I have to inform you that on the 19th of September, 1878,1 received from his excellency the Chung Ching Taotai “Youn,” who on the 15th of September, 1878, received from the officer in charge of the tax-station at Kwei-Chow the following dispatch, in which he states:

“I am in receipt of a dispatch from his excellency, Sung, Taotai of Ichang, who has received from his excellency Ho, the Hankow Taotai, stating that Consul Shepard has addressed him a dispatch, requesting that I will forward to his office the following transit passes to carry goods from Chung Ching to Hankow, which has been applied for by Mr. M. A. Jenkins. Passes as follows: five for musk, two for gallnuts, one for silk, one for white wax, and one for safflower; in all ten passes, and that Chung Ching is considered the first tax-station en route, and all of the rest of the way stations are to examine and pass without delay, all duties for the said goods to be collected at Ichang. I, the tax officer, in reference to the above, would observe that since imported goods have been taken into Szchuen, under transit passes, the customs and internal tax offices at Kwei Chow have suffered a loss of over 200,000 taels. Now, if native produce is to be brought out from Szchuen, on which my office can collect nothing, the treasury will be empty, and where is the money to come from which the province will be called on to forward for public services? Strict orders from high authority have been issued to my office to make strict investigation that the large packages of foreign goods which pass here under transit passes, to see that they do not cover native goods; and should any native produce be found concealed, it is to pay the duties as per regulations.

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“This order plainly shows that all produce coming out from Szchuen is to pay the regular charges. I have written to his excellency the viceroy, and have asked that he will bring this to the notice of the foreign board at Peking, and I have also written to the prefect at Ichang to ask that instructions be sent to Mr. M. A. Jenkins not to use the passes he has in his hands at present.

“It is now for this purpose that I address your excellency and ask that you will instruct Mr. M. A. Jenkins that the passes which he has at Chung Ching be not used for the present. Should Mr. M. A. Jenkins not obey your instructions, please inform him that on the arrival of the goods at Kwei Chow tax-barriers, that I shall not recognize the passes, but shall demand the regular dues payable at my office. As soon as I have received instructions from his excellency the viceroy, I will write you again. Thus I will be acting in accordance with the strict orders referred to.

“I, the Chung Ching Taotai, having received the above dispatch, have to instruct you, the magistrate of Chung Ching, to issue orders for the carrying out of the tax-officer’s views, and you are instructed to order Mr. M. A. Jenkins not to disobey.”

Now, I, the magistrate, having received the above instructions, address you this, and have to instruct that you will not disobey the orders above given.

From Lee, the magistrate of Chung Ching, to the American merchant, Kung-Tai.

M. A. JENKIN’S Agent.
[Inclosure 2 in No. 76.]

Mr. Holcombe to Prince Kung.

I have the honor to inform your Imperial Highness that I am in receipt of a communication from the United States consul at Hankow, in which it is stated that Mr. M. A. Jenkins, an American merchant at Hankow, having applied for and received ten transit passes for the purpose of bringing to that port certain native produce purchased by him in Szchuen, has been warned by the local authorities at Chung Ching that the passes would not be respected, and informed that upon the arrival of his goods at Kwei Chow he would be required to pay the usual barrier charges, the same as for goods unprotected by transit passes. As a result of this procedure the produce purchased by Mr. Jenkins is stopped in the interior, and he is subjected to serious loss from deterioration of the produce and changes in the market. The consul requests me to bring this business to the notice of your Imperial Highness, and to seek from you such remedy as the circumstances demand.

Your Imperial Highness will, doubtless, remember a correspondence had with Minister Seward upon the subject of the issue of transit passes to American citizens who may desire to bring native produce from the interior of Szchuen to Hankow, and which resulted in a scheme proposed by yourself and accepted by this legation last spring, by which such passes could be secured, and the transit dues upon the produce covered by them could be paid at Hankow.

The consul at Hankow was in due course informed of this arrangement, and the ten transit passes in question were issued under it. It appears that the tax authorities in the district named refuse to acknowledge the validity of these documents, although issued by virtue of a distinct understanding arrived at between your Imperial Highness and this legation, and venture to take a course which is in manifest violation of treaty, and calculated to work grave injury to the interests of my countrymen.

Under these circumstances I have the honor to request that your Imperial Highness will issue such orders to the local authorities concerned as will cause them to respect treaty obligations, adhere to the arrangement made between your Imperial Highness and Mr. Seward, and regard the rights of such Americans as may be within the limits of their jurisdiction.

I inclose a copy of the notice served upon Mr. Jenkins.

I have, &c.