CO129-330 - Public Offices - 1905 — Page 539

those places where foreign merchants have been allowed to make their own arrange- ments for leasing land without official intervention, and I fear that Chinan may share the fate of Hangchow, Soochow, Yochow, Wusung, and other similar places where there are commercial settlements laid out in lots, with roads and trees, and possessing an elaborate code of Regulations, but which have to this day remained void of either houses or merchants to inhabit them.

I avail, &c, (Signed)

ERNEST SATOW.

532

(This Document is the Property of His Britannic Majesty's Government.i

C.O.

CHINA TRADE.

CONFIDENTIAL.

No. 1.

Foreign Office to India Office.

17633

[May

TREG 24 MAY 05

SROTION 2.

0

Sir,

Foreign Office, May 8, 1905. ON the receipt of your letter of the 20th October, 1904, a despatch was addressed to His Majesty's Minister at Peking on the subject of the scheme proposed by the Viceroy of Canton for raising additional revenue by an increase of the taxation of opium.

It was suggested in your letter that, by the employment of the words "the hitherto accepted view" of the intention of the additional article to the Chefoo Convention in the last paragraph of his despatch No. 242 of the 7th July, 1904, Sir E. Satow possibly implied that he was not satisfied that the view there referred to was correct.

Sir E. Satow was accordingly requested to furnish any observations he might wish to offer as to the evidence in favour of that view, considered in connection with the correspondence on the subject of the additional Article laid before Parliament in 1885. I am directed by the Marquess of Lansdowne to inclose, for the consideration of the Secretary of State for India, a copy of a despatch which has been received in reply,* in which Sir E. Satow states that, in his opinion, in the event of terminal taxation on opium being levied ad valorem, it has to be levied at the same rate value for value on native as well as on foreign opium, and that in ascertaining for this purpose the value of foreign opium the amount paid on it for li-kin at the port of entry, which is 50 taels per 100 cattics, should alone be deducted from its market value.

This view accords to a certain extent with that expressed by the Board of Trade on the 29th May, 1902, that until the internal duty on native opium shall amount to 80 taels per 100 catties, no terminal tax can be imposed on foreign opium.

With regard to the general question, Sir E. Satow reports two further cases in Hupeh and Chibli, in which the Chinese authorities have evaded or attempted to evade the provisions of the additional Article, and he suggests that until these breaches of the plain wording of that Article are abandoned, His Majesty's Government should refuse even to consider the proposals of the Chinese Government for raising additional revenue from opium taxation at Canton.

I am to inquire whether Mr. Secretary Brodrick agrees with Lord Lansdowne in thinking that Sir E. Satow's suggestion should be approved.

I am, &c. (Signed) F. A. CAMPBELL.

Sir E. Satow, No. 60, February 17, 1905 (in print).

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