This Document is the Property of His Britannic Majesty's Government.j
2
and dues agreeable to the Tariff, such merchandize may be conveyed by Chinese merchants to any province or city in the interior of China on paying a further amount as transit dues (li-kin) which was commuted, at the option of the importer, to 2 per cent. ad valorem. But as long as the goods remain in the city, town, or port opened as a Treaty port, they are not liable to any further impost beyond the import duty.
By section 3, sub-section 1, of the Chefoo Convention of 1876, Sir Thomas Wade undertook to move his Government to allow the ground rented by foreigners (the so- called Concessions) at the different ports to be regarded as the area of exemption from li-kin. But by the Additional Article of the 18th July, 1885, this question was expressly reserved for further consideration, and the Chefoo Agreement was ratified without this sub-section. The Chinese authorities have, however, persistently regarded it as forming a part of the existing Treaty arrangements, contrary to good faith, and His Majesty's Government are entitled to maintain the construction of the Treaties above set forth, and I am instructed to insist upon it.
The Governor of Changsha has sought, nevertheless, to restrict the residence of foreigners to a particular portion of land outside the city of Changsha, and to this arrangement His Majesty's Government have not given their consent. Experience at recently opened ports has shown that the creation of settlements for the exclusive occupation of foreigners is, in most cases, of no advantage to either foreigners or Chinese, and such settlements as, for instance, at Yochou and Hangchou have remained vacant ever since they were laid out. Under such circumstances, it is more econo- mical for China, and more convenient for the few foreign merchants who desire to trade at these new ports, that the merchants should be at liberty to take up their residence anywhere within the port which has been opened to trade either within or without the walls.
In the note to which I am replying, it is alleged that Chinese officials and people are by no means in favour of foreign merchants acquiring property beyond the area of the port opened to foreign trade, because they naturally resent their own helplessness arising out of China's want of jurisdiction over foreigners. But it is not a question of acquiring property, or even of hiring houses beyond the area of the port opened to foreign trade, because the walled city is included in the expression "cities and towns." Your Highness observes that when, as is contemplated by Article XII of the British Commercial Treaty, jurisdiction over foreigners shall have been restored to China, there will be no obstacle in the way of foreigners living promiscuously among the Chinese. But the argument loses any weight which might be attached to it when it is considered that at Foochow, Ningpo, Amey, Swatow, not to speak of other ports, which have been open to trade for sixty years or more, foreigners have always lived promiscuously among the Chinese without any inconvenience being felt.
It is not for any such reason as alleged that the Chinese Government and pro- vincial authorities have always opposed the residence of foreign merchants within the walled city of an open port, but because of narrow-minded prejudices such as existed in former times at Canton, as your Highness will remember, and because they desire to levy li-kin taxes, to which they are not entitled, on foreign goods consumed within that area.
Your Highness' note ends by requesting me to instruct His Majesty's Acting Consul to discuss the question amicably with the Governor to whom you were tele- graphing. As I had not the honour to receive communication of your telegram to the Governor, I am ignorant of the instructions conveyed in it, but judging by the tone adopted by his Excellency in his discussions with His Majesty's Acting Consul, I much fear that those instructions were not in accordance either with amity or the Treaty obligations of China.
I avail, &c.
(Signed)
ERNEST SATOW.
CHINA TRADE.
CONFIDENTIAL.
No. 1.
257
[August 28.]
SECTION 4.
Sir E. Sutow to the Marquess of Lansdowne.--(Received August 28.) (No. 247.) My Lord,
Peking, July 12, 1905. IN continuation of my despatch No. 233 of the 3rd July, I have the honour to inclose copies of further correspondence relating to Changsha questions.
Mr. Flaherty's despatch of the 21st June summarises the local discussions with the Governor of Hunan on the subject of the compromise mentioned in my despatch to Your Lordship No. 183 of the 29th May. No. 3 of the terms proposed-exemption from i-kin and all other levies on foreign goods within the area of the Treaty port. including the city is the stumbling block, and I have instructed Mr. Flaherty that no concession is possible in regard to it.
At an interview with Prince Ching on the 2nd July, I pressed the right of residence within the limits of the Treaty port, including the city of Changsha, and also the right of exemption from li-hin of foreign imports within the same limits, as Treaty privileges in regard to which there could be no question. His Highness promised to instruet the Governor to arrange matters with His Majesty's Consul in accordance with Treaty provisions, and on the 6th July I received a note from his Highness (copy inclosed) on the subject which is conched in conciliatory terms.
1 have, &c.
(Signed)
ERNEST SATOW.
Inclosure I in No. 1.
Acting Consul Flaherty to Sir E. Salow.
(No. 12.) Sir,
Changsha, June 21, 1905. WITH reference to my telegram No. 4 of yesterday, I have the honour to report that on the 13th instant I had an interview with his Excellency Tuan Fang, at which I handed him a Memorandum, written in English, containing the substance of
your His telegram No. 19 to Hankow, and requested an answer in a week's time. Excellency asked me to translate the gist of the paper, which I did, and promised me a reply within the week. The only matters which his Excellency touched on were the land deeds, which he said could be arranged according to the system in vogue at Hankow, and the question of compensation to Mr. Bennertz. The Governor said that if Mr. Bennertz were called upon to remove from the city, he would be willing to pay lim a small sum to meet his expenses. I replied that I would discuss the claim of Mr. Bennertz after his Excelleney had fully considered my Memorandum.
On the 17th instant I was invited to a meeting held at the Foreign Bureau, at which were present the Treasurer, Pang, the Acting Judge and head of the Foreign Bureau, Chang, the Customs Taotai, Chu, and some other officials. At this meeting the Memorandum was discussed in full, and the officials stated that conditions Nos. I and 3 could not apply within the city walls, and showed me a despatch from the Wai-wu Pu which said that the phrase "Treaty port" could not be held to include the native walled city (ch'eng chih). Against this I quoted the English text of the Treaties of Nanking and Tien-tsin. No objection was raised to No. 2, while Nos. 4 and 5 were agreed to without demur. The question of compensation to Mr. Bennertz evoked a considerable amount of discussion, but finally it was agreed that a moderate compensation would be paid to him for loss and inconvenience caused by the Proclamations of last year. A full reply to the Memorandum was promised for
the 20th instant.
On the evening of the 19th instant I received a despatch from the Taotai forwarding the deeds for Messrs. Jardine Matheson and Mr. Craddock's land outside the West Gate, and Mr. Craddock's land on the Island of Shui Lu Chou. The note on the deeds stating that they must conform to landing-place regulations has been
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