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Messrs. Butterfield and Swire, I have now the honour to forward to you duplicate of a further letter which the above firm has addressed to me on the same subject.
Sir,
I have, &c.
(Signed)
L. C. HOPKINS,
Inclosure 5 in No. 1.
Messrs. Butterfield and Swire to Consul-General Hopkins,
Tien-tsin, February 26, 1906.
WE have the honour to acknowledge receipt of your letter of the 22nd instant, covering copy of a despatch from Sir Ernest Satow in reply to our letter of the 9th instant on the subject of the privileged treatment accorded to shipments of brick tea landed at Tien-tsin from the steamers of the China Merchants' Steam Navigation Company.
We desire to thank his Excellency for the prompt consideration he has given this matter.
In reply, we beg to observe that our aim is chiefly to share in the Yang-tsze and sea carriage of Shansi brick tea between Hankow and/or Foochow and Tien-tsin, and we are at present precluded from this owing to the special overland privileges we enumerated in our letter of the 9th instant, being granted exclusively to shipments landed from the steamers of the China Merchants' Steam Navigation Company.
We therefore specially object to the preferential treatment accorded by the Chinese authorities to the China Merchants' Steam Navigation Company, who are thereby enabled to exercise a monopoly of trade. Free competition in the coast carriage of the produce in question is thus eliminated, and the China Merchants' Steam Navigation Company constituted "a privileged commercial society."
May we again request his Excellency to extend his aid to specially meet this, the chief obstacle to our participation in the trade. We gather from his despatch that he may regard us as already general carriers of Shansi brick tea, but this is not the case, as the shipment per steam-ship "Nanchang" was a trial shipment only.
Regarding his Excellency's reference to the Customs Returns, we believe that the heading "Brick Tea for Russia" in that publication is a nominal one only, and that, as before indicated, the produce mainly does not proceed beyond Mongolia. Moreover, the great bulk of the tea is transported by Chinese owners, and this practice was, we believe, first instituted by means of the special privilege granted to the China Merchants' Steam-Navigation Company by Li Hung-chang's special Memorial in 1884.
Will you kindly represent the foregoing to Sir Ernest Satow.
We note that Mr. Hosie will shortly be in Tien-tsin, and we shall be glad to have the opportunity of discussing this question with him.
Your Highness,
We are, &c.
(Per pro. Butterfield and Swire),
(Signed) G. T. EDKINS, Agents, China Navigation Company (Limited).
Inclosure 6 in No. 1.
Sir E. Satow to Prince Ch'ing.
Peking, March 20, 1906.
I HAVE the honour to inform your Highness that I have received, through His Majesty's Consul-General at Tien-tsin, representations from Messrs. Butterfield and Swire of that port to the effect that the transport of brick tea from Hankow and Foochow to Tien-tsin lies entirely in the hands of the China Merchants' Steam Navigation Company, who undertake to deliver it in Kalgan; and, moreover, no coast-trade duty is charged on such tea, as it is declared at the Tien-tsin Customs for export to Siberia and Russia. As a matter of fact, a large proportion of this tea is consumed in Chinese territory, and never reaches the Russian frontier, But it is not only in respect of coast-trade duty that the China Merchants' Steam Navigation Company enjoy privileged treatment, but also in duty and li-kin, being charged only 12 candareens per picul native customs duty, and li-kin at the rate of 4 candareens per picul, while Messrs. Butterfield and Swire were charged on a consignment of tea brought up in their steamer "Nanchang" 30 candareens per picul native customs duty and 15 candareens per picul li-kin.
It appears from these conditions that the China Merchants' Steam Navigation Company are accorded special privileges which enable them to monopolize the carrying trade of brick tea from Foochow and Hankow to Tien-tsin. Such a monopoly is in contravention of the XIVth Article of the French Treaty of Tien-tsin, and I have the honour to request that the High Commissioner for Northern Ports may be called upon to devise means for placing British firms on a footing not less favourable than that enjoyed by the China Merchants' Company,
Awaiting the honour of a reply, I avail, &c.
(Signed)
ERNEST SATOW.
Inclosure 7 in No. 1.
Prince Ching to Mr. Carnegie.
(Translation.)
Peking, May 26, 1906.
Sir,
ON the 20th March last I had the honour to receive a note from Sir Ernest Satow drawing attention to certain special privileges accorded to the China Merchants' Steam Navigation Company which enable them to monopolize the carrying trade of brick tea from Foochow and Hankow to Tien-tsin, and pointing out that such a monopoly is in contravention of Article XIV of the French Treaty of Tien-tsin, and requesting that the High Commissioner for Northern Ports may be called upon to devise means for placing British firms on a footing not less favourable than that enjoyed by the China Merchants' Company.
This Board lost no time in referring the question to the High Commissioner for Northern Ports for consideration, and are now in receipt of the following reply from him :-
"The Tien-tsin li-kin office, the China Merchants' Steam Navigation Company, and the Tien-tsin Customs Taotai, in a joint report, inform me that the China Merchants' Company undertakes the carriage of the Hankow brick tea, which is a staple of the caravan trade westwards, and it has been the practice for the Company's branch office at Hankow to contract to carry it to Tungchow and Fengt'ai, where it is handed over to the tea merchants to convey it themselves to Kalgan for sale. As regards the customs dues and li-kin payable at Tien-tsin, the established Regulations* are conformed to, the native customs duty on brick tea being calculated at 12 candareens per picul, li-kin at 4 candareens, and industrial contribution at 3.2 candareens, while as regards the coast trade import duties, the Imperial sanction has been granted to a Memorial of a former High Commissioner of Northern Trade granting exemption therefrom. The reason for this was that whenever the Imperial Government has any important business it is always the China Merchants' steamers that are employed, and no extra allowance is granted for such service. The Company are unavoidably handicapped by this expense, and therefore, in order to compensate them, a Memorial was submitted and was sanctioned granting them this exemption from duty. The practice has been in force for over thirty years to the prosperity of trade, and no complaints have ever been made.
"As regards brick tea from Foochow, the amount produced at that place is inconsiderable, and the China Merchants' Company has never contracted for its conveyance.
"The complaint that Messrs. Butterfield and Swire now make is that the special privileges enjoyed by the China Merchants' Company are not in accordance with the French Treaty of Tien-tsin. The XIVth Article of that Treaty says:---
'Aucune Société de Commerce privilégiée ne pourra désormais s'établir en Chine, et il sera de même de toute coalition organisée dans le but d'exercer un monopole sur le commerce.'
"I would point out that the real reason why the Company, when undertaking the carriage of tea from Hankow, are allowed to pay reduced dues and li-kin is because they have been accustomed to perform whatever official business there may be. That cannot * This must mean the established Regulations relating to this Company.
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