CO129-205 - Public Offices - 1882 — Page 282

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Reference as above to Sir Frederick Bruce's opinion of what was fair to China, as I shall proceed to show, is not irrelevant. At the time that he advanced it (in 1861-62) li-kin was not, at least so far as the import trade is concerned, the onerous burden that it eventually became. Transit passes had been in many instances refused, in many not respected. Sir Frederick Bruce was persuaded that, in the then condition of the country, the interests of our import trade lay most in the removal of hindrance to the circulation of our manufactures; and the form of hindrance, which he would have wished to rêmovė, was the detention of consignments travelling inland at the transit-duty stations, or barriers, in the interior. The certainty that the British importer had paid the sum by Treaty agreed to as composition for all barrier dues, it might be hoped, would deprive the collectorates of their exeuse for delaying goods certificated in transitu.

I am so far but stating the history of the case, but I shall observe in passing that Sir Frederick Bruce's views of the rights of China in respect of the import trade fairly coincided with the view of his brother, the negotiator of the Treaty of 1858; to wit, that the Chinese should get 7 per cent. of revenue from our imports. I repeat that neither in Lord Elgin's mission, nor in that of Sir Frederick Bruce, was the information at our disposal complete; nor, even in the latter period, I may add, had we had sufficient experience of the working of the Treaty.

Meanwhile, the weight and method of inland taxation were yearly more complained of, and in 1867, when the revision of the Treaty of Tien-tsin was undertaken by Sir Rutherford Alcock, relief from li-kin or other inland charges became the object to which his main efforts were addressed; and this he attempted, though not precisely in the form contemplated by Sir Frederick Bruce, yet, in one important particular, in the same direction. Sir Frederick Bruce would have had the British merchant's option to compound or not for inland dues extinguished, and the half-duty composition rendered obligatory; but the half-duty paid, he would assume that, throughout the Empire, no farther tax of any kind would be imposed upon the imports. I am speaking, be it noted, with the knowledge my position as his Secretary of Legation gave me of the opinions of my Minister. His proposition never came before the Chinese; nor, so far as I can recollect, is it anywhere recorded.

Sir Rutherford Alcock would also have suppressed the option left by the Treaty of 1858; but the exemption from taxation inland would have been subjected (and I think fairly) to certain limitations. It will be simplest to quote the Convention signed by Sir Rutherford on the 23rd October, 1869. (See Blue Book, "China No. 1, 1870.")

"ARTICLE HI

"It is agreed that commodities of the following classes and denominations, viz., cottons, linens, woollens, woollen and cotton mixtures, &c., &c., imported by British merchants, shall pay both import duty and transit due simultaneously at the time of importation.

"On the other part, China agrees that the above-mentioned commodities, imported by British merchants, and having paid import duty and transit due simultaneously at the time of importation, shall be exempt from all other taxes and charges whatsoever in Treaty-port provinces.”

Mr. Hart, the Inspector-General of Customs, who had naturally acted throughout great part of the trade negotiations as intermediary between the Tsung-li Yamên and the British Legation, at Sir Rutherford Alcock's request, appended certain marginal notes to the Convention. The following is his commentary upon the Article above cited :-

"This is a most important concession, for it permits manufactures (the goods in whose sale England is chiefly interested) to circulate freely without certificate, and without further charge or tax, on payment of 74 per cent., through the Treaty-port provinces. It is a concession far in advance of the Tien-tsin. transit clause as regards one-half of China, and as regards the other half, the former transit privilege is continued in force. The 'supplementary regulations' will show the action to be taken.”

The last line of Mr. Hart's note here quoted refers to the Supplementary Rules signed with the Convention, of which Rule I, § 4, runs thus:-

"When commodities of the kinds specified in the first clause of this Rule, and which simultaneously paid import duty and transit due, are to be conveyed by either British or Chinese merchants to non- Treaty-port provinces, transit certificates should be procured from the Customs at the port started from, on the face of which will be distinctly set forth the name of the place for which the said commodities are destined.

"On their way from the port to the place thus set forth in the certificate, such certificated com- modities will be exempt from all liability to inland charges, dues, or duties. But in the event of its being discovered by any Customs station that may make examination that the merchandize contained

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in the packages is different from the commodities set forth in the certificate, or that the certificate is for a less quantity than it is accompanied by, the goods concerned will be confiscated.

"On the arrival of such duly certified commodities at the place set forth in the certificate, the certi- ficate will become invalid, and the commodities having arrived at their place of destination, will be liable to whatever inland charges, dues, or duties the locality they are found in collects, and will thence- forth be treated like native produce in the localities concerned."'

Now, before going further, I shall briefly re-state what I conceive to be the present contentions as regards taxation of our imports, of the Chinese Government on the one part, and of the British merchant on the other. Both parties are, at least, agreed thar the half-duty is not immediately leviable; but that the payment of it must be attested by certificates, and that the production of the certificate shall avail the holder to clear the imports entered upon it from certain taxation. Beyond this, the Chinese contention, or, to speak more correctly, the principle recognized in practice, has been that duty-paid imports, though not as yet even presumably liable to payment by the importer of the half-duty, are liable to li-kin or other taxation if in the hands of a Chinese dealer; that goods accompanied by a transit duty certificate, that is, by the required evidence that a half-duty has been paid in addition to the Tariff duty, are free only of dues at the barriers at which transit duties are collected; and that, on arrival at the stated inland centre to which the imports are to be carried, they are subject to any taxation that may be imposed upon them. Although I cannot call to mind that, in discussion, the right of certificated imports to exemption from barrier dues bas ever been disputed, it is none the less true, as I observed before, that certification has been sometimes refused altogether; also that goods duly certificated bave been detained at barriers, the plea of their deten- tion being irregularity, by no means always substantiated. (See Appendix I, Levy of Li-kin at Shanghae.)

Our merchants have maintained-at least a large majority, and their opinion is supported by some interpreters of our Treaty, not of our nationality nor in any way connected with trade-that, by Treaty, the payment of the Tariff duty should protect our imports from all further taxation until passage of a barrier renders either the pay- ment of the transit dues, or production of a Customs certificate proving payment of the half-duty commutation, necessary. I agree. This region of exemption from all but Tariff duty, the region lying portwards of the transit duty barriers, I have so far claimed as the port area.

But they have further maintained that, the claim for barrier transit dues once satisfied, the imports, having then paid both Tariff and half-Tariff duty (in other words, the 74 per cent, which Lord Elgin thought ought to content the Chinese Government), should thereafter be free of all taxation whatsoever. I do not admit this. Why, I shall show farther on.

The view of the Board of Trade, as expressed after examination of the papers forwarded by Sir Rutherford Alcock during his negotiations of 1867-68-69, is unques- tionably more in accord with the contention of the Chinese Government than with that of the British community.

I extract the following passages from the letter of Sir Louis Mallet, then Secretary to the Board of Trade, dated the 19th May, 1869, and published in the revision of Treaty papers laid before Parliament in 1871-

My Lords entertain no doubt that the view expressed in some of the memorials, and even at one time by Sir R. Alcock himself in his correspondence with Mr. Hart, viz., that the payment of the transit dues ought to be held to exempt the goods upon which it has been paid from all subsequent internal taxation, and to insure the sale of the goods to their ultimate consumer, with no enhancement of cost derived from taxation, save that represented by the import and transit, duties, is a view which cannot be entertained by Her Majesty's Government. There is nothing in the terms of the Treaty which appears to my Lords to justify such a sweeping demand, and in view of the internal taxation to which native goods are subject in China, it would be, in their opinion, both unjust and inexpedient to enforce such a demand, even if it were warranted by the terms of Treaty stipulations.

"All that Her Majesty's Government can claim in this respect appears to my Lords to be that, in the Treaty ports, the importer shall have the right to sell his goods in the market after payment of the customs duties stipulated, and that he shall have the right to send goods to any internal market which he may select, free from any other charge than the customs duty on importation, and the stipulated transit duty; but that both at the port and at the internal market, when once the goods have passed out of his hands, they must take their chance in common with native goods, and bear whatever impositions the rapacity or necessities of Chinese administration nay inflict.'

This would leave the Chinese free to impose what taxes they pleased upon trade in imports, even within the port area. The conditions agreed to by Sir Rutherford Alcock, consequently, if observed by the Chinese Government, would have been far more advantageous than those that, in the Board of Trade's opinion, it would be just

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