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For collecting here, the Fuk Chenug Wo Hong receives, for every hundred taels of silver collected, a commission of mace 6.5. The Lekin Collectorate receives a commission of mace 5.8. per taels 100, whilst the Hoifong Collectorate gets mace 4.8 per taels 100.
From a comparison of the above figures, it will be seen that opium, shipped in native Bottoms, and paying dnty either at Kap-shui Mun or here, is less heavily weighted by 25% in the case of Regular Duty and Lehin, and by 40% in the case of Hoifing than opium shipped in Foreign Bottoms to Canton. The extra charges called Nga Tip-"poor and sick," and "sycee difference," are also excluded. It is obvious therefore that little opium will be shipped from here (for Canton) in Foreign Bottoms. The absence of such shipment has been erroneously considered an evidence of sunggling from Hongkong, as has been shewn elsewhere.
The tax called floifung is a species of Lekin. It really covers two taxes, one a tax called Shuk Li, or the tax on opium for the privilege of boiling it, and the other a levy towards keeping up sen and river defences. As far as I can make out the Shuk Li tax was started in the 11th moon of the 6th year of Kwong Sü.--December 1880,-and was first farmed by a Canton man called Wong Tsun-in. He paid to the Viceroy a sum of $400,000 for the privilege of collecting it for one year. Another tax was imposed later on called Hoifong. These two were lamped, and called by the general name of Hoifong, and the farming of them was sold by the Viceroy to Mr. Li Sing of the Wo Hang Hong of this Colony for a sum of $900,000 a year. Mr. LI SING is said to have lost largely by the transaction, and given it up, and General Pang Yuk, called sometimes General and sometimes Admiral, is reported as seeing to the collection now.
It will be observed that this Hoifong is a very much heavier tax than the Lekin or War tax, properly so-called, the nature and origin of which were so fully described by Sir Thomas WADE in his memorandum on the Revision of the Tientsin Treaty (see Blue Book China No. 6, 1871, page 442). But Lekin is not a fixed amount. In 1874 it was 10 taels a chest on opium at the Lekin Station at Chénng Cháu just out- side this Colony (see Complaint of Hongkong community C. 1628 of 1876 page 30). Now it is double that sum, to say nothing of Hoifong.
The right of the Chinese to levy the Lekin tax on opium has never been disputed, but Sir THOMAS WADE has been endeavouring for some years to induce them to fix a uniform rate at all the parts, and hence the Chefoo Covention proposed to collect the Lekin and Regular Customs duty together; and Sir THOMAS WADE, although believing that the Lekin which the Chinese Government gathered did not amount on the average to 40 taels per picul, was nevertheless prepared to recommend the Indian Govern- ment to collect that sum for China on all Indian Opium passing into China, suck payment, freeing however such opium from all charges of any sort inland or elsewhere. Hongkong would have had a certain allowance without duty or Lekin. (Vide Command paper 2716, China No. 2, 1880, page 4). The Chinese Government replied that, independent of inland levies of Lekin, it would require a levy of 60 taels at the ports to make up for their present collection.
At page 5, H. M. Minister, in farther discussing the question of Lekin, states that if the rates ruling at different ports were to be continued, he should require exact information as to the inland. Collectorates, and the rates levied at each; but the Chinese Government evidently do not want to give that information. (see page 7 of China No. 2, 1880).
Finally it seems that Sir THOMAS WADE would be prepared to agree that opium should pay Lekin at the inland barriors beyond the first existing in 1876, and at the rates then prevailing, the first barrier rate being collected by the Foreign Inspectorate with regular duty. This is such a concession from his first position that he must have ascertained that the Lekin was small.
Sir ROBERT HARt in a communication to the TsuNG LI YAMEN, (published in Command paper No. 1832 China No. 3, 1877, and entitled Proposals for the better regulation of Commercial relations), proposed that the Treaty Powers should consent that Opium should pay an import duty of taels 120 per picul to the Maritime Customs on arrival at a Treaty Port, and that at a distance of 30 li=10 ruiles from the Custom House, it should be regarded as a Chinese commodity, and subject to local, territorial and special taxation, whenever, wherever, and with whomsoever found, and that no other charge shall be levied at the Port (see page 2, Imports).
The above proposals and disenssions are certainly not without interest to the trade of this Colony, and a knowledge of the increased amount of Opium dues now collected by the Cauton authorities might prove useful to the Home authorities and to the Indian Government, especially as that Government has
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lately called attention to the undesirability of the Chinese Government largely enhancing the Import duty on Indian Opium, and more especially because recent observations show that the market for Indian Opium will be confined for the most part to the South of China.
The next question is, the existence of these local Collectorates being shown, whether the Government should take immediate notice of the levy.
There is little doubt but that the system is not of yesterday. It was found out, and stopped by Sir R. G. MACDONNELL, during his Government. It is clearly contrary to international law, (see Lord CLARENDON's despatch, Revision of Tientsin Treaty, China, 1871, page 400), and the Canton authorities know it-sec Sir BROOKE ROBERTSON's representation to the Canton Government, (Command paper 1189 of 1875, page 36,) where he told the Viceroy "that the collection of Imperial duties in the Colony was against the law."
Nevertheless the Hongkong traders say it is a matter of convenience to them to pay duties here, which they would have to pay at the K'ap-shui Mun Station, a distance of 7 miles, and where there is often trouble about the tender. They also say that they can clear their Opium for any place along the Coast north or South, without going to K'ap-Shui Mun. Besides being contrary to international usage, a system of espionage is established, which places the Chinese residents of the Colony very much in the power of the Canton Officials, a power which may be used often to their disadvantage. Otherwise than the principle involved, and the drawbacks to some Chinese residents, I am not sure that there is much to be objected to in the collection, and the convenience to many is obvious. But if there is to be an arrangement, as seems in contemplation, for the future regulation of the Opium traffic, and if this Colony is to have stations estab- lished within its jurisdiction, care should be taken that a proper recognition is made, that the concession, if made, is only granted for a good consideration, and because that our nearness to China warrants our making it. For such facilities granted for collecting, we should perhaps have some of the large revenue which has been over and over again alleged to be lost to the Chinese Government through Hongkong smuggling.
In 1868 Sir THOMAS WADE said that "by the contraband trade of junks frequenting Hongkong "and Macao, the Customs Revenue is defrauded in import and export duties little less than 1,000,000 taels
per annum." Revision of Tientsin Treaty China No. 5, 1871, page 460.
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The Governor states that "the Hongkong Government gets at present $205,000 per annum from "the Opium Farm, which is practically levying an ad valorem tax on it of more than 100 per cent. to the "consumers," and that he agrees with Sir THOMAS WADE that by the opium smuggling from Hongkong "into China, the Government of China loses at least a million of taels of revenue per annum.”
་་
M. Colonial possessions C. 3094 of 1881).
(See H.
Putting aside the disparity in the Estimates of the amount of smuggling, there can be no doubt but the geographical position of the island does afford a basis of operations for smuggling, and that a considerable amount does exist. The undersigned, however, ventures with all respect to point out that a comparison of the figures given by Sir THOMAS WADE, on page 3 of Command paper 2,716 China No. 2 (1880) shows that not more than 3,857 piculs of opium (leaving out Macao which takes up a large quantity) can be smuggled into China from Hongkong. The revenue on that, in 1876, would have been less than $800,000. In 1875 there were left at Hongkong 21,670 pieuls of the whole import. In the financial year 1875-1876 the Hoppo admitted collecting duty on what Sir THOMAS WADE estimates as pienis 10,813, of that amount Sir THOMAS WADE also allows 7,500 piculs for Hongkong boiling, for export and local use, (and export elsewhere than to China in the raw state) whilst the Governor's figures would lead to the conclusion that only 310 chests were boiled or prepared here. His Excellency states that the payment of the tax by the Opium Farmer of $205,000 is an ad valorem tax of raore than 100 per cent. ie., the value of the opium used is at the most $205,000, or equal about to 340 piculs. The capital of the last Company was $1,400,000, and as a first return, Shareholders got 12 per cent. interest on the capital,
However, if the Chinese Government lose annually anything like what is estimated from opium smuggling here, it would certainly pay them well to give this Colony a large percentage to collect their duty for them, or to allow a Foreign Inspectorate Station within the jurisdiction, because they would then get rid of all their Cruisers and save large expenses.
24th October, 1882,
(Signed)
J. RUSSELL, Colonial Treasurer and Registrar General.
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