CO129-353 - Public Offices - 1908 — Page 18

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I have thought it right to put on record my reasons for giving you the advice I did, at greater length than I could do in a telegram.

I have now further considered the question of the use of the flag, and therewith the system of registration which has obtained in Canton and for aught I know in some other Treaty ports. That there is confusion there can be no doubt. I think the confusion has arisen partly from the very loose way in which the Rules and Regulations of 1898 for steam navigation inland were drawn, and partly from the fact that such rules were not made binding on British subjects by legislation of our own, whether Order in Council or King's Regulation.

The Rules and Regulations of 1898 seem to have had their genesis in an arrange- ment to extend our rights of trade with China beyond the Treaty ports. Merchandize was carried seaward from the Treaty ports or received at them from abroad, its collection and distribution in the neighbourhood of these ports was the object of the negotiations which led to these rules. It will be observed that foreign and native vessels are treated alike. From the reference to Article 4 of section 3 of the Chefoo Convention the trade regulated by these rules appears to be the trade between the Treaty ports and all other parts of China. As I read the rules such trade is to be carried on in vessels not being of a sea-going type" (Rule 2) and vessels which confine their trade to inland waters (Rule 1), I will deal with this point more fully later.

I do not think that these general principles have been modified by the Treaty of 1902, Article 10 of which specifically recognizes them. Aunex (C), which enacts new rules, proclaims in Rule 5 the object of the British Government in desiring to see the inland waterways opened, and it is such as have already described.

The words "steamer" and "launch" are used indiscriminately, and so far as I can see without distinction. I do not think that in view of the intention of the Agreement and Rules that it was contemplated by the later Treaty to extend them to sea-going ships. Nor does Rule 8 alter this. The fact that "registered steamers" are allowed to ply from open port to open port cannot affect the right always enjoyed by British vessels not registered under the Inland Water Navigation Rules to touch at one and then another Treaty port, the rule merely confirmed, if confirmation were necessary, the right of a vessel plying inland to trade from port to port, the embargo on trading outside Chinese territory which I have already referred to being maintained.

I will now deal with the Rules and Regulations of 1898: Rules 1 and 2 seem at first to be inconsistent. After careful consideration, I have come to the conclusion that Rule 1 is declaratory, or, to put it otherwise, in the nature of a preamble. Under it the inland waters are open to trade, and two conditions are imposed: the vessels engaged on that trade are not to ply outside China, for obvious fiscal and possibly for political reasons; they must specially register, and they must obey the "following Regulations": The heading, "A. Registration" should have followed Rule 1 and not preceded it. Rule 1 clearly covers the rules in section (B) as much as those in section (A).

It is thus clear from Rule 2 that the "registration" spoken of in these rules is registration at the custom-house, On first reading the rules, I thought that Rules 1 and 2 contemplated different kinds of registration; I am not surprised that some Consular officers took this view. It is in consequence of this confusion, no doubt, that the launch registry at Canton has been opened. I am now of opinion that this procedure was wrong; that, whatever record the Consul-General chose to keep for his own infor- mation, he had no right to "register" under the Regulations of 1898, and that the only registration required thereby is registration at the Customs. throughout in this connection means registration at the Customs.

Registration"

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The Customs, which includes harbour authorities, recognize vessels for two purposes, giving them authority to ply (1) within the waters of a port, (2) generally on inland waters. Since 1886 it has been the custom for the Consul in each port to issue a certificate of British ownership in the case of launches.

In Canton this appears to be the rule whichever of the two Customs licences is to be granted; in Shanghae such a document (copy inclosed) is only issued when the launch is to be restricted to plying within harbour limits. Where a general pass is required a letter (copy inclosed) is written, on which an "inland navigation pass" is issued. When this letter is applied for, the vessel must deposit her certificate of registry. This insures that she is a "British ship," and also that she shall "confine her trade to inland waters" (Rule 1, 1898). This latter procedure seems to me unexceptionable. know, has been raised in Shanghae to the insistence on the British nationality of vessels No objection, so far as I plying generally on inland waters; and the representatives of Messrs. Jardine, Matheson, and Co. and of Messrs. Butterfield and Swire have been consulted, and they

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concur in the soundness of the system. It seems therefore clear that registry under the Merchant Shipping Act should be insisted on in all cases before such a pass should be applied for for the launch. There remains the question of launches plying within the limits of a port, beyond which they cannot go without leave of the customs granted for a special journey. As these vessels claim to fly the flag, or, at all events, in fact do so, and as the fee for registry is only 17 dollars and a small survey fee, I should think that registration might be insisted on also in their case; the point, however, requires more consideration.

In any event, I think it desirable that the flag should be flown on all vessels for which British ownership is claimed; and while I submit the view that the provisions of the Merchant Shipping Acts do not necessarily apply to vessels plying solely in a foreign port, I do not feel myself, with the means at my disposal, competent to offer an opinion. The result of my careful consideration is that all vessels, of whatever size, which navigate the inland waters generally should certainly be compelled to register, and that probably the same rule should apply to launches, confined to harbour limits, if their owners wish them to fly the flag. In view of the lightness of the fees, I do not, as at present advised, sec that there is a case for exceptional treatment.

It is as well, perhaps, to clear the mind as to the allegation that the provisions of the Merchant Shipping Acts are too onerous on registered vessels. Part 1 of "The Merchant Shipping Act, 1894," applies. This, however, only affects registry, flag, and survey. Part II, which is the part which might press heavily, and from which junks and lorchas are excepted by the Shipping Registry Order in Council to which I have referred, does not apply to these vessels, and I have therefore to withdraw the suggestion I made in my despatch No. 13 of the 1st October as to the amendment of that Order. These vessels are not within sections 260 and 261 of the Merchant Shipping Act as they are not "sea-going ships" while they are engaged in the inland water traffic; and Part III, which applies to passenger ships, so defines " exclude these vessels. There is nothing, so far as I can see, to which exception ought passenger ships" as to to be taken in the later provisions.

I wish now to say a word as to the provisions in Sir H. Wilkinson's draft Rules. It will be seen from what I have written that British ships, which would be affected by them, do not include the ordinary passenger steamers plying between the Treaty ports, but only vessels engaged on inland waters. It is true that inland waters include coast as well as river ports, but the main part of the passenger traffic carried on in British bottoms is not touched by the Rules, as it is carried on in vessels which do not ply under the conditions enumerated in draft Rule 39. Such traffic as is carried on in the vessels under consideration is ordinarily in inland waters or at all events in waters where danger is small, and where they can run into safety or, if necessary, beach themselves without difficulty. Such elaborate Rules as 41 and 42 and 47, dealing with survey, are, I think, onerous and unnecessary. Rule 51 is, I am assured and convinced, unworkable, and 52 is enforceable on British ships under section 433 of the Merchant Shipping Act.

On the whole I think that all practical ends will be obtained if proper registry is insisted on in the case of all vessels, penalties for false declaration and improper conduct will follow from the provisions of the existing law. The only additions which I should be disposed to make would be--

(a.) To give the Consuls power to order a survey in any case where they suspect the unfitness of the vessel for the service for which she is intended, these Rules should follow the lines of sections 457-463 of the Merchant Shipping Act;

(b.) Some power to restrict the limits within which a vessel may ply; and (c.) A proviso that vessels of a certain tonnage should carry at least one certificated

officer.

This despatch has been written after careful consideration, and if the suggestions in it are approved, I shall be prepared to undertake the settlement of such Rules and directions to Consular officers as may be necessary in the manner suggested by you in your despatch to Sir Edward Grey of the 24th November last. To save time I am sending a copy of this to the Foreign Office.

I have, &c. (Signed) H. W. DE SAUSMAREZ,

P.S.-A copy of my covering despatch to Sir Edward Grey is inclosed herewith.

R. W. DE S.

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