of Tseng Kwo-fan's Note being in existence. It was discovered, in that year, in a collection of Treaties and Explanatory Despatches which had been published by a Taotai of Shanghai. The question seems then to have been brought to the notice of the Tsung-li yamen by Mr. Hart, and renewed instructions to have been issued, which were fairly obeyed in Kiangsu.
Clause IV of the third Section of the Chefoo Convention, negotiated by Sir Thomas Wade in 1876, consecrated the understanding expressed by Tseng Kwo-fan, in the following terms ---
"The Chinese Government agrees that Transit Duty Certificates shall be framed under one rule at all ports, no difference being made in the conditions set forth therein; and that, so far as imports are concerned, the nationality of the person possessing and carrying them is immaterial.
"Native produce carried from an inland centre to a port of shipment, if bona fide intended for shipment to a foreign port, may be, by treaty, certificated by the British subject interested and exempted by payment of the half-duty from all charges demanded upon it en route.
"If produce be not the property of a British subject, or is being carried to a port not for exportation, it is not entitled to the exemption that would be secured it by the exhibition of a Transit Duty Certificate.
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