(No. 140.) My Lord,
No. 2.
Mr. Townley to the Marquess of Lansdowne.--(Received May 23.)
Peking, April 9, 1903.
IN my telegram No. 72 of the 4th instant, I reported the reply of the Chinese Government to the inquiries of His Majesty's Government with regard to certain points in connection with the new Commercial Treaty. On the 7th I had an interview with Prince Ching, and informed him, as instructed by your Lordship's telegram No. 49 of the 5th April, that the reasons given by the Chinese Government for not answering these inquiries were regarded as inadequate, and that the opposition in England to the provisions of the Treaty for the increase of the import duties could only be removed by satisfactory explanations being given on the points raised. I reminded His Highness that the original desire of the English negotiator was to procure the removal of all inland taxation on goods in return for increased import duties, strong misgivings being felt by English commercial bodies lest, by the retention of inland taxing stations, foreign goods, while paying heavy import duties, should be found exposed to the same delays and exactions as at present. The Chinese negotiators met this difficulty by undertaking that if China were left free to impose on native produce, not intended for export, a tax at the place of consumption, the arrangements for the collection of this tax should be such as in no way to interfere with foreign goods, and on this understanding the British negotiator agreed to the raising of the import duties from 5 to 121/2 per cent, ad valorem. It must be assumed that in giving this pledge with regard to the arrangements that would be made for the collection of the consumption tax, the Chinese Government had in view some more or less definite plan of procedure, and it was information with regard to that plan that the British Government wished to obtain.
Similarly, as regarded the arrangement to be made for the rebates on products of foreign types manufactured by machinery in China, the Chinese Government had agreed that certain rebates should be given, and the question was, what procedure they intended to adopt.
To these observations the Prince answered that, in his view, there was no necessity, at all events at present, for the suggested explanations. Negotiations were now proceeding with the United States and Japan, and would follow with other Powers, and it was, as yet, uncertain whether the main principle of the British Treaty would meet with general acceptance, but, assuming that it did so, and that general assent were given to the imposition of a consumption tax on the same conditions as those accepted by the British Government, the Chinese Government would, of course, be bound by those conditions, and would faithfully observe them. He read from the Treaty the stipulations to which I had referred, and said that they imposed obligations on China which she had no intention of evading.
To this I replied that His Majesty's Government was obliged to take into account the misgivings still felt by important commercial bodies in England as to the exact operation of these clauses, and I added that, as these misgivings were not confined to British merchants, any explanations that tended to allay their doubts would facilitate the acceptance of the British Treaty by other Powers.
The Prince seemed somewhat impressed by this argument, and, though he continued to repeat his views as to the sufficiency of the engagements already embodied in the Treaty, he at last, after much discussion, promised that if I would send him in writing a fuller statement of the nature of the explanations required by His Majesty's Government, he would transmit it to the negotiators of the Treaty and the Yang-tsze Viceroys, and ascertain their views.
It was tolerably evident from the Prince's attitude that he himself has only a vague idea of the arrangements that will eventually be made for the carrying out of the Treaty stipulations with regard to the points raised, and it is probable that the Chinese Government has postponed consideration of the question until other Powers accept the British arrangement in its main features. I mentioned, in the course of the conversation, that, according to the Treaty, the ratifications are to be exchanged within the next five months, but I laid no stress on the point, not being certain as to the intentions of His Majesty's Government, if satisfactory explanations are not forthcoming.
In reporting the above interview by telegram to your Lordship, I have asked whether there are any special suggestions that my note to the Prince should contain, and I shall include in it an elucidation of the position as regards provincial contributions, which, I think, can be more effectively made in writing.
I have the honour to inclose translation of the letter from the Board of Foreign Affairs, summarized in my telegram No. 72.
(Translation.)
I have, &c. (Signed) WALTER TOWNLEY.
Inclosure in No. 2.
Prince Ching to Mr. Townley,
April 3, 1903. THE Board beg to acknowledge the receipt of Mr. Townley's letter asking for a reply for communication to His Majesty's Government to the questions previously asked with regard to the new Commercial Treaty.
In reply, they beg to state that the increase of the duties and the abolition of li-kin formed the leading principle of the VIIIth Article of the Commercial Treaty and that the consumption tax of the 8th section and the excise duty of the 9th were both supplementary matters. It will be necessary to wait until the various Powers have in like manner assented to the increase of duties and abolition of li-kin, and first settle this leading principle before arranging the details, in due succession, of the consumption tax and the excise, what the course of procedure is to be, and in what way refunds are to be made. Again, not until there is an actual revenue from the increased duties will it be known definitely how much the exact contribution [sc., of the Provinces to Peking] is to be.
At the present moment, in the negotiations that have followed with other Powers, the leading principle has not yet been decided, and it is impossible as yet to settle in advance the arrangements for the collection [sc., of consumption tax] and for the rebates [sc., in connection with the excise]. The Board proposes, therefore, to wait till the negotiations with the various Powers have resulted in a settlement of the leading principle and a satisfactory method of initiating operations has been arranged, and then to communicate further with Mr. Townley. They beg that this reply may be communicated to His Majesty's Government,
(Compliments.)
2
167
(No. 140.) My Lord,
No. 2.
Mr. Townley to the Marquess of Lansdowne.--(Received May 23.)
IN my telegram No. 72 of the 4th instant, I reported the reply of the Chinese
Peking, April 9, 1903. Government to the inquiries of His Majesty's Government with regard to certain points in conucction with the new Commercial Treaty. On the 7th I had an interview with Prince Ching, and informed him, as instructed by your Lordship's telegram No. 49 of the 5th April, that the reasons given by the Chinese Government for not answering these inquiries were regarded as inadequate, and that the opposition in England to the provisions of the Treaty for the increase of the import duties could only be removed by satisfactory explanations being given on the points raised. I reminded His Highness that the original desire of the English negotiator was to procure the removal of all uland taxation on goods in return for increased import duties, strong misgivings being felt by English commercial bodies lest, by the retention of inland taxing stations, foreign goods, while paying heavy import duties, should be found exposed to the same delays and exactions as at present. The Chinese negotiators met this difficulty by undertaking that if China were left free to impose on native produce, not intended for export, a tax at the place of consumption, the arrangements for the collection of this tax should be such as in no way to interfere with foreign goods, and on this understanding the British negotiator agreed to the raising of the import duties from 5 to 123 per cent, ad valorem. It must be assumed that in giving this pledge with regard to the arrangements that would be made for the collection of the consumption tax, the Chinese Government had in view some more or less definite plan of procedure, and it was information with regard to that plan that the British Government wished to obtain.
Similarly, as regarded the arrangement to be made for the rebates on products of foreign types manufactured by machinery in China, the Chinese Government had agreed that certain rebates should be given, and the question was, what procedure they intended to adopt.
To these observations the Prince answered that, in his view, there was no necessity, at all events at present, for the suggested explanations. Negotiations were now proceeding with the United States and Japan, and would follow with other Powers, and it was, as yet, uncertain whether the main principle of the British Treaty would meet with general acceptance, but, assuming that it did so, and that general assent were given to the imposition of a consumption tax on the same conditions as those accepted by the British Government, the Chinese Government would, of course, be bound by those conditions, and would faithfully observe them. He read from the Treaty the stipulations to which 1 had referred, and said that they imposed obligations on China which she had no intention of evading.
To this I replied that His Majesty's Government was obliged to take into account the misgivings still felt by important commercial bodies in England as to the exact operation of these clauses, and I added that, as these misgivings were not confined to British merchants, any explanations that tended to allay their doubts would facilitate the acceptance of the British Treaty by other Powers.
The Prince seemed somewhat impressed by this argument, and, though he continued to repeat his views as to the sufficiency of the engagements already embodied in the Treaty, he at last, after much discussion, promised that if I would send him in writing a fuller statement of the nature of the explanations required by His Majesty's Government, he would transmit it to the negotiators of the Treaty and the Yang-tsze Viceroys, and ascertain their views.
It was tolerably evident from the Prince's attitude that he himself has only a vague idea of the arrangements that will eventually be made for the carrying out of the Treaty stipulations with regard to the points raised, and it is probable that the Chinese Govern- ment has postponed consideration of the question until other Powers accept the British arrangement in its main features. I mentioned, in the course of the conversation, that, according to the Treaty, the ratifications are to be exchanged within the next five months, but I laid no stress on the point, not being certain as to the intentions of His Majesty's Government, if satisfactory explanations are not forthcoming.
in reporting the above interview by telegram to your Lordship, I have asked whether there are any special suggestions that my note to the Prince should contain, and I shall include in it an elucidation of the position as regards provincial contribu- tions, which, I think, can be more effectively made in writing.
I have the honour to inclose translation of the letter from the Board of Foreign Affairs, summarized in my telegram No. 72.
(Translation.)
I have, &c. (Signed) WALTER TOWNLEY.
Inclosure in No. 2.
Prince Ching to Mr. Townley,
April 3, 1903. THE Board beg to acknowledge the receipt of Mr. Townley's letter asking for a reply for communication to His Majesty's Government to the questions previously asked with regard to the new Commercial Treaty.
In reply, they beg to state that the increase of the duties and the abolition of li-kin formed the leading principle of the VIIIth Article of the Commercial Treaty and that the consumption tax of the 8th section and the excise duty of the 9th were both supple- mentary matters. It will be necessary to wait until the various Powers have in like manner assented to the increase of duties and abolition of li-kin, and first settle this leading principle before arranging the details, in due succession, of the consumption tax and the excise, what the course of procedure is to be, and in what way refunds are to be made. Again, not until there is an actual revenue from the increased duties will it be known definitely how much the exact contribution [sc., of the Provinces to Peking] is to be.
At the present moment, in the negotiations that have followed with other Powers, the leading principle has not yet been decided, and it is impossible as yet to settle in advance the arrangements for the collection [sc., of consumption tax] and for the rebates [sc., in connection with the excise]. The Board proposes, therefore, to wait till the negotiations with the various Powers have resulted in a settlement of the leading principle and a satisfactory method of initiating operations has been arranged, and then to communicate further with Mr. Townley. They beg that this reply may be communicated to His Majesty's Government,
(Compliments.)
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