No. 131.
Mr. Angell to Mr. Evarts .

No. 48.]

Sir: In my No. 41 to you, dated November 1, 1880, I furnished such information as I had then been able to gain, in answer to the inquiry whether the Chinese Government discriminates against us in tonnage dues and duties on imports. I was able to report that there was no discrimination against us in the dues and duties collected by the so-called foreign customs, unless possibly there was an exception in the case of Chinese steamers bringing government rice from the Yangtsze ports to Tientsin, but that full and exact information concerning the treatment of junks, was not then at hand. A circular to our consuls and a note to Prince Kung, designed to bring out the facts in respect to junks, were transmitted to you as inclosures in No. 41.

I have now the pleasure of inclosing Prince Kung’s reply to my inquiry, and also the replies which the consul-general, and the consuls at [Page 191] Foochow, Chinkiang, Hankow, and Newchwang have sent to the circular.

The prince replies in substance that foreigners and Chinese transporting goods in Chinese craft are treated alike and that the duties they pay are just what is paid on goods of a foreign merchant unprotected by a customs certificate; that is, on goods imported and then sent inland without a transit pass; and further that the tonnage dues paid by Chinese craft are the same as those paid by foreign vessels, that they are paid at every customs station by the Chinese vessels, and that the rate is the same whether the vessels are under foreign or Chinese charter.

So far as this is a declaration of the law, it may be taken as satisfactory. But the testimony of some of our consuls and of intelligent persons, with whom I have conversed on the subject, compels the belief that the law is not taken as the strict guide of the officials of the so-called Chinese customs, who collect the dues and duties from Chinese junks.

The answers of Consul-General Denny, Consul Wingate, and Consul Shepard are clear on this point. There can be no doubt that in many cases the Chinese customs officers, without regard to the law, collect by “squeezes” what they can in payment of dues and duties. Whether this mode of collection results in an advantage or a disadvantage to the native vessels as compared with foreign, is a point on which men equally well qualified to judge differ. Probably in some cases it works one way and in others in a different way. When the official can safely “squeeze” the native trader or vessel into the payment of higher charges than are exacted from the foreigner by the foreign customs, he does not neglect the opportunity; but when the competition of foreign vessels with the native is close, he may accept something less than the foreigner pays, in order to prevent commerce from turning too largely to the vessels which report to the foreign customs. Consul Shepard, of Hankow, while acknowledging the difficulty of obtaining exact information, is of opinion that the native vessels in his district have an advantage over foreign vessels. Consul Wingate, of Foochow, believes that at that port the native vessels pay heavier dues than the foreign, pay heavier duties on the exportation of poles (a large traffic at Foochow), and are forbidden to export certain articles to foreign countries. The only advantage which he concedes to them is that of visiting the non-treaty ports. It will be remembered too that the junks are required by law to pay tonnage dues at every port which they enter, and do probably pay whatever is “squeezed” from them at every port, while the foreign vessels engaged in coastwise trade pay only once in four months, though they may enter several ports in that time. I suppose that Consul-General Denny’s remark is substantially correct that at the present time the trade carried on by the junks “is of a purely native character between coast and inland ports and does not materially affect the interest of foreigners.” Still, the time has been when our vessels did a good deal of the inland and coastwise transportation and that time may come again.

I have received from Mr. Robert Hart, inspector-general of the foreign customs, a reply to my verbal inquiry, whether exemption from duty on the part of the, cargo of the Chinese merchants’ steamers, which bring government rice from the Yangtsze ports to Tientsin, is still continued. I inclose a copy. He answers in the affirmative and argues to show that the exemption practically works no discrimination against foreign vessels. Probably it is intended as a sort of subsidy, [Page 192] and if it were abolished, the subsidy would be continued in some form. A direct subsidy we could not regard as a discrimination against us, but I must regard a subsidy in this form as a discrimination in respect to coastwise duties. But it is the only discrimination recognized in the foreign customs, and does not in fact prevent competing lines of foreign steamers from plying between Shanghai and Tientsin.

I conceive that any remedy for the irregularities in the methods of administering the Chinese customs must be found in measures tending to place them under the direct charge of the Imperial Government. If such measures were adopted, the foreign powers might then under proper treaty stipulations hold them responsible for any maladministration which should work injury to foreign interests.

The bearing of the facts above recited and of the conclusion drawn, upon the negotiations of the commissioners plenipotentiary concerning commercial intercourse will readily be perceived.

Trusting that the information I have been able to gather, though necessarily less exact in relation to Chinese junks than could be desired, may suffice for the present purposes of the Department.

I have, &c.,

JAMES B. ANGELL.
[Inclosure 1 in No 48.]

Prince Kung to Mr. Angell.

Referring to the arrival of the China Merchants’ Steam Navigation Company’s steamship Hochung at San Francisco, your excellency, some time since, addressed certain inquiries to this office to ascertain whether the duties and tonnage dues levied on American goods and vessels differed in any way from those levied on Chinese goods and vessels or those of any other nation, and, it will be remembered, that this office explained in reply that no discrimination whatever was made by the foreign customs in levying duties and tonnage dues on the goods and vessels of all nationalities alike.

Later another dispatch was received from your excellency, inquiring further, whether the duties and tonnage dues levied by the Chinese customs on vessels, or on foreign goods imported, native produce exported, or foreign and native goods carried coastwise, differed in any respect from the duties and tonnage dues levied by the foreign customs.

In reply, I have the honor to state that foreign goods imported, native produce exported, or foreign and native goods carried coastwise, when transported in Chinese craft sailing under foreign flag pay duties at the foreign customs; when transported in Chinese craft proper they pay duties at every customs station, and lekin barrier just like the goods of a foreign merchant when unprotected by customs certificate.

As regards tonnage dues, the ch’uan liao (tonnage dues) levied on Chinese craft is the ch’uan ch’ao (tonnage dues) paid by foreign vessels, and this is paid by the former at every customs station (Chinese) according to the regulation of the station, and the rate paid is the same whether the craft be under foreign or native charter.

[Inclosure 2 in No. 48.]

Mr. Denny to Mr. Angell .

No. 33.]

Sir: Referring to your dispatch No. 11, submitting interrogatories relating to the arrival at San Francisco of the Chinese steamer Hochung, I have the honor to submit the following:

  • First. There are no other or higher tonnage dues exacted in the open ports of China from the vessels of the United States resorting thereto than are paid by Chinese vessels (not junks) or any foreign vessels engaged in like trade therewith.
  • Tonnage dues on vessels are collected by the Imperial Maritime Customs, at the rate of 4 mace per ton of 40 cubic feet, if over 150 tons, and 1 mace per ton, if 150 tons or under.
  • Second. American citizens pay the same import duties on all merchandise imported by them as are paid by the Chinese and subjects or citizens of all other powers, according to those specified in the tariff. No higher duties are exacted or paid by them.
  • Third. There is no discriminating or additional customs duty imposed on American or other merchandise imported into China in American vessels, a uniform tariff exists for all nations.

The dues and duties levied by the native customs at the treaty and non-treaty ports upon junks and merchandise carried in them vary considerably. Their trade, however, is of a purely, native character, between coast and inland ports, and does not materially affect the interest of foreigners.

I informed the Department in a dispatch dated the 15th of May last of the intention of the China Merchant Steam Navigation Company to establish a line of steamers between China and San Francisco via Honolulu, and the Hochung is the first one of that line to arrive in United States waters. The Meifoo (Benclutha) a fine iron ship of 2,000 tons, just built at Shanghai, will be the next to follow. There are to be three in all, I believe.

While it is gratifying to see China step out of the narrow path she has trod in this direction for ages past, and modestly bid for a portion of the carrying trade between the United States and her own country, it is humiliating to Americans, with all their boasted enterprise on sea and land, to have Chinese steamers entering our harbors, while there is not a single steam merchant ship entering Chinese waters, flying the American colors.

Now, that the Chinese have concluded to enter upon this new departure, it is certainly an appropriate time to settle discriminations, if there be any.

In this connection I may add, that as tonnage dues collected from Chinese ships entering harbors of the United States will be, like others, expended in the improvement of her harbors and bars, so those paid by United States vessels entering Chinese harbors should be used for the same purpose, as originally intended by the treaties with China.

I am, &c.,

O. N. DENNY.
[Inclosure 3 in No. 48.]

Mr. Wingate to Mr. Angell .

No. 9.]

Sir: I have the honor to acknowledge the receipt of your dispatch No. 6, of the 11th instant, making inquires regarding comparative dues and duties levied upon American ships and their cargoes.

Foreign vessels of all nationalities, and Chinese vessels with foreign rig, so far as relates to tonnage dues, and import and export duties, are, I understand, treated precisely alike at this port, and so far as relates to them, I answer all your interrogatories in the negative.

The customs collect no tonnage dues from junks, but they are subject to certain exactions called, “squeezes,” from the native customs. Junks from foreign ports, as Singapore or Hong-Kong have to pay for entry. For this there is no known fixed rate, it depending somewhat upon the influence of the owners or supercargoes.

But the sum exacted is reported to be in excess of that collected from foreign vessels, so that it is for the interest of the merchant to import most articles of foreign manufacture in foreign or foreign rigged vessels. Junks have some advantage in visiting non-treaty ports. They are placed at a disadvantage in some other respects; they pay higher export duty on poles, and they are not allowed to export certain articles to foreign countries.

Citizens of the United States have equal advantages with Chinese subjects, or citizens or subjects of the most favored nations, in importing and exporting merchandise, except as may be noted in my remarks relating to junks.

I am, &c.,

J. C. A. WINGATE.
[Inclosure 4, in No. 48.]

Mr. Shepard to Mr. Angell .

No. 53.]

Sir: I have the honor to acknowledge receipt of your Nos. 3 and 4. Referring to the latter I respectfully submit the following:

[Page 194]

First. In answer to your first query, experience and conference with the custom-house officials lead me to reply that all foreign vessels, of whatever nationality, are required to enter at the foreign customs, and also all vessels of foreign type owned by the Chinese (i. e. the steamers of the “China Merchants’ Steam Navigation Company”), and the tonnage dues exacted are on precisely the same scale and terms for all.

I suppose this answers the question you wish to solve, but I think it proper to explain that altogether another system is applied to native craft proper, engaged in purely native trade. These do not enter the foreign but native customs, and pay what we call “port dues” and “boat tax.” Exactly what these dues are it is difficult to learn, on account of the reticence of the native officials in such matters, but they most undoubtedly give an advantage to the native over foreign vessels in local trade. I have endeavored, before answering you, to get definite information on the topic but unsuccessfully.

Second and third. The answer to both your second and third queries with the postscript is: “None whatever.”

I am, &c.,

ISAAC F. SHEPARD.
[Inclosure 5 in No. 48.]

Mr. Scruggs to Mr. Angell .

No. 35.]

Sir: I have had the honor to receive your dispatch No. 5, dated the 11th ultimo, relative to tonnage and other duties, levied and collected by the Chinese authorities at this port.

There are no direct imports or exports to or from this port and foreign ports. All imports of foreign goods, or exports of native product, are made through Shanghai and the southern Chinese coast ports. Consequently, there are no sea-going vessels plying between this and foreign ports, except an occasional English or French steamer from Hong-Kong.

The carrying trade of the Yangtsze ports is done by English and Chinese steamers, (the last named being also foreign built) plying regularly between Shanghai and Hankow, also by native build, but foreign owned, sailing vessels known as lorchas, usually not exceeding 150 tons burden. There is also a considerable portion of this trade done by Chinese junks, frequently charted by foreigners, though never carrying foreign flags.

Many of the lorchas fly the United States flag. They are commanded by citizens of the United States; though the crew in every instance, are Chinese subjects. And they are provided with consular certificates of ownership by resident United States citizens in China. It is observable however, that many of them are mortgaged to the full extent of their value to some Chinese subject.

Admitting nevertheless, that in every case the alleged ownership is genuine, this class of vessels can hardly be called “American,” in the sense contemplated by our statutes; they could not obtain a register or license under our laws; and should they visit any of the United States ports would have to be classed as foreign vessels. Consequently, whilst they are entitled to protection as property owned by United States citizens in China, they cannot, I apprehend, lay claim to many of the privileges and immunities pertaining to bona fide American vessels.

So much by way of preliminary. Recurring more directly to your inquiries, I am assured by the customs authorities here, that “tonnage dues are levied at a uniform rate as laid down by treaty on all foreign vessels, and on Chinese vessels of foreign build.” Also “that custom duties on re-imports and re-exports, &c., are uniform, and with out discrimination against foreign traders or powers.”

This is an ex-parte statement of course. It is just a little evasive also. But I have no means of probing the matter further, as I am instructed by the State Department to proceed at once to Canton, and am expecting to leave by to-morrow’s steamer. I apprehend however, that the statement may be correct so far as it goes.

There have been no complaints of discriminations, and, it is noticeable that the number and business of the so-called American lorchas are on the increase here as at other ports.

I am, &c.,

WILLIAM L. SCRUGGS.
[Page 195]
[Inclosure 6 in No. 48.]

Mr. Bandinel to Mr. Angell.

Sir: I have the honor to acknowledge the receipt of your excellency’s dispatch, No. 7, referring to the questions raised by the arrival of the Chinese steamer Ho Chung at San Francisco, and in reply to state that:

  • First. No other or higher tonnage dues are exacted in the open ports of China from the vessels of the United States resorting thereto than are paid by Chinese vessels or any foreign vessels engaged in like trade therewith.
  • Second. No other or higher customs duties of import or export are exacted in China from American citizens importing merchandise thither, or exporting merchandise thence, than are paid by Chinese subjects or the citizens of the most favored power importing or exporting the like merchandise into or from China.
  • Third. No discriminating or additional customs duty is imposed upon merchandise, whether of American or foreign origin, entering or leaving the open ports of China in vessels of the United States, which is not imposed upon the like goods entering or leaving those ports in Chinese vessels or in vessels of any foreign power.

The above replies describe not only the law but the practice of the authorities, so far as I know, especially in my consular district.

I am, &c.,

F. BANDINEL.
[Inclosure 7 in No. 48.]

Mr. Hart to Mr. Angell .

Dear Mr. Angell: In reply to your inquiry concerning special advantages allowed to the Chinese Merchants’ Company’s steamers, I have now to give you the result of my reference to the Tientsin customs. It is, in a word, this: The rule is still in existence and has never been rescinded, notwithstanding my belief that it has fallen into desuetude.

The rule stands thus: Chinese junks bringing government rice from the Yangtsze to Tientsin are allowed to carry a two-tenths cargo of native produce free of duty; that is to say, a junk may bring 200 bags of produce free of duty for every 800 bags of rice carried. Chinese steamers carrying government rice are to be dealt with similarly. It is only the custom-houses at Ningpo, Shanghai, and Chinkiang (starting point) and Tientsin (destination) that are to pass produce in this way, and the exemption applies solely to Chinese produce and not to foreign goods.

I do not think it likely an exemption of this kind creates any specially favorable condition for Chinese vessels as against foreign flags, seeing that it is limited to a few ports and a special cargo, while that cargo only comes forward at a special season, and the exemption of the two-tenths produce accompanying it is part of the payment of freight on the government eight-tenths rice. Owners of such produce have probably to pay the amount of the duty exempted to the steamer company, in addition to ordinary freight, and the arrangement appears to be a sort of guarantee to the rice carrier; that whether the government is in funds or not he, himself, can secure the payment of whatever freight (sometimes more, sometimes less, according to the nature of the produce) the duty exempted may be held to represent. A freighter would, therefore, find it as cheap to send his produce by another vessel.

Yours, &c.,

ROBERT HART.