:
2
In view of the information which I have received from His Majesty's Consul- General and bave and am now communicating to your Lordship, it appears to me that the language used by the "Times" correspondent is misleading and unnecessarily violent. His telegram leads to the supposition that the illegalities complained of are. matters of every-day occurrence, whereas, when they are subjected to close examination, it is shown that they amount to a few isolated cases, which have been promptly taken up by His Majesty's Consul-General. If, on the other hand, the correspondent is correct and such cases are numerous, it is evident they cannot have been brought to the notice of the Consulate-General, as should have been done in order to obtain redress.
In regard to the Taotai, there is no doubt that he is not a satisfactory official, and it would be well if he were removed to another post. It is, however, probable that he is no worse than many of his class in other places, whose peculation and obstruction are often notorious. In any case no charges have as yet been brought to me officially against him, such as would justify my making an application to the Chinese Government for his removal.
I would, in conclusion, point out that the imposition of a heavy li-kin on cattle, which cannot but be regarded as an unfriendly act, is not illegal nor an infringement of any Treaty stipulations.
3
378
It is a fact that a heavy li-kin has been imposed upon cattle, but the idea did not originate with the Chinese authorities. A certain Italian Company wished to obtain a monopoly of the supply of cattle, and offered in exchange to guarantee a certain sum in payment of li-kin. The authorities improved on the idea, and imposed the increased -kin without granting the monopoly. The question has been taken up by the Consular Body, and will be referred to the Viceroy at Nanking. I inclose a letter from Yuan Tantai on this subject. It is a reply to an inquiry of mine regarding import of cattle.
As regards the statement that foreign-owned cotton mills are required to pay heavier ducs on raw material than those levied on the native mills, it is true that the tax levied on raw cotton consumed at the Ta Sheng native mill at Tung Chou, which is the property of the Hanlin Chang Ch'ien, is only 240 cash per picul, whilst that sought to be levied on cotton brought by Ilbert and Co. in the same district was 600 cash. This is the only case of attempted levy of differential duties that has been reported
to me.
I have, &c.
(Signed)
PELHAM L. WARREN.
(No. 50.) Sir,
I bave, &c. (Signed)
ERNEST SATOW.
Inclosure 1 in No. 1.
Consul-General Sir P. Warren to Sir E. Satow.
Shanghae, June 22, 1905. I HAVE the honour to acknowledge the receipt of your despatch No. 39 of the 4th instant, transmitting a cutting from the "Times" newspaper, and requesting me to furnish you with a detailed report on the statements made in the second paragraph.
1. As regards the levy of l-kin on goods covered by transit pass, there are, as mentioned in my despatch No. 46 of the 15th instant, two cases in my hands. In connection with the case of stoppage of cotton belonging to Ilbert and Co., the owner of the premises rented by them at Chiu Lung was imprisoned on the charge of a breach of the Regulations under which he bolds his buyer's licence. It is probable that the real reason for his imprisonment was that he had rented his promises to a foreign merchant, but there is no evidence of this, and the man appears to have been guilty of a technical breach of the Regulations. I am not in a position to say whether the Chinese Government encourages provincial officials to supplement the revenues by all manner of terminal and transit taxation, and by differential treatment. The collection of li-kin and other inland taxes is as a rule farmed out; the farmers pay a fixed sum to the provincial authorities, and make what they can out of the levy. The system is bad, and leads to many abuses, but the fault can scarcely be said to lie at the door of the Central Government. Chinese employed by foreign merchants to act as their agents in places other than Treaty ports certainly do complain that their business is on that account interfered with by the Chinese officials; but it frequently turns out on inquiry that the Chinese employé has given the local official cause for interference by putting up a sign- board setting forth that the business is that of a foreign firm, and by claiming on that account exemption from all taxation. The Shanghae Taotai, Yuan Shu-hsun, is inclined to be extremely obstructive in business of every description-so much so, that I generally refer any question of importance direct to the Viceroy at Nanking or the Governor at Soochow, it being mere waste of time to discuss matters with the Taotai. He is reported to have made a large fortune during his tenure of office, but this is attributed to the fact that the indemnity passes through his hands; he cannot derive much, if any, benefit from li-kin or other taxation of the kind, as the li-kin offices are not under his control. It is true that it was recently discovered that an office called the "Ch'ou Fang Chii," for the collection of duties on opium and a general levy of half the Customs Tariff duties on native goods in native hands, had existed in the Settlement for some time, and the revenues collected by this office were reported to pass through the Taolai's hands. The office has now been removed from within the Settlement, but is reported to have been established outside. Some months ago it was rumoured that the Taotai was to be made Treasurer of this province; such a promotion would hardly be appreciated by him, as the post of Taotai at Shanghae is one of the most lucrative and most sought after.
(Translation.)
Sir,
Inclosure 2 in No. 1.
Shanghae Taolai to Consul-General Sir P. Warren.
May 15, 1905. IN reply to your letter stating that William Brandt proposed to bring cattle into Shanghae from Soochow and asking whether this could be done or not, I have the honour to inform you that last year I received several communications on this subject from the Consul-General for Italy stating that an Italian, E. Denegri (?), wished to open a Li Sheng Te Li Cattle Import Company in Shanghae for the purchase and import of cattle from Kiangsu and Chekiang for the consumption of foreigners in this port, not for expert, and asked me to issue a permit.
I reported the matter to the Superintendent of Southern Trade, who wrote to the Governors of Kiangsu and Chekiang to instruct the inland li-kin officers to evolve a plan for levying a collective contribution of 1,800 cash per head of cattle, to be paid in a lump sum at Shanghae, a limit of 50,000 head being fixed for each year. If other merchants should start Companies or combine or split up this number is still to be the limit.
In case of drought inland the traffic will be prohibited, the Regulations being communicated as altered, with a request that instructions be issued for their observance.
The Consul-General for Italy agreed to the plan proposed, but no decision could If be come to on the subject of the li-kin, so that no permit has yet been issued. William Brandt without loss of time comes to my office and agrees to pay the full li-kin while the Italian merchant has not yet come to an arrangement, I can petition for permission to be granted to William Brandt, so that he will obtain the priority to his great advantage.
Please inform the said merchant. Compliments.