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SIR,
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General Committee to principal English Chambers of Commerce.
31, Lombard Street, 31st August, 1890.
As it seems beyond question that China is about to propose an increase of her present Customs Tariff, the General Committee of this Association have thought it well to consider in what way the demand should be met.
The Association considers that it cannot be fairly resisted, in principle, but that the opportunity should be taken to require a great extension of existing means of intercourse, and guarantees for the exemption of goods from all further inland taxation beyond the 21/2 per cent. Transit Duty contemplated in Art. 28 of the Treaty of Tientsin.
Certain conclusions* based on these views, which have been formulated after consultation with our Eastern branches, are submitted for the consideration of your Chamber, together with copies of telegrams and letters that have been exchanged.
*
To the Secretary to the
ENCLOSURE.
*
*
*
*
*
(Signed)
R. S. GUNDRY,
Hon. Secretary China Association.
Chamber of Commerce.
* Memorandum by the General Committee.
81, Lombard Street, 31st August, 1896.
In presence of a report that the Chinese Government intends to ask for an increase of the Duties leviable under existing Treaties, it seems desirable that this Association should formulate its views as to the conditions under which such a change might be accepted.
The General Committee cannot, under the circumstances, regard the Chinese wish as unreasonable; but they consider that the opportunity should be taken to require largely increased facilities of intercourse, in exchange.
The service of the debt which China has had to incur, to meet Japanese exactions, will nearly exhaust her present Customs Revenue. She must raise additional funds, and in presence of the social danger that would probably be involved in an attempt to augment the land or salt taxes which constitute other chief imperial resources, it is natural that she should turn to the tariff of duties on foreign commerce.
The Eastern branches of the Association have accordingly been consulted, and their views will be found expressed in the telegrams annexed.
The rate leviable under existing treaties is 5 per cent. ad valorem; though the actual incidence varies from that sum, in many cases, owing to variations of value since the tariff valuation was fixed.
It is assumed that the addition might be 21/2 per cent., which would represent a 50 per cent. increase on existing rates, and would subject imports into China to 71/2 per cent. Import Duty, plus 21/2 per cent. inland Transit Duty.
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It is conceived that the equivalents which Great Britain should ask in exchange for such a concession are two-fold,
1.
2.
Guarantees for the immunity of merchandise from any further inland taxation beyond the 21/2 per cent. Transit Duty.
Extended rights of trade and communication with the interior,
The Committee are persuaded that efforts to free goods from inland taxation should be accompanied by fiscal arrangements in the interest of the Provincial Governments. These Governments 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 that system implied by the collection of Customs by an Imperial service, at the Treaty Ports, 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. Another cause has doubtless been the necessity of raising funds to meet the cost of suppressing the great rebellions that have occurred in China since the conclusion of the Treaty of Nanking.
Art. 28 of the Treaty of Tientsin was designed to obviate the uncertainty and irregularity of this taxation. The difficulty which has been found in enforcing its provisions may suggest a danger that would arise if the Chinese demand were now refused. The Government would probably increase its requisitions from the provinces; and these-resorting to the line of least resistance would be driven to increase the taxes on commerce. That would result, probably--seeing the laxity of the Chinese fiscal service--in the exaction of far more than the budget claim. It would seem wise, therefore, as well as reasonable, to meet the Imperial Authorities frankly and bargain with them.
It would follow, if this reasoning be correct, that any attempt to relieve commerce from the frequent petty taxes by which movement is now hindered, must be accompanied by an effort to conciliate the Provincial Authorities. It has been suggested that this might be accomplished by a stipulation that Transit Passes shall constitute, in the hands of the Provincial Government concerned, vouchers which it shall be empowered to encash in full at the nearest Imperial Maritime Customs Office, appropriating the amount for local administrative purposes. That proposal commends itself, as adapted to promote the object in view. Subordinate officials and their assistants might still be interested in trying to squeeze; but local irregularities might be combated if the Provincial Treasury were appeased, whereas they are almost beyond check when they have the sympathy of the Provincial magnates.
The Committee are opposed, for these reasons, to merging the Import and Transit Dues in one sum. The two should--though collected at the same time--be kept separate in account, and applied respectively to Imperial and Provincial purposes. They consider the concession of an increased Import Duty should be made conditional (subject to this re-arrangement) on a distinct undertaking to enforce Art. XXVIII of the Treaty of Tientsin throughout the eighteen provinces; likin, terminal duties, and additional charges of any kind to be declared illegal; the Transit Duty to cover all inland taxation, and some form of penalty to be exacted for infringement.
The occasion should also be taken to require largely increased facilities of inland communication and trade.
Navigable water-ways should be opened to steam. Guarantees should be taken for the