486
[This Document is the Property of His Britannic Majesty's Government.]
AFFAIRS OF CHINA.
18087
[May 22.]
CONFIDENTIAL.
REC
SECTION 1.
REG? 16 JUN 11
[19445]
[No. 1.
(No. 186.) Sir,
Sir J. Jordan to Sir Edward Grey.--(Received May 22.)
Peking, August 29, 1911. IN my despatch No. 479 of the 22nd December, 1909, I had the honour to enclose the copy of the note addressed by the dean of the diplomatic body to the Chinese Government on the 10th of that month, protesting against the imposition, under various denominations, of improper taxes upon foreign merchandise conveyed from the treaty ports to the trade marts in Manchuria under the exemption certificates provided for in the provisional regulations of 1907.
On the 22nd February, 1910, the Wai-wu Pu replied to Mr. de Kuczynski in a note of which I have the honour to enclose the translation. It will be seen that while the Governor of Fengtien formally denied that any illegal taxes were imposed, the Governor of Kiriu admitted the levy of the taxes complained of, but argued that the incidence fell not on the foreign goods but on the Chinese who had purchased them, since they were levied on the business capital and selling turnover of the Chinese merchants.
As the Wai-wn Pu's note amounted practically to a denial of the reports of the foreign consuls in Manchuria, the diplomatic body decided to refer the note to the consular body at Mukden for their observations, and to request them to furnish a detailed report on the nature of the taxes levied, with a list of specific instances in which complaints had been brought to their notice.
It was not until the 21st October that the senior consul replied. He then stated that there was little difficulty in protecting goods covered by exemption certificates and transit passes so long as such goods remained in the hands of foreign merchants The original protest had, however, in the main been directed against the open claim of the Kirin provincial authorities to the right to levy local taxes on foreign goods once such goods had passed into the possession of Chinese dealers. That principle, Mr. Koiké pointed out, was reasserted in the Wai-wu Pa's communication, and the consular body would be glad to know, before drawing up the desired report, how for this claim was recognised by the foreign Governments.
To this the diplomatic body replied that such a claim had never been admitted. On the 10th January, 1911, the senior consul at Mukden forwarded a report in the form of a memorandum based on information collected from the foreign consuls in the three provinces of Manchuria. A copy of the memorandum is enclosed herein. The report was to the effect that, as far as the province of Fengtien was concerned, recent investigations went to show that the present condition of affairs there was fairly satisfactory. Neither the consulates at Mukden nor those established at the other open marts in the province had any outstanding cases on hand, although it was reported that in certain marts consumption taxes were being openly levied from Chinese dealers. On the other hand, at Mukden a Chinese storekeeper, handling only foreign articles, stated that no attempt was made to collect taxes from him. It was added that a system seemed to be in force by which foreign goods bought directly from a foreigner were exempted on production of a bill of sale. As far as could be ascer- tained, there was a general levy throughout the province of a consumption tax averaging about 2 per cent. ad valorem. This was collected sometimes on arrival of the goods at destination, sometimes at the end of each month on an assessment of the gross value of trade done by the particular merchant. In the former case, goods under exemption certificate would escape; in the latter, it would seem that foreign goods would pay their quota, especially as the majority of Chinese importers did not use exemption certificates. Further, when exemption cargo had been broken up into small parcels after importation, it would be extremely difficult to protect it against a levy of this nature. Speaking generally from the absence of complaints, the consuls thought it a not unwarranted conclusion that the consumption tax was not heavy, and was on the whole collected reasonably, and that there was a desire on the part of the tax officials to avoid direct levies on exemption cargo.
[2023 y---1]
B