Papers Relating to Foreign Affairs, Accompanying the Annual Message of the President to the Third Session of the Fortieth Congress
Mr. Williams to Mr. Seward
Sir: I have the honor to forward to you the eight rules agreed on between Prince Kung and the foreign ministers for the conduct of the joint tribunal in cases of confiscation and fines for breach of revenue laws. The inclosures A to E contain the correspondence upon the arranging of these rules, and F G the rules as finally agreed upon, with [Page 522] a copy of my circular letter to the American consuls explaining them, to all of which I respectfully invite your attention. These eight rules are the result of several years’ efforts to adjust the workings of a very difficult part of our international obligations with due regard to the entire independence of each party. The experience of three years at Shanghai had shown the Chinese authorities how advantageously the three rules (Nos. 2, 3, and 4) relating to confiscation had worked, and they were thus prepared with more confidence to add similar ones relating to fines and disputed duties.
I have no doubt myself that the code will ultimately commend itself for approval to all nations who have treaties with China, and pass into the catalogue, not yet very long, of established rules of procedure for conducting international affairs with this empire. Such a series of rules as this could never have been established under the old régime; they are the result of the constant discussion of principles and their practice, which is going on in Peking to the gradual enlightenment of the minds of its rulers. I beg to refer you to Mr. Burlingame’s dispatch No. 82, of June 6, 1864, for remarks connected with the experimental adoption of these rules, under which I am told that hitherto not a single case has come before any consul. One great preventive is the publicity attending such cases, and the exposure of the circumstances which led the customhouse officers to seize goods or ship.
The adoption of these important rules by this government shows the desire of its leading statesmen to go on and develop the principles contained in the treaties as fast as they can see their way clear to do so practically. In making these changes it is an advantage to them that they can examine the results of certain principles of government in other lands, and choose what they deem to be best without going through the same crucible of trial as Occidentals. These rules, for example, contain principles whose equitable adjustment would have baffled them completely, even if they had been disposed to adopt them; but, guided by experience acquired elsewhere, the rights of each nation have been easily guarded, and the Chinese themselves admit that no infringement of their rights has been urged upon them.
In the vast consequences connected with the elevation of so great a mass of people to the position of a civilized nation, the problems in social and political life which have already been worked out elsewhere, or are now developing, can be advantageously studied by this people, and their practical adoption cannot be long deferred. This power of comparison and choice carries with it immense advantages.
In all the discussions connected with the adoption of these rules, I have been in constant intercourse and accord with Sir R. Alcock, K. C. B., the British minister, and with Mr. Hart, the inspector general.
I have the honor to be, sir, your obedient servant,
Hon. William H. Seward, Secretary of State, Washington, D. C.
A.
Prince Kung to Mr. Williams.
Prince Kung, chief secretary of state for foreign affairs, herewith makes a communication: In a dispatch formerly received from Sir Frederick Bruce, the British minister, he [Page 523] proposed a modification of the regulations respecting the confiscation of vessels and goods; and that in cases where the treaty gave the Chinese authorities the right to impose fines, the circumstances of each case that arose should be examined previously to its being carried into effect.
On receiving his dispatch the Foreign Office, in consultation with the inspector general, Mr. Hart, drew up four rules, which were transmitted to the customs officers at Shanghai, to be tried at that port for a twelvemonth. If at the end of that period they were found not to interfere with the rights of the Chinese government in levying fines, they could then be extended to all the ports for general observance. This arrangement was made known to Mr. Burlingame in August, 1864.
From this it appears that when the rules for this joint tribunal (in respect to confiscation and fines) were proposed to him, it was understood that after they had been tested at Shanghai for a year they should be extended to all the ports as the rule to be observed in such cases; and as they have now been fully tried there, it is desirable and proper to put them into operation at all other ports, and if at the expiration of another year no difficulties arise in their operation, further consultation can be then held as to the manner of making them generally observed. The Foreign Office has therefore directed the two superintendents of commerce for the northern and southern ports to enjoin their observance on the customs officers at all the ports; and I also now inform your excellency of this action, with the request that you would direct the United States consuls to infrom all American merchants that these rules are to go into operation for the term of one year at all the open ports, dating from the 25th of this month.
I should be pleased to receive an answer respecting the details of the arrangement at your early convenience.
His Excellency S. Wells Williams, United States Chargé d’affaires ad interim.
B.
Prince Kung to Mr. Williams.
Prince Kung, chief secretary for foreign affairs, herewith makes a communication respecting the mode of action in cases of confiscation by the customs, according to the rules already jointly agreed upon (August 12, 1864) and now in operation at each port:
It appears by these that whenever the intendant, or collector of the port, and the consul differ in their depision, rule IV provides that the merchant shall give a bond for a certain sum to pay the duty, and that when the goods on board ship shall be delivered to him, when the superior officers have examined into the case and decided whether the goods are to released or the penalty forfeited, the case is then to be referred back and acted on. In this way it was expected that neither the duties would be lessened nor the facilities of trade be impeded.
But in the collection of duties by the customs, there have arisen many doubtful points growing out of the discrepancies existing between the meaning of the Chinese and foreign texts of the regulations, and also of the great variety of articles of commerce, some coarse and others fine, which are continually brought into the country, and which cannot be easily compared with those previously brought and reduced to a uniform standard. In these cases it is constantly happening that while the collector thinks the article ought to pay a duty, the consul thinks it ought to come in free, and it is almost impossible to prevent their arguing and disagreeing thereon. The collector at a port, being only a subordinate official himself, cannot presume to violate the regulations which are given him, and therefore feels himself obliged to levy the duty, at least until both of them have referred the matter to their superiors and received a decision to be followed by each. But when this reference has been made, if the superior officers decide that duty need not be levied on the article, then the merchant every time asks for compensation, and to be reimbursed for both cost and profit on the articles. Thus it happens that the collector, in his endeavors to act right according to the rules, involves himself in loss and injury, and nobody is benefited.
Seeing, therefore, that difficulties occur on both hands, the Foreign Office have, after much careful deliberation, come to the following decision:
Whenever, in the collection of duties, it happens that the collector and consul cannot agree as to whether an article is dutiable or free, they shall act in accordance with the provisions of rule IV of the confiscation rules; but meanwhile they shall require a bond from the merchant for the estimated cost of the goods, pledging himself to comply with the decision and clear his bond, to which the consul shall affix his seal and then deposit [Page 524] the bond in the hands of the collector, who shall meanwhile release the goods to their owners without receiving any duty, and the case has immediately to be fully reported by both parties to their superiors for decision. If it be decided by them that the article is not dutiable, then the collector shall transmit the bond in his hands to the consul to be nullified, without any further discussion or excuse. But if the decision be that it ought to pay duty, then the consul shall require the merchant who owns the goods to pay the duty and clear them at the customs. By this course of procedure, though the duty would be collected a little later in case it was decided that the article was dutiable, still the incomes of the customs would not suffer any loss; while, if it was decided otherwise, the merchant would not have been kept out of the use of his money; and thus the interests of trade would on both hands be materially benefited and accommodated.
This proposal is therefore now made known to your excellency, with the request that you will inform the United States consuls at the various ports that this mode of procedure in cases of dispute about duty has in future the force of law at each port, and enjoins upon them its observance, making known to me, however, your action upon the matter.
His Excellency S. Wells Williams, United States Charge d’affaires ad interim.
C.
Mr. Williams to Prince Kung
Sir: I have the honor to acknowledge the receipt of two dispatches from your Imperial Highness of the 7th ultimo, both relating to proceedings in cases of confiscation by the customs.
One of them contains a draught of a regulation defining the mode of procedure to be followed in cases of fines whenever the consul and collector of customs cannot agree in their decision, proposing that then the merchant should give a bond, sealed with the consular seal, which is to be deposited with the collector, and that his goods or vessel should then be released to him until the appeal to the higher authorities at Peking has been made; when if they decided that no fine was to be paid, the collector should return the bond: concluding with the request that this regulation should be made known to the American merchants for their observance at each port.
The other dispatch contained a second request that the four rules for joint action in confiscation cases, which have been in operation at Shanghai for a year, should now be extended to all the open ports for trial another year, and asking that a reply be given whether the necessary orders had been given to this end. In respect to the subject-matter of these two dispatches, it appears to me that the proposed rule merely requiring a merchant to give a bond to pay the amount of the fine, and then releasing his vessel or goods, is like to be very advantageous to him, while it will not work any detriment to the customs revenue; and I have therefore no objection to enjoin it upon the United States consuls as a rule to be observed. But in the operation of the other four rules I have heard during the past few years that there has occasionally been some differences of opinion between the consuls of the United States and the commissioners of customs at the ports, upon points of etiquette and rank, making it desirable that an additional rule regulating the standing of these two classes of officials be established, and providing that the intercourse between them be conducted in a harmonious manner and to the furtherance of the public business.
In the dispatch under reply, your Imperial Highness requests a reply stating my action as to enjoining the observance of the four former rules agreed upon in the year 1865 by the merchants at the other ports. I beg to observe respecting them, that they refer only to cases of confiscation of vessels and merchandise, stipulating that whenever a vessel or merchandise has been seized, before the confiscation can be carried into effect the case must be examined by the consul; and if he and the collector disagree, the merchant must give a bond to the latter to await the decision of the superior authorities, and meanwhile his property need not be detained. It seems desirable, in addition to this, that another rule should be prepared giving directions in cases of fines, and the mode of procedure when the consul and commissioner do not agree as to the amount of the fine. In such cases it will be convenient if the merchant can also be allowed to give a bond for the amount, in order to release his property from detention and not lose its use. It must constantly be borne in mind that the power to levy fines upon American, citizens belongs alone to the United States consuls; and that when the case has been tried, and the money paid to him, he then will pay it to the collector of customs.
[Page 525]This mode of procedure in cases of fine for breach of regulations being similar to that in cases of confiscation, no impediment or hinderance is likely to arise in carrying it into effect. I have therefore prepared a draught of three additional rules, which I inclose for the examination of your Imperial Highness, and on receiving a reply I will inform the consuls at all the ports of the seven regulations which are to be observed as rules of procedure in cases of confiscation and fines by the customs.
I avail myself of this occasion to renew the assurance of the respect with which I am your Imperial Highness’s obedient servant,
His Imperial Highness Prince Kung.
D.
Prince Kung to Mr. Williams
Prince Kung, chief secretary of state for foreign affairs, herewith makes a communication:
In the month of February last your excellency and the British minister together proposed three more rules to the four which had been adopted in October, 1865, for joint investigation in cases of confiscation, and requested that the whole seven might be experimentally put in force at all the ports.
On receiving this proposal the Foreign Office took the matter into their most careful deliberation in all its bearings. The four former rules were found to require no alteration, but the three new ones have been somewhat modified to make them entirely satisfactory, and a new one has been added. They were all submitted to the inspection of the British minister in March last, who replied that, after adopting a few alterations in rule VI, he was willing to accept the whole eight as a body of rules for investigating cases of confiscation, and would direct them to be tried at the ports. The French minister also assented in the same sense.
Exact copies of these eight rules, thus amended, are now, therefore, sent to the foreign ministers at Peking; and orders have likewise been transmitted to the two superintendents of trade for the northern and southern ports, and to the inspector general of customs, enjoining their observance of them. With the inclosed copy now sent to your excellency I have to request that you will direct them to be observed by the various consuls of the United States in China.
His Excellency S. Wells Williams, United States Chargé d’affaires ad interim.
E.
Mr. Williams to Prince Kung
Sir: I have the honor to acknowledge your Imperial Highness’s dispatch of the 29th ultimo, containing the eight rules for the joint investigation of cases of confiscation and fines, of which four are identical with the old ones, three are nearly the same as those proposed last February, and a new one, the eighth, has been added. A few sentences in the sixth have also been altered, at the suggestion of the British minister, and a copy of the whole is now sent for my inspection. I have accordingly examined them with the greatest carefulness, and deem them to be well calculated to promote the object in view. I also agree to the eighth rule, wherein it is provided that the custom-house authorities shall have the power, if they please to do so, of purchasing the goods or vessel at the price stated by the merchant himself before the case has been decided, and foreclosing his right to redeem them afterwards.
I have given directions to the consuls at the ports to give these rules a trial, and I entertain the strongest hopes that all cases of fine or confiscation arising hereafter between the custom-house authorities and the American merchants will be settled in an equitable manner. The general effect of these rules will certainly be to smooth the way in conducting such cases, and to indirectly strengthen the amicable relations existing between our respective countries.
I have the honor to be, sir, your Imperial Highness’s obedient servant,
His Imperial Highness Prince Kung, Chief Secretary of State for Foreign Affairs.
F.
Mr. Williams to United States Consuls
Sir: I herewith send you a copy, in English and Chinese, of the eight rules which have been agreed upon with the Chinese government to be followed in adjudicating cases of confiscation, and for violating the revenue laws of China by American citizens. Four of them have been in operation at Shanghai since 1864, where they have been found to promote the satisfactory adjustment of such disputes, and no material alteration is made in them. Four others (Rules I, VI, VII, and VIII) have been added, relating to the official position of the foreign commissioner of customs, to the mode of procedure in settling cases of fines, and in disputes respecting duties leviable on goods, and the purchase of vessels or goods arrested by the custom-house officers. These are now all made alike applicable to all the ports, and it is at present agreed that they shall be regarded as experimental, and be open to alteration at the end of one year, if good cause be shown for modification. I wish, therefore, that you would report to this legation every case which comes under your cognizance connected with any of these rules, in order to furnish such facts and well-considered opinions as can guide those who may be called on to after them. I hope, however, that they will be found to work well, and prove to be the commencement of a system of joint tribunals on other cases. To my mind they exhibit an encouraging advance on the part of the Chinese government to assimilate their legal action to the rules adopted in western lands, and to acknowledge an equality of powers, interests, and aims between their own and other officials that has not hitherto been so distinctly marked. The results during a series of years can hardly fail to be instructive, and these rules may serve as a guide and precedent in adjusting disputes on other points, and suggest measures worthy to be adopted in other departments of territorial jurisprudence.
Among the chief objects aimed at in drawing up these rules, four deserve to be specified. One is the acknowledgment in rule I of the official standing of the foreign commissioners of customs, who heretofore, while exercising control in the details of their administration, has been more or less ignored by the consuls because of this non-recognition, and this has sometimes led to untoward results and antagonism.
Growing out of this is the indication of the equality of the native and foreign authorities when brought together on the same tribunal. It has been arranged by requiring that cases of confiscation (the power of doing which has been by treaty yielded to the Chinese) shall be investigated and decided at the custom-house, while cases of fining an American citizen for breaches of revenue laws shall be tried at the consulate; in both cases the officers of both nationalities sitting together on the bench.
Another is the refusal to grant an appeal to Peking when these officers agree upon the sentence, inasmuch as they must generally be better acquainted with the details of a case than referees can be, and better fitted for settling it on the spot, if the facts are known and the law clear.
The fourth point is that of allowing a merchant to file a bond in the consular court, for deposit in the superintendent’s hands, whereby he will be able to release his vessel or goods at once, and avoid the vexatious delays and inevitable losses which have hitherto been experienced in such cases as these rules cover. I have, however, to urge upon you the need of great carefulness in accepting these bonds, and see that the security be ample for their punctual fulfillment on the part of the merchant. In case of non-payment, the remedy would be difficult and the reproach to our national reputation not slight, seeing that the consul is regarded as the principal warrantor of its adequacy, and officializes it with his seal.
It is my impression that the feeling which was not uncommon 10 years ago, when the foreign inspectorate of customs was established, that its personnel had lowered themselves by entering it, and that disputes relating to the execution of the Chinese revenue laws were not discreditable, has gradually given place to a juster view on the part of the community to the benefit to be derived from an equitable administration of these laws. These eight rules will, it is to be hoped, not only tend to remove this feeling entirely, but to elevate the whole character of the revenue department.
If the Chinese government is ever to become able wisely to utilize the knowledge, integrity, and capacity of foreigners in carrying out reforms in its internal administration, their effective usefulness must depend somewhat on their status among their own countrymen. I need hardly add in conclusion, however, that I fully expect that you will, on your part, do whatever is right in carrying out these rules in the most harmonious and equitable manner.
I am, sir, respectfully, your obedient servant,
Rules for joint investigation in cases of confiscation and fine by the custom-house authorities.
Rule 1. It shall be the rule for all business connected with the custom-house department to be in the first instance transacted between the commissioner of customs and the consul, personally, or by letter, and procedure in deciding cases shall be taken in accordance with the following regulations:
Rule 2. Whenever a ship, or goods, belonging to a foreign merchant is seized in a port of China by the custom-house officers, the seizure shall be reported without delay to the Kien-tuh, or Chinese superintendent of customs. If he consider the seizure justifiable he will depute the Shwuiwu-sze, or foreign commissioner of customs, to give notice to the party to whom the ship or goods are declared to belong that they have been seized because such or such an irregularity has been committed, and that they will be confiscated unless before noon on a certain day, being the sixth day from the delivery of the notice, the custom-house authorities receive from the consul an official application to have the case fully investigated. The merchant to whom the ship or goods belong, if prepared to maintain that the alleged irregularity has not been committed, is free to appeal, within the limited time, directly to the commissioner, who is to inform the superintendent. If satisfied with his explanations, the superintendent will direct the release of the ship or goods; otherwise, if the merchant elect not to appeal to the customs, or if, after receiving his explanations, the superintendent still decline to release the ship or goods, he may appeal to his consul, who will inform the superintendent of the particulars of this appeal, and request him to name a day for them both to investigate and try the case publicly.
Rule 3. The superintendent, on receipt of the consul’s communication, will name a day for meeting at the custom-house, and the consul will direct the merchant to appear with his witness there on the day named, and will himself on that day proceed to the custom-house. The superintendent will invite the consul to take his seat with him on he bench. The commissioner of customs will also be seated, to assist the superintendent.
Proceedings will be opened by the superintendent, who will call on the customs employés who seized the ship or goods to state the circumstances which occasioned the seizure, and will question them as to their evidence. Whatever the merchant may have to advance in contradiction of their evidence he will state to the consul, who will cross-examine them for him. Such will be the proceedings in the interest of truth and equity. The consul and superintendent may, if they see fit, appoint deputies to meet at the custom-house in their stead, in which case the order of proceeding will be the same as if they were present in person.
Rule 4. Notes will be taken of the statements of all parties examined, a copy of which will be signed and sealed by the consul and superintendent. The room will then be cleared, and the superintendent will inform the consul of the course he proposes to pursue. If he proposes to confiscate the vessel or goods, and the consul dissents, the merchant may appeal; and the consul having given notice of the appeal to the superintendent, they will forward certified copies of the above notes to Peking, the former to his minister, and the latter to the Foreign Office, for their decision.
If the consul agrees with the superintendent that the ship or goods ought to be confiscated, the merchant will not have the right of appeal; and in no case will the release of ships or goods entitle him to claim indemnity for their seizure, whether they be released after the investigation at the custom-house, or after the appeal to the high authorities of both nations at Peking.
Rule 5. The case having been referred to superior authority, the merchant interested shall be at liberty to give a bond, binding himself to pay the full value of the ship or goods attached should the ultimate decision be against him, which bond, being sealed with the consular seal and deposited at the custom-house, the superintendent will restore to the merchant the ship or goods attached; and when the superior authorities shall have decided whether so much money is to be paid, or the whole of the property seized be confiscated, the merchant will be called on to pay accordingly. If he decline to give the necessary security, the ship or merchandise attached will be detained. But whether the decision of the superior authorities be favorable or not, the appellant will not be allowed to claim indemnity.
Rule 6. When the act of which a merchant at any port is accused is not one involving the confiscation of ship or cargo, but is one which by treaty or regulation is punishable by fine, the commissioner will report the case to the superintendent and at the same time cause a plaint to be entered in the consular court. The consul will fix the day of the trial, and inform the commissioner that he may then appear with the evidence and the witnesses in the case. And the commissioner, either personally or by deputy, shall take his seat on the bench and conduct the case on behalf of the prosecution.
When, the treaty or regulations affix a specific fine for the offense, the consul shall, on conviction, give judgment for that amount, the power of mitigating the sentence resting [Page 528] with the superintendent and commissioner. If the defendant is acquitted, and the commissioner does not demur to the decision, the ships or goods, if any he under seizure, shall at once he released, and the circumstances of the case he communicated to the superintendent. The merchant shall not he put to any expense by delay, but he shall have no claim for compensation on account of hinderance in his business, for loss of interest, or for demurrage. If a difference of opinion exists between the consul and commissioner, notice to that effect shall be given to the superintendent, and copies of the whole proceedings forwarded to Peking for the consideration of their respective high authorities.
Pending their decision, the owners of the property must file a bond in the consular court to the full value of the proposed fine, which will be sent to the custom-house authorities by the consul, and the goods or ship will be released.
Rule 7. If the custom-house authorities and consul cannot agree as to whether certain duties are leviable or not, action must be taken as rule 5 directs, and the merchant must sign a bond for the value of the duties in question. The consul will affix his seal to this document, and send it to the custom-house authorities, when the superintendent will release the goods without receiving the duty, and these two functionaries will respectively send statements of the case to Peking, one to his minister, the other to the Foreign Office.
If it shall be decided there that no duty shall be levied, the custom-house authorities will return the merchant’s bond to the consul to be canceled; but if it be decided that a certain amount of duty is leviable, the consul shall require the merchant to pay it in at the custom-house.
Rule 8. If the consul and the custom-house authorities cannot agree as to whether confiscation of a ship, or a cargo, or both of them together, being the property of a foreign merchant, shall take place, the case must be referred to Peking for the decision of the Foreign Office and the minister of his nation. Pending their decision, the merchants must, in accordance with rule 5, sign a bond for the amount, to which the consul will affix his seal, and send it for deposit at the custom-house. As difference of opinion as to the value [of ship or goods] may arise, the valuation of the merchant will be decisive; and the custom-house authorities may, if they see fit, take over either at the price aforesaid. If, after such purchase, it be decided that the property seized ought to be confiscated, the merchant must redeem his bond by paying in at the custom-house the original amount of the purchase money. If the decision be against confiscation, the bond will be returned to the consul for transmission to the merchant, and the case then be closed. The sum paid by the custom-house authorities for a ship or goods being regarded as their proper price, it will not be in the merchant’s power by a tender of the purchase money to recover them.