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Inclosure 6 in No. 1.
(D.)- Statement re Cotton Case.
It having come to the knowledge of Tlbert and Co. that the Tungchow cotton mill, in which Chinese officials are largely interested, were obtaining supplies of cotton from certain districts upon payment of the equivalent of 39 cents per bale to cover all inland taxation, they applied to the Li-kin Office for permission to pass cotton for their mill at the same rate. The Li-kin Station declined to agree to this request and insisted on payment of the equivalent of 87 cents per bale, to which were added 9 cents for li-kin at a station outside Shanghae. The local taxation demanded roughly amounted to 4 per cent. on the value of the cotton. The Li-kin Station declined to admit that the local taxation is li-kin; it is contended that the levy is grower's tax, although it is only levied on cotton exported from the district in which it is grown. It was also claimed that foreigners have no right to buy cotton from the farmers, but must confine their business to buying from a licensed hong; the licence for hongs dealing in cotton, &c., varies from 150 taels to 500 tacks per annum, according to the number of articles dealt in, and one of the conditions of the licence is that the holder agrees to be responsible for payment of all taxation which may be imposed by the local authorities.
Ilbert and Co. eventually applied for transit passes, which were issued by Imperial Maritime Customs. They bought cotton in the country and tendered payment of duty under transit pass; the Li-kin Station declined to acknowledge the validity of the pass, and refused to allow the boats to pass the li-kin barrier. The boats, laden with cotton, were detained at the barrier for over four months, but were eventually allowed to pass. During part of this period Ibert and Co.'s employés and landlords, from whom they rented premises, were imprisoned by the local authorities. One effect of this action was to deter the natives from dealing with the firm's representatives. Their employés and landlords have only been set at liberty pending settlement of the case; their land- lords have been threatened with punishment if they do not consent to pay the full amount of local taxation originally demanded, irrespective of the payments of duty under transit passes. A claim has been made by 1lbert and Co. upon the Chinese Government for damages to the cotton through exposure while it was illegally detained at the li-kin barrier, for expenses incurred in connection with the delay and with the imprisonment, and for interference with their business.
After a great deal of trouble, Ilbert and Co. have got possession of the cotton, and the Shanghae Taotai has sent a representative to examine the damaged cargo, but so far that is all that has been accomplished after six months of constant pressure.
Ilbert and Co. have throughout received the active assistance of His Majesty's Consul. General, who has dealt firmly with the case throughout. The case is cited as an example of the attitude maintained by the native authorities towards foreigners who try to deal direct with natives in the interior under the provision of the Shimonoseki Treaty and the Inland Navigation Rules of the Shanghae Treaty of 1902; it is significant that the various local imposts are always referred to under names other than li-kin. The case occurred in a district within 100 miles of Shanghae.
Shanghae, May 26, 1905.
Inclosure 7 in No. 1,
(E.)-China and the Commercial Treaties.
WHEN Earl Percy assured the House of Commons that the Chinese had made no default, as far as he was aware, in their execution of the provisions of the Treaty of Shanghae, he must have overlooked the case of Mr. Bennertz, which has been occupying the attention of His Majesty's Consulate-General at Hankow and the British Legation at Peking for some months. It will, of course, be remembered that Article VIII of the Treaty of Shangbae provides for the opening of five new ports: Changsha, H.; Wanhsien, Su.; Nganking, An.; Waichow, Kt.; and Kongmoon, Kt. It is stipulated, however, that "if this Article does not come into operation, the right to demand under it the opening of these ports shall lapse." The Article has not come into operation yet, and the opening of Changsha cannot therefore be claimed under the
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Mackay Treaty; but it is definitely provided for under the Japan-China Commercial Treaty of 1903. In Article X of this Treaty it is stated that the Chinese Govern- ment agree to open to foreign trade, within six months of the exchange of the ratifications of this Treaty, Changsha-fu, in the Province of Hunan, on the same footing as the ports already opened to foreign trade." Under the most-favoured-nation arrangement this concession to Japan is as fully to be enjoyed by Great Britain as if it were actually incorporated in the Treaty of Shanghae.
Mr. Benneriz last year took advantage of the opening of Changsha to open a hong in the city, with native agencies at Yochon, Chenglin, Changtel, and Siangtan, the commercial classes in Hunan being ready, and, indeed, anxious, for the introduction of Western trade. Mr. Bennertz met with consistent opposition from the officials, backed by the "literati and gentry," those pillars of conservatism and obstruction in China. His signboard was taken down, his hong closed up, and his business entirely stopped, the plea being that, though Changsha was open to foreign trade, foreign steamers running there regularly in the season, and an office of the Imperial Maritime Customs having been opened there, the city of Changsha itself was not open. For some months Mr. Bennertz has been claiming compensation for the loss suffered by him through this high-handed action of the Changsha officials, and his claim has been firmly supported by the British Consul-General at Hankow and the Legation at Peking, and last month Mr. Bennertz made another attempt to begin business as he is fully authorized to do by Treaty. He arrived at Changsha on the 14th April last, and we give what happened in his own words :---
"After carefully consulting with His Majesty's Consul, I prepared to take my cargo into my premises in the city of Changsha on the 18th April, after duly getting the same passed through the Imperial Maritime Customs, and paying the wharfage dues. I took delivery of them from Messrs. Butterfield and Swire's godown outside of the city, and engaged fifty coolies to carry the first consignment into the city. On arrival of the goods at the city gate, the keeper and Li-kin authorities in charge stopped the goods from proceeding to my premises, stating that I must pay li-kin and should take the cargo back to the li-kin station and pay the li-kin, then only would they allow them in. During that short period of conversation, what with fifty coolies and thirty-five packages of heavy cargo and thousands of roughs and other Chinese that gathered round me, the shouting of the Li-kin Station authorities to my coolies, stating that they would be punished for bringing goods without passing the li-kin station, the situation was not at all a pleasant one. Still I stood firm and did not move an inch, simply told the authorities in charge that I would either pass through the city gate with my cargo free of li-kin, or they could take charge of saine. As they did not allow me through, I dropped all the thirty-five packages inside the city gate, took away all my coolies to my hong in the city, and paid them their dues. The matter is at present referred to the Minister, and I am again waiting without a cash of indemnity yet paid for the stoppage
business now since July 1904 up to date.”
of
my
It must be understood that there is a British Consular Representative at Changsha, under whose advice Mr. Bennertz has been acting in his endeavour to establish a British house of business in that city. Mr. Bennertz adds :
"Now as the officials have not gained their point, and as they see that they will *lose face' very soon, they are at my poor landlord, who rented me the premises in the city, and this gentleman has just served on me a notice to leave his premises by the 13th May, though he holds my rent in advance up to November 1905."
Mr. Bennertz is standing up for a principle whose maintenance is of the greatest importance to all foreigners in China, and the curious thing is that the Chinese officials must know that they will have to give way ultimately, unless they can get rid of Mr. Bennertz in some way, and by his fate deter any other foreigner from opening a hong in Changsha. There is the Japanese Treaty with China signed and duly ratified, and there is no popular opposition to the action of Mr. Bennertz, though it would not be at all surprising to hear that the officials and the leisured classes had organized a riot. It is a well-known fact that there are, at the present moment, similar cases to that of Mr. Bennertz at places much nearer Shanghae than Changsha is; but the case of Bennertz is a typical example of the audacity of Chinese officials, and their readiness to flout solemn engagements ratified by their own Government.
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