Papers Relating to the Foreign Relations of the United States, Transmitted to Congress, With the Annual Message of the President, December 6, 1880

No. 153.
Mr. Seward to Mr. Evarts.

Legation of the United States,
Peking, February 16, 1880. (Received April 26.)

No. 596.]

Sir: In September last I transmitted to our several consuls in this empire, through the consul-general, copies of the circular letter addressed in March, 1878, by the Tsung li Yamên to the ministers of China in foreign countries, and requested them to report to me their opinions upon its contents. I did this because I was desirous of bringing to their notice the positions taken up by the Chinese in regard to questions which are of daily interest at the ports, and because I was anxious to place before you evidence from divergent sources of the estimation in which the paper in question may be held.

The responses which I have received have been less full than I expected. It is my intention to gather them together and send them to you when time will permit, but at the moment I can do no more than to forward the fullest and most careful which has come to hand, that of Dr. Lord, consul at Ningpo, the oldest and most experienced of our officers in China.

The report of Dr. Lord has been written from his own standpoint, and with but little opportunity for any comparison of opinions with myself.

It seems to me, however, to sustain perfectly the views upon the various questions involved which were long since embraced by me, and which the foreign representatives here, generally, have come to consider those entitled to support. It is a paper, therefore, to which I invite your especial attention.

It would be tedious as well as unnecessary to review Dr. Lord’s paper, but there are some points in it which need a word of explanation. He refers in sections 3 and 4 to the coast-trade duties, saying that they are not mentioned in the treaties. This is entirely true. The present system was devised after the treaties of 1858 were signed, and was intended to be an equitable arrangement of the matter. Foreign vessels had for a long time shared in the coast trade, paying at the ports of departure and arrival such duties as were demanded of them. Thereafter, however, they were to pay a full duty oh all native goods carried out of a Chinese port, just as if the goods were being exported to a foreign country, and upon importation at the second port a half duty. This arrangement was agreed upon in 1861, by Sir Frederick Bruce, then minister of England, and the Tsung-li Yamên, and has been acquiesced in by all other powers. The details will be found at page 204 of “Mayer’s Treaties” a copy of which is in the Department.

Dr. Lord again refers in the same division of his paper to the option which foreigners exercise to send their imported goods into the interior, and bring native produce from the interior, either under transit passes or without them, and intimates that tariff rule No. VII provides only for the use of transit passes when foreigners desire to move such merchandise.

Tariff rule No. VII will be found on page 30 of “Mayer’s Treaties.” It reads as stated by Dr. Lord, but it is to be construed with reference to the appropriate article of the treaty (XXVIII, page 15), perusal of which will show that the option to use transit passes or not is reserved to British merchants. If there be any doubt on this head, it will be resolved by a reference to a further agreement made by Sir Frederick Bruce and the Tsung-li Yamên, the particulars of which are given at page 203 of “Mayer’s Treaties.”

The articles of our treaties which refer to transit duties are the thirteenth of the treaty of 1844, and the seventh of the supplementary treaty of 1858. Bead by themselves, these articles would indicate that since the latter was signed no transit dues in excess of 2½ per cent, can be levied upon any goods.

In section 5, Dr. Lord refers to the question whether goods not intended for exportation may be brought from the interior under transit passes, and reaches the conclusion that it is equitable to acknowledge the objections made by the Chinese on this score. The merit of their objections is universally recognized, as I believe, and it is generally conceded, also, that the intent of the treaties sustains their view.

With these remarks I again commend Dr. Lord’s paper to your notice.

I have, &c.,

GEORGE F. SEWARD.

[Inclosure in No. 596.]

Mr. Lord to Mr. Seward.

Ningpo, November 29, 1879.

No. 105.]

Sir: The United States consul-general at Shanghai has sent me a copy of a “circular note addressed by the Chinese Government to its ministers abroad in March of last year,” with the request that I would make and forward to you such comments on it as my experience might suggest.

The paper referred to, I notice, is divided (I speak of its English translation) into paragraphs, which are numbered consecutively from 1 to 10. It may serve both convenience and perspicuity if, in the remarks which I may make, I follow the order and numbering here observed.

1. The note opens with the declaration that, “Since the treaties of Tientsin were ratified China’s relations with foreign powers have invariably been conducted in accordance with their stipulations.” The entire accuracy of this statement may perhaps be questioned. It is too broad and too positive. It overlooks an important element which has existed, and which has influenced this whole matter. It is known, of course, that the Chinese Government did not enter into these stipulations willingly. It assented to them, because it seemed necessary to do so. They were regarded as burdensome, and the observance of them has necessarily been irksome. But reluctant services are usually scant services, for what one does not want to do, one is always finding opportunities and reasons for not doing. And in the matter in question the Chinese Government has probably been no exception to this rule; Had the treaties made with foreign powers been on its part as on theirs, treaties of real friendship, its observance of them would probably have been attended with less friction and less complaint.

The “accidents to individuals which,” it is rightly said, “may occur many country, and which no amount of foresight can effectually guard against,” would probably have been fewer, or, if not fewer, would have given rise to less complaint. Indeed “the accidents to individuals,” here referred to, are not in themselves infractions of treaty stipulations. They become such only when inadequate measures are taken to prevent them, or when, having occurred, they are reluctantly or insufficiently redressed. And the presumption is that the complaints that have been made by foreign governments in connection with these “accidents” have been called forth not so much by the “accidents” themselves as by the existence or supposed existence of these attendant and damning circumstances.

But while the statement with which this paper opens seems liable to the criticisms here made, it is but fair to admit that there is in it much of truth. The Chinese Government has undoubtedly taken pains, and great pains, to observe the stipulations of its treaties. That it has not done all that could be desired must be admitted, but that it has done much cannot be denied. And when all the circumstances of the case are considered, the matter of wonder must be, not that it has failed so much, but that it has failed so little.

Treaties are not always fair, especially when made at the cannon’s mouth. Nor when fair, are they always so intelligible as to be capable of no misapprehension. It would, therefore, be no new or wonderful thing if those in question were in some points capable of different constructions. It happens, however, that the different constructions put upon such instruments do not always arise from any wrong or ambiguity in them, but from the party or selfish interest through which they are viewed. How it may be in this case there will be opportunity to inquire further on.

2. This paragraph states the efforts that had been made to revise the treaties, and the failures that had attended them. It also enumerates the subjects that had been discussed but on which no agreement had been reached. They are four in number, “transit,” “lekin taxation,” “extraterritoriality,” and “the most favored nation” clause. And these are the subjects discussed at length in the succeeding paragraphs.

3. In this paragraph we have a statement of the conditions on which foreigners may carry on their trade both at the ports, and in the interior, in accordance with the treaties of Tientsin. But some of these conditions are hardly found in these treaties. For instance the coast-trade duty mentioned here, I believe is not mentioned there. And the choice which the foreign merchant is said to have of passing his goods into or out of the country either with or without transit certificate does not appear in the rules of trade adopted in the supplementary treaties made at Shanghai. But these are minor points, and need perhaps no particular discussion here.

4. The discussion of the transit difficulty which here begins is divided into two parts, transit inward and transit outward; the former is first considered. The positions taken by the contending parties seem clearly and fairly stated.

Foreigners “have held that foreign goods which have once paid transit dues cannot subsequently be called upon to pay any local charge whatever.” But “to this interpretation the Chinese Government cannot agree.” It maintains that such goods are exempt from local charges only while they are passing from the port to any given place inland; and that on their arrival there their transit certificate is canceled, and they thereafter differ in no respect from ordinary uncertificated goods.” These positions are wide apart, and the matter at issue is a vital one since not only the welfare but the very existence of our trade here must depend upon it.

The Chinese Government claims that its position is sustained by the treaties, yet it cites no article or clause of them in proof, except an incidental statement from the rules of trade to the effect that in transit certificates covering goods to be sent into the interior, the place of destination must be inserted. The statement, however, is not in this form, but in the following: “In the case of imports, notice being given at the port of entry from which the imports are to be forwarded inland of the nature and quantity of the goods, the ship from which they have been landed, and the place inland to which they are bound, with all other necessary particulars, the collector of customs will, on due inspection made and on receipt of the transit duty due, issue a transit duty certificate.” Now, from this incidental clause (which to indicate I have underscored in my citation), which evidently relates to a matter of form, and which, both from the connection and from the nature of the case, could have had no reference to the matter in question, the grave inference is drawn that foreign goods, though they have paid both import and transit duty, are liable, as soon as they reach their destination, to further and unlimited taxation. Such reasoning seems truly wonderful.

Again, it is stated that the foreign merchant, in sending his goods into the interior, “has the option of taking out or not transit documents.” This statement is in conflict with the rules of trade. It is there stated that “any attempt to pass goods inward or outward otherwise than in compliance with the rule here laid down” (Rule VII, which provides for the transit pass system) “will render them liable to confiscation.” This rule complied with, the supposed inconvenience of finding two kinds of goods at the same place in the interior at the same time, one exempt from local charges, and one liable to them, could never happen in regard to goods passed by foreigners. Were it to happen on account of goods passed by natives under other regulations, this might be a reason why all imports sent into the country, whether by foreigners or natives, should be sent under the transit pass system, but it could be no reason why those sent by foreigners should be further taxed. It rests with the Chinese Government to adopt some such regulation as that, or to leave its people to the inconvenience of getting on without it. But whatever course it may elect in this matter, it is bound to observe the regulations which it has carefully and solemnly made.

The reasons then assigned in this note for the Chinese interpretation of the transit system are not in point. And were the interpretation correct, its correctness would need to be shown from other considerations. But these, it is resumed, do not exist. For the other interpretation, that given to it by foreign governments, there are better reasons. I will mention one or two of them.

I. Treaties and regulations relating to duties or the taxes to be levied on the goods of one country when imported into another, always aim to be definite. They state just what is intended by the parties, no more and no less. Thus were there an agreement entered into betwixt England and the United States, to the effect that each country might import its goods into the other on the payment of an ad valorem duty of 5 per cent., it would be understood by everybody that when these goods had paid this duty they would be liable to no other charges. Or if the agreement were to the effect that these goods on landing at the ports must pay this 5 per cent, duty, and then if sent into the interior, they must pay 2½ per cent, transit duty here too, everybody would understand that when these duties were paid, no more could be levied. In other words, to collect the duty or duties named would be lawful, but to levy any not named would be unlawful. And if either government were to attempt to make such levies, on the pretext that this agreement covered the goods of its neighbor only till they reached their destination, after which they might be taxed to any extent that suited its convenience, what would be thought of it but that its faith was badly kept?

II. Again, as this method of making and interpreting treaties is so universally and so thoroughly understood, it is almost certain that if either party to the treaties had, at the time they were made, intended or suspected the interpretation now sought to be put upon this part of them, there would have been left some real evidence of it. The Chinese commissioners, had this been their intention, would have given some definite expression of it; while foreign ministers, had they suspected such an intention, would have taken pains to guard against it. But in the language used there are no such indications. And this fact, together with the entire absence of reference to duties or charges, other than those definitely named, must be regarded as adequate proof that at that time no others were contemplated.

III. Again, the negotiation of treaties, the regulations of trade, and especially such parts as relate to the duties which one party may levy on the goods of the other, commonly require much and careful attention. Every stipulation needs to be fully understood and definitely stated. And this, there is every reason to suppose, was the case in the present instance. Moreover, in the present instance, instead of a single treaty, there were several, all negotiated by able men, and ratified after much and careful scrutiny. These treaties, on the matter in question, all use the same language, and this language, in form simple and definite, has been generally supposed to limit the taxes leviable on foreign goods to the import and transit duties. And no other interpretations seem to have been proposed or even thought of until conjured up by Chinese officials, mostly, no doubt, in the interest of their lekin arrangement, but partially, perhaps, as an effort to assert their rights to regulate their own taxation. Now, simply from these circumstances, the inference is very strong that the interpretation commonly given to this part of the treaties is the only legitimate one.

IV. Again, the supposition that foreign ambassadors would have made or their governments ratified the seventh rule of trade with the meaning now put upon it by the Chinese Government is very improbable. They could hardly have done it without seeing that the result would be the hinderance if not the destruction of the trade which it was their great object to facilitate and conserve.

It was known, of course, when these treaties were made, that the Chinese did not want to make them. China, it was said, wanted neither commerce nor intercourse with foreign nations; but foreign nations, it was replied, wanted both with China. And having the power, they exacted these concessions, and, to secure them, tied them up in treaties. These treaties everywhere insist on the right of trade, and very great pains were taken in order to facilitate and conserve it. In addition to all the guarantees thrown around it in the main treaties, supplementary ones were made with special and exclusive reference to it, containing a set of rules setting forth, very minutely and very definitely the conditions on which it should be conducted. And now, is it reasonable to suppose that after all this care and all these pains the matter would have been left in such a way as to imply the right on the part of the Chinese Government, should it choose to, exercise it not only to hinder, but to render impossible the trade so positively exacted and so carefully guarded? And yet this is the long and short of what is contended for in this diplomatic note. It says in substance, “Yes, we have consented to foreign trade. Foreigners may bring here their goods, and having paid on them the duties prescribed in the treaties, they may sell them to our people. But as soon as they are sold we may tax them further, and to any extent that may suit our object.” “And so,” it could list as well have added, “should it suit our object to stop this trade altogether, we have only to starve it with taxation.”

For the right to tax trade without limit is right to prohibit it. Does the Chinese Government really claim this right under existing treaties? If so, for what purpose were these treaties made?

V. Were it needful to discuss this matter further, it would be in point to refer to the circumstance that these treaties with China are in some respects peculiar. They were made on the presumption that on several important matters she could not be safely left to the exercise of her own discretion. And so in regard to them she has been required to bind herself to a prescribed course of procedure. One of these relates to the rights, of treaty subjects in the matter of residence, travel, business, &c., within her territory; another relates to the government to which they are amenable; and another relates to the kind and extent of the tribute that may be levied on foreign commerce.

These agreements on the part of the Chinese Government are concessions which, under the circumstances, foreign governments thought it needful to require, and which under the circumstances the Chinese Government thought it needful to make; and the presumption is that when they were made both parties understood them, and that their understanding was the same.

VI. Finally, there is in the treaties themselves the clearest possible evidence that they could not have meant and could not have been understood to mean that foreign goods having paid the tariff duty and the one-half tariff duty as transit dues could be further taxed; In Article X of the treaty of Nanking there is a very explicit statement to the effect that no such taxes shall be levied. The language is, “such merchandise,” (merchandise having paid thetariff duty,) “may be conveyed by Chinese merchants to any province or city in the interior of China on paying a further amount of transit dues, which shall not exceed —— per cent, on the tariff value of such goods.” The treaty of Nanking, ratified in 1843, was in force until superseded by that of Tientsin, ratified in 1850. This latter treaty, Article XXVIII, mentions Article X of the former treaty, and states that its observance had not been satisfactory to British merchants. It is not intimated that what they complained of “charges suddenly and arbitrarily imposed by the provincial authorities,” grew out of a different interpretation of the article. On the contrary, it is implied that it grew out of irregular and excessive valuation of goods, the dues to be levied being a percentage on their value.

The evil being stated, the article goes on to prescribe a remedy. But the remedy prescribed seems on further reflection to have been deemed unsatisfactory. So we find it presently modified or substituted by Rule VII of the Rules of Trade, which sets aside the ad valorem arrangement, and adopts the simpler one of the one-half tariff duty, which has ever since been in operation. And now reviewing these various efforts on the subject of transit dues, can anything be clearer than that the aim of each and all was to relieve foreign trade of excessive and troublesome taxation? In a word, to prevent what the Chinese Government now avers is not prevented. To me its position on this point seems novel and extraordinary. Looking at it in Reference to the treaties, it is without foundation; and looking at it as a matter of reason, it is really absurd. The absurdity of course does not lie in the simple fact of the government’s claiming for itself the right to regulate its own taxation, for this is a natural right and belongs to all nations. It lies in the fact of claiming this right after it has ceded it away, and under the treaties in which the cession is made.

In these treaties China has ceded to foreign nations the right to trade at her ports and among her people. She has also ceded or relinquished her right to tax their goods except to a limited and specified extent. Yet in the face of this she here maintains that she may tax them to any extent that may suit her convenience, as soon as they reach their destination or pass into native hands, as if she did not know that the object of the regulation referred to is to protect trade or as if she could not see how little difference it makes to trade itself whether it is taxed in foreign or native hands, since it is not the hands but the taxing that kills it.

Should it be said that the right here claimed by the Chinese Government to tax foreign goods beyond what is specified in the treaties is only a matter of theory, not of practice, and that until such taxation is actually resorted to, it need not be complained of, it may be replied that its being a matter of theory, not of practice, is by no means admitted, as we shall see further on; and if it were, it would still be sufficiently important to need attention, as theory leads to practice, and what we admit in the one we must tolerate in the other. Foreign trade with China will have difficulties enough to encounter even when it is placed under regulations the most equitable in kind and the most simple in form. Hence it is of the greatest importance that when suck regulations are reached they should be mutually understood and mutually observed.

5. This paragraph discusses the matter of transit outwards. But transit outwards and transit inwards are the same in substance. So there is nothing new needing attention here, excepting, perhaps, the question that is raised as to what goods foreigners can bring from the interior under transit certificates. “Foreigners,” it is said, “have held that goods may be brought down under transit certificate, even when not intended for foreign export, but meant for resale in China; and have gone so far as to say that even without certificates no tax ought to be charged in the interior on goods ordinarily exported to foreign countries.” It is perhaps unnecessary to inquire what views or what language may have been held on these matters either by foreigners or Chinese, since we have at hand what is not only better authority, but what in fact is the only authority, the authority of treaty stipulation. Rule VII of the treaties, supplementary to the treaties of Tientsin, stating how foreign merchants may bring native produce from the interior to the ports, says: “Produce purchased by an American citizen in the interior will be inspected and taken account of, at the first barrier it passes on its way to the port of shipment. A memorandum, showing the amount of the produce and the port at which it is to be shipped, will be deposited there by the person in charge of the produce; he will then receive a certificate which must be exhibited and visaed at every barrier on his way to the port of shipment. On the arrival of the produce at the barrier nearest the port, notice must be given to the customs at that port, and, the transit duties thereon being paid, it will be passed. On exportation the produce will pay the tariff duty.”

This language shows:

1. That there is no treaty arrangement for foreigners to bring native produce from the interior except by transit certificate, and the payment of one-half export duty as transit dues.

2. That the produce thus brought to the port is presumed to be for shipment. There is no statement, however, to the effect that it must be shipped; and unless it should appear that some wrong or inconvenience should arise to the Chinese Government from its non-shipment, the language employed would seem inadequate to enforce its shipment.

3. That the presumption is that the produce brought to the port is not only for shipment, but for shipment to foreign countries. As before, however, there is “no statement to the effect that this is necessary. Any shipment—shipment to other ports—would seem to answer all that the language implies; and, as already remarked, no shipment at all would seem to be necessary, except on the ground that this was the condition or a condition on which the right to purchase produce in the interior and bring it to ports under transit certificates was granted, and that the non-observance of this condition would result in harm to the party granting. But the condition of shipment being admitted, it would belong to the Chinese Government to say whether it would or would not be harmed by non-shipment. The question open for discussion, then, is, the existence or non-existence of this condition. Was the right conceded to foreigners to purchase goods in the interior and bring them to ports conditioned on their being shipped therefrom? In answering this question, it may be asked whether their shipment was a matter of desire on the part of the Chinese Government, influencing it towards granting to foreigners the right of this inland trade. On the contrary, is it not well known that the Chinese Government was influenced by no such desire, and that the admission of our merchants to its ports and into its country arose from other considerations? It would seem quite reasonable to suppose that the language here used referring to the shipment of goods arose simply from the presumption that such would be their destination, and that its object is not to state that the goods must be shipped, but to prescribe when and how the duties must be paid. And yet there are grounds, perhaps, on which it might be argued that the intention of the Chinese Government was that all native produce purchased by foreigners should be exported, and exported to foreign countries. Their exportation would serve to increase its levenue; and their exportation to foreign countries, besides subserving this object, would tend to restrict foreigners to foreign trade, and so lessen their influence in local matters. Moreover, the reason here suggested, that of preventing native trade from being subjected to unfair competition, would seem in point as a motive for this arrangement. And if for these or any of these objects, the Chinese Government intended that goods purchased in the interior by foreigners should be exported to foreign countries; and if this intention were understood, and this condition accepted, then the correctness of the position here taken, “that the produce that is entitled to transit privilege can only be such produce as is intended for foreign export.” must be admitted.

6. The lekin question here discussed strikes me as being handled somewhat unfairly. In the first place, it is not true that “lekin is continually objected to by forigners” in the broad sense here stated. Lekin, as a purely Chinese matter, they care nothing about. They object to lekin simply as applied to their own trade. And they object to it here not on the ground which the language of the note would seem to imply, namely, that the Chinese Government has not the same right that other nations have “in raising loans or increasing taxes,” but on the ground that, in doing so, it has agreed, in the matter of foreign goods, to collect prescribed duties and to abstain from all others.

Again, as to this matter of lekin, objected to alike by foreign and Chinese merchants, it is said “that the government regards it only as a temporary expedient.” What may have been or what may now be the intentions of the Chinese Government in this respect we need not discuss. It may, however, be in place to remark that this system of taxation, known as lekin, has been in operation now for many years, and, although the “troublous times” said to have made it a necessity, have long since ceased, the remedial measure has in no respect been laid aside. On the contrary, lekin is more of an institution now than it has been at any time before; and so strongly has it become intrenched in official greed, so closely is it watched, and so carefully is it guarded that the prospect of its being “only a temporary expedient” appears unhopeful. However, so far it is only purely a Chinese matter, a war betwixt the people and their rulers, and we may stand aside and let them fight it out. This should and would have been our attitude had the Chinese Government permitted it. But its action in undertaking to lekin foreign goods as well as native has necessarily drawn us into the conflict. But in this conflict we are not allies, we stand simply in self-defense, and our war is not against lekin, but against lekin applied to us.

The Chinese Government undertakes to show the unreasonableness of foreigners in complaining of its action in this respect. “Independentpowers,” it says, “must be guided by national necessities in fixing their taxation. We maintain,” it adds, “that all such matters should be left to be determined by China herself, and that the foreigner has no more right to interfere with or object to them than China would have to interfere with or criticise the action of a foreign government in raising loans or increasing taxes.”

In reply to these remarks one can hardly help an expression of surprise, that the Chinese Government should seem not to see that in the comparison here made, it calls things the same that are much unlike. If China has no right to criticise a foreign government for increasing its taxation on her goods, it is because that government has, not agreed with China to abstain from doing so. On the other hand, if foreign governments complain of China for increasing her taxation on their goods, it is on the ground that she has agreed with them not to do it. And if the question be raised why foreign nations should ask of China what China does not ask of them, the answer is easy. In the former case there is a need, in the latter there is none. Let us look a little at the two cases.

In the United States, there are no lekin burdens, and no transit duty obstructions. When Chinese or other merchants land their goods at our ports and clear them of the customs duty, they are at liberty to take them to any place they like. No restriction is laid upon them or their goods. In like manner they may go to any part of the country and purchase goods. And when purchased they can take them to the ports and ship them without any government tax or official surveillance. Here, then, in the matter of trade, there is nothing to ask for. Every needed protection and every possible facility are afforded without asking. The state of things is very different in China. Here our merchants are under many restraints. If they go into the country they must go covered with passports. If they take goods with them their goods must be covered with transit certificates. These certificates must state precisely the kind and quantity of the goods, and the place to which they are destined. Then if the goods should stop short of the place specified, or go beyond it, or if any of them should be sold by the way, they are all to be confiscated. To begin with, there is the trouble of procuring transit certificates, and the expense of transit dues, which are supposed to exempt the goods from lekin charges, but which, as we shall yet see, only suspend them while in transit. Then en route both certificates and goods must be submitted for examination at all the barriers (lekin stations) passed. In this way time is lost, expenses are increased, misunderstandings arise, goods are seized, and litigations ensue. The same difficulties burden and obstruct our outward trade. Now, considering how reluctantly China opened to us her trade, and how many burdensome restrictions she has been inclined to force upon it, can it be very difficult to see how much need we had, in our negotiations relating to it, to ask of her what she had no need to ask of us, a prescribed method of taxation?

Having expressed surprise at the disposition of foreigners to complain of lekin charges, the circular note proceeds to add: “If foreign merchants desire to escape the lekin, they can escape it; all they have to do is to supply themselves with transit certificates when taking foreign goods into the interior or bringing native produce out of the interior.” This remark, had it not been differently explained in another part of the paper, would lead us to suppose that goods having paid the prescribed duty and become covered by transit certificates, would thereafter be exempt from lekin charges. But we have been told in paragraph 4, that the exemption lasts only while the goods are passing to their place of destination; that having “arrived there, the certificate becomes waste paper and the goods thereafter differ in no respect from ordinary uncertificated goods.” Now, with this explanation of the language, we are at a loss to know what could have been its object here. It must have been known to the Chinese Government that the complaint of foreigners in the matter of lekin, is not against lekin as levied on their goods during transit, but against lekin as levied on their goods at all. How then, on the Chinese theory, could foreign merchants, by taking out transit certificates, escape lekin? Were the Chinese Government asked to answer this question, it could of course only repeat what we so often hear from its provincial and local officials, that the interest of the foreign merchant in his goods ceases on their arrival at their destination, and that whatever treatment they receive after passing into native hands, is a matter of no concern to him. It is difficult to understand how men of insight can seriously maintain a hypothesis like this. But on the supposition that they can, one is disposed to ask them one or two other questions. And first, suppose the Chinese Government or its provincial authorities were for some reason of their own to undertake to destroy all foreign goods so soon as they pass into native hands, would this be a matter of concern to the foreign merchant or one to be complained of as a breach of treaty stipulations? In this case; no doubt, the answer would: be “Yes, for this would be equivalent to the prohibition of foreign trade, which of course the treaties would not permit.” Well, now, suppose the procedure is not to destroy the goods but to tax them so as to produce the same result, how would the matter stand then? The reply would be, “In the same way, of course, for the destruction of trade is not permitted.” It is admitted, then, that the foreign merchant has an interest in his goods, after passing into native hands, to the end that his trade may not be destroyed. Has he not the same interest in them to the end that his trade may not be injured? The foreign merchant knows, audit would seem that everybody must know, that whatever taxes are laid upon his goods are taxes upon his trade. Moreover, it must be known that when these taxes reach a certain limit his trade becomes unproductive, and that when this limit is passed his trade becomes impossible. The process of taxing goods may be as destructive to trade as the process of burning them, and it makes little difference to the merchant which process is used when the result is the same.

But to pass from principles to facts, what taxes are actually levied on foreign goods? First, of course, there is the import duty. Then, if the goods are sent into the interior, there is the transit duty. And then in all cases there is lekin. If goods are sold at the port, they must pay lekin at the port; if they are sent into the interior, they must, in addition to the transit duty, pay lekin in the interior. Whenever the goods are sold, be it at the port or in the interior, the lekin is rigidly exacted. The treaties presume that the foreign merchant importing goods and clearing them from the customs can take them to his go down and sell them, without their being subjected to further charges, to any one who will buy them. But, under present lekin regulalations, no native will buy them, no native would dare buy them, till they have paid the lekin charges and cleared from the lekin office, for if they should be found off the foreign merchant’s premises and in the possession of natives without lekin receipts, they would be seized and confiscated. Who procures these receipts; and who pays for them? They are procured by the seller or the buyer as may be arranged, by the parties themselves. But in either case it is the owner of the goods who is taxed; To illustrate, let us suppose a foreign merchant imports a lot of goods worth, in the absence of lekin, $10,000; but when he comes to sell them he finds them burdened with lekin claims amounting, we will suppose, to 5 percent., or $500. The buyer says to the merchant, “I will take your goods at $10,000, you paying the lekin, or at $9,500, if I pay it.” The sale is effected on these conditions, it being impossible to effect it on any other. The same thing happens if the merchant takes or sends his goods into the interior; they must pay lekin, and lekin is a tax on his trade. The statement, therefore, that “if foreign merchants desire to escape the lekin, they can escape it, all they have to do is to supply themselves with transit certificates,” is misleading. There is really but one way to escape it, and that is to give up business.

7. The question of jurisdiction, i. e., extraterritoriality, is taken up in this section. The treaties, it is said, exempt foreigners from the jurisdiction of the Chinese authorities and place them under that of their own. “But,” it is added, “foreigners claim much more than this; they interpret this extraterritorial privilege as meaning not only that Chinese officials are not to control them, but that they may disregard and violate Chinese regulations with impunity.” This charge is doubtless inconsiderate. No such claim could have been made by intelligent and respectable foreigners; for amongst them there is no principle better understood or more firmly held than that one is bound to respect and observe the laws of the country, both of which he may be a citizen and in which he may be a sojourner. If there has been any expression on this subject that could have given to the Chinese Government occasion for the complaint here made, it must have had reference not to what are commonly called the laws of the country, but to some national or local usages which afford no benefit to society and so have upon it no claim for observance. And this would seem to be indicated by the example used for illustration—the act of passing through a prohibited passage. An act of this kind might be wrong, but not necessarily so. The right or wrong could be determined only on knowing the circumstances. If, on knocking at a man’s gate, we were told that entrance was prohibited on the ground that the proprietor was absent or ill, or engaged, we should at once respect the prohibition as one of reason and obligation. But if, in passing along the highway, we were stopped in front of an image, a statue, or a temple, and asked to dismount from our horse or to descend from our chair, as it was forbidden to pass these objects except on foot, this would be a prohibition the reason for which many foreigners would not see, and one which it is quite possible they might hesitate to observe.

Again, in entering an official residence, a question might be raised as to the gate or passage by which the entrance should be made. Now, on the one hand, it is clear that the officer in charge of the residence has the right to control its gates and passages, and, if the foreigner enters, he must enter by the way that is open to him. But, on the other hand, the foreigner has rights as well as the officer, and if it should appear to him that the way which he is asked to enter indicates a want of that courtesy which a host should show to his visitor, he may reasonably decline to enter it; and the harm, if any should follow, will lie at the door of him who is really at fault. In this and in all such like cases both parties have rights, and neither is to trample upon those of the other.

With this disavowal of the charge that foreigners claim “that they may disregard and violate Chinese regulations with impunity,” it may be only fair now to admit that there may have been instances, and possibly not a few, where Chinese regulations have been disregarded and where Chinese rights have been trampled upon by foreigners. But these are wrongs to be regretted. No right is or has been claimed to commit them. On the contrary, when committed, if brought to public notice they have been condemned, and if brought into foreign courts they have probably been punished. And if at any time they have been committed with impunity, it must have been owing to circumstances other than a wish or a willingness on the part of foreign governments or their officials to withhold redress.

The interpretation of the treaties here given on the matter discussed, that their meaning is, “not that a foreigner is at liberty to break Chinese laws, but that, if he offends, he shall be punished by his own national officials,” will no doubt be accepted as correct, if the understanding be that these officials are to be the judges both of the offense committed and of the punishment to be awarded. And that such is the understanding seems probable from the remark, “If they commit an offense, their own authorities are to punish them, according to their own national laws.” There would seem then to be little or no ground for misunderstandings on this matter. On the one hand, the Chinese Government maintains that foreigners, while residing in its country, are required to obey its laws; and the obligation to do so foreigners readily admit, understanding of course, by laws, the regulations needful to secure the peace and welfare of society. On the other hand, foreigners maintain that they are answerable for all their real or supposed offenses only to their own officials; and this is readily admitted by the Chinese Government. What is there, then, to contend about? There is really nothing, unless it be supposed that something will be called laws on the one side which will not be regarded as such on the other. This may or may not happen, but, if it does, the Chinese Government must not overlook the fact that, in assenting to this extraterritorial arrangement, it has left the decision of these questions in the hands of the defendant’s judge. If a foreigner offends, or is supposed to offend, against Chinese laws, he can be complained of to his consul: and it will be for his consul to ascertain what, if any, law he has violated, and what, if any, punishment he should suffer. But it is presumed that it would seldom, if ever, happen that the Chinese Government would be inclined to complain of foreigners for acts other than those forbidden and punishable by foreign laws as well as their own.

The matter taken up in the latter part of this section is one of great importance; “Seeing that China has agreed that judicial powers shall be exercised by foreign consuls within Chinese territory, foreign governments should on their side take care that none but good and reliable men are appointed to these posts.” The matter here brought forward is not only important, but in place; and the position taken in regard to it is entirely correct. Indeed, it is a matter of wonder that the position of any foreign governments in reference to it should have been such as to have fairly subjected them to the reproof and the instruction here administered. The practice of making merchants consuls is objectionable, even in countries where they have no judicial functions, but to make them such in countries like this is so obviously unsuitable and so obviously wrong that no government should ever have done it, or even thought of doing it. It may be hoped that when attention is sufficiently drawn to this objectionable practice it will cease. If it should not, the Chinese Government would do well to refuse exequaturs to such consuls.

But the Chinese Government has reason to object not only to merchant consuls but to all consuls who are incompetent to perform their duties. So its remark is well put, that “Foreign governments should on their side take care that none but good and reliable men are appointed to these posts.” It is much to be hoped that this remark will not only meet the eyes but sink deeply into the hearts of those whose duty it is to appoint consuls for this country. The Chinese Government of course cannot be an examining board, to put these officers on trial when they arrive and apply for their exequaturs; but as governments that send them expect them to be received and treated with respect, so both reason and justice would demand that they should send those worthy of such treatment.

8. This section discusses the meaning of the most-favored-nation clause of the treaties. I see nothing unfair in the views here expressed.

9. Our attention is here called to the “missionary question,” and the attitude of the Chinese Government towards it, so far as it is stated here, seems to be in accordance with the treaties. It “has by treaty assented to missionaries coming to teach their doctrines in China, and has also guaranteed protection to them and to their converts.” “But,” it is added, “among the missionaries are some who, exalting the importance of their office, arrogate to themselves an official status, and interfere so far as to transact business that ought properly to be dealt with by the Chinese local authorities; while among their converts are some who look upon their being Christians as protecting them from the consequences of breaking the laws of their own country, and refuse to observe the rules which are binding on their neighbors. This state of things China cannot tolerate or submit to. Chinese subjects, whether Christians or not, to be counted good subjects, must render an exact obedience to the laws of China; if any offend against those laws they must, one and all, Christians and non-Christians alike, submit to be dealt with by their own native authorities, and the foreign missionary cannot be permitted to usurp the right of shielding them from the consequences of their act.” The right here claimed by the Chinese Government, that of governing its own subjects, “Christians and non-Christians alike,” must certainly be admitted, and one can hardly suppose that it has ever been disputed, either by foreign governments or by foreign officials. Why, then, the very strong declaration of this right which we find in the words here quoted? We should be utterly at a loss to know but for the accompanying statement that some missionaries have arrogated to themselves an official status and assumed authority belonging to the local magistrates.

This is a grave charge, and, before accepting it, one has a right to be put in possession of the facts upon which it is based. As for myself, without denying its truth, I must yet say that a somewhat extended acquaintance, both with missionaries and their operations, has furnished me with no facts that would serve to corroborate it. The statement may have special reference, I suppose it has to the Catholic missionaries. But even in regard to them I think it should not pass unchallenged, or be accepted without proof. Quite likely in the interior, where there are no consular officers, these missionaries may in some cases have undertaken to afford protection to their converts against persecution, or against wrongs to which their religion or their connection with foreigners would be likely to subject them. And quite likely in their endeavors to do this, they may have committed some improprieties. More likely it has oftener happened that where no real improprieties have been committed they have been charged with them by unfriendly officials. And in all cases, it must be borne in mind, reports of their conduct, whatever it may have been, would reach the Peking government only through tortuous and distorting channels. The charge, then, is by no means proved because it is stated. It is open also to other objections. In the first place, there was no need of its being made. If wrongs of the kind stated had been committed, the proper course to take was to trace out the wrong doers and report them to their respective authorities, and not to indulge in general complaint against a class.

Again, it is put forward as the occasion for insisting upon a certain right, as if that right had really been or was likely to be endangered. Again, it is a charge of wrong-unaccompanied with proof. And again, it is so made that it subjects to suspicion the innocent with the guilty.

China, of course, must rule her own people, as well those who become Christians as those who do not. No one can deprive her of this natural right; and no one, it is presumed, has or ever has had any intention or wish to do it. On the other hand, China has pledged herself to permit the people to become Christians, if they choose to do so, and to protect them from all persecutions on that account. The Peking government, it is presumed, has acted, and has the intention to act, in good faith in this matter. If, now, it would instruct and require all its officials throughout the provinces to do the same, it would take a long step in the way of preventing those complications known as “missionary difficulties,” and of facilitating the settlement of those that might arise. If a general and hearty disposition were manifested on the part of these officials to afford to missionaries and to Christian converts the toleration which the treaties guarantee, and which both reason and justice demand, there would probably be very little heard about missionary interference; for there can hardly be a doubt that in most if not in all cases where missionaries come in collision with native authorities, it is owing to acts of intolerance on their part. In ordinary disputes, although neither party is likely to be faultless, the aggressor is always held to be the greater sinner. Applying this rule here, one can hardly see with what propriety the Chinese Government comes forward as a complainant in this matter.

If missionaries have interfered in matters belonging to local magistrates, it is pretty certain that there have been occasions for their interference. Let the Chinese Government put an end to these occasions, then it will be in a position to complain should; there be any cause for it.

10. I see no occasion for remarks upon this section, as it is only a recapitulation of the matters previously discussed.

In closing these comments I have, in the first place, to apologize for their great length; and in the second place to express my regret that, through want of time and strength, I am unable to condense and put them in a better shape.

I have the honor to be, &c.,

EDWARD C. LORD.