2
of the Shui-wu Ch'u which need cause the slightest apprehension." I said that there were rumours of difficulties which had arisen in connection with the construction of a custom-house at Amoy, and alterations in the system of publishing customs statistics. His Excellency replied that he knew nothing of the former, but, as regarded the latter, the Board had instructed the Inspector-General to submit statistical and similar reports to them prior to their publication. It was only reasonable that the Board should wish to see what they contained before they were given to the public.
Mr. Tang then gave me at considerable length his views on the changes which he wished to introduce in regard to financial reports. Hitherto these had been rendered by the Customs Taotais quarterly; now monthly ones would be required. Some of the Taotais were seven quarters in arrears with their reports, which caused much confusion; for though the Board of Revenue knew the sum total which had to be eventually accounted for, they were in ignorance as to the exact amounts in the hands of various officials. He hoped that by insisting on this new scheme the Board would be in possession of some 15,000,000 taels (some £2,500,000) in a few months, which would otherwise have been lying idle as far as the Government were concerned. Then the Inspector-General would have to furnish a statement respecting the annual expenditure on the Customs Service. He had hitherto received a lump sum every year, for which he rendered no accounts. On my expressing my surprise at this system, Mr. Tang assured me that what he said was true, and added that he had not the remotest idea of the amount of Sir R. Hart's salary. The Customs statistics, he went on to say, were not full enough. For instance, it would be advantageous to have returns showing the country of origin of goods imported, the nationality of the persons handling them, and the flag of the ship they were carried in.
His Excellency finally begged me to believe his word that no changes beyond those on the lines which he had indicated, and which were for the obvious improvement of the Customs Service, were contemplated. As my visit had been somewhat protracted, I then took leave of his Excellency, as there was evidently little to be gained by further discussion at the time of the question on which I had come to see him.
In the course of the same day I received your telegram No. 140 of the 2nd August, and as Mr. Campbell was to see Mr. Tang in the evening on other business, I asked him to revert to my conversation of the morning, and to endeavour to obtain some more satisfactory statement.
After traversing much the same ground as I had, Mr. Campbell ultimately prevailed on his Excellency to promise that he would verbally instruct Sir R. Hart to issue the Circular in the sense I had requested. He declined to write to Sir Robert on the subject, though pressed to do so. I had the honour to report the above in my telegram No. 149 of the 5th instant.
I requested His Majesty's Consular Representatives at Shanghai and Amoy to ascertain confidentially if any instructions had been received by the Commissioners of Customs at those ports in regard to the two matters which I had mentioned to Mr. Tang. The reply from Sir P. Warren bore out what his Excellency had told me respecting the publication of statistics, while Mr. O'Brien-Butler's report failed to show that there had been any departure from established precedents.
Mr. Gardner, acting agent of the Hong Kong and Shanghai Bank here, gave me confidentially copy of a letter written to him by Sir Robert Hart, which I have the honour to inclose. It will be seen that the Inspector-General is not sanguine as to the future. He briefly reviews the various aspects of the present situation, and puts the question whether the Inspectorate is to become the trustee of the bondholders, and the protected representative of the will of the Treaty Powers, or to remain a purely Chinese office.
Looking at the matter from his own standpoint, and taking into account the welfare of his service, he appears to come to the conclusion that the less the Legations interfere the more likely is the service to enjoy a peaceful though subordinate existence under the Shui-wu Ch'u. Mr. Gardner also left with me copy of an extract from a letter from Sir R. Hart to Sir R. Bredon, inclosed herewith, summing up in a few words the views of the former on the attitude which the Inspectorate should adopt under existing circumstances.
As I had the honour of stating in my telegram No. 147, I am in communication with Sir R. Hart, whose opinion I asked respecting the new instructions and the general position of affairs. I beg to inclose copy of his reply, in which he sets forth the various arguments which may be urged for or against the right of the Chinese Government to place the Customs under the new Revenue Council, which, as he himself admits, has not yet taken any steps which can be considered contrary to the engagement contained in the Loan Agreements.
3
I also informed Sir R. Hart of the statement made to me by Mr. Tang that he was at perfect liberty to issue a Circular containing the verbal assurances given him by the Administrators-General, if he considered such a course advisable. I inclose copy of a letter I have just received, in which Sir Robert explains why he has deferred taking any action so far, and indicates that he will find an opportunity to issue the Circular and to put its issue on record in despatches to the Shui-wu Ch'u and the Wai-wu Pu on his return to Peking. He also gives his views on the possible position of the Inspectorate-General in the future.
In acknowledging the receipt of these letters, I shall acquaint Sir Robert of the promise given by Mr. Tang to Mr. Campbell in regard to the issue of the Circular.
I have, &c.
LANCELOT D. CARNEGIE,
(Signed)
Inclosure 1 in No. 1.
Draft Instructions to the Inspectorate-General of Customs, Sir Robert Hart.
(Translation.)
WITH reference to the Imperial Decree commanding us to administer revenue affairs, we have already communicated to you the date on which these duties would be entered upon,
Hitherto all Customs affairs have been under the control of the Wai-wu Pu and Hu Pu (Board of Revenue). In obedience to the Imperial Decree, we have established the Shui-wu Ch'u (Revenue Council) for the special management of these affairs, and it will enter upon the administration thereof on the 22nd July. Thereafter all Customs affairs which in any way concern revenue business—over and above such as involve international relations, which shall continue to be transacted by the Wai-wu Pu, and the appropriation of revenue, which shall follow the directions of the Board of Revenue—shall be reported directly to this Council, to be considered and dealt with by it.
We have therefore to instruct the Inspector-General of Customs to act accordingly.
Inclosure 2 in No. 1.
Sir R. Hart to Mr. H. G. Gardner.
Dear Mr. Gardner,
AS being the bankers who issued the guaranteed loans, your people are, of course,
Peitaiho, July 29, 1906.
interested in whatever touches the Inspectorate of Customs, especially as your Agreement contains a clause, approved of by Imperial Edict, stipulating that during the currency of the loans the constitution of the Customs shall not be changed; it is therefore natural for you to discuss the substitution of the new office of Shui-wu Ch'u for the old one, the Wai-wu Pu, to control Customs business and staff.
It is a many-sided question, and different people occupying different standpoints will take different views and arrive at different conclusions. Thus the banks will ask: "Does the change damage loan security?" The trading public will ask: "Does it change the transaction of Customs business?" Legations will ask how it affects their political interests; and the Inspectorate will be curious as to its effect on the standing, permanency, and efficiency of the service; and on all these points different people will differ in opinion.
As for loan security, an Edict only (P) pledges the Empire. As for current work, Chinese procedure and European differ. As for political interests, the Inspectorate has never been the agent, much less a tool, of any Legation; but its disappearance would be felt by all; it has been a convenience, and perhaps it has sometimes been felt to be an obstacle, although whatever it has done has been in general interests, and "the most-favoured-nation" clause has made favouritism and differential treatment impossible. As to the effect of the recent Edict on the Inspectorate, it will, of course, affect it in every way, lowering standing, limiting existence, and perhaps impairing efficiency by delaying work. But the real question we of the Inspectorate have to face is this: "Are we to...
[2146 aa-2
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752
2
of the Shui-wu Ch'u which need cause the slightest apprehension." I said that there were rumours of difficulties which had arisen in connection with the construc tion of a custom-house at Amoy, and alterations in the system of publishing customs statistics. His Excellency replied that he knew nothing of the former, but, as regarded the latter, the Board had instructed the Inspector-General to submit statistical and similar reports to them prior to their publication. It was only reasonable that the Boar should wish to see what they contained before they were given to the public.
Mr. Tang then gave me at considerable length his views on the changes which he wished to introduce in regard to financial reports. Hitherto these had been rendered by the Customs Taotais quarterly; now monthly ones would be required. Some of the Taotais were seven quarters in arrears with their reports, which caused much confusion; for though the Board of Revenue knew the sum total which had to be eventually accounted for, they were in ignorance as to the exact amounts in the hands of various officials. He hoped that by insisting on this new scheme the Board would be in possession of some 15,000,000 taels (some 2,500,000%) in a few months, which would otherwise have been lying idle as far as the Government were concerned. Then the Inspector-General would have to furnish a statement respecting the annual expenditure on the Customs Service. He had hitherto received a lump sum every year, for which he rendered no accounts. On my expressing my surprise at this system, Mr. Tang assured me that what he said was true, and added that he had not the remotest idea of the amount of Sir R. Hart's salary. The Customs statistics, he went on to say, were not full enough. For instance, it would be advantageous to have returns showing the country of origin of goods imported, the nationality of the persons handling them, and the flag of the ship they were carried in.
His Excellency finally begged me to believe his word that no changes beyond those on the lines which he had indicated, and which were for the obvious improvement of the Customs Service, were contemplated. As my visit had been somewhat protracted, I then took leave of his Excellency, as there was evidently little to be gained by further discussion at the time of the question on which I had come to see him.
In the course of the same day I received your telegram No. 140 of the 2nd August, and as Mr. Campbell was to sec Mr. Tang in the evening on other business, I asked him to revert to my conversation of the morning, and to endeavour to obtain some more satisfactory statement.
After traversing much the same ground as I had, Mr. Campbell ultimately prevailed on his Excellency to promise that he would verbally instruct Sir R. Hart to issue the Circular in the sense I had requested. He declined to write to Sir Robert on the subject, though pressed to do so. I had the honour to report the above in my telegram No. 149 of the 5th instant.
I requested His Majesty's Consular Representatives at Shanghae and Amoy to ascertain confidentially if any instructions had been received by the Commissioners of Customs at those ports in regard to the two matters which I had mentioned to Mr. Tang, The reply from Sir P. Warren bore out what his Excellency had told me respecting the publication of statistics, while Mr. O'Brien-Butler's report failed to show that there had been any departure from established precedents.
Mr. Gardner, acting agent of the Hong Kong and Shanghae Bank here, gave me confidentially copy of a letter written to him by Sir Robert Hart, which I have the honour to inclose. It will be seen that the Inspector-General is not sanguine as to the future. He briefly reviews the various aspects of the present situation, and puts the question whether the Inspectorate is to become the trustee of the bondholders, and the protected representative of the will of the Treaty Powers, or to remain a purely Chinese office.
Looking at the matter from his own standpoint, and taking into account the welfare of his service, he appears to come to the conclusion that the less the Legations interfere the more likely is the service to enjoy a peaceful though subordinate existence under the Shui-wu Chu. Mr. Gardner also left with me copy of an extract from a letter from Sir R. Hart to Sir R. Bredon, inclosed berewith, summing up in a few words the views of the former on the attitude which the Inspectorate should adopt under existing circumstances.
As I had the honour of stating in my telegram No. 147, I am in communication with Sir R. Hart, whose opinion I asked respecting the new instructions and the general position of affairs. I beg to inclose copy of his reply, in which he sets forth the various arguments which may be urged for or against the right of the Chinese Government to place the Customs under the new Revenue Council, which, as he himself admits, has
3
not yet taken any steps which can be considered contrary to the engagement contained in the Loan Agreements.
I also informed Sir R. Hart of the statement made to me by Mr. Tang that he was at perfect liberty to issue a Circular containing the verbal assurances given him by the Administrators-General, if he considered such a course advisable. I inclose copy of a letter I have just received, in which Sir Robert explains why he has deferred taking any action so far, and indicates that he will find an opportunity to issue the Circular and to put its issue on record in despatches to the Shui-wu Ch'u and the Wai-wu Pu on his return to Peking. He also gives his views on the possible position of the Inspectorate- General in the future.
In acknowledging the receipt of these letters, I shall acquaint Sir Robert of the promise given by Mr. Tang to Mr. Campbell in regard to the issue of the Circular.
I have, &c.
LANCELOT D. CARNEGIE,
(Signed)
Inclosure 1 in No. 1.
Draft Instructions to the Inspectorate-General of Customs, Sir Robert Hurt.
(Translation.)
WITH reference to the Imperial Decree commanding us to administer revenue affairs, we have already communicated to you the date on which these duties would be entered upon,
Hitherto all Customs affairs have been under the control of the Wai-wn Pu and Hu Pu (Board of Revenue). In obedience to the Imperial Decree, we have established the Shui-wn Ch'u (Revenue Council) for the special management of these affairs, and it will enter upon the administration thereof on the 22nd July. Thereafter all Customs affairs which in any way concern revenue business-over and above such as involve international relations, which shall continue to be transacted by the Wai-wu Pu, and the appropriation of revenue, which shall follow the directions of the Board of Revenue- shall be reported directly to this Council, to be considered and dealt with by it.
We have therefore to instruct the Inspector-General of Customs to accordingly.
Inclosure 2 in No. 1.
Sir R. Hart to Mr. H. G. Gardner.
act
Dear Mr. Gardner,
AS being the bankers who issued the guaranteed loans, your people are, of course,
Peitaiho, July 29, 1906. interested in whatever touches the Inspectorate of Customs, especially as your Agree- ment contains a clause, approved of by Imperial Edict, stipulating that during the currency of the loans the constitution of the Customs shall not be changed; it is therefore natural for you to discuss the substitution of the new office of Shui-wa Ch'u for the old one, the Wai-wu Pu, to control Customs business and staff. sided question, and different people occupying different standpoints will take different It is a many- views and arrive at different conclusions. Thus the banks will ask: "Does the change damage loan security ?” The trading public will ask: "Does of Customs business " Legations will ask how it affects their political interests; and change the transaction the Inspectorate will be curious as to its effect on the standing, permanency, and efficiency of the service; and on all these points different people will differ in opinion.
As for loan security, an Edict only (P) pledges the Empire. As for current work, Chinese procedure and European differ. As for political interests, the Inspectorate has never been the agent, much less a tool, of any Legation; but its disappearance would be felt by all; it has been a convenience, and perhaps it has sometimes been felt to be an obstacle, although whatever it has done has been in general interests, and "the most- favoured-nation" clause has made favouritism and differential treatment impossible. As to the effect of the recent Edict on the Inspectorate, it will, of course, affect it in every way, lowering standing, limiting existence, and perhaps impairing efficiency by delaying work. But the real question we of the Inspectorate have to face is this: "Are we to
[2146 aa-2
21
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752
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