CO129-205 - Public Offices - 1882 — Page 280

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Inclosure in No. 73.

Part III of Report by Sir T. Wade, dated July 14, 1877.

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III. TO come now to Section 3, relating to trade. The case with which I have had to deal requires, I regret to say, a considerable amount of explanation.

By Article X of the Treaty of Nanking, signed in August 1842, the Government of China agreed to establish at the five ports then thrown open to British trade a Tariff of export and import customs, and other dues. It further agreed that when British mer- chandize should have once paid such dues and customs, it might be conveyed by Chinese merchants to any province or city in the interior of China, on paying a further amount as transit duties, which amount was not to exceed a certain percentage on the Tariff value of the goods.

The ratifications of this Treaty were exchanged at Hong Kong in June 1843, but the percentage on value to be levied as transit duties not having been fixed, a declaration was signed by Sir Henry Pottinger and the Imperial Commissioner Keying, the same Plenipotentiaries who had negotiated the Treaty of Nanking, to the effect that the charges to be levied as transit duties should not exceed the rates then existent; these, said the Declaration, being on a moderate scale.

The ratifications of the Treaty, it was added, were exchanged subject to the above stipulations.

In October of the same year a supplementary Treaty was signed, to certain pro- visions of which, although it was subsequently abrogated, it will be necessary elsewhere to direct attention.

At a later period, I am unable to say precisely whether by Sir Henry Pottinger or by his successor, Sir John Davis, there was published, in 1844, a Table of the barriers or stations recognized by the Board of Revenue as those at which transit dues were leviable; leviable, that is to say, on account of Imperial, as distinct from Provincial,

revenue.

That local dues not accounted for to the Board of Revenue did at the time exist there is little doubt, but of the nature or amount of these we have no published official evidence.

The date of the Code of the Board, from which the list above referred to was translated, was, unless I am mistaken, 1881. So late as 1850 I was unable to procure a more modern edition. My reason for directing attention to the date will be seen in due time.

From an early period our merchants complained that inland charges were pressing fitfully and unduly upon their trade, import and export. So far as the latter was con- cerned, indeed, the Treaties extant in no way protected produce on its way to a port of shipment against any charges that the Chinese might choose to impose upon it. Our imports, by the Declaration of 1843, were certainly entitled to exemption from all charges inland not authorized before that year. Yet their annual rise was insisted on by the Chinese purchasers of our goods, and having no access to the interior, for the Treaty of 1842 gave us no more than a right of residence at the five open ports, we were unable to gainsay their testimony; the truth of which, besides, with our knowledge of the irregularity of Chinese finance, there was no reason to question. This, even up to the year 1849-50, when the insurrection, subsequently known as the T'ai Ping, was beginning to make itself felt in the southern provinces of China, and the needs of the Government, real and pretended, became a ground of appeal to the patriotism of those who were assumed to be best able to contribute to the necessities of the State, or, to speak more correctly, were most accessible for purposes of abnormal taxation.

These would be, for many reasons, the mercantile classes.

The Imperial revenue, which, in normal times, may amount to some 15,000,0001, sterling, is beholden for more than two-fifths of this total to the tax assessed on land in three degrees. In an insurrection much of the land is of course thrown out of cultivation, and even where this is not the case, much of the land-tax is beyond the reach of the collector. The land-tax is, at the same time, the one impost which it is absolutely dangerous to raise. A direct augmentation of it would, at any time, be the surest means of ducing a rebellion. Abnormal taxation of trade, on the other hand, is attended with no such result. In one instance, where the wholesale and retail dealers were taxed accord- ing to their ledgers, and with such freedom, that the suns exacted were held to amount to cent. per cent. upon value, the people closed their shops until the rate of charge

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was lowered; but the iniquity produced no rising; and although through the Censorate and other channels of representation the native trading communities continue now to protest to the Throne against the burden laid upon them, the Govern- ment bas comparatively little difficulty in levying very heavy "patriotic contribu- tions" in one form or other; not solely for war expenses, as it is common tó assert, but for other expenses of the Government, general or particular. The sale of the lower offices, or of high official rank, is but one form of abnormal taxation. This, however, does not otherwise than remotely affect trade. The taxation immediately con- cerning it is that known as the li-kin, or li-kiuen, the nominally "one per mil contribu- tion," which has for more than twenty years borne with increasing weight, not only upon the trade in foreign imports, but upon all departments of commerce in China, inland or maritime.

The Treaty of Tien-tsin signed by Lord Elgin in 1858 secured by Article IX to British subjects the right of access under passport, whether for business or pleasure, to all parts of the Empire. It added by Article XI to the five ports above enumerated as open to trade, the ports of New-chwang, Chefoo, Tai-wan, Swatow, Kiung-chow, Chin-kiang, Kin-kiang, and Hankow, and by Article XII it obtained a right to purchase land and to build, not only in the port towns, but in their immediate vicinity.

I note this stipulation, because I shall have to recur to it when I come to speak of abnormal taxation upon trade within or beyond the limits of the ground at most ports more particularly set apart for the residence of foreigners; the foreign settlements or so-called "Concessions."

By Articles XXVI and XXVII, it was agreed that the Tariff of 1843 should be immediately revised, and that for the time to come a fresh revision should be made every ten years; and for the regularization of the taxation of trade inland, it was agreed by Article XXVIII, that any British subject desiring to convey produce purchased inland to a port, or to convey imports from a port to an inland market, should be enabled, if he chose, to clear his goods of all transit duties by payment of a single charge. If he did not choose so to clear his goods, he would have to pay the duties leviable, whether upon native produce or British imports, between open port and inland centre. The amount of duties leviable in the latter case was to be declared within four months of the signature of the Treaty.

The Tariff of import and export duties was duly revised in the autumn of 1858; but the Declaration promised in Article XXVIII was not ready. In the then state of the Empire it was impossible that it should be. Up the valley of the Great River, and throughout the central provinces of China, the Tai-P'ing rebels, although their con- sistency had been much impaired, were still in force. Six years were yet to elapse before the recovery of Nan-king. The provisions of Article XXVIII were consequently modified; and in Rule 7 of the Regulations appended to the Tariff, it was agreed that the Article in question should be interpreted as declaring the amount of transit dues legally leviable upon merchandize imported or exported by British subjects to be one- half of the Tariff duty leviable at the port of shipment or entry upon such merchandize. A British subject, desiring to clear imports inland by payment of the half-duty, would have issued to him, on application, a certificate, exhibition of which along the line of barriers through which the merchandize must pass to the inland centre specified would free the imports of all other charges. If he were bringing down produce for exportation from the interior, he was to have it inspected at the first barrier upon the line of transit, and he would then receive a Memorandum which would similarly clear this produce down to the barrier nearest the specified port of shipment. Here the half-duty would have to be paid. Unauthorized sale in transitú of produce, entered as above for a port of shipment, would render it liable to confiscation, So would an attempt to pass produce in excess of the amount stated in the Memorandum. At the port of shipment permission to export produce, which could not be proved to bave paid its transit dues, would be refused by the Customs. This arrangement rendered unnecessary the notification of inland Tariffs stipulated for in Article XXVIII of the Treaty. It should be specially noted that clearance, inwards or outwards, under its conditions, was not made obligatory. An option was left to the British merchant to avail himself of the new rule or not.

By Rule 5 of the same Tariff Regulations the restrictions affecting trade in various commodities heretofore declared contraband were conditionally removed. Of these commodities the first-named, opium, was the chief. It is unnecessary here to refer to the conditions regarding any other. The steps taken by the High Commis- sioner, Lin, to suppress the trade in opium, had been, it will be remembered, the imme- diate occasion of our first war with China. A proposal to legalize it had not been wholly unsupported by Chinese statesmen shortly before the time of the rupture, but

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