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The attitude of the Chinese authorities on the point is shown in Articles 5 and 6 of the proposed Customs Regulations for Mukden forwarded in my despatch No. 7 of the 8th February, 1907. The carriage of native goods by railway from Treaty mart to Treaty mart is a new question, and will require consideration in the negotiations for Customs Regulations.
I have reason to believe that the object of the Mukden Board of Foreign Affairs, in adding their remarks concerning native goods in their letter of the 20th May to Mr. Straight, was to prevent the claim which might be made that native goods brought to Mukden and other open towns by foreigners should be also free from consumption-tax. The question has been the subject of dispute between the Japanese and Chinese authorities. The Japanese are said to claim the right to carry native goods from Treaty mart to Treaty mart in Manchuria, and up to the present time refuse to pay any taxes thereon. The Chinese claim that such goods should pay full export duty at the mart of departure, and coast trade duty, i.e., half import duty at the mart of arrival; or, in the alternative, pay the ordinary native Customs taxes. The Japanese are said to have refused to pay the native taxes, as they were only liable to pay the Treaty Tariff taxation, and this they could not pay because the Maritime Customs had not been established in the various open towns.
I have had no personal experience on the question, as no British merchants are as yet interested, so far as I know.
As a proof that the Board of Foreign Affairs agree with Mr. Straight's view, that foreign goods should be free of consumption-tax in the entire cities, irrespective of the hands into which they come, I may add that, on the 25th ultimo, I had occasion to complain to the Board that the Tieh-ling tax office appeared to be without instructions as to the arrangement made with the American Consul-General, as it still demanded the tax from the Chinese retail dealers, the clients of the British-American Tobacco Company. The latter have for some time past refused to pay the tax, which was then collected from their clients after their goods had left their own hands.
The Board replied on the 29th ultimo, explaining that instructions had by that time certainly been given to the tax officials.
I have, &c.
(Signed) II. E. FULFORD.
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Inclosure 4 in No. 1.
Acting Consul Tebbitt to Sir J. Jordan.
(No. 21.) Sir,
Newchwang, June 21, 1907. EARLY this year the Standard Oil Company, when sending oil by rail to Hsin Min Tub, was compelled to pay li-kin at Kou Pang Tzu, a station en route of the Chinese Railway. The American Vice-Consul thereupon protested to Peking, and Mr. Rockhill complained to the Wai-wu Pu, and requested that instructions be issued that all foreign goods going from one open mart to another in Manchuria be furnished with an exemption certificate by the Customs (hitherto refused), and that no taxes or charges whatever be imposed on the goods en route.
Prince Ch'ing at the end of May agreed to Mr. Rockhill's request, and issued instructions accordingly. The Maritime Customs here have therefore been ordered by Sir Robert Hart to issue exemption certificates for all foreign goods that have paid the full import duty, and that are conveyed by rail to any open mart.
The American Vice-Consul informs me that the original instructions from the Chinese authorities to the Inspector-General of Customs did not specify the means of conveyance, and that Sir Robert Hart himself limited the privilege to rail-borne goods only. He is therefore protesting again to Mr. Rockhill, but suggested, in view of the difficulty of supervision of river or cart-borne traffic by the Customs, that for the last two means of conveyance exemption certificates shall only be issued if the transit duty is deposited with the Customs, to be refunded on the return of the exemption certificate. This latter measure is aimed at Chinese merchants who otherwise would distribute the foreign goods in the interior, thus avoiding all taxation.
The arrangement is already in working order, as the Standard Oil Company has since dispatched two consignments of oil by train to Hsin Min Tun under exemption certificates without fi-kin interference.
I have, &c. (Signed)
R. T. TEBBITT.
Inclosure 2 in No. 1.
Gentlemen,
American Consul-General, Mukden, to Mukden Board of Foreign Affairs.
May 28, 1907. ON the 20th instant I received your note, in which you state that the procedure refers to foreign goods, and that native Manchurian goods shall not be entitled to similar treatment.
Your statement is quite clear, and I presume you to mean that special provisions must be arranged for native goods merely passing from one Manchurian Treaty mart to another, but that native goods for export to other provinces, or abroad, must be dealt with according to the practice of the Maritime Custoins.
I have, &c. (Signed)
W. D. STRAIGHT.
Inclosure 3 in No. 1.
(Translation.) Sir,
Mukden Board of Foreign Affairs to American Consul-General.
May 29, 1907 WE have just received your letter, in which you say that native Manchurian produce exported abroad, or to other provinces of China, should be dealt with according to the practice of the Maritime Customs.
We find your statement to be correct.
We avail, &c.
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