No. 134.
The commission to Mr. Evarts.
United
States Commission,
Peking, November 17,
1880. (Received January 5.)
No. 15.]
Sir: In our two dispatches of the same date, we
have informed you of the signature of the two treaties, copies of which were
inclosed. We also informed you of the condition of the question as to the
formal communication between consuls and the higher provincial Chinese
authorities.
The only remaining subject of discussion between the two governments is that
of lekin taxation, including the system of transit passes, and kindred
regulations. As you are aware, this subject has been for some time under
consideration by the diplomatic representatives of the treaty powers in
Peking.
Since our arrival here, two conferences of the diplomatic body have been
held. The result of those conferences, and communication with the Yamen is
at present this: The diplomatic corps have, for many months, been engaged in
an effort to secure amendments to the rules which the Chinese Government
have instituted in respect to transit passes outwards. The foreign ministers
have maintained that some of the rules are in contravention of treaties, and
that all have been often enforced in a vexatious and unjust manner. A
correspondence has been carried on with the Tsung-Li-Yamen which bids fair
to produce desirable results at no distant day. But the correspondence is
not yet concluded. The positions taken by the ministers, so far as we have
been able to study them, meet with our entire approval.
The Chinese Government seem disposed to accept the rule that an import duty
paid once for all at the port of entry, shall protect foreign importation
from all other duties, to whatever extent, and in whatever direction, such
importation may afterwards pass within the territory of China. But the
subject is only under consideration, and there is a very serious difference
between the Chinese Government and the treaty powers as to what the amount
of such import duty should be.
At the conference held on the 15th instant, Sir Thomas Wade, Her Britannic
Majesty’s minister, to whom the subject had been referred, made a report, a
copy of which will be found in inclosure No. 1. After hearing this report
Monsieur Von Brandt, the German minister, was requested to prepare a
memorandum, a copy of which is also inclosed. To this memorandum you will
find the names of the commissioners plenipotentiary of the United States
appended, signifying their entire agreement with their colleagues.
You will observe that the question of the amount of import still remains
under discussion, and that when—if that can be anticipated—the Chinese
Government and the representatives of the treaty powers have agreed, then
the whole scheme is to be referred back to each government for consideration
and instruction. It is unnecessary to point out that this involves a
negotiation of no short duration. All that we can now properly do,
therefore, is to give whatever weight attaches to the opinion of our
government, to the recommendation of the conference. We do not see that any
useful purpose could be served by the full commission remaining in Peking
during the progress of this discussion and the reference home of its
result.
There can be no doubt of the great advantage to foreign trade that the
settlement of this question upon the basis indicated would be, but [Page 202] the presence of the commission
would, not aid materially in its completion. We have therefore deemed it our
duty to address a communication to Sir Thomas Wade, as “doyen of the
diplomatic corps,” stating that Mr. Angell was in full possession of the
views of our government, and that, upon our departure, was fully authorized
to deal with it in any stage of its progress as we would have been. The
necessity of this arises from the fact that the commission in its full
number was invited to participate in the conferences, and that the absence
of two of its members seemed to require some explanation.
We can scarcely anticipate that any practical action in the matter can or
will be taken until next spring, when it is possible that a reference may
have been made to the respective treaty powers, and their instructions
received.
Mr. Swift and Mr. Trescot will accordingly leave this capital for Shanghai on
the 20th instant, going thence to Yokahama, whence Mr. Trescot will take the
treaties by the first Pacific steamer that he can conveniently reach.
We have, &c.,
- JAMES B. ANGELL.
- JOHN F. SWIFT.
- WM. HENRY TRESCOT.
[Inclosure 1 in No. 15.]
Memorandum on a conference held at the
Tsung-li-Yamen on the 13th November,
1880, regarding exemption of foreign imports from
taxation inland.
The origin of all discussions on this point, it will be borne in mind, is
the difference of interpretation put by the Chinese authorities and the
foreign merchant upon the clauses in the treaties affecting taxation of
imports.
The construction most favorable to the foreign merchant has been that his
imports, having paid import tariff duty, and a half duty, which it was
at the option of the foreigner to pay or not, were thenceforward free of
all possible charge, no matter to what part of the empire they might be
carried. Some of the treaties, it is held, would scarcely justify so
sweeping a claim to exemption, but by the favored-nation clause if so
large a measure could be established under any one treaty, all foreign
traders alike would of course be equally benefited.
The Chinese have argued that the half duty should clear inland duties
leviable in transitu only from port to inland
market, the treaties specifying none but the dues leviable at transit
duty barriers. These barriers they have multiplied at pleasure, and they
have taxed imports long before they could be said to have reached any
barrier at all.
The continual altercation to which conflict of opinion on the point at
issue has practically given occasion being scarcely less injurious to
foreign interests than the unauthorized taxation itself has proved
directly to trade it was proposed some time since to draw from the
Tsung-li-Yamen the suggestion of some arrangement by which a single
payment made in the first instance should clear imports of all further
taxation whatever throughout the empire. This was, with a certain
difference, the proposition of Sir Rutherford Alcock when negotiating a
revision of the British treaty in 1868. The Chinese Government then
consented, if the option to pay or not to pay the half duty were
extinguished—if the payment of it, that is, were made as obligatory as
the impost tariff duty itself—to free imports of all taxation in the
maritime provinces. In the inner provinces certificate of the payment of
the half duty was still to clear imports in
transitu of barrier dues. On arrival at inland centers they
were to become liable to taxation once they were separated from their
certificate. The present proposal is to effect an arrangement for the
clearance of imports by a single payment throughout the empire.
The ministers of the Yamen being called on to say under what conditions
this might be secured promptly replied, by increase of taxation. Being
pressed to state in what degree, they proposed a reference to the
provinces; and this made, they signified their wish that the foreign
representatives conferring with them should first declare their
estimate. This was the point reached before the conference of the 13th
instant. The ground on the foreign side taken on the 13th instant was
the following:
[Page 203]
The negotiators of the foreign treaties called in question had
undoubtedly been of opinion that if the Chinese Government had secured
to it the tariff duty, roughly estimated at five per cent, ad valorem, and the half duty—a total, that is,
of seven and a half per cent. upon value—it ought to be content. This
total it did not now receive. The customs returns of 1879 showed that
the duties collected on imports, opium excluded, for the right of the
Chinese to tax opium once purchased by Chinese is not contested was,
taels 2,262,299. Had immediate payment of the half duty been obligatory
there would have been further collected the sum of taels 1,131,149.
The sum collected on transit-passes, the application for these being
optional, was but taels 342,795, or little more than one-third of this
sum. The obligation to pay down the half duty would, therefore,
manifestly be a concession very favorable to Chinese revenue. This was
stoutly denied. The li-kin, the chief item of the
abnormal taxation, imposition of which on his imports is protested
against by the foreigner, amounted, it was affirmed, to a far larger sum
than half the tariff duties. Could the Yamen, it was asked, produce
statistics? There was some difficulty about a direct answer to this
question; but, in the end, it was stated that according to the report of
some provincial governments, the li-kin equaled
twice, of others three times, the tariff duty. One reason earlier, given
for the Yamen’s unwillingness to name the amount to be added to the old
tariff, had been its apprehension that the demand of the provinces would
be far in excess of the expectations of foreign ministers; and the
provincial estimates now referred to prove that the Yamen’s surmise had
been correct.
The natural rejoinder to these arguments was that the provincial estimate
was far too high, and that the foreigners’ experience authorized a
conviction that whatever the amount really levied, but a limited
proportion of it found its way into the public chest, central or
provincial.
These conclusions were, of course, deprecated, and a suggestion being
pressed for as to the utmost increase of tariff duty that foreign
representatives might consent to move their governments to adopt, the
ministers were assured that taking the tariff duty and the half duty at
7½ per cent., a rise of one-half per cent., or, at the most, of 1 per
cent., would be regarded as a very liberal concession. An addition of a
half per cent. would have given, in 1879, a total of taels 3,619,677; of
1 per cent., a total of taels 3,845,906.
The ministers were confident that this arrangement would not be
satisfactory to the provincial governments, and, if not, would fail of
its end. In some jurisdictions at this moment, the li-kin, as it had been stated, equaled three tariff payments;
that is to say that, including the tariff, imports paid 20 per cent. In
other jurisdictions they paid 15 per cent. Finally, after much
discussion, they expressed a belief that 12½ per cent.—that is, a tariff
and a half in addition to the present tariff duty—was the minimum that
would satisfy the provinces.
T. WADE.
Peking, November 15,
1880.
[Inclosure 2 in No. 15.]
Draft of memorandum prepared by Monsieur de Brandt,
as representing the opinion of himself and his colleagues, after
hearing Sir Thomas Wade’s report of his conference with the
Tsung-li-Yamen on November 13, 1880.
The proposal that a single payment at the port of entry should be
substituted for the optional payment of the transit duty, all transit
dues, as well as the illegally levied inland and li-kin duties, seems admissible; less so the amount of this
single payment as proposed by the Yamen.
By the payment of half the tariff duty the merchant can, under existing
treaty stipulations, carry his imports free from any taxes, duties, or
li-kin to any place in the interior named in
the certificate.
The making the payment of the half tariff duty compulsory instead of
optional should therefore free all imports from all further taxation,
whatever it may be called or whatever its purpose, from the port of
entry to any place in the interior to which they might be sent.
Admitting, for argument’s sake, that the Chinese Government has the right
to tax imports ad libitum on leaving this place
in the interior, all that can, in justice, be claimed by them is that
the loss which may arise from the suppression or abandonment of this
right shall be made good to the Chinese Government. Imports forwarded
from a first market to a second or third will, as long as the means of
conveyance remain what they are, represent only a comparatively small
percentage on the whole trade. The Chinese Government can therefore not
expect more than a small compensation for the abolition of this
right.
As Sir Thomas Wade has reminded his colleagues in the Anglo-Chinese
convention [Page 204] of 1868, the
Chinese Government agreed to free imports from all further taxation in
the treaty port provinces in consideration of a compulsory payment of
the half-tariff duty at the port of entry, reserving to itself the right
to tax the imports ad libitum in other
provinces.
If, therefore, fifty per cent. of the tariff duty was considered a fair
equivalent for all taxes, dues, or li-kin legally
or illegally levied on the large amount of imports within the treaty
port provinces, twenty or at the utmost thirty per cent. of the tariff
duty would be a fair compensation for the abandonment on the part of the
Chinese Government of its right or pretension to levy taxes, duties, or
li-kin on the much smaller amount of imports
reaching the other provinces and distributed through them.
A proposal to this effect seems all that the representatives of the
treaty powers could venture to submit to their governments, and all that
these latter would be likely to consider.
Peking, November 16,
1880.
[Inclosure 3 in No. 15.]
The commissioners to Sir
Thomas Wade.
United
States Commission,
Peking, November 19,
1880.
Sir: As we have had the honor to receive at
your hand, as the representative of the diplomatic corps in Peking, an
invitation to join you in conference upon certain subjects of common
interest to all the Treaty Powers, it becomes necessary to inform you
that two members of the Commission Plenipotentiary sent hither by the
Government of the United States, Messrs. Swift and Trescot, will leave
this capital on the 20th, upon their return home.
Of several subjects commended our care, we have fortunately succeeded in
making such treaty arrangements as we hope will be acceptable to our
government. We would feel it our duty to remain and join in any
negotiations with our colleagues upon such subjects as remain unsettled
were it not that we feel ourselves authorized to believe, from what has
passed in the conferences which we have attended, that at present no
further result can be attained than a reference to their home
governments of such propositions as they may agree upon, by the
diplomatic representatives of the Treaty Powers. As we have already had
the honor to signify our entire and cordial agreement with the views of
the diplomatic body as to the recommendation to be submitted to the
consideration of the Chinese Government, and, upon its consent, to be
referred home for approval, we beg to inform you that any further
discussion which may arise will be left to the charge of Mr. Angell, one
of the commissioners, and who remains in Peking a Minister
Plenipotentiary and Envoy Extraordinary.
We have, &c.,
- JAMES B. ANGELL.
- JOHN L. SWIFT.
- W. H. TRESCOT.
