į
3
126
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had then been found; and that I have lately been shown by the Company cigarettes of pure Chinese leaf with which they are experimenting.
Inclosure 3 in No. 1.
I have, &c. (Signed)
ALEX. HOSIE.
Shanghae Custom-house Order No. 601.
NOTICE is hereby given that from this date (22nd January, 1904) Chinese manufactures of foreign type will, until the Mackay Treaty, Article VIII, comes into operation, be liable to a single 5 per cent. ad valorem duty, and thereafter be free from further taxation.
5
5 per cent. ad valorem is not paid, the privilege cannot be enjoyed of exemption from further taxation, and the rule applicable to native produce must be applied: that if, after payment of export duty, there is a re-entry into another port, coast trade duty must be paid, and if there is a further conveyance into the interior customs dues must be paid at customs stations, and li-kin at l-kin stations.
As regards the dues previously levied in excess by the Shanghae Customs, if it is ascertained that after export the goods in question did not enter another port, or were not again conveyed into the interior, instructions will be given for the amount levied in excess to be ascertained and it will be returned to the firm concerned in the shape of drawback certificates.
In making this reply for your Excellency's information, I have the honour to request a reply in order that the necessary instructions may be issued to the Customs authorities concerned.
Inclosure 4 in No. 1.
Memorandum from Deputy Commissioner to Commissioner of Customs, Shanghae.
Manufacturing Industries in China.
THE right of foreigners to engage in manufacturing industries in the China open ports is recognized in the Japanese Commercial Treaty (Article VI, section 4) of 1896 (1895), previous to which date the Chinese Government did not concede the right.
Article III of the Protocol to that Treaty agrees that taxes on such manufactures shall be the same as are payable by Chinese subjects for the same things.
The only stipulation for a rebate on imported materials is found in Article VIII (section 9) of the Mackay Treaty, and that Article is not in operation.
(Initialled)
(Signed)
H. E. H.
J. W. INNOCENT,
Deputy Commissioner.
Sir,
Inclosure 6 in No. 1.
British Cigarette Company to Consul-General Sir P. Warren,
Shanghae, January 14, 1905, I BEG to acknowledge receipt of your letter of the 9th instant, covering copy of Prince Ch'ing's Minute to Sir Ernest Satow, relative to the 5 per cent. export duty on cigarettes.
I laid the matter before my Board, and I am instructed to inform you that the proposed arrangements will be satisfactory to the Company.
I would request you therefore to communicate this decision to Sir Ernest Satom with a view to having the necessary instructions issued to the local customs, so that they may cease to levy duty at the higher rate, and issue the necessary drawback certificates for the amounts overpaid during the last year.
My Board desire to express to you their thanks for all you have done to secure them justice in this very difficult matter, and further desire me to ask you if you will he good enough to convey to Sir Ernest Satow an expression of their thanks to him. and their high appreciation of his great excrtions on behalf of the Company.
Thanking you in anticipation, I remain, &c.
(Signed)
H. A. KELLY, Director.
Custom-house, Shanghae, January 14, 1907.
(Translation.)
Your Excellency,
Inclosure 5 in No. 1.
Prince Ching to Sir E. Satow.
Peking, December 26, 1904. I HAVE the honour to acknowledge receipt of your Excellency's note of the 13th December, on the subject of export duty on cigarettes manufactured at Shanghae. (Note summarized.)
My Board have to observe that cigarettes are manufactured from "
yen ssu (prepared tobacco), but cannot themselves continue to be called by the latter names, just as foreign cloth manufactured from cotton yarn cannot itself be called cotton yarn. The duty on foreign cloth is not the same as that on cotton yarn, and there would seem to be a lack of equity in declaring that cigarettes must pay the same duty as yen ssu" (prepared tobacco). The course previously taken by the Shanghae Customs in levying duty on cigarettes as on "yen ssu was no more than a compromise based on analogy and adopted with a view of avoiding the difficulties of detail involved in the estimate of the value, and the proper course would have been undoubtedly to levy an ad valorem duty of 5 per cent. as on articles not enumerated in the Tariff lists.
Moreover, as this Board had decided with a view to the encouragement of manufactures that only the single levy of 5 per cent. ad valorem should be made, and no further duties imposed, there were fully compensating advantages; but as your Excellency has debated the point in previous communications, insisting that duty should continue to be paid as on catties, this Board has no objection in agreeing to this.
yen ssu" at the rate of 4 m. 5 c., per hundred But inasmuch as the
Dear Sir John,
Inclosure 7 in No. 1.
Sir R. Hort to Sir J. Jordan.
Peking, February 14, 1907. I HAVE received, and now return, Mr. Hosie's Report on cigarettes manufactured in China.
As you are already aware, the 5 per cent. rate, with exemption afterwards, was applied to such cigarettes, just as to other foreign-type manufactures, but, at the request of the Legation, the original local treatment was reverted to and the native produce rate-export duty at port of shipment, coast trade duty at port of discharge, liability to local taxation as native goods afterwards-acted on." The Maritime Customs collect only these two duties, export and coast trade; whatever other charges is levied is demanded by other tax offices acting on their own rules.
Regarding the general question of the treatment of goods at open ports after payment of import duties, the point has often been raised, but never settled. My own view is that payment of import duties-that is, full Tariff import duty in the case of foreign, or coast trade duty in the case of native goods-should free the goods in question while at, or within the area of, the port itself; but here we are met by several unsettled questions, e.g.:—
(a.) What are the boundaries of an open port ?
(b.) What is the port area of such open port?
(c.) Does freedom within the port area cover only goods in their original condition and unopened packages?
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