[This Document is the Property of His Britannic Majesty's Government!
0239
RECR Rear 18 FEB 10. [January 18.]
AFFAIRS OF CHINA.
CONFIDENTIAL.
[1969]
No. 1.
SECTION 5.
(No. 487.) Sir,
Sir J. Jordan to Sir Edward Grey-(Received January 18, 1910.)
Peking, December 28, 1909. IN my despatch No. 479 of the 22nd instant I have dealt with the difficulties experienced by the foreign merchants of Tien-tsin in securing the advantages granted to them in Manchuria by the provisional rules of 1907, which were designed to place them on a footing of equality with the merchants at Dalny as regards the levy of duties on imported goods destined for the newly-opened marts in the interior.
The actual system of taxation in Manchuria causes, however, serious injustice to certain British merchants in yet another respect.
The establishment of branches of the Imperial Maritime Customs at the sea-ports renders it possible for foreign goods to pay import tax to the Customs on arrival, and to be shipped inland to the open marts exempt from all further taxation whatsoever. On the other hand, a similar system has not as yet been put into force as regards goods exported from Manchurian marts either to other treaty ports or to foreign countries, the primary reason being that the Maritime Customs have not been established at most of the marts in the interior. Consequently, as goods in process of export do not enjoy the privileges conferred by exemption certificates, they must submit either to payment of inland taxation, such as li-kin, on their way down, to the coast, or be conveyed under a transit pass, paying the half duty.
Apart from the difference in the treatment thus accorded to imported and exported goods 'respectively, the system imposes in practice grave disabilities on Tien-tsin and Chinwangtao merchants as compared with those engaged in the export trade at Dalny and Newchwang. These latter profit by the refusal of the Japanese authorities to allow the levy of any Chinese taxes on goods conveyed by the South Manchurian Railway, and therefore freight travelling to Daluy is exempt from the payment of any taxes beyond the regular export duty. On the other hand, merchants desirous of exporting their goods from Chinwangtao are exposed to vexatious levies of li-kin along the Imperial Northern Railways, a state of things which has given rise to many complaints from firms affected. The documents of which I have the honour to enclose copies herewith, namely, my memorandum to the Wai-wu Pu dated the 13th August, and a despatch from His Majesty's consul-general at Tien-tsin, will put you in possession of the details of two such complaints received from the British Cigarette Company and Messrs. Forbes and Co, respectively.
In my numerous representations, both written and verbal, to the Chinese Government I have laid great stress on the loss in freight traffic caused to the Chinese line by the consequent diversion of the export trade of Manchuria to the profit of the Japanese Railway, and have urged the necessity for taking steps to ensure that the Imperial Northern Railways shall obtain their proper share of the bean- export trade, which is now expanding to such a large extent. His Excellency Liang Tun-yen has shown himself appreciative of my arguments on this point, but to my suggestions that outward exemption certificates be granted to goods travelling on the Chinese Railway in order to free them from all taxation except a 5 per cent. duty at Chinwangtao he has hitherto replied by adverting to the loss which would thereby be imposed on the provincial revenues. At my latest interviews, however, his Excellency has evinced a genuine desire to find a means of alleviating the existing inequalities, and I have hopes that the presence in Peking of Taotai Yen, of Changchun, with whom I have discussed the whole subject, and who has promised his co-operation, may lead to the adoption of a scheme on the lines of my suggestion. Liang Shih-yi, the Director-General of Railways, is also interesting himself in the question.
I should add that something has already been done towards enabling the Chinese line to compete with the South Manchurian Railway by the abolition of the li-kin tax hitherto collected at Koupangtzn on goods travelling via the Imperial Northern Railways between Mukden and Newchwang. This, though undoubtedly a step in the
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