[This Document is the Property of His Britannic Majesty's Government.]
[B]
AFFAIRS OF CHINA.
CONFIDENTIAL.
[23854]
No. 1.
[July 4.]
SECTION 3.
i
(No. 189.) Sir,
Mr. Max Müller to Sir Edward Grey.-(Received July 4.)
Peking, June 11, 1910. THE question of the duty charged upon foreign merchandise entering the city of Peking has lately been engaging the attention of the foreign representatives.
octroi,"
This duty, which the Chinese call "loti shui" (literally "bring-to-the-market- place tax "), and which is generally known to foreigners under the name of " has been recorded in a regular tariff for Peking since the earliest days of the present dynasty, and is farmed out to two Imperial princes or high Manchu or Mongol officials, who pay a certain fixed sum to the Board of Finance and the Imperial household and pocket the surplus. This naturally renders it all the more difficult to obtain any alteration likely to affect adversely the yield of the octroi.
Before 1900 no difficulties arose over the collection of this tax, as the two foreign firms admitted to trade in Peking were only supposed to supply the legations with foreign articles and provisions, which were sent to Peking under exemption But after the events of that certificates issued by the customs taotai at Tien-tsin. year the question became one of some practical importance since foreign firms have, every year in increasing numbers, established themselves in this city, in spite of the fact that it is not open to foreign trade. I need hardly point out that the levy of "octroi" on foreign goods entering Peking is contrary to the treaties, which only admit of a transit dne of half the import duty, or 24 per cent. ad valorem on foreign goods sent into the interior. The Chinese authorities have, however, always claimed that, by reason of a local custom, the transit pass system did not apply to the capital, and have directed the customs administration at Tien-tsin not to issue transit passes for goods consigned to Peking. This action on their part, though obviously not justified by their international agreements, has nevertheless not been seriously questioned. The foreign representatives had the matter under their consideration in 1901, and apparently came to the conclusion that some exception should be made in favour of a long-established custom, and that, as long as the question of the residence of foreign merchants in Peking was not raised by the Chinese Government, it would be wiser not to challenge the imposition of octroi upon foreign goods. The existence of the tax and the privileged position of the capital have, therefore, been tacitly recognised by the foreign representatives for the last nine years. The recent action of the octroi authorities in extending their system to places outside the walls of Peking, and the arbitrary manner in which octroi is at present being assessed, have led to numerous protests from foreign merchants, and have obliged the diplomatic body to take up the question again. The completion of the Kalgan Railway having had the result of diverting goods traffic which formerly passed through Peking, the octroi administration, who naturally do not desire to lose any of their revenue, have established stations where the tax is levied at Fengtai Junction, some 5 or 6 miles to the south of Peking, and even as far away as Paoting-fu, four hours by express from Peking on the Hankow line, while both at these stations and at the old-established station at the "Hatamen gate of the city, octroi has been charged not upon the declared value of the goods but upon the appraisement of the octroi officials, which are at once arbitrary, uncertain, and, in many cases, excessive. Foreign merchants have, conse- quently, made numerous complaints to their respective legations, and I have been engaged, as have most of my foreign colleagues, in addressing repeated representations to the Wai-wu Pu in regard to each specific case which has been brought to my notice. Finally, in November last, the consular body at Tien-tsin called the attention of the doyen of the diplomatic body to the question of this extension of the Peking octroi, and M. de Kuczynski, in his capacity of doyen, addressed the enclosed note to the Wai-wu Pu on the 7th December last, requesting that orders might be issued to put an end to this abuse. To this note the Wai-wu Pu returned the usual evasive reply, copy of which is also enclosed.
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[2827 d-3]
B
392