303
2
provided that the additional taxation is not imposed while the original packages are intact, and provided that native opium pays the same tax, even if prior to its imposition foreign opium has paid 110 taels duty and li-kin per picul and native opium has paid nothing.
I have already in my despatch No. 231 given my reasons for believing that this interpretation of the additional Article to the Chefoo Convention is contrary both to the intention of its framers and to the understanding of it on which the Chinese Government itself acted for many years, but pending the receipt of your Lordship's instructions, which I propose to request by telegraph as soon as there has been time for my despatch to reach England, I shall do no more than again call the attention of the Board to the fact that they have ignored this view of the stipulations of the additional Article.
I have, &c.
Sir,
(Signed)
Inclosure in No. 2.
WALTER TOWNLEY.
Prince and Ministers to Mr. Townley.
Peking, July 13, 1903.
THE Board have the honour to acknowledge the receipt of Mr. Townley's letter with regard to the establishment at Kanchow in Kiangsi of an office for the collection of li-kin on foreign opium.
Letter summarized.
In reply they have the honour to state that the system in force in Kiangsi for the collection of the prepared opium tax is that on every 100 taels (ounces) of the drug a tael of silver is levied, and that on foreign opium the tax is paid by Chinese merchants after the packages have been opened. This scheme was previously submitted by the Governor of Kiangsi by telegram.
On receipt of the letter under acknowledgment, the Board again telegraphed to the Governor to inquire in what way the tax was actually collected, and informed him that he must devise a thoroughly satisfactory system. They have now received his reply, which is to the effect that the annual sale of foreign opium in Kiangsi is only about 3,000 odd chests; that as regards the tax at Kanchow on prepared opium the deputy there has now summoned the merchants and people, and has discussed with them the method of collection, which is that, in accordance with rule, the tax is only levied after the packages have been opened, and by no means on the drug while the packages are still intact, and that there is therefore no infringement whatever of the additional Article to the Chefoo Agreement. The Governor adds that he will give orders that the system is to be carefully considered.
From the above it is evident that in their system for the collection of duty on prepared opium the Kiangsi authorities are mindful of their obligations under Treaty, and it would seem that there is no reason to apprehend such action as the levying of the tax without regard to the question whether the packages have been opened or not.
The Board beg to communicate the above for Mr. Townley's information. Compliments.
3
Mr. Mansfield in his first despatch states that the Viceroy is, of course, within Treaty rights in refusing to allow the export of flour to foreign countries. A reference to the Rules of Trade attached to the Treaty of Tien-tsin would not appear to me to bear out this contention, as in Rule 2 it is distinctly stated that flour, among certain other enumerated commodities, is free of all duty, whether import or export. The Vicoroy's theory is clearly that flour should be classed with "rice and all other grains whatsoever," of which the export is prohibited under section 3 of Rule 5. Before replying to Mr. Mansfield I called upon Sir Robert Hart, and asked him his opinion as to whether, under the Rules of Trade, flour could be exported or not. The Inspector-General of Customs replied that he did not consider that the export could be prohibited. He remembered that some correspondence upon the subject had taken place a few years ago, but the record of it had been destroyed with the Customs archives in 1900.
I accordingly addressed a despatch, copy inclosed, to Mr. Mansfield, asking him for fuller particulars, and representing that it was not clear to me that the Viceroy is supported by Treaty in his prohibition of the export of flour.
Your Lordship will perceive that Mr. Mansfield states in his reply that the Viceroy bases his refusal to grant the permits on paragraph 3 of Rule 5, and points out that in September 1900 his predecessor, the late Viceroy Liu, granted a permit as a special favour, and on the understanding that it must not be taken as a precedent, whilst a similar request on the part of an American was refused last year.
Mr. Mansfield further shows that the question was raised at Tien-tsin in 1898 by a firm which was anxious to manufacture flour, and that their inquiry of the Commissioner of Customs whether such flour could be exported to foreign countries received, after reference to Peking, an answer in the negative. It appears from the correspondence submitted by Mr. Mansfield that Messrs. Schärff and Co., laid the point before the then German Minister, Freiherr von Ketteler, in 1899, and that an exchange of notes between the German Legation and the Tsungli Yamên resulted in the Board's returning answer that the application could not be entertained, since, by the Commercial Treaties, the export abroad of rice or grain is prohibited.
There is nothing in the archives to show that the above view of the Tsungli Yamên was ever accepted by this Legation, nor apparently was the arrangement made by Mr., now Sir Pelham, Warren with the late Viceroy Lin for the export in September 1900 of 50,000 piculs of flour reported to Peking.
I am accordingly instructing Mr. Mansfield to inform the Viceroy that I am of opinion that flour is exportable duty free under the second Tariff Rule, and that I am referring the question to your Lordship for instructions. I am also requesting Mr. Mansfield to tell the Viceroy that although, in view of the clear wording of the Rule, I am not able to accept without authority from your Lordship any arrangement for the payment of duty, I should be prepared to recommend any reasonable compromise that he may be able to suggest.
(No. 16.) Sir,
I have, &c. (Signed)
WALTER TOWNLEY.
(No. 267.) My Lord,
No. 3.
Mr. Townley to the Marquess of Lansdowne.—(Received August 31.)
Peking, July 16, 1903.
I HAVE the honour to transmit to your Lordship herewith copies of two despatches from the Acting Consul-General at Shanghae, representing that the Viceroy of Nanking has refused permission to the China Flour Mills Company of Shanghae to export 100,000 piculs of flour to Japan or Vladivostok.
Inclosure 1 in No. 3.
Acting Consul-General Mansfield to Mr. Townley.
Shanghae, June 15, 1908. I HAVE the honour to report that last month the China Flour Mills Company applied to me to endeavour to obtain permits to export to Japan or Vladivostok their surplus stock of flour. The amount for which permits were applied was 100,000 piculs, but I understand the actual amount of their surplus was about half that amount. They explained that the new harvest, which will shortly be gathered, promises to be very large, and that there is consequently no market for their flour, and that in the damp months it is very liable to mildew.
I have been in communication with the Viceroy on the subject, and have pointed out to him that the manufacture of flour is becoming a very important industry in Shanghae, and bids fair in a few years, if given any encouragement, to obviate the necessity for importing flour from abroad. That it is not the staple food of the people here, and that the market price is exceedingly cheap, only 4 dol. 50 c. a picul. That
[2091 hh-2]
B 2
303
2
provided that the additional taxation is not imposed while the original packages are intact, and provided that native opium pays the same tax, even if prior to its imposition foreign opium has paid 110 taels duty and li-kin per picul and native opium has paid nothing.
I have already in my despatch No. 231 given my reasons for believing that this interpretation of the additional Article to the Chefoo Convention is contrary both to the intention of its framers and to the understanding of it on which the Chinese Government itself acted for many years, but pending the receipt of your Lordship's instructions, which I propose to request by telegraph as soon as there has been time for my despatch to reach England, I shall do no more than again call the attention of the Board to the fact that they have ignored this view of the stipulations of the additional Article.
I have, &c.
Sir,
(Signed)
Inclosure in No. 2.
WALTER TOWNLEY.
Prince and Ministers to Mr. Townley.
Peking, July 13, 1903.
THE Board have the honour to acknowledge the receipt of Mr. Townley's letter with regard to the establishment at Kanchow in Kiangsi of an office for the collection of li-kin on foreign opium.
Letter summarized.
In reply they have the honour to state that the system in force in Kiangsi for the collection of the prepared opium tax is that on every 100 taels (ounces) of the drug a tael of silver is levied, and that on foreign opium the tax is paid by Chinese merchants after the packages have been opened. This scheme was previously submitted by the Governor of Kiangsi by telegram.
On receipt of the letter under acknowledgment, the Board again telegraphed to the Governor to inquire in what way the tax was actually collected, and informed him that he must devise a thoroughly satisfactory system. They have now received his reply, which is to the effect that the annual sale of foreign opium in Kiangsi is only about 3,000 odd chests; that as regards the tax at Kanchow on prepared opium the deputy there has now summoned the merchants and people, and has discussed with them the method of collection, which is that, in accordance with rule, the tax is only levied after the packages have been opened, and by no means on the drug while the packages are still intact, and that there is therefore no infringement whatever of the additional Article to the Chefoo Agreement. The Governor adds that he will give orders that the system is to be carefully considered.
From the above it is evident that in their system for the collection of duty on prepared opium the Kiangsi authorities are mindful of their obligations under Treaty, and it would seem that there is no reason to apprehend such action as the levying of the tax without regard to the question whether the packages have been opened or not.
The Board beg to communicate the above for Mr. Townley's information. Compliments.
3
Mr. Mansfield in his first despatch states that the Viceroy is, of course, within Treaty rights in refusing to allow the export of flour to foreign countries. A reference to the Rules of Trade attached to the Treaty of Tien-tsin would not appear to me to bear out this contention, as in Rule 2 it is distinctly stated that flour, among certain other enumerated commodities, is free of all duty, whether import or export. The Vicoroy's theory is clearly that flour should be classed with "rice and all other grains whatsoever," of which the export is prohibited under section 3 of Rule 5. Before replying to Mr. Mansfield I called upon Sir Robert Hart, and asked him his opinion as to whether, under the Rules of Trade, flour could be exported or not. The Inspector- General of Customs replied that he did not consider that the export could be prohibited. He remembered that some correspondence upon the subject had taken place a few years ago, but the record of it had been destroyed with the Customs archives in
1900.
I accordingly addressed a despatch, copy inclosed, to Mr. Mansfield, asking him for fuller particulars, and representing that it was not clear to me that the Viceroy is supported by Treaty in his prohibition of the export of flour.
Your Lordship will perceive that Mr. Mansfield states in his reply that the Viceroy bases his refusal to grant the permits on paragraph 3 of Rule 5, and points out that in September 1900 his predecessor, the late Viceroy Liu, granted a permit as a special favour, and on the understanding that it must not be taken as a precedent, whilst a similar request on the part of an American was refused last year.
Mr. Mansfield further shows that the question was raised at Tien-tsin in 1898 by a firm which was anxious to manufacture dour, and that their inquiry of the Com- missioner of Customs whether such flour could be exported to foreign countries received, after reference to Peking, an answer in the negative. It appears from the correspondence submitted by Mr. Mansfield that Messrs. Schärff and Co., laid the point before the then German Minister, Freiherr von Ketteler, in 1899, and that an exchange of notes between the German Legation and the Tsungli Yamên resulted in the Board's returning answer that the application could not be entertained, since, by the Com- mercial Treaties, the export abroad of rice or grain is prohibited.
There is nothing in the archives to show that the above view of the Tsungli Yamên was ever accepted by this Legation, nor apparently was the arrangement made by Mr., now Sir Pelham, Warren with the late Viceroy Lin for the export in September 1900 of 50,000 piculs of flour reported to Peking.
I am accordingly instructing Mr. Mansfield to inform the Viceroy that I am of opinion that flour is exportable duty free under the second Tariff Rule, and that I am referring the question to your Lordship for instructions. I am also requesting Mr. Mansfield to tell the Viceroy that although, in view of the clear wording of the Rule, I am not able to accept without authority from your Lordship any arrangement for the payment of duty, I should be prepared to recommend any reasonable compromise that he may be able to suggest.
(No. 16.) Sir,
I have, &c. (Signed)
WALTER TOWNLEY.
(No. 267.) My Lord,
No. 3.
Mr. Townley to the Marquess of Lansdowne.—(Received August 31.)
Peking, July 16, 1903.
I HAVE the honour to transmit to your Lordship herewith copies of two despatches from the Acting Consul-General at Shanghae, representing that the Viceroy of Nanking has refused permission to the China Flour Mills Company of Shanghae to export 100,000 piculs of flour to Japan or Vladivostok.
Inclosure 1 in No. 3.
Acting Consul-General Mansfield to Mr. Townley.
Shanghae, June 15, 1908. I HAVE the honour to report that last month the China Flour Mills Company applied to me to endeavour to obtain permits to export to Japan or Vladivostok their surplus stock of flour. The amount for which permits were applied was 100,000 piculs, but I understand the actual amount of their surplus was about half that amount. They explained that the new harvest, which will shortly he gathered, promises to be very large, and that there is consequently no market for their flour, and that in the damp months it is very liable to mildew.
I have been in communication with the Viceroy on the subject, and have pointed out to him that the manufacture of flour is becoming a very important industry in Shanghae, and bids fair in a few years, if given any encouragement, to obviate the necessity for importing flour from abroad. That it is not the staple food of the people here, and that the market price is exceedingly cheap, only 4 dol. 50 c. a picul. That
[2091 hh-2]
B 2
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