SIR,
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Hongkong Committee to General Committee.
Hongkong, 10th July, 1896.
I have the pleasure, on behalf of the Committee, to acknowledge the receipt of your esteemed favours of 15th and 22nd May, dealing respectively with the questions of Transit and Terminal Taxation and Foreshore Rights at Chefoo.
In referring to the former matter the Committee thinks it may be safely assumed that higher rates than are provided for by the present tariff will be asked for—probably in the near future, and as even an increase of, as has been suggested, 8 per cent., if final, and relieving goods of all further levies, would still leave the duties within the limits of moderate taxation, the proposal would probably meet with little, if any, opposition from the Treaty Powers.
If such an arrangement is arrived at, the opportunity should certainly not be missed of endeavouring to obtain a more liberal recognition of the status of foreigners in China, together with the opening up of her extensive waterways and the right of travel and residence throughout the Empire. These privileges, if granted, would in some measure tend to render more easy any attempts at reform in the fiscal administration of the country, more particularly with regard to collection and appropriation of Transit Duties, and bring about, to the mutual benefit of both foreigners and Chinese, closer business relations and a much-needed more intimate knowledge of each other than is possible while the area of trade operations remains restricted, as at present, to little beyond the country's sea-board.
In suggesting a primary collection of the whole amount of Import and Transit Duties at the port of entry, with a subsequent equitable apportionment of Transit Dues between the different Provinces through which the goods may be transported, the very serious difficulties which would necessarily attend the carrying out of such a proposal, involving as it would an almost drastic change in the financial administration of the country, must not be lost sight of. The measure would be certain to meet with strenuous opposition on the part of the farmers of local taxation, who, in addition to having to recoup themselves for the heavy initial outlay paid for the position, have also to satisfy the rapacity of a host of followers and hangers-on, who are recognised as a necessary appendage to even minor appointments. Nor would it recommend itself to the provincial officials who, with the literati, are persistent opponents of all innovations, and too conservative in their ideas to be convinced of the possibility of increased revenue through the expansion of trade fairly taxed, but not squeezed.
Great as the difficulties are which stand in the way of fiscal reform these are, apparently, not insurmountable if an analogy may be drawn from the reported successful working of the system adopted in the collection of duties upon opium.
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The question of Foreshore Rights at Chefoo seems to have been taken up with most commendable promptitude by Sir Claude Macdonald, and some satisfactory settlement will no doubt be arrived at.
(Signed) F. HENDERSON,
Hon. Secretary.
B. S. Gundry, Esq.,
Hon. Sec. China Association,
SIR,
General Committee to Hongkong and Shanghai Committees,
31, Lombard Street, 23rd July, 1896.
In presence of a report that the Chinese Government intends to ask for an increase of the Import Duties leviable under the present treaty, Her Majesty's Government has expressed a wish to be informed of the views of this Association in regard to such a proposition.
The General Committee cannot, under the circumstances, consider the Chinese wish unreasonable; but they consider that the opportunity should be taken to require largely increased facilities of intercourse in exchange.
It is assumed that the addition might be 21 per cent., which would represent a 50 per cent. increase on existing rates, and would subject imports into China to 7½ per cent. Import Duty, plus 2½ per cent. Transit Duty into the interior == 10 per cent. in all—which is, it may be remarked, the rate conceded in our recent treaty with Japan.
It is conceived that Great Britain should ask, in exchange for such a concession,
1. Guarantees for the Immunity of Imports from any additional taxation.
2. Extended rights of trade and communication with the interior.
The Committee are persuaded that efforts to free goods from inland taxation must be accompanied by fiscal arrangements designed to conciliate the Provincial Governments. These Governments, it must be remembered, practically collect their own revenue and administer their own resources, subject to requisitions by the Central Government for Imperial needs. It has been contended that the divergence from this system involved in the collection of Customs at the Treaty Ports by an Imperial service has been largely responsible for the additional taxation of goods in the interior; the Provincial Authorities having sought to compensate themselves, by this means, for revenue of which they had been deprived.
It has been suggested that this diversion might be remedied by a stipulation that Transit Certificates shall constitute, in the hands of the Provincial Government concerned, vouchers which it shall be entitled to encash in full at the nearest Imperial Maritime Customs Station,
149