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In the course of the present year a number of schemes have been brought forward from different quarters. Indeed, including the arrangement coutemplated in the Chefoo Agreement, and the modification of this above cited, which would have restricted operation of the clause to Shanghae for a stated period, there are, perhaps, a dozen proposals at this moment before us.
There is, first, the scheme of Mr. Samuel, an English gentleman, who, in his capacity of financial agent, has had occasion to devole some attention to the opium revenue of India. In prosecution of inquiries that he desired to make, he came on to China, by way of India, last summer, provided with a letter from the Foreign Office, instructing Her Majesty's Consuls to assist him in collecting information so far as lay in their power.
Mr. Samuel's idea, in few words, was to make the British Government sole proprietor of all opium produced in the world, to supply all the opium markets outside China with a certain limited quota of drug, to deposit all drug in excess of these quotas at Hong Kong, whence it was to be passed, according to the estimated requirements of the open ports, into China, under surveillance of the Maritime Customs, the purchaser paying into the Customs at the same time both the Tariff duty and a fixed rate of li-kin.
Opium imported into China under these conditions would have nothing further to pay as taxation, and the sole market of the purchaser being in reality at Hong Kong, the amount of duty to be imposed upon it would be exclusively the affair of England and China.
I did not bring this scheme to the knowledge of the Tsung-li Yamêu, because Mr. Samuel had not been invested with any official authority, but I reported it to my Government as a scheme that appeared to me worth examination.
It has been examined
at the India Office, but no decision has as yet been pronounced upon it.
The next project was a native monopoly. While Mr. Samuel was in the south of China he had some communication with certain Chinese of Canton, who desired to form a Company for the sale of opium in China. Their head-quarters were to be, I believe, in Hong Kong. Their capital was affirmed to be considerable, and they were ready to guarantee to the Chinese Exchequer a large amount of revenue in exchange for the exclu- sive right to sell opium in China free of all taxation inland. They have since prayed the support of the Government of Hong Kong, and their petition has been forwarded by the Governor of the Colony to me.
I have given it no encouragement. The value of the opium imported annually into China is some 40,000,000 taels; the revenue of the two countries, China and India, is largely concerned in the trade, and I have doubts whether, even if the amount of the capital of the Company be not overstated, it would be safe to intrust the conduct of so vast an enterprise to a local association. Its operations, it appears to me, would, at least, have to be controlled by competent official authority.
To proceed. When I returned to Tien-tsin last month I had communicated to me The first is that the two other schemes, which also undoubtedly merit attention. Chinese Government should virtually become proprietor of all British Indian opium for a term of years, to be fixed by common consent, the Government of England engaging that the production of opium in India shall be gradually reduced during that term, and that, on the expiry of the term, the export of opium from India shall wholly cease. The price to be paid per picul to the Indian Government would be fixed, either once a-year or at longer intervals, by agreement, and the payment agreed to would be made either at Hong Kong or in India, as might be agreed, and either through an official agency or a privileged Company.
These, if I have not misunderstood the Grand Secretary Li and the Tao-tai Ma, are, more or less, the conditions lately submitted to a high officer of the Indian Government by the Tao-tai Ma, who, by order of the Grand Secretary Li, had proceeded to India on a private mission to obtain information regarding opium.
The second scheme is little more than a modification of the above, the chief addition of importance being the provision of a means of payment of the revenue promised to the Government of India during a term of years in consideration of the engagement, should it be accepted, to extinguish its interest in the opium trade within that term.
The scheme would work thus:-An official Agency, representing both Governments, being established in Calcutta and Bombay, would buy all opium leaving India for China. Cheques for the estimated value, at a rate agreed to, drawn on a stated bank, also duly appointed to act for both Governments, would be handed by the Agent of the Chinese Government to the Agent for the British Government. These cheques cashed, the Treasury of India would claim no farther interest in the opium exported. The opium would be consigned to a second official Agency established at Hong Kong, in whose
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keeping it would remain until it might be sold in Hong Kong or at the ports; the price charged covering the advance of the bank in India, plus the duty imposed upon the opium by the Chinese Government. The Agency, as the sales were effected, would repay the bank the money paid by it to the Government of India; the bank necessarily retaining a lien upon the opium deposited at Hong Kong until the completion of these sales. This is the substance of an arrangement laid by a foreign agent before the Grand Secretary Li, and communicated to me by his Excellency.
There remain to be noticed the proposition of the Grand Secretary Tso, who would levy, in addition to the Tariff duty of 30 taeis collected by the Maritime Customs, a uniform rate of 120 taels, that is to say, a total sum of 150 taels; and the kindred proposi- tion of the Grand Secretary Li himself, who would fix the li-kin rate at 80 taels, in addition to the Tariff duty, would levy, that is to say, a otal of 110 tacls; the whole in this case to be collected through the Maritime Customs.
These propositions were brought forward by the Tsung-li Yamên last summer, and while I was at Tien-tsin the Grand Secretary Li forwarded me a Momorandum in three Articles regarding the collection of the impost should his own proposal be adopted:-
1. The sum of 110 taels being collected at the port of entry by the Maritime Customs, opium is to be thenceforward free of all charge whatever, and any official found to be levying li-kin upon it is to be punished.
2. All opium brought from India being deposited at Hong Hong, an official Agency of the Chinese Government is to be established at Hong Kong for the purpose of surveil- lance, the Government of India and the Government of Hong Kong being instructed by the Government of Her Majesty to keep this Agency informed of the shipment and arrival of the drug, the duty on which is to be collected either at Hong Kong or at the ports to which it is consigned, according as the Hong Kong Government and the high officer at the head of the Chinese Agency shall agree. The Governments of India and Hong Kong are to engage to do all in their power to prevent smuggling.
When the
3. These arrangements are to be tried under provisional regulations. sanction of the Governments of England and China shall have been given, the Opium Clause of the Chefoo Agreement is to be cancelled.
As regards the establishment of a uniform rate, 1 have been at some pains, in past discussions, to prove that a li-kin of 50 taels being added to the Tariff duty, the Chinese Government would receive a larger sum than the total of its revenue on foreign opium as at present estimated. In a Conference held last May at the Tsung-li Yamên, in which, I think, the Grand Secretary Li himself took part, the Ministers present maintained that the opium revenue was estimated at 6,000,000 taels; but from this they allowed that there would have to be deducted a charge of 10 per cent. for expense of collection, while it was farther admitted that the duty on no small amount of opium that ought to pay duty was cvaded.
Taking the import of the year 1878 as an average year, I pointed out that with a charge of 50 taels li-kin, plus 30 taels Tariff, per picul, the exact sum of 6,000,000 taels would be attained; that as this, if the provisions of the Chefoo Agreement were to be abided by, would be paid through the Maritime Customs, the expense of collection, as at present conducted through the opium li-kin offices, would be saved. Lastly, that by an understanding with the Government of Hong Kong, not only might evasion of the li-kin at other places be rendered impossible, but revenue might be collected on a great deal of opium that now never reaches the open ports at all.
I have argued that, when the Chefoo Agreement was signed in 1876, no higher li-kin than 40 taels was exacted at any ports except Foochow and Amoy, at which ports, precisely because the li-kin rate was so high, the import was comparatively small. The country in rear of these ports was supplied from other quarters, and at these ports them- selves much of the li-kin due on the opium imported was admittedly evaded. ports, again, the li-kin in 1876 was considerably below 40 taels.
At some
Against this the Grand Secretary Li has upheld that the rates I refer to were merely the rates ruling at the ports of entry, and that I have overlooked the inland taxation of opium. I do not forget the liability of opium to inland taxation, but I am satisfied from the testimony of Chinese officials and Chinese of business experience, that once an article so easily concealed as the foreign drug begins to travel inlaud, its further taxation is but Unless 1 am misinformed, in many imperfectly assured, and consequently insignificant. provinces the opium, after passing the first li-kin collectorate, is franked by a particular badge or ticket throughout the province. I have therefore urged, and I still hold, that a uniform rate of 50 taels -kin per picul, even were no larger quantity of opium to be imported annually than in the year 1878, would raise the revenue on British Indian opium not only to 6,000,000 taels, the Tsung-li Yamên's estimate of what it is entitled to receive,
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