September 27, 1909.]
CORRESPONDENCE.
THE UNOFFICIAL MEMBERS OF COUNCIL AND THE IMPORT TAX,
(TO THE EDITOR OF THE “HONGKONG DAILY PRESS." ]
Hongkong, 17th Sept., 1909. SIR, The Council Meeting held yesterday for the purposes of passing the second reading of the Liquor Bill brought out the fact that some at least of the unofficial members had been driv. en into supporting it, notwithstanding their great objection to altering the present condi- tions of the freedom of the port, and it would appear that had they but known the Govern- ment intended to provide for the proper collec- tion of same, they would not have supported it.
Everyone must appreciate that it is necessary for the Government to have powers to make the law effective, and it is absolutely childish to raise these quibbles.
What the unofficials can now see is, that they have been nicely drawn by the Government. They congratulated themselves on having upset the first proposal of increased licence fees, and now when they find the imposition of duties necessitates all the paraphernalia of a Customs House they squirm, and make excuses having agreed to the measure at all.
for
I am glad to note their change of front, as I am absolutely against the tax; it upsets the free import or export of the port, and this I consider is of the greatest importance to the Colony..
I trust this will not be the thin end of the wedge for further taxation of commodities as necessity requires, but that an easier, cheaper and a more equitable tax will be imposed by increasing the present property taxes.
It is peculiar that the only argument against the latter is that so many people hold property, bought at very high and inflated prices, and an increase of taxes might weigh heavily upon them. Are these particular people to be protected by legislation? What about holders of Dock shares bought at $340? Haven't they just as much right to assistance because they made an unfortunate deal?
The argument in favour of an increase of taxes on property is that everyone has to pay his fair proportion for the upkeep of the Colony, the whole total collected would be available, and the free intercourse of trade in the Colony would remain intact.
I respectfully submit that H. E. the Governor is in error in stating that the community through their representatives are agreeable to the import tax. The community are practical- ly unrepresented on the Council, and if a poll were taken the Government would soon find out the opinion of the community, and not of a few largely interested parties.-Yours, &c.,
IMPARTIAL.
THE NEW LIQUOR DUTIES,
[TO THE EDITOR OF THE "HONGKONG) DAILY PRESS."]
SIE-You state in to-day's issue that the duty on Spirits of Wine and Arrack is $3.00 per gallon. Should this not be a mistake? The value of Arrack is $0.50 per gallon only, and I hardly believe that the Government will impose 600 per cent. duty on the value. Yours faithfully,
KARL BRANDES. [The rate of duty was correctly printed. -ED.]
THE LIQUOR TAX.
[TO THE EDITOR OF THE "HONGKONG DAILY PRESS."]
CHINA OVERLAND TRADE REPORT.
Gazette was positively unobtainable until 3 p.m. to-day, and as by means of the Gazette I only were the public told what the law now is,
I maintain that any obstructive measures taken by the authorities before this date and time were illegal.
Hongkong, September 18th. SIR," The Ordinance to provide for the collection of duties upon Intoxicating Liquors received the assent of His Excellency the Governor late in the evening of yesterday, and I have received the personal assurance of the Colonial Secretary that from that moment it was operative.
If this is so, the reported seizures of native wine made in the early hours of this morning are possibly in order, but as the Government
In a former letter to the Press I criticised the Council Meeting in a more or less facetions spirit.
Many technical absurdities have, thanks to the attitude of Mr. Hewett, disappeared, but there are still amendments to be made. In first dealing with the Bill the Authorities should have approached some five of the men most interested in, and in contact with, the trade, and these should have been representative of all sections.
I understand that, officially, two men only were consulted, and if their advice has been followed the result is not flattering to their brilliancy, nor have they been impartial.
Lest I am misunderstood, let me explain that my interest in the trade of the Colony, es- pressed in figures, amounts to some £1,000 monthly, nominally it is worth much more.
My criticism, however, is honest and not com- petitive, and is warranted by a life-long connec- tion with my work and a specialized study of the conditions in Far Eastern markets.
I have no axe to grind, but I ask for greater consideration for the welfare of the retailers and less influential firms, who in the aggregate are, after all, of more importance than two or three larger ones.
I fully recognise that many irritating points in the Bill will be removed in time, but I would call attention to the following :--
Notification 570. Paragraph 7, dealing with rates for moving and storing dutiable liquors. It was distinctly promised that charge should be made.
I
storage
nishing of this return is impracticable, There Notification 571. Paragraph 7. The fur- is opportunity for abuse, and I think the Council are overstepping their powers to ask for an account of sales,
I find no fault with the duties per se, but they are not simple enough and are inconsistent.
Every practical man will unhesitatingly declare that the fairest way to tax spirits is on the proof gallonage. This favours no one and its world-wide adoption declares its utility.
If I import 50 cases whisky at 17 u.p., I have approximately 100 gallons containing 83 gallous proof-spirit, and on this 83 gallons I pay duty, say, at $1 per gallon, equal to 83. I sell the whisk at $15 per case, and so receive $750-less $83, equals $667.
If I import 100 gallons in bulk at proof strength, I pay $100 duty, but as this will require 21 gallons of water to reduce it to 17, u.p., I have actually the equivalent of 603
cases.
Selling these also at $15 per case, I receive $907.75 less the $100 tax-$807.75. The tax on proof gallonage would not alter the existing state of affairs, since the bigger firms usually import in bulk, the smaller in case, and the difference shown has always been in favour of
the local bottlers.
The original price of the whisky in bottle or bulk does not affect this question, but I am prepared at any time to prove that locally bottled spirits give a bigger profit thau imported bottled spirits.
Under the present law the importers of Home bottled spirits at usual drinking strengths have actually to pay duty on water. There are other
instance: points, but none can modify my contention. For It is mere twaddle to talk of encouraging local bottling, since a machine coolie can bottle nearly 100 cases daily, and usually the consumer gets better value
on
Home bottled goods than on locally bottled goods. This, also, I am prepared to prove, and any apparent advantage a less duty would give bottled goods over bulk is more than equalized by the extra cost, freight, etc.
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There is no good reason why champagne should pay a higher tax than other sparkling wines, though in this case good will be done, and all the so-called champagnes improperly labelled as such will now change their name to Saumur, etc., libelling the good wines of this place as they have of Eperney.
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from Madeira will not pay one month's salary of a revenue officer.
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What is to prevent port being labelled Muscatel" and entering under the $1.20 duty? Is it the Government Analyst who is to say where Port ends and Muscatel begins? As he will have to define many terms he had better adopt the "trade" definitions right away, or he will have a busy time. Witness the "What is Whisky?" controversy. And are the Revenue officers such experts that they will know at what rate to tax wines labelled· “Amontillado,
Manzanilla, "Soleia "P
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If the Government had considered the physical welfare of the Colony, they would have given no incentive to purchase cheap liquors, and morals and revenue would be less likely to suffer.
mean
Is it known that spirits of wine rectified spirits of the strength of not less than 43 degrees above proof? A little water and burnt sugar to this and you have the ingredients of China-made randy, which gives the wily compounder a clear $1.20 per case profit on duty alone, apart from his profit on the reducing part of his manufacture.
Part 3, Clause 22, is going to be troublesome; there will be more leakage out of the warehouse than in.
Part 4, Clause 23. When your legislators deal with the distillery details they come to the fine art of Revenue work!
Part 2, Clause 12. "Marked by stencil or otherwise." If not by stoncil how else than
Yet there was otherwise ?
miantes' a fire argument on the point!
Part 6, Clause 29 Do you think any officer will ever be able to explain the difference in the sub-sections (a) and (b) ?
Part 10, Clause 55," to determine the quality of native wines and spirits, the materials to be used therein, and the branding and labelling of such Yo Gods! Poor analyst! A threat to appoint any erring officer to carry ont these possible regulations would absolutely ensure efficiency. Are duties payable at strength at which they enter boud ? If so immediate tests in every case will be necessary, otherwise it will not be so impossible for a native spirit at 40 per cent. duty 1.0, to, shall we say evaporate to 39 per cent., duty 40 cents, by the morning!
It is a misfortune that the amendment to give the unofficial members an opportunity to criticise future contemplated regulations was lost. The necessity for this has been so fully proved-and the unfitness of the compilers. By the by, Mr. Murray Stewart's tremulous solicitude lest the
civilian friend should too often be a cante n guest nearly upset the able appeal of the C. O. for a duty rebate for the army and navy; but the rebate should certainly be allowed and in full.
Where was the Colonial Secretary's point that if the men considered themselves under-
paid they should appeal to the Home Govern- ment, when the question was only that they were not overpaid and contentment would hardly hold if their expenses were increased by the taxes?
The object of the tax is laudable, and its ap- plication not objectionable, but its working will cause the Government heaps more trouble than they anticipate, and its enforcement will, un- doubtedly entail friction.
The
My feeling is simply that the Bill might have more business-like been fully prepared in a way, and might have been presented in a more complete and less contentious manner. provisions for its smooth working might have been more perfect, and a trained man or men from Home should have been here to facilitate things.
cause
That it will
incon- considerable venience is natural and not wholly · un- avoidable, but it will bear most heavily on our poorer friends and the small trader, for the retailer who charges his customers only exactly the extra cost of the duty (and they will object to pay more), and receives his money in small change, will lose some 5 per cent. to 8 per cent. on exchange, and the small trader will find he cannot so easily compete with the large firms.
The feverish anxiety of the Council to rush Port, Sherry, Madeira, 1.80 per gallon." the Bill through was undignified and unneces- Why not also Marsala, and Malvasia and a sary. Many simple precautions could have been dozen others? I'll wager the yearly revenue taken to prevent too large stocks arriving.
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