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from Newchwang to the Chinese agents of the firm in Mukden. I claimed that the sugar should not pay consumption tax in Mukden, and alluded to the freedom of other foreign firms-British, American, German, and Japanese-from taxation under similar circumstances; the only difference being that the other firms have foreign employés in Mukden.
The Chinese authorities would not admit that the other firms did not pay the tax. In fact, they asserted that all these firms, except the Japanese, who evaded payment for the present under the plea of the goods being military supplies for their Army of Occupation, paid consumption tax. It was then evident to me that while the Chinese would not openly admit that foreigners were not paying the tax, for fear that they thereby admitted the principle that the whole of the town was open to foreign I advised Messrs. Butter- trade, they would not attempt to force the foreigners to pay. field and Swire accordingly to follow the example of the other firms and refuse to pay the tax. They took my advice, and there has been no further trouble.
A similar situation prevails in Tiehling, though the tax officers there have been The British American Tobacco Company more exacting than those at Mukden. intend to refuse to pay the consumption tax upon their tobacco in that town also.
The German Consul informs me that in the case of Liao Yang, which is to be an open port, but has not yet been declared open by the Chinese, he had lately occasion to protest to the Tartar General against the levy of consumption tax from German merchants, while the Japanese merchants escaped payment. The Tartar General replied that the Japanese were doing wrong in not paying, and that the Germans should not follow a bad example. The German Consul, however, informed him that as the Japanese did not pay, be should advise German merchants also to refuse to pay.
Sir,
I have, &c.
(Signed)
H. E. FULFORD.
Inclosure 2 in No. 1.
Consul-General Fulford to the Tartar General of Mukden.
Mukden, February 23, 1907. ON the 6th instant I had the honour to address your Excellency with reference to the area of the Treaty marts in Manchuria.
1 have now the honour to inform you that I have received a despatch from His Majesty's Minister at Peking, communicating to me a despatch from His Majesty's Principal Secretary of State for Foreign Affairs, to the effect that His Majesty's Government caunot agree with the desire of the Chinese Government to restrict Treaty In the view of His port limits to the actual area occupied by foreign residence. Majesty's Government, the term "Treaty port," no matter how any particular port may have been opened, must in all cases be held to include the city and the waterway giving access thereto, together with any roads connecting such waterway with the city.
I have, &c.
(Signed)
H. E. FULFORD.
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mercy.
No Chinese subject must presume to make any private arrangements for renting or selling. Should
any dare to disobey, he will, upon detection, be surely punished without Most important. Do not disobey. A special Proclamation. February 20, 1907.
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Sir,
Inclosure 4 in No. 1.
Consul-General Fulford to the Tartar General of Mukden.
Mukden, March 14, 1907.
I HAVE the honour to call your Excellency's attention to a Proclamation issued by the Police authorities of Mukden on the 20th February, to the effect that any Chinese desiring to sell or lease land or buildings to foreigners must report the matter in the first instance to the Police authorities, and await their sanction before entering into contracts of the nature mentioned.
I beg to remind your Excellency that in the XIIth Article of the American Treaty of 1858 it is stipulated that "citizens of the United States residing or sojourning at any of the ports open to foreign commerce shall be permitted to rent houses and places of business, or hire sites on which they can themselves build houses, &c. The parties interested can fix the rent by mutual and equitable agreement, nor shall the local authorities interfere.
Again, the XIth Article of the British Treaty of 1858 provides that British subjects are permitted to carry on trade with whomsoever they please, and to reside and rent houses and land as they desire at the open ports.
The other Treaty Powers have in their Treaties with China similar provisions, which it is not necessary to quote.
The Proclamation under consideration is of an obstructive nature, opposed to Treaty stipulations, and is a distinct hindrance to the freedom of my nationals to acquire lands and houses in an open port. I cannot acquiesce in such procedure, and must request your Excellency to give instructions for the withdrawal of the Proclamation, and to favour me with a reply.
I have, &c.
(Signed)
H. E. FULFORD.
(Translation.)
Inclosure 3 in No. 1.
Proclamation by the Head Office of the Mukden Police.
WHEREAS the lease or sale of Chinese subjects' houses to foreigners is an inter- national affair, and one which comes within the duty of this office to control; aud whereas of late, when Chinese have rented their houses, they have not reported the matter to this office, and we hear that worthless characters, seeing that foreigners are not acquainted with Chinese Government restrictions and regulations, have led them into swindling conspiracies, with the result of frequent legal proceedings.
It is therefore expedient to at once issue a Proclamation, and we hereby order all classes of people to take note that henceforth, in every case in which a Chinese subject sells or lets house property to a foreigner, he must, as a preliminary step, come to this office and report the matter. He must then wait until this office sends a deputy to make investigations and report, after which, if permission be granted, he may proceed to enter into an Agreement,