2
system in the Canton Province only affects the drug at the place of consumption after it has been prepared, and is not an additional tax on foreign opium before the packages have been opened. There is no infringement of the Treaty. As the Board however has received the despatch under acknowledgment from you complaining of the system of collection, the Viceroy of Canton will again be notified that the proposed regulation of the farm must be carefully revised and made quite in order. On receipt of his reply the Board will again communicate with
I avail, &c.
(No. 231.) My Lord,
you.
No. 2.
Mr. Townley to the Marquess of Lansdowne.-(Received August 4.)
Peking, June 18, 1903. MR. SCOTT'S despatch No. 18 of the 1st June, of which he has sent your Lordship a copy, reached me on the 15th instant, and on the 16th I addressed to the Foreign Board the note, of which I have the honour to inclose a copy, in support of his efforts to prevent the newly devised system of taxation of opium at Canton from coming into force. I had already enumerated to the Board the main grounds on which I considered that the proposed system infringed the Additional Article to the Chefoo Convention, but from their reply, of which a copy was transmitted to your Lordship in my despatch No. 224 of the 10th instant, they appeared to think that no objection could be raised to any arrangement that did not involve the taxation of Indian opium before the packages containing it were opened, and therefore I thought it well to remind them of the provisions of the Additional Article with regard to the equal taxation of native and foreign opium.
The wording of the Additional Article on this point is as follows:-" The Chinese Government undertakes that when the package shall have been opened at the place of consumption, the opium shall not be subjected to any tax or contribution, direct or indirect, other than or in excess of such tax or contribution as is or may hereafter be levied on native opium."
This is not altogether free from ambiguity, but there is no doubt as to the sense in which it has always been understood both by the Chinese and ourselves, until it suited the purpose of the Canton authorities to profess a different view. It has always been taken to mean that Indian opium on paying the combined import and li-kin dues of 110 taels per chest could not be subjected to any further taxation, unless such taxation were also imposed on native opium, and unless the latter had previously paid the same amount as the foreign drug, namely, 110 taels a chest.
Mr. Scott's reports of last summer show that this was the belief of the Chinese authorities themselves up to that time, and it is difficult to suppose that the negotiators of the Additional Article had any other intention. One of the arguments used, for instance, by the Chinese negotiator, the Marquis Tseng, in recommendation of the proposed arrangement was, that it would be "better for the British merchants engaged in the opium trade to know exactly what are the imposts to which the drug would be subjected than that these should be left to be regulated, as they are at present, according to the ever-changing necessities of the Provincial Governments." (Memorandum sent to the Foreign Office on the 27th September, 1884.) If the present contention of the Canton Government were accepted, foreign opium would be in precisely the position from which the Additional Article was intended, according to the Chinese negotiator, to remove it.
Moreover, even if there were admitted to exist some doubt as to the liability of foreign opium to further taxation in the interior, there can be none as to its immunity within the limits of the Treaty port, which is the sphere of operation of the present scheme.
I have, &c. (Signed)
WALTER TOWNLEY.
Your Highness,
3
Inclosure in No. 2.
Mr. Townley to Prince Ching.
June 16, 1903.
I HAVE the honour to acknowledge the receipt of your Highness' note with regard to the opium farm at Canton, in which you state that as the opium will not be taxed until the packages containing it have been opened, and that there is therefore no infringement of the provisions of the Additional Article to the Chefoo Convention.
I have the honour to draw your Highness' attention to the provisions of the 5th section of that Article, according to which the Chinese Government undertakes that when the package shall have been opened at the place of consumption, the opium shall not be subjected to any tax or contribution, direct or indirect, other than or in excess of such tax or contribution as is or may hereafter be levied on native opium.
The combined duty and li-kin paid on entry by foreign opium is 110 taels per 100 catties, and the amount paid by native opium in the Canton Province is much less than this. Therefore, even if under the proposed arrangement an identical tax were to be levied on foreign and native prepared opium, they would not be on an equal footing, and the Additional Article would be infringed,
I shall be obliged if your Highness will inform the Canton Government accordingly.
I avail, &c. (Signed) WALTER TOWNLEY.
232
2
system in the Canton Province only affects the drug at the place of consumption after it has been prepared, aud is not an additional tax on foreign opium before the packages have been opened. There is no infringement of the Treaty. As the Board however has received the despatch under acknowledgment from you complaining of the system of collection, the Viceroy of Canton will again be notified that the proposed regulation of the farm must be carefully revised and made quite in order. On receipt of his reply the Board will again communicate with
I avail, &c.
(No. 231.) My Lord,
you.
No. 2.
Mr. Townley to the Marquess of Lansdowne.-(Received August 4.)
Peking, June 18, 1903. MR. SCOTT'S despatch No. 18 of the 1st June, of which he has sent your Lordship a copy, reached me on the 15th instant, and on the 16th I addressed to the Foreign Board the note, of which I have the honour to inclose a copy, in support of his efforts to prevent the newly devised system of taxation of opium at Canton from coming into force. I had already enumerated to the Board the main grounds on which considered that the proposed system infringed the Additional Article to the Chefoo Convention, but from their reply, of which a copy was transmitted to your Lordship in my despatch No. 224 of the 10th instant, they appeared to think that no objection could be raised to any arrangement that did not involve the taxation of Indian opium before the packages containing it were opened, and therefore I thonght it well to remind them of the provisions of the Additional Article with regard to the equal taxation of native and foreign opium.
The wording of the Additional Article on this point is as follows:-" The Chinese Government undertakes that when the package shall have been opened at the place of consumption, the opium shall not be subjected to any tax or contribution, direct or indirect, other than or in excess of such tax or contribution as is or may hereafter be levied on native opium."
This is not altogether free from ambiguity, but there is no doubt as to the sense in which it has always been understood both by the Chinese and ourselves, until it suited the purpose of the Canton authorities to profess a different view. It has always been taken to mean that Indian opium on paying the combined import and li-kin dues of 110 taels per chest could not be subjected to any further taxation, unless such taxation were also imposed on native opium, and unless the latter had previously paid the same amount as the foreign drug, namely, 110 taels a chest.
Mr. Scott's reports of last summer show that this was the belief of the Chinese authorities themselves up to that time, and it is difficult to suppose that the negotiators of the Additional Article had any other intention. One of the arguments used, for instance, by the Chinese negotiator, the Marquis Tseng, in recommendation of the proposed arrangement was, that it would be "better for the British merchants engaged in the opium trade to know exactly what are the imposts to which the drug would be subjected than that these should be left to be regulated, as they are at present, according to the ever-changing necessities of the Provincial Governments." (Memorandum sent to the Foreign Office on the 27th September, 1884.) If the present contention of the Canton Government were accepted, foreign opium would be in precisely the position from which the Additional Article was intended, according to the Chinese negotiator, to remove it.
Moreover, even if there were admitted to exist some doubt as to the liability of foreign opium to further taxation in the interior, there can be none as to its immunity within the limits of the Treaty port, which is the sphere of operation of the present scheme.
I have, &c. (Signed)
WALTER TOWNLEY.
Your Highness,
3
Inclosure in No. 2.
Mr. Townley to Prince Ching.
June 16, 1903.
I HAVE the honour to acknowledge the receipt of your Highness' note with regard to the opium farm at Canton, in which you state that as the opium will not be taxed until the packages containing it have been opened, and that there is therefore no infringement of the provisions of the Additional Article to the Chefoo Convention.
I have the honour to draw your Highness' attention to the provisions of the 5th section of that Article, according to which the Chinese Government undertakes that when the package shall have been opened at the place of consumption, the opium shall not be subjected to any tax or contribution, direct or indirect, other than or in excess of such tax or contribution as is or may hereafter be levied on native opium.
The combined duty and li-kin paid on entry by foreign opium is 110 taels per 100 catties, and the amount paid by native opium in the Cantou Province is much less than this. Therefore, even if under the proposed arrangement an identical tax were to be levied on foreign and native prepared opium, they would not be on an equal footing, and the Additional Article would be infringed,
I shall be obliged if your Highness will inform the Canton Government accordingly.
I avail, &c. (Signed) WALTER TOWNLEY.
232
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