CO129-205 - Public Offices - 1882 — Page 294

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not been respected, that is to say, they have not secured the goods they covered against undue detention, or against taxation in transitu. In the ground between the port of entry and the barriers at which transit dues first become leviable-the ground within which Tariff-paid imports should by Treaty be exempted from all further taxation, and which I have been wont to denominate the port-area-li-kin collectorates have of late years been multiplied, their operations being extended, at some ports, into the foreign Settlements; without figure of speech, up to the very doors of the foreign merchant.

The Chinese Government's plea of action has been that it had the right to tax the property of its own subjects, and that imports in native hands were no longer foreign property. By parity of reasoning it has defended the detention and taxation of certificated imports in transitu, if these were being carried by the native purchaser.

Our case is not so complete in the matter of exports. We have, however, an analogous grievance in respect of these; but it is unnecessary for my present purpose further to refer to it.

What I have written above exposes, I trust with sufficient clearness, the grievance of our import trade. We had to complain that our imports, opium excepted, were illegally I should taxed within the port-arca, and on their way from the port to the inland market. add that the grievance was aggravated by the refusal, or professed inability, of the authorities engaged in collecting the duty illegally imposed, to supply us with infor- mation regarding its rule of incidence.

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I have excepted opium from the list of imports illegally taxed, because it does not possess under Treaty the same rights as the rest of our imports. Lord Elgin's proposiion regarding opium amounted to this: Admit into the new Tariff openly the drug which is now introduced into China with the connivance of the Government, and is as regularly taxed as any other merchandize, and you may lay on it what you please once it passes into Chinese bands. I will not claim for it the protection of the transit-duty clauses, nor, in the decennial revisions of the Tariff, shall the same rule be applied to opium as to other goods. No amount of taxation, therefore, that may be laid upon opium after it leaves the importer's premises, can be complained of as illegal. My complaint had been that all other imports were treated as if they were opium, and it was to the cure or mitigation of the evil thus inflicted upon them that I was pledged to address myself.

On the other part, I could not ignore the fact that one measure very necessary to this end would expose the Chinese revenue lawfully derivable from opium to a certain loss, and against this I cannot but think that I was in honour bound to guard. Let me, at the same time, assure your Excellency that, if the changes I was about to recommend had appeared to me in any way calculated to prejudice the revenue of the Government of India, I should have refrained from any step so advanced as the signature of an instrument com- mitting me to the support of that recommendation. It was to a recommendation alone, as reference to my Agreement will show, that I did commit myself. I could not have conceded restriction of a Treaty right-contraction of our area of exemption from taxatioe in excess of Tariff-or other modification of the commercial clauses of our Treaty, except with the consent, not only of my own Government, but of all other Powers having Treaties with China. Our Treaties have so much in common that it is scarcely possible, in trade it is impossible, that amendment of any single Treaty should be operative, unless all are agreed to adopt it.

Accordingly, when I undertook, on my own responsibility, to close the Yün Nan affair if certain conditions were satisfied, I especially stipulated that my colleagues, the Repre- sentatives of the Treaty Powers, should at once be invited to consider the proposition I was about to submit to my own Government; and that, in token of good faith, the draft Tuis of the Tsung-li Yamên's Circular to the different Legations was to be shown ine. was done.

And now, before going further, I will briefly restate the proposition which immediately affects the matter before me. 1 was convinced that, for some time to come, it might be and years, the Government of China would not be able to dispense with its li-kin revenue; that, so long as li-kin collectorates existed for the taxation of native trade, so long would it be certain that foreign imports would be made to feel its weight wherever the li-kin collectorate might be beyond reach of Consular surveillance. I feel equally sure that whenever the financial condition of the Empire might enable it to give up this trade tax, so odious to the native merchant, it would no longer be laid upon the foreign import trade; for, considerable as it is, the whole foreign trade is but small in proportion to the internal trade of the country; and I do not believe that it will ever pay to maintain li-kin collectorates exclusively for the taxation of foreigu imports. Having secured, as I conceive, a more just interpretation than has heretofore obtained of the transit-duty clauses of the Treaty of 1858, I proposed, therefore, that if the Government of China

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conceded us greater opportunities of trade than we possessed, we should restrict the arca of our exemption from li-kin.

For various reasons, a principal one being the difficulty of precisely defining the area to which, in theory, the Separate Article of 1843 would entitle us, I proposed that the limits of the new area should coincide with those of the foreign Settlements at the ports, which it would devolve on the foreign Consuls and the local authorities to consider together. This delimitation would involve the exclusion of the li-kin collectorates from the port-area, and the exclusion of those would, of course, render necessary an adjustment of the taxation of opium, the only one of our imports on which the Chinese were, under I proposed, Treaty, entitled to impose taxation in excess of Tariff duty in a port-area. accordingly, that the collectorates once banished, the li-kin on opiumn should be levied by the foreign Inspectorate of Maritime Customs, an admirably organized Service, whose proceedings would be as regular, as the action of the li-kin collectorates' Executive had proved itself, at Shanghac at all events, the most considerable of the open ports, to be fruitful of misunderstanding.

On somewhat similar grounds I subsequently recommended a like transference to the foreign Inspectorate of the duty of collecting li-kin on opium brought into Hong Kong. The trade of the Colony with the coast of China, unless in foreign bottoms trading to and The Chinese from the Treaty ports, is of course a question per se outside the Treaties. Government, in order to protect itself against loss of revenue, eminently of revenue on opium, has planted native Custom-houses on different points of Chinese territory in the neighbourhood of the Colony for the surveillance of the junk trade, which is further watched by a preventive service of small steamers. The right of the Chinese Government thus to protect its interests was beyond dispute. Its modus operandi had been as The vexatious as the action of Chinese officials uncontrolled is ever certain to be. revenue the Chinese most desired to secure in the trade in question was, beyond doubt, the opium revenue. This secured, I hoped, on our side, to secure the extinction of the obnoxious cordon. Removal of similar causes of bickering is of advantage to more than the interests of the Colony per se, precious as these may be allowed to be.

My suggestion regarding Hong Kong, however, was doomed to shipwreck. The Superintendent of Customs at Canton objects to place the junk trade, in the manner I proposed, under the foreign Inspectorate. He has instead assented to a Code of Regula- tions which, if the native Executive observe them, will diminish the inconvenience complained of. But it is too much to hope, so long as the three Custom-houses are maintained, that there will never be cause of offence to the Colony. The Chinese Govern- ment, on the other part, will undoubtedly lose much both of the Tariff revenue and li-kin on opium that the foreign Inspectorate would have collected for it.

The recommendation that the foreign Inspectorate should collect the li-kin on opium brought into the Treaty ports, out of deference to the wishes of your Excellency's Govern- ment, has not either been confirmed. I had not contemplated as necessary the formal ratification of the Chiefoo Agreement; but as I exacted the publication of an Imperial Decree approving that instrument before I would consent to report a final settlement of the Yün Nan affair, the Government of China has claimed a corresponding expression of approval on the part of our own. It has satisfied, it contends, all the conditions insisted upon by me, and it urges that we are equally bound to confirm the provisions of the Cheefoo Agreement.

This, to a certain point, is fair argument. Not anticipating in any quarter serious objection either to the proposed method of collecting li-kin on opium, or to the exchange of the larger port-area of exemption from li-kin against the proposed extension of trade, I stipulated that the four new ports of residence and the six ports of call, which were to be the price of our concession, should be opened within six months of the receipt of the Imperial Decree above-mentioned, and these ports were all opened within the six months.

But, as in duty bound, I provided that the date for giving effect to the stipulations affecting exemption of imports from hi-kin taxation within the foreign Settlements, and the collection of li-kin on opium by the foreign Inspectorate, should be fixed as soon as the British Government had arrived at an understanding on the subject with the other Treaty Powers.

Now the Representatives of various of the Treaty Powers having objected in particular to the reduction of the port-arca to the narrow limits recommended by me, the discussion of the port-area question will be resumed on my return to Peking; and however this may be ultimately disposed of, it will be impossible that the question of opium l-kin should not be also revived. The eagerness of the Chinese Government to see the Chefoo Agreement ratified is, in my belief, mainly due to its apprehension that without some

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