44
TARIFF REVISION AND COAST TRADE DUTIES.
The Case for Abolition of Inter-Port Taxes.
It was unanimously agreed :-
That this Conference desires to express the view that the additional revenue accruing from any revision of the existing import duties should be held in trust until such time as the Chinese Government shall have shown itself capable of maintaining order and protecting trade interests throughout the country.
At the same time it desires to express the opinion that when the time for such revision shall arise, advantage should he taken of the opportunity so presented to press for the reorganisation of the whole system of taxation of trade in China on the lines suggested in the Association's letter of the 21st April, 1920. and that as a preliminary and practical step in this direction the Chinese Government be pressed to abolish forthwith the taxation now levied by the Chinese Maritime Customs on all goods carried from one port to another in China."
In moving this resolution on behalf of Shanghai. Mr. Sheppard (Jardine. Matheson & Co., Ltd.). said :-
--
Mr. Chairman and Gentlemen, it falls to my lot to propose this resolution, and I approach it, being a somewhat complicated subject, with extreme diffidence, but I have encouragement from the remarks made by Mr. Clive in his speech yesterday that he regards currency reform and the abolition of internal taxation as the chief items of importance for the future of China. The resolution as it stands is the outcome of two motions put forward by prominent business houses of Shanghai, which, in order not unduly to encroach upon the time of the members of this conference, has been merged into one. I will take them in their order :-
That this conference desires to express the view that any revision of the existing import duties on a higher scale should not be brought into effect until such time as the Chinese Government shall have shown itself capable of main- taining order and protecting trade interests throughout the country.'
"I understand, and in fact it is so stated in the printed memorandum of correspondence pertaining to last year, that we are pledged to the revision of existing duties two years after the ratification of peace. I have little doubt that the peace intended was the European peace, but what we are after is peace in China. It is generally conceded by the mercantile community that it is unreasonable that we should be called upon to pay higher duties on goods, while the main avenues of trade are occupied by uncontrolled military forces who levy and loot the goods to their heart's content.*
"The second part of the resolution which refers to the letter of the 21st April, requires perhaps a little explanation. At last year's conference it was decided to press for the carrying out of the Mackay Treaty. Subsequent investigations and discussions brought forth a very strong opinion that it would be better to abandon the Mackay Treaty and strive for thorough reform in China.
"That view found support from Peking, and from indications that the Chinese Government had given that they were not unwilling to consider such matters, the letter of the 21st April was written. In it, it was stated that the Chinese Govern- ment would be well advised to dispense with not only likin, but octroi as well. It was on further elucidation of the subject that it was recommended that this must include coast trade duty also. In the mind of the average person in China coast trade duties are held to mean the duties now levied between ports in China: but what is the experience of the cotton industry of this city, which for some years has been agitating and pointing out the disadvantage to China itself in levying the duty on Chinese raw materials sent here to be manufactured into goods, which are circulated again
In the discussion of this part of the resolution the binding character of the pledge referred to was fully recognised, and the suggestion that the additional revenue accruing from any revision of the existing import duties should be held in trust would not be a contravention of it.-Ed.
15
in their own country? When they at last got coast trade duty removed on raw cotton only the half duty had been taken off. I therefore think it would be well to supple- ment our letter of the 21st April by a clear explanation that what was meant by the letter was the removal of the total duty levied on goods between ports. The third part of the resolution is—
That as a preliminary and practical step in this direction the Chinese Government be pressed to abolish forthwith the taxation now levied by the Chinese Maritime Customs on all goods carried from one port to another in China.
It has always struck me and many others that while we have year after year clamoured and fought for the abolition of li-kin a great institution like the Maritime Customs is in effect collecting the very same duty. Now, that duty which is collected between treaty ports was introduced in the days of the Manchus to protect li-kin levies in the country. When ships carried goods from one port to another the treaty tariff duty and a half was instituted as an equivalent for what would have had to be paid in li-kin. As trade has extended throughout the country by the opening up of new ports, probably the largest li-kin collectorate in China to-day is the Chinese Maritime Customs! I say that with a due sense of the words I am using and with a due recognition of what it means that that great organisation. whose honesty and efficiency and good work in close association with foreign trade in the past are well known, does take part in this collection. And I think the good work of the Customs should not be allowed to overshadow the fact that that organisation, at the instiga- tion of the Chinese Government, is stopping and collecting duties on goods in transit within the Chinese Republic itself. I do not refer to goods going abroad-that is a matter which the Chinese decide for themselves, but I refer to the internal transit of goods in the country itself which are never intended to go outside.
Some will say that these things are true, but is it not largely a matter which affects shipping, and we exporters and importers are not guardians of their concerns. That is a mistaken view. Take the case of the importer. He brings the goods tu a port of foreign entry. He pays duty and has to obtain a pass proving that he has paid duty on those goods, and if he has to move them from one port to another he has to produce that pass and prove to the satisfaction of the customs that those goods are not liable to domestic taxation that is the duty and a half levied between ports. That requires considerable staff in the custom house and in your office and consider- able recording. It also involves examination of goods, bringing them to the custom house, having them opened, all in order that the Chinese, who are largely concerned, shall not utilise this protection to escape the levy of coast trade dues.
L
When you get to Hankow or Ichang, you are again subject to more applica- tions put into the custom house, more examinations, more staff employed by your office and the custom house to record it all. Beyond Ilankow and as you go into Szechuan get the same thing again. Take exports, and as an example somebody doing business in exports which emanate from the vicinity of Tsinanfu. That exporter has the option of bringing his goods down by various routes, by railway to Pukow, and there put them on a steamer for Shanghai, or convey them across the river and carry them by rail to Shanghai. Or he can take them from Tsinanfu to Tsingtao. If he brings them down the railway he runs through the li-kin stations. At Pukow he has to pay export duty and at Shanghai he has to pay half-duty on the same goods to the Chinese Maritime Customs. If he buys those goods from Chinese dealers to export them he has to keep a record of that cargo, and in order to obtain a refund of that half-duty, he has to prove that the goods which arrive in the way they did were the goods which he was exporting; then he can obtain his refund. All that organisation, work and staff engaged in that work are the outcome of having these coast trade duties. How does all this affect shipping? Why is it that shipping lies here from daylight till 2 or 3 o'clock in the afternoon doing nothing They are waiting for this mass of export permits to come out of the custom house in order that goods may be shipped. Documents of all sorts have to be made up to enable the ships to leave, even if they are trading up the Yang-tsze and remaining within Chinese jurisdiction.
K
Take again the so-called opening of inland waters concession. When that was obtained we were told by Lord Curzon, in a statement made in the House of Commons, that British goods could be carried in British ships to every riverside and coast town in China. Why was this a complete failure? The customs administra-
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