4.
It must be remembered that, whatever provision may be made, even if its terms are carried out in the letter, it will always be impossible to prevent the Central Government (knowing, as it will, the exact amount of the proceeds of the surtaxes from the books of the Imperial Maritime Customs) from demanding contributions from the provinc & after the latter have received their quotas from the surtax.
Owing to the fact that the Memorial requested the Throne to agree to an arrange- ment financially in favour of the provincial authorities, their Excellencies Liu and Chang wished to avoid taking part in a proceeding which is considered undignified în Chinese eyes, i.e., asking for money for oneself. They therefore delayed sending the Memorial on to its destination until seven days before the Treaty was to be signed.
A Decree (translation of which is inclosed) having arrived on the 28th August authorizing the signature of the Treaty, it was decided that the signature should take place on the 30th August, and I was assured that the Edict as to the disposal of the surtaxes would certainly be ready by that date.
When we met, however, no satisfactory Edict had been issued. I was shown instead an Edict abolishing li-kin stations all over China, on the ground that all the Powers had agreed to the imposition of the surtaxes on their goods, and in which nothing was said as to the disposal of the surtaxes except that the Board of Revenue was to communicate on the subject with the provinces.
I have the honour to transmit a translation of this Edict.
The Commissioners appeared very distressed at the non-arrival of a proper Ediet, and, of course, wanted me to sign without it, but I told them then that my instructions absolutely forbade me to do so. They then begged me to send an urgent telegram to His Majesty's Minister for pressure to be brought to bear at Pekin, which I did, and they themselves promised to spare no pains to obtain the issue of a proper Decree merely sanctioning the Memorial which had already been communicated to me, the advantage of this course being that no extraneous matter or modification could be introduced in the Decree.
On the 2nd September, the Commissioners communicated to me the Edict, in the form now in which it is now annexed to the Treaty, sanctioning all that had been asked for in the Memorial referred to.
The Memorial (as now annexed to the Treaty) had, I found, since it had been communicated to me, been slightly altered by the Viceroy's (two characters are added) to whom it had been forwarded by the Commissioners for transmission to the Throne. Some additional apparent discrepancies are to be found therein owing to the fact that the nature of the Chinese language is so very allusive that translations of the same thing by different persons always differ widely in wording; in this case the translation of the Memorial, as telegraphed to your Lordship on the 1st September, was furnished by one of Sheng Kung-pao's Secretaries, and that embodied in the Treaty is the work of Mr. J. W. Jamieson, Commercial Attaché to the Legation at Pekin.
I understand that the Memorial appears to contemplate the following pro- cedure:
The Board of Revenue having arranged with the provinces the proportions in which each province is to receive its share, each of these will be credited in the books of the Customs' Tuotais, or other Chinese officials entrusted with the distribution, with its full share of the whole of the surtaxes, but an amount equal to that now remitted to Peking will, with the consent of the provinces, be retained by these officials and written off from their credit balance and sent direct to, or held to the order of, Pekin.
It was stated in my Memorandum as telegraphed to your Lordship in my telegram No. 71 that the whole of the proceeds of surtaxes should go to the provinces, and this in a sense will be done; but just as the provincial authorities, after collecting li-kin, send their quota to the Throne, they now, after being credited with their full share of the surtaxes, will also have the amount of surplus funds automatically sent direct to Pekin from the Customs' Bank, or whatever institution receives the surtaxes. (The Imperial Maritime Customs do not handle any funds at all even now.)
To make the matter clear, I addressed to the Commissioners the despatch, now annexed to the Treaty, defining the procedure which I understand would be adopted, and I have received a reply (also annexed) from their Excellencies assenting to my view.
Your Lordship will perceive that it is definitely stated in the despatches that they are to form part of and to be annexed to the Treaty; they will accordingly have fuil Treaty value.
On the 4th September I received your Lordship's telegram asking me to secure a stipulation that the surtaxes should not be given as security for the indemnity bonds.
5
This was a new point which had not been raised before, and I felt some doubt as to Sheng's being in a position to agree to the specific mention of these bonds. I pointed ont to him, however, that the Memorial clearly laid down that the surtaxes were to go to t.provinces in lieu of li-kin; that they were not to be pledged to any new loan, and were to be applied to no other purposes beyond the service of the 1898 Loan, to which li-kin is partly pledged; and that he might safely agree to the mention of indemnity bonds. The Chinese Commissioners, however, I found, would have had to refer the matter to Peking (which would have caused a long delay) if the bonds were actually specified in so many words, and I thought it would suffice if it was laid down that "the surtaxes, in addition to not being pledged for any new foreign loan, are not to be pledged to, or held to be security for, liabilities already contracted by China, except in so far as li-kin revenue has already been pledged to an existing loan."
Sheng Kung-pao then consented to accept the suggestion without referring to Peking, but only on condition that I was able to assure him that if he agreed to its insertion in the notes, I would be prepared to sign the Treaty at once.
Having, meanwhile, just before the meeting began, by great good fortune, received your Lordship's telegram No. 78 of the 4th instant authorizing me to accept the Memorial as it stood, with the explanatory notes which I had agreed with Sheng, and not to press the mention of the indemnity bonds if it was likely to risk the Treaty, I was able to give him the desired assurance, whereupon the texts of the notes were finally agreed to in the form in which they are now in the Treaty.
At 9 P.. we accordingly met at the offices which Sheng Kung-pao bas set up for Treaty Revision meetings with the various Powers, and after the English text had been examined by Sheng Kung-pao's Secretaries and Messrs. Hippisley and Taylor, and the Chinese text by Mr. Jamieson, their Excellencies Lu and Sheng showed me the Imperial Decree on yellow paper authorizing them to sign, while I produced the full powers granted to me by His Majesty the King. Our respective authorities to sign having been found mutually satisfactory, the Chinese Commissioners and I duly affixed our signatures at 11 P.M. to the copies of the text, of which two were in English and two in Chinese. Each party retained one copy of the English text and one copy of the Chinese text. I am sending both original texts to your Lordship under a separate cover.
I have, &c.
(Signed)
Inclosure 1 in No. 1.
JAS. L. MACKAY,
Treaty between Great Britain and China, signed at Shanghae, September 5, 1902.
HIS Majesty the King of the United Kingdom of Great Britain and Ireland and of the British Dominions beyond the Seas, Emperor of India, and His Majesty the Emperor of China, having resolved to enter into negotiations with a view to carrying out the provision contained in Article 11 of the Final Protocol signed at Peking on the 7th September, 1901, under which the Chinese Government agreed to negotiate the amendments deemed useful by the foreign Governments to the Treaties of Commerce and Navigation and other subjects concerning commercial relations, with the object of facilitating them, have for that purpose named as their Flenipotentiaries, that is to say:
His Majesty the King of Great Britain and Ireland, His Majesty's Special Com- missioner, Sir James Lyle Mackay, Knight Commander of the Most Eminent Order of the Indian Empire, a member of the Council of the Secretary of State for India, &e. ;
And His Majesty the Emperor of China, the Imperial Commissioners Lu Hai-huan, President of the Board of Public Works, &c., and Shêng Hsuan-huai, Junior Guardian of the Heir-Apparent, Senior Vice-President of the Board of Public Works, &c.;
Who, having communicated to each other their respective full powers, and found them to be in good and due forin, have agreed upon and concluded the following Articles :----
ARTICLE I.
Delay having occurred in the past in the issue of Drawback Certificates owing to the fact that those documents have to be dealt with by the Superintendent of Customs at a distance from the Customs Office, it is now agreed thai Drawback Certificates shall here- after in all cases be issued by the Imperial Maritime Customs within three weeks of the
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