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PUBLIC RECORD OFFICE

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PUBLIC RECORD OFFICE, LONDON |

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Hoppo a duty of nearly 60 per cent. more than the consumer on the mainland. If the native and foreign Tariff were the same, the extra duty would be 100 per cent., but Sir Brooke's despatch shows that they are not the same, for the native Tariff is 1 m. 2c., whereas the foreign is 2 m. per picul.

But the Hoppo observed that as he had established a Custom station at Cheung- chau and Fat-tau-chau, he foregoes the Siao-hao. The boon granted, however, is more apparent than real, when it is known that native craft leaving Hong Kong are obliged to call at these stations and pay on shipments 50 per cent. more than the foreign Tariff price, or else will be seized and confiscated.

8. In September, 1874, the Viceroy and Hoppo published a joint Proclamation, in which they stated that vessels clearing from Hong Kong could pay a commuted sum at the stations east and west of this island, whereby shippers would be freed from all trouble at the port of entry. It was very soon discovered that the west coast officials did not acquiesce in that arrangement, as appears from a Memorandum drawn up by the then Acting Registrar-General, copy of which I have the honour to inclose.

9. The advantages in respect of diminished duty payable on goods shipped from Macao to the West Coast soon became obvious, as appears from the Registrar-General's letter of the 28th December, 1874.

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10. Sir Brooke's despatch under review endeavours to explain why the taxation on goods shipped by Macao junks is less oppressive than goods for Hong Kong; but your Lordship will have observed that the only reason advanced for placing the Hong Kong native trade in a worse position than his fellow at Macao is a territorial fiction, which was tested by the offer of the Hong Kong Chinese merchants to pay the same duties as those at Macao, when the Haikwan remarked "that he would lose by such an arrangement."

The Portuguese exercise every sovereign right over Macao that we do in Hong Kong, and Her Majesty's Government has over and over again recognized Portugal's territorial rights in that Colony, notably Her Majesty's confirmation of a recent Extradition Ordinance.

11. Sir Brooke Robertson, in his despatch of the 1st December, 1874, says, “to listen to the declamations of Chambers of Commerce and public meetings it would seem that the Canton Government is determined to crush and stamp out the trade of Hong Kong, the speaker forgetting that if it did so it would annihilate the source of a very large revenue, which a little reflection would show the Imperial Government is not likely to sacrifice for a sentimental consideration."

12. Sir Brooke has shown that the Macao merchant pays nearly 60 per cent. less duty for his sugar than the Hong Kong merchant. The Chinese trader from Macao pays at this moment on West Coast shipped cotton only about half the duty which he does at Hong Kong, and I should prefer to account for this disparity by the explanation given in the Memorial of the Chinese merchants to Her Majesty, viz., the Chinese officials' jealousy of the development of this Colony, rather than the "sentimental consideration" of the territorial fiction accepted by Sir Brooke.

13. In Sir Brooke Robertson's despatch occur the following words :-" Now by the regulations any produce exported from any port in the four lower Prefectures of the Province for a foreign port is subject to the levy of the 'Neito-shin' at the port of ship- ment, and before being taken to its destination must be brought to Canton, where, besides paying a local tax called the 'Siao-hao,' it has to pay export duty according to the foreign Tariff."

A glance of the map of the Canton Province will at once show what a ridiculous regulation this would be, and your Lordship will see how thoroughly effective it would be in annihilating the sources of revenue which, according to Sir Brooke, the Imperial Government of China is so anxious to foster.

14. But, my Lord, I have taken some pains to find out if there is really such a rule.

The Consul has frequently announced his inability to procure the Chinese Customs' Regulations. I have had, therefore, to get the best information I could on the subject; and I hope to transmit by an early mail a collection of data, from which I have arrived at the conclusion that if there is such a regulation, it is a recent invention trumped up for the occasion. I lean, however, to the belief that there is no such rule, for the Chinese traders here deny having ever heard of it, and several assert that it does not exist. I fear that in accepting it, and giving his sanction to this statement, Sir Brooke has been again misled by the Chinese officials, just as he was in the "Kam-hop-sing" case, in reference to the duties at Formosa, the capture here, and the final release.

15. The contention of Her Majesty's Consul that the Treaty of Tien-tain applies to Chinese traders or Chinese ships is easily met by a reference to the 24th section of the

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Tien-tsin Treaty. The whole scope of the Treaty and regulations is to protect the trade of British subjects, and it certainly is most inequitable to treat the Chinaman who trades to and from Hong Kong as a British subject only so far as it increases the Hoppo's exchequer, while all the rights of a British subject are denied him both at sea and in Chinese territory. His junk is open to search as soon as out of British waters; any tax that the rapacity of the Chinese authorities may suggest they can exact from him; and as they will not publish any Tariff, he has no means of knowing his rights; while the least show of remonstrance is certain to lead to the confiscation of his property.

16. Long ere this it has been sufficiently obvious to your Lordship what protection the Chinese trader may hope for against those entrusted with the superintendence of the fiscal arrangements of the adjoining Province, and as your Lordship truly observes, the Hong Kong Chinaman has nowhere else to appeal than to this Government, which will not relax in its efforts to obtain for him a known, fixed and equal Tariff, which is the right of every tax-payer.

17. A consideration of the foregoing will readily account for the disinclination of the Chinese authorities to publish their Tariff, and submit cases of disputed seizure to the judgment and arbitration of a Mixed Commission Court, recording and publishing the evidence on which results are arrived at in each case.

18. I am of opinion that the commercial community of Hong Kong will continue to be preyed upon by unprincipled Chinese tax-collectors, until these or similar conditions are enforced, and their cruizers excluded from Colonial waters.

I bare, &o. (Signed)

Inclosure I in No. 24.

Minute.

A. E. KENNEDY.

THE papers with which his Excellency the Governor has furnished us, and upon which he has asked for an expression of our opinion, deal with questions of the very greatest importance to this Colony.

We were not aware until the despatch from Sir Brooke Robertson, dated Canton, 18th January last, was laid before us that the native trade with this Colony, in addition to bearing the burdens of local Chinese taxation (Imperial and provincial), was further subjected to the operation of the Tariff annexed to the Treaty of Tian-tain; and it appears to us strange that this is the first intimation given by Her Majesty's Consul of the character of the duties levied, although he would seem to have been for some time aware of what the Chinese were doing.

We are also surprised that the imposition of these duties has been quietly acquiesced in, and that the Consul even expresses a doubt whether the Chinese be not perfectly entitled to take the course they have adopted.

We dissent entirely from such policy of submission to whatever the Chinese choose to exact; and we consider the Treaty of Tien-tsin has nothing whatever to do with the matter of duties on the trade of Hong Kong, as the Tariff has reference only to foreign trade through the open or Treaty ports. But assuming it to be applicable, the collection of duties at stations round this island would not be permissible under the 25th clause, as at these stations there is no trade, and goods are neither landed nor shipped.

Sir Brooke Robertson's despatch states that, "independently of smuggling, there are other causes for Customs surveillance which are not so well understood," and he proceeds with a catalogue of exactions of the most unjust character, and shows with what ingenuity schemes were devised and carried out by which to oppress the trade of the Colony to the very utmost. It is singular that not one word of condemnation of these measures of a hostile character against a British Possession is met with; and it leads one to reflect that in a despatch, dated 1st December, 1874, treating of the complaints of the Colonists, Her Majesty's Consul took credit to himself for having suggested the Customs stations and established the blockade.

The Consul asserts that the duties are not farmed. In some technical manner this may possibly be true, but we believe, as regards the practice of revenue collection, the statement is inaccurate. Further inquiry is necessary.

The duties that have been and that are still levied appear from the despatch to be,-

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