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MEMORANDOM RE INLAND NAVIGATION,
la exier that the nature and meaning of these restrictions may be fully understood it is necessary to enter into somewhat lengthy details, but the importance of the stake at issue will, we think, form ample apology for doing so, At the opening of the West River to foreign trade two lines of steamers were started by us to engage in the carrying trade of it-ous for the direct trade between Hongkong and Wuchow via Samshni and the "ports of call"; the other between Canton and Wuchow also via Samshui and the "ports of call." On the direct ronte the advantage accruing to merchants from the payment of a fixed sum for import duty and transit dues which franked their goods through to the remote parts of Yunnan and Kweichow caused a considerable rash of imports to find their way in from Hongkong by water carriage instead of via the Pakhoi overland route, etc., sto., which they had followed previous to the opening of the river. Tho lekin anthorities have from time to time held out threats of reducin their import duty on goods, thus diverting them from foreign to native craft, but although the Canton provincial authorities hare adopted these taotics with the success which usually characterizes their actions of this sort, there has been, up to date, no systematic attempt to extend them throughout the length of the West River, so that to a large extent the competition we encounter although keen is but the natural result of rivalry in trade.
When the inland waters of China were first declared to be open a good deal of doubt existed as to the conditions under which the navigation of them would be allowed, and with a view to gaining information on this important point- important to us, not only from the expansion of trade that would result but also that it might seriously modify the plaus of vessels we were then contracting to have built-we applied to the Imperial Maritime Customs at Samshui to register the steamer Kongpak for inland navigation. Aftor reference to Peking this was refused by the Inspector-General of Customs, whose decision on the matter is given in the Samshni Commissioner's letter, copy of which is attached. While we still think that the privileges asked for might be accorded without danger to the safety of the revenue of Chinn we must at the same time admit that there are considerable difficul ties in the way and that probably the only effective way of meeting them would be to opou Kongmoou or some other place situated at the mouth of the river 89 a treaty port, whence and also from Samushni and Wuobow, after pay. ment of duties, goods would be free to find their way inland carried either by the importing or other steamer as was found most convenient.
So far we have only dealt with the effect the opening of waters has had on the direct trade with Hongkong, the craft engaged in which come under the heading of vessels engaged in trade with ports outside Chinese jurisdiction and are therefore excluded from any direct
participation in the benefits which should result therefrom. There still, however, remains the Canton Wuchow trade, the steamers on which, being vessels engaged in inter-treaty-port trade, are also. by the Inspector General's ruling, debarred from inland water privileges. It is to this decision as affecting this class of vessel that we would beg your most earnest attention, as we are of the unanimous opinion that if on- forced it will, as we have already stated, render the whole concession valueless.
From the beginning our vessels on the Can- ton-Wuchow line have been subjected to such restrictions that it seemed quite hopeless for them to attempt to compete with their more favoured Chinese rivals who by means of specially constructed lighters towed by steam- fanuches secure the great bulk of the cargo aud, until recently, of the passengers. The system adopted at the treaty ports is for those lighters and their cargos to come under the lekin ad- ministration, and the steam annob, which is merely the menus of propulsion and carries no
Cargo
cargo, comes under the M. Customis, a dual eyitom of control which gives the advantage of the quickness of steam transit and au elastic tariff for the paymout of duty on the cargo car- ried on
the lighters. Nor is it so much the fact that the lekin collected on this cargo is less than the one and a half duty which would be levied by the 1.M. Customs if it were carried in our steamers, as it is if so carried, lekin taxes before shipment and after discharge would be payable in addition to the Customs duty and a half. The foregoing facts are only too well known and have been frequently commented ou, notably by L.B.M. Consul at Canton in his trade report for 1897; but if further proof be needed it is abundantly supplied by the fact that the only domestic trade of which we seenre the carriage is a few piculs of goods between Samshni and Wuchow, whereas the merchants refuse to ship the same goods by our vessels between Wuchow and Canton even although the freight charged be the same in both cases!! That is to say, taxation and cost of transport being equal for both distances they will ship by our vessels over the shorter one bat steadily refuse to do so over the louger one! The ex- planation of this is simple. At Samshuí by vigorous protests made at the opening of the port the native goods carried in foreign vessels are to a certain extant exempt from lekin taxes before shipment and after discharge, while at Canton the reverse is the case, and as the bulk of the domestic trade of the West River districts is destined for or comes from Canton as being the great centro or mart of trade the fural result of this differential taxation is that our Chinese rivals secure the carriage of the whole of it. Nor does the evil stop at this, for know- ing that our earnings must be made out of the carriage of foreign goods, into which, as far as the carrying in steamers between treaty ports goes, the question of taxation does not enter they can either couform to our rates of freight and compete against us or by lowering them slightly get the monopoly of the carriage of these as they do of the domestic trade.
Although the subject of this representation is the disadvantages under which we suffer as Britiel Shipping Companies engaged in the carrying trade of China we will for the moment waive this question and look at it from the broader standpoint of trade in general. From the foregoing, it might be argued that al- though we as individual concerns suffer, the Frast circulation of goods is facilitated by steam + traffic. Were such the case we might well find compensation for our losses in the general prosperity that would result, but it is only to the privileged fow that permission is given to ran this class of vessel and any attempt to I encroach on the monopoly thus secured, either on the part of Chinese or Foreign steamers, is rendered nugstory by differential duties in the manner we have shown.
Again, with the passenger traille the Chinese vessels had the option of using all routes con- necting Canton with the West River, whereas we were confined to one only, laid down by the Customs, entailing an increase in the distance traversed of some thirty miles. They were also privileged to stop at any and all places en route for the embarking and disembarking of passen. gers or cargo while we were confued to the four ports of call (See Canton Commissioner's Trade Report, 1897, pars. 4 and 7).
The question of opening the shorter contes to foreign vessels was made the subject of re- presentation to H.M. Consul at Canton, but so scandalous bad the disabilities under which we laboured become sud so heavy the losses in. curred in running steamers practically empty that the question of withdrawing them alto- gether from the trade was being seriously cou sidered when the throwing open of the inland waters gave the IM. Customs the chance, of which they gladly availed themselves, of attempt- ing to place us on terms of equality with our opponents. This equality in respect to the carriage of passengers we now enjoy and we were not without hopes that, by Claus 5 of the Suplementary Rules under Inland Steam Navi-
gation
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