816
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A translation of the Taotai's reply to this letter was sent to you on the 27th November with the Minutes of the twenty-first meeting of the Consular Body, and a copy of a second letter to the Taotai on the same subject accompanied the Minutes of the twenty-second meeting.
I have the honour to forward to you now a copy and translation of the Taotai's reply to this second letter from the Consular Body. As he still declines to issue the Proclamation asked for, it was decided at the last Consular meeting to refer the whole question to the Diplomatic Body at Peking.
You will observe from the correspondence that the Taotai, while he bases his refusal on the ground that the levy of li-kin outside the Settlements, but within the harbour limits, is not contrary to Treaty, points out that the li-kin collected at this port is part of the security for the British and German loans, and that, in any case, it would be impossible for him to accede to the request of the Consular Body and direct the discontinuance of the levy of the tax within the harbour limits without special instructions from his Government.
The exact limits of the area within which the levy of li-kin is illegal has for the last forty years been a perpetual source of dispute between this Consulate and the Chinese authorities. It is a question which, in the interests of trade and shipping at Shanghae, has long stood in urgent need of settlement. The demand made by the Consular Body is not indeed as comprehensive as it might be, for our contention always has been that the harbour limits of the port should be a li-kin-free area for goods of every description, whether native or foreign, whereas the Proclamation asked for by the Consular Body refers only to foreign goods. Nevertheless, if the Peking Government could be induced to give way on the question of foreign goods alone, and issue instructions to the Taotai that whether such goods have passed into native hands or not, they are, under all circumstances, to be exempt from li-kin within the harbour limits, it would be a long step in the right direction. But if the term "foreign goods" could be made to include all goods shipped through the Imperial Maritime Customs, the main object for which we have been striving will have been attained.
I have, &c.
(Signed)
PELHAM L. WARREN.
5
obvious that the levying of dues by the Chinese authorities from the native merchant after the latter has come into possession of the goods cannot in any way affect the foreign merchant.
The relinquishing by the Chinese authorities of li-kin upon foreign goods of all kinds within the Settlement upon the mere suggestion of this course was an act in the highest degree in concordance with the Treaties; but the exaction of li-kin within the area of the Treaty port is strictly in accordance with precedent, and cannot be regarded as being an illicit procedure. In what way are foreign merchants prejudiced by the levy of li-kin from a native firm into whose hands goods have already passed? If they be indeed prejudiced thereby, the evil is not of recent growth; why was no complaint made to the foreign Plenipotentiaries at such times as the rules as to trade and navigation have been undergoing revision, with the express object of removing or remedying commercial difficulties of all kinds? That the foreign merchants should have refrained from raising any such complaint at these times, and should now represent themselves to their Consuls as thus aggrieved, is a matter beyond my comprehension.
After an exhaustive consideration of the question, it appears to me that, although the limits of a port and anchorage may be determined by requirements of the local shipping, yet these limits cannot be taken as defining the area within which li-kin is not leviable, nor, in the absence of any instructions from my Government that li-kin is not to be exacted within the limits of a Treaty port, am I in a position to accede to your request to direct the discontinuance of the collection of such li-kin. However, the abolition of li-kin in favour of customs dues is provided for by a special clause in the Treaties of the majority of the Powers, and as soon as such Treaties shall have been concluded by the whole of the Treaty Powers the removal of all hitherto existing obstacles will doubtless be a matter of small difficulty. I would therefore suggest that, in the case where their Governments have not yet concluded a Treaty for the abolition of li-kin, their respective Consuls be requested to urge the early adoption of such a course in the interests of their countries' trade. In the meantime, as regards the collection of li-kin at Shanghae, we must be guided by the existing Regulations; while to safeguard the amicable relations at present subsisting, I will give careful instructions that no li-kin is to be levied upon goods which have not passed into the interior or which have not come into the possession of a native firm.
I have, &c.
(Card of Taotai Liang.)
(Translation.) Sir,
Inclosure 4 in No. 1.
Shanghae Taotai to Shanghae Consular Body.
I HAVE the honour to acknowledge receipt of your note on the subject of the levy of li-kin within the area of the port, to the effect that the area denoted by the expression "Treaty port" comprises the port, the city of the port, and any road or waterway connecting these two; that the limits of the port are determined by the Imperial Maritime Customs in accordance with the requirements of the shipping visiting the port; and that within the limits thus determined the levy of li-kin is not permissible.
The great regard of yourself and your colleagues for the interests of your respective merchants, and the concern felt by you at the loss occasioned to these by the exaction of li-kin are readily apparent from your note, and I myself should be only too willing to introduce any change tending to their advantage could this be done without detriment to my Government's revenues. Unfortunately, the financial pressure under which we have laboured ever since the military operations necessitated by the T'ai Ping insurrection, and which has been since aggravated by our English and German loans, involving the hypothecation of the Shanghae li-kin, precludes the consideration of any but the most economical counsels.
The imposition of li-kin upon either Chinese or foreign goods consumed in Chinese territory is not mentioned in the Treaties, being a matter for the sovereign control of the Chinese Government, while the collection of dues upon foreign imports of all kinds warehoused in a port pending sale is a question for the Imperial Maritime Customs. Formerly, before the collection of the duty on foreign opium had been taken over by the Customs, my Government established a li-kin office in the Settlement, and all foreign opium consigned to native dealers had to be cleared through this office before the consignee could land and remove it; nor was any objection ever made that this procedure should be discontinued as being contrary to Treaty. When the duty on foreign opium was raised in 1887 the Customs took over its collection. Thus it is
Inclosure 5 in No. 1.
Doyen of Diplomatic Body to Prince Ching. Your Highness,
April 2, 1908. ON behalf of the foreign Representatives I have the honour to transmit, for the information of your Highness' Board, copies of correspondence which has passed recently between the Consular Body at Shanghae and the Customs Taotai on the subject of the levy of li-kin on foreign merchandize within the harbour limits of the port, and to inform your Highness that the inclosed letters of the Consular Body to the Taotai have the approval and express the views of the foreign Representatives.
It has always been held by the Governments of the Treaty Powers that the duty-free area of a port which, under the Treaties, has been declared open to international trade, comprises the whole area of the port, including, of course, the harbour thereof; and that the taxes and charges leviable on foreign goods imported therein, and native goods exported therefrom, are those only which are specified in the Treaties.
Further, as regards foreign imports, it has always been held that, even after they have been sold to Chinese firms, they are not liable to further taxation within the Treaty-port area; and it is only by strict observance of these principles that the proper distinction can be preserved between "Treaty ports" and "the interior."
In the interests, therefore, not only of trade but of friendly relations, I have the honour to request that the Shanghae Li-kin authorities may be instructed to conform with this principle and make no exactions on foreign imports, whether in foreign or native hands, or on foreign-owned produce intended for export within the Treaty-port area.
I avail, &c.