No. 147.
Mr. Angell to Mr. Evarts .

No. 94.]

Sir: Since my dispatch No. 58, of November 30 last, the discussion between the diplomatic body and the foreign office on the proposition to increase the duty on imports, and abolish the lekin on them, has advanced one stage.

On the 13th of December Sir Thomas Wade received from the foreign office a reply to the memorandum which he had presented to them in behalf of himself and his colleagues. A discussion between Sir Thomas and the foreign office, in respect to the exact import of a certain passage in the reply delayed the translation. But I now inclose a copy. At a conference held on the 4th instant, it was decided, by the unanimous vote of the foreign ministers, to instruct Sir Thomas Wade to say, with brevity to the foreign office, that their proposition is unsatisfactory.

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You will observe that their proposition is to raise the duty on imports from 5 per cent. to 11½ per cent., and to free the goods from all lekin and charges of every sort in the interior. This is a very important proposition, even in that form. But the belief of the diplomatic body here is that the government may perhaps be brought to accept of 10 per cent. instead of 11½.

The British minister presented at the conference a rough draught of a paper, in which he expressed the opinion that if the proposed arrangement were adopted lekin would still, to a greater or less extent, be laid on foreign goods so long as it should be laid on native goods; and that, notwithstanding the frequent protests against it by the Chinese themselves, the native goods will probably not be exempted from it in many years. He was requested by the conference to write out his opinion on this subject more fully.

Since the conference Sir Thomas Wade has had an interview with the Tsung-li Yamên, and reported to them our dissatisfaction with the rate they propose—11½ per cent. He received the impression that they will probably agree to accept ten if we propose it. It will be borne in mind that none of the propositions mentioned will be recommended by the ministers here to their respective governments, except with these conditions annexed: First, that there shall be a court of reclamation to secure to importers the return of any lekin or other tax laid upon goods which have paid the stipulated duty; and second, that the scheme shall be experimental, tried for a limited time, until it shall be seen how it works.

I reserve a discussion of the very interesting and important subject until it is determined whether the diplomatic body and the foreign office can come to an agreement upon the rate of duty to be imposed.

I have, &c.,

[Inclosure in No. 94.]

The writers have perused the memorandum handed them regarding the proposition to increase the duties on foreign goods.

It states that the half tariff duty is equivalent to the lekin levied in the provinces, and that inasmuch as in the port provinces, where the trade in foreign goods is comparatively large, the lekin and other charges amount to a tariff duty and a half duty, in the provinces inland of these, where the trade in foreign goods is comparatively small, the lekin and charges thereon can amount but to two-tenths (1 per cent.) or at the most three-tenths (1½ per cent.) ad valorem.

To make any arrangement possible in affairs in which Chinese and foreigners are conjointly concerned, the essential condition is that thought should so be bestowed upon it on both sides as to enable each to arrive at what is just. The object of the foreign representatives being the advantage of the merchant, they will hold naturally that as regards any addition to the duty, the less that can be added to it the better. But it is incumbent on the Chinese Government, when projecting measures to be adopted, to look at both sides of the question in its integrity, and while mercantile interests are advantaged, yet more to see that no loss befall the state’s revenue. Thus possibly may it be enabled at the same time to do justice and to make a settlement that will endure.

The lekin besides (which it is now proposed should no more be levied on foreign goods) is of consequence to the support of the provincial armies. The proposition under review is that after payment of an additional duty, which is to be levied at the same time as the (original) tariff duty, on foreign goods when they enter port, nothing farther in the shape of lekin or other duty of any kind or denomination shall be levied on these goods when they are carried inland from the port, or from any place to which they may have been carried inland, to any other place. This single payment of duty will be a considerable advantage to the merchant.

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But now on the other side. The Chinese Government on its part is to collect duty but once, and the lekin and charges which should be collected at different stations, whenever foreign goods arrive at these, are to be altogether foregone. If the amount of this single collection prove an inadequate substitute for the revenue derived from the lekin and charges collected at those different stations, to say nothing of the myriad difficulties that would beset such a scheme in its operation, it is to be assumed that considering the friendly terms on which foreign governments have long been with the Government of China, no foreign representative would desire to introduce a measure that, while it purported nominally to increase the tariff, in reality made China suffer by the loss of lekin. In a conference with Sir Thomas Wade sometime ago the ministers suggested an addition that would have raised the tariff to 12.5 taels. This reduction (from a previous estimate) was made after much deliberation, and was in point of fact not considered by the provincial authorities a fair equivalent for what is collected as lekin or other (inland) duties. The distances to which goods are carried are some greater and some less, and while the lekin levied on foreign goods sold in the provinces near the port is (admitted to be) more than the barrier duty (half duty), there is greater difficulty in estimating what will be the amount levied on goods as they are being carried for sale to provinces more remote.

When therefore the ministers resolved on proposing as a mezzo termine the addition of a single tariff duty to the tariff duty and half duty (now leviable) they were arguing the point in all fairness.

But the foreign representatives requiring a farther reduction on the part of China, the ministers have had nothing for it but to make every effort towards concession. They accordingly farther reduced (the proposed addition) by five mace. By the free circulation of foreign goods in all parts (under these conditions) foreign merchants will be benefited in no mean degree. The Chinese Government will lose by it, but not so very much.

The ministers would add that having considered (this question) twice and again, they do not attempt (do not propose) to engage in an exchange of arguments controversially, a vain waste of correspondence and verbal discussion. They present a plain statement to the representatives, viz, that they have reduced their estimate by five mace, in addition to the five mace before taken off it—by one tael, that is, in all—thus making (the total duty) 11 taels, 5 mace. This is a reduction extraordinary and the fartherest length in that direction that when every point has been strained they find they can go. It is their hope that it may meet the requirement. It would be difficult for them to make any farther concession. The representatives, they imagine, will appreciate the pains they have been at to meet their wishes.