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The Steam-ship Companies, as shown in their letter of the 28th March, 1899 ("China No. 1, 1900," p. 186), are by no means unreasonable in their demands, and simply claim approximate equality of treatment in the matter of taxation, and a full share of the privileges granted to Chinese steamers in the matter of towing, and of calling at inland places en route.
In what follows I attempt to draw up a practicable scheme, which may go some way towards getting rid of a few of the present difficulties.
In order to do away with the disadvantages under which cargo, carried in vessels, entering the West River from Hong Kong or Macao direct, labours, and at the same time to safeguard revenue interests, a suggestion has been made that the first stage, Kong-moon, be constituted a Treaty port, and that dues on such goods as are destined for points higher up the river be paid there.
If it be found impossible to carry into execution the proposal, which I make later on, this would undoubtedly prove a step in the right direction. The suggestion is, however, open to objection, as in that case Customs examination would have to take place on arrival there.
This would involve the discharge of at least a portion of the goods, thereby delaying the steamer, increasing and exposing the packages to risk of damage, as there would be no representative of either consignor or consignee to assist at the examination. Kongmoon, in this respect, differs from Canton. The latter is a terminal point, where all cargo has of necessity to leave the steamer and be redistributed. Only a small proportion of a steamer's cargo would be destined for Kongmoon. The rest would, after examination, be reshipped and pass on. The only possible way by which this and other inconveniences of a like nature, can be obviated is to provide for Customs examination and payment of duty at the port of shipment, be it Hong Kong or Macao.
I am well aware of the very deep-rooted objection entertained by these Colonies—and more particularly by the Governments thereof to having any representatives of the Chinese Customs within their territory. But, to obtain a satisfactory solution of the West River question, it would be well worth while to stretch a few points and endeavour to come to some understanding on the lines of the Opium Agreement of 1886.
The administration of the leased territory, which Germany lately acquired in Shantung, has led the way in this respect, and Lord Palmerston, in his instructions to Sir H. Pottinger, dated the 31st May, 1841, has, I think, by his citation of European precedents, shown that it is not derogatory to the dignity of a Sovereign Power to have a foreign Customs Agent stationed within its boundaries to safeguard the revenue interests of a conterminous friendly State.
I do not know how many of the precedents, quoted by Lord Palmerston, still hold good, but I believe that a mutual arrangement of this kind exists between Canada and the United States.
What I would propose is that a section of the Hong Kong Harbour be set apart for all junks and other craft, except foreign vessels desiring to load to Treaty ports direct trading with China, where they shall load and discharge under the supervision of the Imperial Maritime Customs, the offices of the latter to be on board a hulk, moored within the section so set apart. The ordinary junk traffic with China will there pay such dues as they have hitherto paid at the Kowloon and Lappa stations, or as may hereafter under another system, be imposed. They will not, however, be allowed the privilege of steam towage.
The fundamental principle, underlying taxation on goods circulating on the inland water, ought, in my opinion, to correspond with that which is in operation on the coast, i.e., uniformity of tariff for all goods carried in vessels of foreign type. Ocean-going steamers under the Chinese flag, pay duty to the Maritime Customs on the same basis as vessels under a foreign flag. And similarly Chinese launches—seeing that they avail themselves of European methods of propulsion—should be placed on the same footing, subject to the same disabilities and participators in the same privileges as foreign launches. Any craft purely native ought, of course, to be allowed to trade as before. All vessels, irrespective of nationality, using steam as a method of traction or propulsion, trading with points on the coast of China, the inland waters of that country or with Treaty ports on the West River should pay on their cargo as follows:-
1. If reported for shipment to a Treaty port, the ordinary tariff duty of 5 per cent.
2. If the destination be not specified, a duty at the rate of 7 per cent., of which 5 per cent. should go to the Imperial Exchequer, and 23/10 per cent. to the Provincial Treasury of the province wherein landed. Should the goods, however, be eventually landed at a Treaty port they will receive a drawback for the 23/10 per cent. excess duty, paid on shipment.
3. All goods, which have paid 7 per cent. duty, shall be accompanied by a transit certificate, which will free them from all further dues whatsoever, and enable them to proceed to any point in the interior—near or remote. They will thus be placed on a footing of equality with goods, imported at Canton or other Treaty ports proceeding up-country.
In order to insure, as far as possible, that the goods in question shall enjoy the contemplated immunity from further taxation, a clause might be introduced into the Agreement, revoking the grant of a harbour section in Hong Kong, in the event of the undertaking not being adhered to.
It should further be clearly laid down that all vessels, loading or unloading in such section of the Hong Kong Harbour, shall be at liberty to trade anywhere, either Treaty port or other inland place. As regards native produce, it is divided into two classes :—
(a.) Cargo for export abroad, or to points outside of the Liangkuang.
(b) Cargo moving along the West River from one port or stage to another.
The former, if for abroad, to be brought down under outward transit pass, and to pay at Hong Kong or Canton a duty of 73/10 per cent. If for shipment to Chinese ports, outside of the Liangkuang, to pay a similar duty and be provided with a duty-paid certificate, enabling it to enter other ports exempt from further duty. It should be stipulated that, irrespective of province of origin, or point therein where bought, this 73/10 per cent. is an inclusive charge and that 23/10 per cent. shall go to the province of origin, and the remaining 5 per cent. to the Imperial Government.
It is less easy to devise an equitable mode of taxing native produce along the West River. As shown above, the system at present in force, as far as steamer-borne cargo is concerned, is very unsatisfactory. I would therefore suggest that produce, wishing to avail itself of steamer facilities, should pay an uniform rate of 5 per cent. between Treaty port and Treaty port, stage and stage, Treaty port and stage, without being subject to any li-kin or other charges at point of shipment or destination; this 5 per cent. should be paid into the provincial authorities. And in the case of produce passing from one province to another, it should be shared equally by those concerned. Should the incidence of the tax prove too heavy, one may assume that transport by steamer will be abandoned in favour of that by native craft. But, as it is hoped that the principle above indicated, in respect of vessels using steam, will be adopted, no hardship need be felt, nor will junk owners be wholly cut out of the carrying trade.
Places of call should only be those where a staff to collect duties exists, and duties should be paid on shipment. The duty charge being an uniform one, the fact of produce being on board a steamer may be taken as proof that duty has been paid thereon, and it can be carried to any point on the river.
The payment into the Provincial Treasury of the 5 per cent. riverine duty will cause coast-trade revenue to disappear from the Customs Returns of the ports in the Canton delta. But the whole volume of trade on the West River, exclusive of direct imports and exports, is so small that the loss of this revenue can be viewed by the Imperial Government with equanimity. It receives the full duty of 5 per cent. on foreign imports and native exports, and loses a coast trade duty which is by no means large nor likely to expand. (The average annual amount of coast-trade duty collected at Wuchow and Samshui since these ports have been open to trade is 3,090 taels.)
The Provincial Treasury on the other hand would be a gainer, as an uniform rate of 5 per cent. along the river would be in excess of present local rates, and this prospect of additional revenue should go some way towards removing apprehension and opposition and securing the goodwill of the provincial officials.
A final argument in favour of adopting some such scheme as that outlined above is that it would result in the removal of the necessity for maintaining a Customs staff at the West River stages, or for continuing to keep open so commercially unimportant a Treaty port as Samshui.
J. W. JAMIESON,
Commercial Attaché.
Shanghae, August 5, 1901.
(Signed)
(Note. The collection of Native Customs dues by the Maritime Customs, a subject at present under discussion, would greatly facilitate the introduction of an uniform method of taxation, whereby the dues on junk-borne cargo would conform to those on steamer-borne goods, and thus get rid of the long-standing grievance with respect to differential charges.)
[2353 6--1]
(Signed)
J. W. JAMIESON.
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