354
Inclosure 2 in. No. 1.
Memorandum with regard to Taxation on Produce, moving vid the Inland Waterways of the Liang Kuang, between Chinese and non-Chinese Ports.
ALMOST as soon as the West River was opened to foreign trade complaints arose that the Regulations, framed to control the traffic, were not adapted to local conditions. And, when on the opening of the inland waters to steam navigation the introduction of a double set of Rules enhanced the disabilities under which British steamers laboured, the outcry became more pronounced. The burden of the plaint of the British ship-owner is that he cannot do what Chinese vessels, supposed to be running under the same Rules and Regulations as his own boats, are permitted to do, and that in the words of His Majesty's Consul at Wuchow, "he has to employ two separate vans to deliver his goods in the same street;" what is wanted is an equitable and uniform set of Regulations which will not interfere with the legitimate traffic on the one hand, nor adversely affect revenue interests on the other.
Prior to suggesting some remedy, it would perhaps be useful to give a short statement, setting forth existing conditions, at the same time calling attention to some of the anomalies complained of.
(A.)—International Trade.
1. Foreign goods carried in vessels of foreign type—Chinese or Chinese owned— or carried in foreign-owned vessels of Chinese type, can only be taken to Treaty ports or stages. They, at the Treaty ports, pay import duty, and at the stages import duty, plus li-kin, unless covered by transit pass. They are not allowed to carry goods under transit pass to any point except the regular stages. (There would seem to be no reason for a restriction of this kind.)
Foreign-owned vessels can be towed by steamers, Chinese or foreign. Chinese-owned vessels can only be towed by Chinese steamers. (Why should not foreign steamers be allowed to tow native craft?)
Vessels being towed, or having other vessels in tow, are not allowed to trade at the stages. (Why not? It surely makes no difference whether a vessel has its means of propulsion inside or outside; and if the steamer can trade at a stage why should not craft towed by steamers trade there too? As will be shown later on, Chinese towing-launches stop anywhere and everywhere, and are not interfered with. The stereotyped objection to conceding to towing-vessels the right of trading at the stages is that the practice of smuggling is thereby facilitated; but, given the intention to smuggle, it is just as easy for a steamer to do so as it would be for a towing-vessel.)
2. Foreign goods carried in native craft (junks) pay duty under the native tariff, and other dues at the Kowloon and Lappa stations. Properly speaking, these payments should free them throughout the Province of Kuangtung; but there is little doubt that additional taxation is levied later on. Yet this can hardly be considered a hardship, as, according to the Customs Returns for 1900, the incidence of taxation on foreign imports (exclusive of opium) coming under the cognizance of the Kowloon Commissioner was only at the rate of 1.15 per cent.
(The placing of the Native Customs under foreign control may result in an equalization of the tariff.)
N.B.—It is not, as a rule, permitted to tow native craft of this kind; but if permission to tow is given the towing-vessel must be Chinese.
Internal Trade.
(a.) Under West River Rules.
(a.) Between Treaty ports pays a duty and a-half—71/2 per cent.
All cargo carried in foreign craft :
(b.) Between stages, pays li-kin at the stage of shipment; li-kin at the stage discharge; li-kin between the two stages.
(c.) Between stages, passing a Treaty port en route, pays li-kin at the stage of shipment, li-kin from stage of shipment to the Treaty port, li-kin from the Treaty port to the stage of discharge, and at the Treaty port a full tariff duty of 5 per cent., simply because it passes the port.
(The levy of this duty should certainly be done away with. It is virtually a surtax of 5 per cent. on steamer-borne cargo carried from one stage to another across a Treaty port. Its abolition would not affect revenue Returns, as no shipper will subject his goods to an impost of this kind when he can legitimately evade it by placing them on native craft.)
Foreign steamers can only tow foreign vessels, and vessels towed cannot trade at the stages at all.
(Vide comment under the heading "International Trade.")
(b.) Under Inland Water Rules.
Under these Rules, carriers (foreign owned) can only be steamers. (One again asks in vain wherein a foreign flat towed by a launch differs from a flat with her engines on board.)
They are not permitted to run between Treaty ports, and are therefore debarred from proceeding past a Treaty port.
(This is one of the provisions of the inland water Rules, which urgently calls for revision. A striking proof of its absurdity is afforded by the fact that the open port of Yo-chou has cut off cargo carriage by steam between Hankow and Hunan.)
Duty payments on cargo carried by either foreign or native craft are theoretically the same, i.e., from Treaty port to inland place, dues in accordance with provincial tariff. In the case of native craft, however, the cargo is put on junks towed by launches, and the former come neither under West River nor inland water Rules. The goods pay only li-kin, and the towing-launches are either inland water or interport boats, as occasion suits. They stop anywhere en route, and are at liberty to proceed to any point either below or above a Treaty port.
(It has been stated that British steamers can do whatever Chinese steamers can do; this is not the case. The British steamer is bound by Rules, while the Chinese launch remains unfettered. In the case of the latter all distinction between interport and inland water craft is ignored. If they are interport boats they ought, under West River Rules, to stop at the stages only, or, if towing, not to be allowed to stop anywhere. On the other hand, if they are inland water boats they ought not to be granted privileges, in the matter of trading past a Treaty port, denied to their foreign competitors.)
The result is that for the foreign vessel the inland water concession has been practically abrogated. For the Chinese vessel it has been amalgamated with the interport trade.
To sum up, we have—
1. The foreign steamer, trading between ports and stages en route, and, if towing, debarred from calling at the stages.
2. The Chinese steamer, towing a native junk, trading between Treaty ports, and calling at any and all places en route, thus combining inland and interport trade.
Cargo in the junk, towed by the Chinese launch, pays li-kin only, and that to the ordinary li-kin Administration. Under the inland water Rules, an official was to have been appointed to collect the revenue in accordance with a published tariff. Up to date no tariff has been published, nor official appointed. Sir Robert Hart, in his despatch of the 12th May, 1899 (“China No. 1, of 1900,” p. 186) states that whatever licensed Chinese steamers can do inland foreign flag licensed steamers can do also, and whatever interport foreign steamers cannot do inland, interport Chinese steamers are likewise forbidden to do.
I think that I have shown such not to be the case.
The Inspector-General goes on to say that "it will be necessary to legislate locally, and in accordance with circumstances, conditions and requirements." It is precisely because the fear of the foreign trader "that the restrictions which provincial officials call for, will thwart development," has been realized, that local legislation has become so imperative.
I may add that from my own experience of the West River, it is not the provincial official, who is apprehensive of destruction of revenue, through foreign development, but the officer of the Maritime Customs, who has gone out of his way to suggest difficulties.