474
: Your Excellency,
Inclosure 4 in No. 1.
Acting Consul-General Campbell to Viceroy of Canton.
Canton, June 6, 1904. ON the 30th May I received a letter from your Excellency stating that you proposed to levy a tax on prepared opium by licences ("kao-p'ai"), and that as it did not affect the Additional Article of the Chefoo Convention, you had already sanctioned the establishment of an office for an experimental levy, &c. (Letter of the 30th May quoted in full.)
On receipt of this letter I asked your Excellency for an interview, and your Excellency was good enough to call at this Consulate-General on the 1st June, when we discussed this tax. I argued that it contravened the Additional Article of 1885; your Excellency insisted that it did nothing of the kind. To settle this difference of opinion in the most amicable manner, I proposed that your Excellency should send me a despatch stating your case, which I promised to present fairly to His Majesty's Minister at Peking; and also that you on your side should write to the Wai-wu Pu, my contention being that, in view of the special Article of 1885, no additional tax of any kind whatsoever should be imposed on Indian opium without the preliminary sanction of His Majesty's Minister and the Wai-wu Pu.
Your Excellency agreed to this course. I made it quite plain that if your Excellency could not agree to do this and to stop all local action in the meantime, I should be compelled to telegraph at once to His Majesty's Minister on the subject.
On the 4th June I received your Excellency's despatch stating your case, but I notice that although you have been good enough to send me a copy of the former Regulations of the Yung An Tang, I have not been furnished with the official text of the Regulations now proposed by the Shan Hon Chü. I would also draw your Excellency's attention to the following telegram which was received from the Wai-wu Pu by your predecessor, the Viceroy Tao Mo, on the 11th April, 1902, when there was a similar discussion on the subject of an opium tax:--
"According to clause 5 of the special Additional Article of 1885, when the packages of foreign opium have been opened, the opium shall not be subjected to any tax or contribution other than or in excess of such tax or contribution levied on native opium, &c. This means that the duty and li-kin on native opium must first exceed 110 taels before any proposal can be entertained in respect to foreign opium for the concurrent additional levy of a prepared opium tax."
I avail, &c.
(Signed)
Inclosure 5 in No. 1.
C. W. CAMPBELL.
Acting Consul-General Campbell to Sir E. Satow.
(No. 43.) Sir,
Canton, June 11, 1904. IN continuation of my despatch No. 41 of the 7th June I have the honour to inclose copies and translations of the Regulations referred to in the Viceroy's despatch to me of the 3rd June (Inclosure 2 in No. 41), and of the proposed Regulations which his Excellency now wishes to enforce.
I have examined the records of this Consulate-General with regard to the history of the opium licence fees, as set out by the Viceroy in the despatch above-mentioned, and I find that as early as 1887 Mr. Alabaster submitted for the consideration of Sir John Walsham a question whether a tax levied on prepared opium of 3 tael cents per tael weight was not in contravention of the Additional Article of 1885. Mr. Alabaster had doubts on the subject, but he does not appear to have received any instructions from Sir John Walsham in reply to his question (see to Peking, No. 56, of the 10th October, 1887). Nothing further is heard of this tax till October 1899, when Mr. B. C. G. Scott reported that it was farmed out to a Syndicate of Canton merchants styled the Yung An Tang for a lump payment of 120,000 taels a-year (see to Peking, No. 41, of the 14th October, 1899). From a note inclosed in Mr. James Scott's despatch to yourself, No. 37, of the 24th April, 1902, I gather that the Syndicate's speculation was not profitable, and that they did not succeed in collecting in the aggregate even 1 tael cent per tael weight of prepared opium, although they were empowered to collect a tax of 3 tael cents. Such a tax amounts to 28-80 taels per picul of raw opium; and there being an estimated yearly import of over 25,000 piculs of raw opium, foreign and native, into the province during the period of the Syndicate's operations, it should have produced more than 500,000 taels; whereas, at its best, it seems to have been worth barely 100,000 taels a-year.
It would seem that the Viceroy's sketch of the history of the tax is in the main correct, and that it was in force in Kuangtung for many years previous to 1902, without any official objection from this Consulate. I have therefore to confess that his Excellency's strongest argument in this matter that I am opposing a tax to which my predecessors from the eighties offered no objection-appears incontrovertible.
As to the present existence of similar taxes in other provinces I have no personal knowledge; but if such taxes exist without opposition from His Majesty's Consuls, the fact would, of course, argue in the Viceroy's favour.
There appears to be no difference in principle between the "kao chian" now proposed by the Viceroy and that which was levied before 1902. Both tax opium only after it is boiled and prepared for consumption. I should be disposed to consider the old Regulations of the Yung An Tang Syndicate more open to objection than the Viceroy's new proposals, because the former favoured the creation of a private monopoly in contravention of Treaty. The new Regulations would double the old levy and make it 6 tael cents per tael weight (ounce). It is usually calculated that 100 piculs of raw opium ("tu") will boil into 60 of prepared opium ("kao"); and on this basis a tax of 6 candareens would mean 57.60 taels per picul, that is to say, an addition of 52 per cent. to the aggregate of duty and li-kin (110 taels per picul) which is now collected at the Imperial Maritime Customs on foreign opium. As it is fairly certain that the present Viceroy would not be content with one-sixth or one-seventh of the proper levy as his predecessors were, but would exact the last farthing, this increase of the taxation on foreign opium would be real and serious; and, in interpreting the somewhat ambiguous terms of clause 5 of the Additional Article, it is evident that the proposed new addition of 52 per cent. bears a complexion totally different from the old one, which really meant only 5 per cent. or 6 per cent.
In my interview of the 1st June with the Viceroy I relied on my recollection of a similar question which arose when I was last in Peking. In connection with that, I understood that in Sir Robert Hart's personal opinion clause 5 meant that native opium must first be taxed to the level of foreign opium (110 taels a picul) before additional levies could be discussed.
From a telegram which the Wai-wu Pu sent to the Viceroy Tao on the 11th April, 1902 (quoted in Inclosure 3 of my despatch No. 41), it is clear that the Chinese Government then held the same view as Sir Robert Hart. This interpretation seems rational, and it is possibly what was contemplated by the negotiators of the Additional Article; but I am bound to admit that an impartial consideration of the Article itself, and especially of clauses 3, 5, and 7, favours the view that the additional 80 taels per picul frees opium from all imposts whatsoever while in transit from the port of entry, and until "opened at the place of consumption" only. Paragraph 2 of clause 7 helps to make this clear; the right of denunciation arises when the transit certificate is "found not to confer on the opium complete exemption from all taxation whatsoever whilst being carried from the port of entry to the place of consumption in the interior." It seems to me fairly arguable, as the Chinese authorities here contend, that the effect of clause 5 is to give native opium a start of 110 taels a picul over foreign opium "at the place of consumption in the interior." On the whole, without explicit instructions that Sir Robert Hart's view is that of His Majesty's Government, I should not again feel justified in pressing it upon the Viceroy.
I had rather take the ground, which is my real objection to any local tampering with the present opium arrangements, that his Excellency cannot satisfy me that, if he institutes this new tax, Indian opium is "not subjected to any tax or contribution, direct or indirect, other than or in excess of such tax or contribution as is or may be hereafter levied on native opium." My reasons are as follows:--
Any additional tax which would satisfy this stipulation of clause 5 must be fairly levied on all foreign and native opium alike. There is no difficulty in reaching the foreign opium, of which an average of over 15,000 piculs a-year has been reported to the Imperial Maritime Customs in Kuangtung during the period 1898-1902; but there is no guarantee whatever that the authorities can levy, if they would, on the native opium, of which an average of only 799 piculs has been reported to the Imperial Maritime Customs...
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