CO129-360 - Public Offices - 1909 — Page 611

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[This Document is the Property of His Britannic Majesty's Government.]

CHINA TRADE.

CONFIDENTIAL.

606

C.O.

8857

[January 27.]

SECTION

REOP Pe 12 MAR 09

F1545/09

(3506]

(No. 7.)

No. 1.

Sir J. Jordan to Sir Edward Grey.-(Received January 27.)

Sir,

Peking, January 6, 1909. REFERRING to my despatch No. 522 of the 24th November, 1908, I have the honour to inclose copies of further correspondence with the Wai-wu Pu respecting the proposal of the Board of Finance to levy an additional tax on foreign opium.

The Wai-wu Pu and the Board of Finance coutend in effect that under the terms of the Additional Article of the 18th July, 1885, the Chinese Government is free to tax foreign opium, upon which duty and li-kin have been paid, to the same extent as native opium as soon as the chests or packages are opened, whether in the Treaty ports or in the interior.

I have informed Prince Ching that this position is not tenable, and that the Additional Article, in our view, provides that foreign opium, after payment of duty and li-kin, is free from all taxation whatsoever in the Treaty port, and, if covered by the transit certificate of which the form is given in clause 4, while in transport beyond the Treaty port and up to the place of consumption in the interior. I have also stated that this view has been always acted upon by His Majesty's Government, and that I shall in practice insist on the due observance of our interpretation by the Chinese Government at all the Treaty ports.

I have pointed out that His Majesty's Government have maintained a consistently benevolent attitude towards the opium crusade, and I have given the Chinese Govern- ment at all times to understand that there is every desire to support bond fide steps for the suppression of the evils arising from the consumption of opium; but I have at the same time held that it is practicable and possible to take these steps in a legitimate manner and without doing any violence to Treaty stipulations.

J. N. JORDAN.

I have, &c. (Signed)

Inclosure 1 in No. 1.

(Translation.) Sir,

Prince Ch'ing to Sir J. Jordan.

Peking, December 8, 1908.

I HAVE the honour to acknowledge the receipt of your Excellency's note of the 24th November respecting the proposed levy of additional taxes on opium, and requesting that the Board of Finance may be moved to make it quite clear that the levy of such taxation in Treaty ports is not intended.

The Board have the honour to point out, in reply, that the Additional Article to the Chefoo Convention makes the following provisions :-

of

Such certificate shall free the opium to which it applies from the imposition any further tax or duty whilst in transport in the interior, provided that the package has not been opened and that the Customs seals, marks, and numbers on the packages have not been effaced or tampered with."

And further :-

"The form [of the certificate] shall be as follows:----

"The production of this certificate will exempt the opium to which it refers, wherever it may be found, from the imposition of any further tax or duty whatever, provided that the packages are unbroken and the Customs seals, marks, and numbers have not been effaced or tampered with.""

From these provisions it may be seen that the exemption from further taxation enjoyed by foreign opium depends upon whether the packages have been opened or not,

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