724
[This Document is the Property of His Britannic Majesty's Government.]
CHINA TRADE.
CONFIDENTIAL.
C.O.
November 21.]
42072
SECTION 2.
No. 1.
13 DEC 04
(No. 348.) My Lord,
Sir E. Satow to the Marquess of Lansdowne
Received November 21.)
Peking, September 30, 1904. IN continuation of my despatches No. 242 of the 7th July, and No. 329 of the 8th September, on the subject of the taxation of prepared opium at Canton, I have the honour to transmit to your Lordship herewith a translation of the note which I have received from the Chinese Government in reply to my representations,
In this note Prince Ch'ing sets forth the views of his Government on the question, and I have the honour to request your Lordship to communicate to me by telegraph instructions as to the attitude I should observe in regard to the position taken up by the Chinese Government.
I have forwarded translations of Prince Ch'ing's note to the Government of India and to His Majesty's Consul-General at Canton.
I have, &c.
(Signed)
ERNEST SATOW.
Inclosure in No. 1.
Prince Ching to Sir E. Satow.
Your Excellency,
Peking, September 15, 1904. ON the 8th September I had the honour to receive your Excellency's note in reply to mine of the 27th August on the subject of taxation of prepared opium at Canton. (Note of the 8th September quoted at length.)
In reply I have the honour to refer to your Excellency's note of the 4th July last on this question, in which your Excellency remarks that the Canton Regulations contain no provision to ensure that before foreign opium can be further taxed native opium must first have paid taxation amounting to 110 taels. Your Excellency's reference appeared to be limited only to that part of section 5 in the Additional Article which provides that foreign opium shall not be subjected to any taxation in excess of that levied on native opium, but to omit calling attention to the following words in the text, which provide that in the event of such taxation being imposed it shall be calculated ad valorem, the same rate being assessed value for value on foreign and native opium.
It was on account of this omission that this Board specially quoted the above passage in our reply to your Excellency of the 27th August. Furthermore, as the Viceroy explains in his telegraphic report, the li-kin and Customs dues on Szechuan, Yunnan and Kiao-chau opium range from a maximum of over 90 taels to a minimum of over 60 taels. Native opium is cheap while foreign opium is dear; and even if the li-kin of 80 taels be deducted from the market price of foreign opium, a comparison with (the price of) native opium will by no means show any over taxation on the foreign drug,
The principle laid down in clause 5 is so clear that it was not necessary for me to actually quote the final clause, which, as your Excellency says, provides that the li-kin paid by foreign opium should be deducted from its market price (when its value is to be ascertained for purposes of taxation), and which comparative method of ascertaining values was by no means overlooked by us.
Your Excellency apprehends that if each provincial authority is going to place extra taxation on foreign opium a state of uncertainty will prevail which would prevent foreign merchants from being able to calculate its incidence beforehand. It must, however, be borne in mind that the tax under consideration is one upon prepared opium, not upon the raw drug, Foreign merchants have hitherto only concerned themselves with importing opium, and do not deal in the prepared drug so that any variation in the taxation of the latter would not affect them.
Your Excellency points out that China has derived a revenue such as she never derived before from foreign opium, since the duty and li-kin have been paid together at
[2236 x~2]
724
[This Document is the Property of His Britannic Majesty's Government.]
CHINA TRADE.
CONFIDENTIAL.
C.O.
November 21.]
42072
SECTION 2.
No. 1.
13 DEC 041
(No. 348.) My Lord,
Sir E. Satow to the Marquess of Lansdowne
Received November 21.)
Peking, September 30, 1904. IN continuation of my despatches No. 242 of the 7th July, and No. 329 of the 8th September, on the subject of the taxation of prepared opium at Canton, I have the honour to transmit to your Lordship herewith a translation of the note which I have received from the Chinese Government in reply to my representations,
In this note Prince Ch'ing sets forth the views of his Government on the question, and I have the honour to request your Lordship to communicate to me by telegraph instructions as to the attitude I should observe in regard to the position taken up by the Chinese Government.
I have forwarded translations of Prince Ch'ing's note to the Government of India and to His Majesty's Consul-General at Canton.
I have, &c.
(Signed)
ERNEST SATOW.
Inclosure in No. 1.
Prince Ching to Sir E. Satow.
Your Excellency,
Peking, September 15, 1904. ON the 8th September I had the honour to receive your Excellency's note in reply to mine of the 27th August on the subject of taxation of prepared opium at Canton. (Note of the 8th September quoted at length.)
In reply I have the honour to refer to your Excellency's note of the 4th July last on this question, in which your Excellency remarks that the Canton Regulations contain no provision to ensure that before foreign opium can be further taxed native opium must first have paid taxation amounting to 110 taels. Your Excellency's reference appeared to be limited only to that part of section 5 in the Additional Article which provides that foreign opium shall not be subjected to any taxation in excess of that levied on native opium, but to omit calling attention to the following words in the text, which provide that in the event of such taxation being imposed it shall be calculated ad valorem, the same rate being assessed value for value on foreign and native opium.
It was on account of this omission that this Board specially quoted the above passage in our reply to your Excellency of the 27th August. Furthermore, as the Viceroy explains in his telegraphic report, the li-kin and Customs dues on Szechuan, Yunnan and Kiao-chau opium range from a maximum of over 90 taels to a minimum of over 60 taels. Native opium is cheap while foreign opium is dear; and even if the li-kin of 80 taels be deducted from the market price of foreign opium, a comparison with (the price of) native opium will by no means show any over taxation on the foreign drug,
The principle laid down in clause 5 is so clear that it was not necessary for me to actually quote the final clause, which, as your Excellency says, provides that the li-kin paid by foreign opium should be deducted from its market price (when its value is to be ascertained for purposes of taxation), and which comparative method of ascertaining values was by no means overlooked by us.
Your Excellency apprehends that if each provincial authority is going to place extra taxation on foreign opium a state of uncertainty will prevail which would prevent foreign merchants from being able to calculate its incidence beforehand. It must, however, be borne in mind that the tax under consideration is one upon prepared opium, not upon the raw drug, Foreign merchants have hitherto only concerned themselves with importing opium, and do not deal in the prepared drug so that any variation in the taxation of the latter would not affect them.
Your Excellency points out that China has derived a revenue such as she never derived before from foreign opium, since the duty and li-kin have been paid together at
[2236 x~2]
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