Directory_and_Chronicle_1903 — Page 117

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THE BRITISH COMMERCIAL TREATY WITH CHINA

"It is therefore necessary to memorialize for the issue of an Edict, giving "effect to the above stipulations and directing the Board of Revenue to find out what "proportion of the provincial revenues derived from lekin of all kinds, now about "to be abolished, each Province has hitherto had to remit, and what proportion it "has been entitled to retain, so that, when the Article comes into operation, due "apportionment may be made accordingly, thus providing the Provinces with funds "available for local expenditure and displaying equitable and just treatment towardsall." On the 1st instant an Imperial Decree "Let action, as requested, be taken," was issued, and we now do ourselves the honour reverently to transcribe the same for your

information.

GENTLEMEN,

ANNEX B-(2).

Shanghai, September 5th, 1902.

I have the honour to acknowledge the receipt of your despatch of the 2nd instant forwarding the text of the Memorial and Decree dealing with the disposal of the surtaxes. I understand that the surtaxes in addition to not being pledged for any new foreign loan are not to be pledged to, or held to be security for, liabilities already con- tracted by China except in so far as lekin revenue has already been pledged to an existing loan,

I also understand from the Memorial that the whole of the surtaxes provided by Article VIII. of the New Treaty goes to the Provinces in proportions to be agreed upon between them and the Board of Revenue, but that out of these surtaxes each Province is obliged to remit to Peking the same contribution as that which it has hitherto remit- ted out of its lekin collections, and that the Provinces also provide as hitherto out of these surtaxes funds whatever may be necessary for the service of the foreign loan to which lekin is partly pledged.

I hope Your Excellencies will send me a reply to this despatch and that you will agree to this correspondence forming part of the Treaty as an Annex,

I have the honour to be,

Gentlemen,

Their Excellencies,

Your obedient servant,

(Signed)

JAS. L. MACKAY.

LU HAI-HUAN and SHENG HSCAN-HUAI,

etc.,

etc.,

etc.

ANNEX B (3).

(TRANSLATION).

Lu, President of the Board of Works;

SHENG, Junior Guardian of the Heir Apparent, Vice-President of the Board of Works;

Imperial Chinese Commissioners for dealing with questions connected with the Commercial Treaties, to

SIR JAMES L. MACKAY, His Britannic Majesty's Special Commissioner.

Shanghai, September 5th, 1902. We have the honour to acknowledge the receipt of your communication of to-day's date with regard to the allocation of the surtax funds allotted to the Provinces, and to inform you that the views therein expressed are the same as our own.

We would, however, wish to point out that, were the whole amount of the alloca- tion due paid over to the Provinces, unnecessary expense would be incurred in the retransmission by them of such portions thereof as would have to be remitted to Peking in place of the contributions hitherto payable out of lekin revenue. The amount, therefore, of the allocation due to the Provinces, arranged between them and the Board of Revenue, will be retained in the hands of the Maritime Customs, who will await the instructions of the Provinces in regard to the remittance of such portion thereof as may be necessary to fulfil their obligations, and (on receipt of these instructions) will send forward the amount direct. The balance will be held to the order of the Provinces.

In so far as lekin is pledged to the service of the 1898 loan, a similar method of procedure will be adopted.

As you request that this correspondence be annexed to the Treaty, we have the honour to state that we see no objection to this being done. 100g e