No. 57.
Mr. Low to Mr. Fish.
Legation of the
United States,
Peking, February 20, 1873.
(Received April 21.)
No. 231.]
Sir: The third commercial rule appended to the
treaty of 1858 designates munitions of war and salt as contraband, which can
neither be imported nor exported.
About a year ago a quantity of shell, ordered by the Japanese government
through an American house, arrived at Shanghai, en
route to their port of destination, Nagasaki. Notice was given to
the proper authorities that such goods were on the way, and, when the ship
arrived, application was made for permission to transship them. The customs
authorities refused the permission asked for and seized the goods. The case
was tried by a properly constituted court and a decree of confiscation
rendered. Subsequently, through the intercession of the consul-general, and
upon the owners giving a bond in the full value of the goods, they were
released and reshipped to their destination. The condition of the bond was,
that the case should be referred to Peking for re-examination by the yamên
and the legation, and if, after such examination, it should be decided that
the seizure and confiscation were warranted by the terms of the treaty, the
sum named should be paid without further question. The owners of the goods
were not charged with fraud or evasion; on the contrary, it was conceded
that they acted in good faith, not supposing that the bringing of contraband
goods into a treaty port, merely for the convenience of reshipping them to
foreign countries, would subject them to confiscation or their owners to any
other penalty. In presenting the case to the yamên, I asked for the
cancellation of the bond, and also that a definite rule should be made and
promulgated for regulating transshipment of such goods in the future. After
considerable discussion it was agreed that the bond in question should be
canceled, the yamên conceding the point on the score of equity alone. This
concession was coupled with a declaration that after a certain date
transshipment would not be allowed, and that if contraband goods arrived
after the time named they would be confiscated. (See inclosure No. 1.) To
this I replied, (inclosure No. 2,) objecting to the proposed rule as being
in conflict with treaty right, and declining to issue orders to the consuls
in accordance with the yamên’s request. Further discussion and
correspondence ensued, in
[Page 145]
which
the position on either side was restated and the question argued without
reaching any definite result.
In a note received a few days since from the yamên, (inclosure No. 3,) the
ministers indicate that they are ready to abandon their position; they now
propose to allow transshipment of munitions of war upon conditions which
practically concede all that has been contended for. To this I have replied,
(inclosure No. 4,) accepting, with certain reservations, the
proposition.
The question is, I trust, practically settled in a manner which will
facilitate trade and at the same time work no injury to the Chinese
government.
The effect of all this will probably be that most of the war material needed
for Nagasaki and ports in the inland sea will come to Shanghai for
reshipment, and, as American steamers practically control the carrying-trade
between Shanghai and those ports, it is obvious that this arrangement will
prove of considerable value to our commercial interests.
In view of the facts above stated, I would respectfully suggest that the
Treasury Department be informed of the new regulation.
I have, &c.,
[Inclosure 1.]
Ministers of the Yamên to
Mr. Low.
Your excellency is aware that some time ago the tsungli yamên sent
instructions to the superintendent of trade and the inspector-general of
customs to investigate and decide, in concert with the taotai of
Shanghai, the claim against the China and Japan Trading Company growing
out of the importation and transshipment of eighty-four cases of
shell.
On the 15th instant we received a communication from the superintendent
of trade in which his excellency states that Mr.
Hart, after his arrival at Shanghai, wrote on
the 27th April to Taotai Shên to inform him that the object of the
importation of shell by the aforementioned company had actually been to
transship these goods for conveyance to Japan; permission ought,
therefore, to be given to send them on, and the bond issued by claimants
should be cancelled; but this case having been settled, no further
importation of munitions of war ought to be allowed.
Mr. Commissioner Dick issued his first notification
on the 30th July, 1871, thinking that it would come to the knowledge of
everybody near and far. It seems advisable, however, that Mr.
Dick should now publish another notice to the
effect that munitions of war, arriving from foreign ports at Shanghai,
will, after having been duly reported to the customs, either be sent off
again in the same vessel, or allowed to be transshipped for
re-exportation, but all on condition that the vessel has sailed from the
foreign port before the 7th May, 1872. If, however, munitions of war
should arrive within the limits of the port of Shanghai in any vessel
which left home after the before-mentioned date, such goods will neither
be allowed to leave again in the same vessel nor to be transshipped and
re-exported, but will be regarded as contraband and forthwith seized and
confiscated by the customs. Thus a uniform rule will be established, and
the merchants will understand that a violation of the rules takes place
as soon as a vessel with munitions of war on board enters the limits of
the port, though no landing of these goods be effected; and they will
further understand that the transshipment of munitions of war being
interdicted, it is of no use to import these articles with a view of
shifting them from one vessel to another.
These propositions of the inspector-general were communicated to Mr.
Dick by Shên, taotai, and a definite course of
action will be decided upon as soon as Mr. Hart,
who left for Kuangtung on the 4th May, shall have returned.
The tsung li yamên beg to add the following remarks:
Rule 3 of the treaty distinctly prohibits the export and import of
contraband goods, and although transshipping such goods is different
from selling them, the fact is they
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have been transported to the place, and not less a
fact that they have been imported and exported.
Even granting that nothing but the simple transshipment takes place, and
no fraudulent action be intended or perpetrated, yet such action
constitutes, properly speaking, a violation of the treaty
prohibition.
Now, as regards the claim of the China and Japan Trading Company, the
inspector-general has ascertained that nothing but the transshipment of
the goods in question was intended, and that otherwise no irregularity
was connected with the affair; we shall, therefore, in this case follow
an exceptional course of forbearance and release the goods without a
fine, as well as allow the bond given by the company and deposited with
the customs to be cancelled. To effect, however, an efficient
arrangement it will be necessary to hereafter set distinct bounds with
regard to the importation of the forbidden article, and to draw up a
special and severe rule based on the treaty regulations. The
inspector-general’s proposition, to let the commissioner of customs
issue a notification informing the merchants that the 7th of May is the
limit by which it will be decided whether munitions of war are to be
released or confiscated, is not only distinct, comprehensible, and easy
to apply, but it also prevents the merchants from committing errors at
the outset, and thus subjecting their goods to seizure and subsequent
embarrassment. While insisting upon this prohibition, founded on treaty
rules, we at the same time show our willingness to make allowance for
the merchants.
We have sent a reply to his excellency the superintendent of trade, who
will instruct the taotai that as soon as the inspector-general shall
have returned from Kuang-tung to Shanghai he is to meet him and they are
to effect the publication of the proposed decree.
We request your excellency likewise to give notice of this arrangement to
your consul.
The date mentioned, however, being already past, the inspector-general
will, after his return to Shanghai, again have to decide in concert with
the taotai what other month shall be fixed as the term by which the
proceedings in cases of importation are to be regulated. As soon as
their decision shall have been reported to us, we shall not fail to
apprise your excellency of its purport. In the meantime we avail
ourselves of this opportunity, &c.
[Cards of the ministers.]
[Inclosure 2.]
Mr. Low to Prince Kung.
Legation of
the United States,
Peking, June 28,
1872.
Sir: I have had the honor to receive from their
excellencies the ministers of the yamên a note, informing me that the
case of transshipment of shell to Japan by the China and Japan Trading
Company has been decided; that the company is released from all
responsibility, and that orders have been given to cancel the bond.
This case, the ministers say, is exceptional, and cannot be considered a
precedent; and it is announced that after a certain date, hereafter to
be named, all munitions of war brought within the limits of any of the
ports, whether for sale or transshipment to a foreign country, will be
confiscated.
In reply, I have the honor to inform your imperial highness that the
adjustment of the particular case in question in accordance with the
principles of justice and equity, and, as I believe, according to the
letter and spirit of the treaties, is highly satisfactory.
I cannot, however, concur in the yamên’s construction of rule 3, of the
supplementary treaty of 1858, that goods brought into a port for the
purpose of transshipment to a foreign country can be considered either
an “import” or an “export” in any proper sense.
In view of this, I do not feel at liberty to advise my countrymen that it
will be their duty to conform to the notification indicated in their
excellencies’ note so far as the transshipment of contraband goods is
concerned. If such goods should be brought into the ports by American
merchants, with no intent to land or sell them in China, and an attempt
be made to confiscate them, I should feel bound to protest against such
proceedings.
But while firmly insisting upon the right of transshipment, no objection
will be offered to the adoption and enforcement of rules which would
absolutely secure the government against fraud. In foreign countries it
is usual in such cases to demand a bond of the owner of the goods equal
in amount to their fall value, conditioned that he will produce a
certificate from the authorities of the port to which they are destined,
showing that they have been regularly landed there.
Upon the production of such certificate within a certain time named, the
bond will be cancelled, otherwise it will be enforced. Such a
regulation, if adopted at the ports,
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would secure the government against fraud, nor
would it prove a hardship to the honest merchant.
In view of these considerations I have most respectfully to request that
your imperial highness and their excellencies the ministers of the yamèn
will carefully reconsider this whole question, in the hope and confident
expectation that a solution, more in accordance with the spirit of the
treaty and principles of justice than the one proposed in the yam en’s
note, will he found.
With, &c.,
[Inclosure 3.]
The ministers of the
Yamên to Mr. Low.
* * * * * * *
In the month of August the inspector-general reported that the
enforcement of the rule as proposed would work great hardship to the
merchants, whereupon we directed him to reconsider the whole matter, and
suggest some new plan. In response to this, Mr.
Hart reported, on the 3d January, 1873, as
follows:
“By treaty merchants are prohibited from importing or exporting munitions
of war for sale; but the bringing of such goods into a treaty port for
transshipment is not, properly speaking, either an import or an export;
it is therefore proposed to allow them to be transshipped under the
following conditions: When a vessel, having munitions of war on board,
enters a treaty-port, the consignee must report the fact, and also that
they are intended to be transshipped.
“And the consignee of the goods in question must, before making
application for a transshipment certificate, enter into a bond to be
executed before his consul, binding himself to transship the goods
within a number of days hereinafter named, or to forfeit three times
their value.
“The time within which transshipment must be made will be fixed by the
commissioner of customs, not to exceed, however, in any event, fifteen
days. No contraband goods must be landed; and the customs will take such
precautions as may be necessary to prevent fraud in transshipment.
Whenever an invoice of such goods shall have left the port, the bond in
such case shall be cancelled and surrendered.
“In case the goods are to proceed to their destination in the same ship,
the consignee of the vessel must, previous to obtaining permission to
break bulk, give the bond provided for above.”
The yamèn finds the propositions of the inspector-general equitable and
proper; the only thing to consider is the question of time. The
commissioners of customs should take the circumstances of each case into
consideration and decide upon the time necessary for transshipment; it
must not exceed, in any event, fifteen days.
Having issued instructions in accordance with the foregoing to the
superintendents of trade and the inspector-general, we now beg your
excellency to instruct the consuls that the above rules are iu force and
must be complied with.
It must be borne in mind that according to the treaties, munitions of war
cannot be imported or dealt in within the limits of the empire.
Heretofore this prohibition has been strictly enforced. With a view,
however, of facilitating commerce, the foregoing rules have been laid
down by which contraband goods may be brought into a Chinese port when
in transitu to a foreign country.
Should it be found hereafter that the rules are evaded, and, under cover
of transshipment, contraband goods are brought in and sold, the rules
will be rescinded, and all importation of such goods for whatever
purpose stopped.
We especially request that your excellency will cause this to be made
known to the merchants at the ports.
With, &c.
[Cards of the ministers.]
[Inclosure 4.]
Mr. Low to Prince Kung.
Legation of
the United States,
Peking, February –,
1873.
Sir: I have had the honor to receive from their
excellencies, the ministers of the yamên, a note concerning a question
which has been the subject of discussion between
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the yamên and the foreign legations—the
transshipment of munitions of war within the iimits of a
treaty-port.
The ministers, after referring to former discussions on this subject, and
certain propositions which proved unacceptable, now propose that
munitions of war entering a Chinese port, when in
transitu to a foreign country, may be reshipped under certain
conditions and sent on to their destination.
In reply, I have to inform your imperial highness that the rules proposed
will generally answer the purpose. Cases may, however, occur in which a
strict enforcement of the conditions would work injustice.
The penalty prescribed for violations of the regulations is excessive,
and might, with great propriety, be reduced. On that point, however, I
shall offer no serious objection. If the honest merchant can be
protected from liability arising from unforeseen circumstances, no
objection will be made to the infliction of severe penalties in cases
where fraud can be proven.
I am, therefore, prepared to accept the yamêns’ proposal with this
reservation: When, in any given case, it shall be made to appear to the
consul that, in consequence of exceptional circumstances, it was
impracticable to complete the transshipment within the time named in the
permit, and that no fraud or collusion has been practiced or attempted,
proceedings to enforce the bond given in the case shall not be
instituted until the facts are made known to the minister in Peking, and
orders to that effect have been received from him.
It must also be clearly understood that if now, or at any time hereafter,
more favor able terms are granted to the merchants of any other nation,
citizens of the United States shall enjoy the same advantages.
I may add that if the yamên mean to assert that the arrangement proposed
is a concession entirely outside of the treaty, which may be granted or
withheld at pleasure, such a declaration cannot be accepted as a correct
interpretation of treaty right. In my view the bringing of contraband
goods, when in transitu to a foreign country,
into a treaty-port for the purpose of transshipping them to their
destination, does not constitute an “import” or “export” in any proper
sense, and therefore is not prohibited by treaty.
I have, &c.,
