ware not without hopes that, by Clause 5 of the Supplementary Rules under Inland Steam Navigation Regulations, goods carried in native boats towed by steamers would come under the same rules for duty payment as goods carried in our vessels, but up to date there is no sign of any attempt being made to bring this about, and moreover by the Inspector-General's decision it would appear that instead of a further step being taken to secure equality of taxation for all goods no matter how carried a retrograde movement is contemplated which will place us in the disastrous position we occupied at the opening of the trade.
If this decision hold good the utter impossibility of any steamer securing the carriage of goods under inland navigation rules can perhaps be best shown by an illustration. Certain foreign goods are imported into Samshui, where they pay import duty and transit dues, being destined for some place (not a "port of call") situated between Samshui and Canton.
We as British Shipping Companies compete with the Chinese referred to throughout this memorandum for the carriage of them. If we wish to secure them we must provide a special steamer to run from Samshui to the place in question although our inter-treaty port steamers pass it en route every day and are for the reasons already given practically empty. The Chinese Companies not being under any such restrictions will be at liberty to carry them in their lighters, which are also free to engage in inter-treaty-port trade! We have endeavoured to show that as long as the tax of one duty and half on cargo carried in steamers between two treaty ports is enforced, while it is permitted to other craft coming under the native administration to compound for a less sum, the domestic trade will surely be diverted to vessels so privileged and that the monopoly so gained can be and will be used to secure the carriage of foreign goods from one port to the other or to any point lying between them. So by an analogous reasoning it can be shown that in the event of our attempting to start any steamers under inland navigation rules to run beyond the precincts of the last treaty port, so surely will this differential treatment be extended to the goods carried in them.
We are only too well aware that nothing short of the abolition of the dual system of custom houses in vogue in China will provide an effectual remedy for the evils we complain of. We are not so sanguine as to entertain the belief that a workable tariff will ever be published by the provincial officials, but by insisting on the measures suggested in our covering letter the hand of the Chinese Government will be so forced that it must ultimately result in the I. M. Customs being called upon to undertake the compilation of a general tariff applicable to the whole of the internal taxation of China, the maximum basis of which might be the 7 per cent (duty and a half) now charged on goods steamer borne between two treaty ports and which it is evident that the Inspector-General's ruling is intended to protect.
Hongkong, 28th March, 1899.
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