No. 137.
Mr. Seward
to Mr. Evarts.
Legation of
the United States,
Peking, December 8, 1879.
(Received January 27.)
No. 526.]
Sir: I have the honor to hand to you herewith a
letter which I have received from the consul-general, transmitting one
addressed to me by the Chamber of Commerce at Shanghai, in which the belief
of the chamber is stated that the Swatow Guild, a combination of Swatow
merchants, doing business at the open ports in China, has a recognized
connection with the collection at Shanghai of lekin taxes on opium, and that
its power in this respect is used to forward its own interests in the
trade.
The fact that the collection of lekin taxes is sometimes committed to guilds
of native merchants, and that such guilds are able, directly and indirectly,
to promote their own interests in this way, and to displace other traders,
native and foreign, has already fallen under the observation of the
diplomatic body here, and has been included in the list of trading
grievances lately transmitted by us to the Tsung-li Yamên. (See my dispatch
510, inclosure 3, grievance number 14.*)
It is not singular that, when trade and the opportunities for enterprise are
rendered inelastic by repressions everywhere exercised, the efforts of
traders should take the form of combinations intended for their defense
against the government, and the removal of opposition on the part of those
who do not share in the expenses and responsibilities of the combinations so
made.
[Page 192]
Broader opportunities for enterprise and a right regard for the interests of
individuals would go far to break down such combinations, but as things are,
this is not to be hoped for in China.
Foreigners cannot join the guilds. They are therefore at especial
disadvantage, and it is the more necessary for their national
representatives to give them all proper support.
I have, &c., &.,
[Inclosure 1 in No. 526.]
Mr. Bailey to Mr.
Seward.
Shanghai, November 25,
1879.
No. 730.]
Sir: I have the honor to inclose a letter
addressed to yourself by F. B. Forhes, esquire, chairman off the
Shanghai General Chamber of Commerce, upon the subject of the case of
Messrs. Duff and David versus The Swatow Opium
Guild, and cognate subjects.
The secretary of the chamber, Mr. George R. Corner, called on me in
person to-day and handed me the letter with the request that I should
transmit it to you by the first opportunity, which is accordingly
done.
I have, &c.,
[Inclosure 2 in No. 526.]
Mr. Forbes to Mr.
Seward.
Shanghai General Chamber of Commerce,
Shanghai, November 22, 1879.
No. 554.]
Sir: The recent suit in the mixed court of two
British subjects, Messrs. Duff and David, against the association known
as the Swatow Guild, has brought to light certain facts which are of
grave importance and cause deep anxiety to the mercantile community of
Shanghai. Any discussion of the merits of the case itself is, at
present, beyond the province of this chamber, but the committee feels
that no time should be lost in protesting against the disregard of
treaty stipulations involved in the position held by the Swatow Guild,
under sanction of the Chinese authorities.
The committee has reason to believe that the collection of the lekin tax
on opium at Shanghai and Chin Kiang is entrusted to members of the
Swatow Guild, either as direct agents for the authorities, or, more
probably, as farmers of the revenue in question. To whatever extent this
arrangement may be officially undeclared or disguised, the power
exercised by the guild is so far effectual that payment of lekin is said
to be refused from China outside of the association, who are further
liable to be denounced for attempting to smuggle the very drug on which
the tax has been declined. The result is that the members of the guild,
being enabled to close to others the only lawful outlet for opium, have
acquired for themselves a practical monopoly of the trade at this
port.
Unfortunately, legal evidence about matters in which the local
authorities are interested is never easily obtained in China, and, in
this instance, is now impossible to produce. The reason is not far to
seek. Since the proceedings in the mixed court the Taotai has issued a
proclamation in which he declares the statements of the plantiffs in
this case to have been unfounded and malicious, and warns his people to
beware of bringing wanton and calumnious accusations in the future. To
the Chinese, who are accustomed to read between the lines of such
documents, this proclamation is a significant hint to say nothing at
all, and the committee has therefore not been surprised within the last
few days to be met with blank assertions of ignorance from trustworthy
natives who were previously ready to give full information.
The difficulty of obtaining evidence is further complicated by the fact
that the Swatow Guild has been for many years in undisputed enjoyment of
its privileges, which, as the committee is informed, date back to an
arrangement made when His Excellency Ting-Jih-Chang was Taotai of
Shanghai. However this may be, it is notorious that for a long time past
Swatow men have been the exclusive traders in opium here, either as
principals or as brokers for non-members of their guild, and the quiet
acquiescence of other Chinese merchants in this state of things goes far
to prove that it has
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official
sanction. It is probably not too much to say that the arrangement is
accepted by every one who is not ready to take the risk of evading the
lekin tax altogether.
The committee has been verbally informed by Mr. Davenport, Her Britannic
Majesty’s consul here, that he is sending to His Excellency Sir Thomas
Wade such information as he has been able to procure, including, the
committee understands, certain important admissions by the present
Taotai as to the connection between the Swatow Guild and the opium lekin
office. I can only regret that circumstances have precluded the
committee from supplementing Mr. Davenport’s statement by any direet
evidence.
It hardly needs argument to show that a trading guild allowed to farm the
inland revenue on commodities in which it deals, is a privileged
corporation within the meaning of the treaties, and there is no reason
why, if found to work successfully in the case of opium, the same system
should not be extended to tea, silk, and piece goods. There are indeed
serious grounds for belief that fiscal arrangements of this kind at the
outports have had much to do with the virtual banishment of foreign
importers, which it has been the fashion to ascribe to the greater
prudence and economy of the native trader.
The Canton Co-hong monopoly, in spite of its one advantage of a
collective responsibility enforced by the Chinese Government, was found
so intolerable that it was solemnly abolished by treaty. It would
appear, however, that the establishment of lekin, in the face of the
treaties, has gradually led to other equally illegal combinations which,
in port after port, and in one thing after another, threaten to hedge in
foreign trade with privileged guilds, worse than the old Co-hong in
proportion, as the interests affected are larger and more difficult to
combat, because while effectually screened they are not officially
recognized before foreign powers.
If any additional motive were needed for a vigorous declaration of treaty
rights with regard to lekin, the committee would respectfully urge that
it may be found in the tempting facilities offered to the collectors of
this tax for the evasion or open disregard of other vital stipulations.
The committee cannot conceal its anxiety lest, if the present
opportunity be allowed to pass without dealing firmly with this
question, the development of foreign trade may be still further
crippled, if not entirely arrested, by such underhand influences. This
statement is submitted in the hope that your excellencies and your
colleagues may feel that the circumstances are such as to call for a
prompt consideration of an undoubted grievance.
I have, &c., &c.,
[Inclosure 3 in No. 526.]
Mr. Seward to Mr.
Bailey.
Peking, December 5,
1879.
No. 205.]
Sir: I have had the honor to receive your
dispatch No. 730, with which you have transmitted a letter addressed to
me by the chairman of the Chamber of Commerce, dated November 22, and
having reference to the case of Duff and David versus The Swatow Guild and the danger growing out of the
alleged committal to the guild of the collection of lekin taxes on
opium.
Other allegations of the same kind, notably in reference to the
piece-goods trade at Ningpo, having fallen under the observation of my
colleagues and myself, the subject will doubtless be presented to the
government in as forcible a manner as the evidence will warrant.
Please be so good as to transmit the substance of this note to the
chamber with an expression of my thanks for the information contained in
their communication.
I am, &c.,
