No. 148.
Mr. Angell to Mr. Evarts.

No. 95.]

Sir: In my dispatch No. 52, of November 22 last, I described the state of the negotiations at that date between the diplomatic body and the foreign office on the subject of transit passes outwards. I referred to the draught of a paper presented by Mr. von Brandt at a conference on November 22, setting forth, at the request of the Tsung-li Yamên, the reasons for the rules suggested by the foreign representatives. A copy of that paper has since been furnished by Mr. von Brandt, and I inclose it. It will be remembered that according to the understanding of the conference, Mr. von Brandt was to present this communication to the foreign office as simply his own, but he was authorized to say at the close of it that the foreign representatives were unable to understand why the Chinese Government should object to Sections II and III, without which the proposed arrangement would not be acceptable.

To the communication of Mr. von Brandt the Tsung-li Yamên, on December 5, sent a reply, a copy of which is inclosed. They still express objections to Sections II and III, and they ask for a list of the native articles which by treaty are duty free.

[Page 227]

Owing to the illness of Mr. von Brandt no Conference was held last month. But one was held on the 4th instant and the Yamên’s reply was considered. It was decided to adhere to the propositions before made, save that Rule II should be changed so as to indicate specifically what articles of foreign manufacture or origin, and what articles of foreign or native manufacture or origin, shall be duty free. A copy of the amended Rule II is inclosed.

I have, &c.,

[Inclosure 1 in No. 95.]

Mr. Von Brandt to the Ministers of the Tsung-li Yamên.

On the 19th instant the undersigned had the honor to receive the visit of their excellencies Shen, Lin Wang, Chung, and Hsia. They informed him that, notwithstanding the opposition from the provinces, the Yamên was willing to agree to section I, rule 9, of the proposals laid before them by the undersigned, but that in view of the strong objections raised from the same quarter they could except neither section II nor section III of the same proposals.

At the close of the conference the ministers suggested to the undersigned to place before the Yamên in writing his reasons for desiring to maintain the two sections, and the undersigned agreed to do so after having taken the sense of his colleagues, the representatives of the other treaty powers. The reasons which caused the foreign representatives to place before the Yamên in May last the proposals contained in the three sections now under discussion were to do away with such difficulties as had arisen from time to time, and which, while they seriously interfered with the interests of trade, were likely to create and continue disagreements and ill-feelings between the local officials and the consuls as well as between the Government of China and those of the treaty powers.

The Tsung-li Yamên having repeatedly complained of abuses in the use of transit passes outwards, the representatives of the treaty powers made it their first object to remove all causes of complaint in relation to this subject. The restrictions as to the time within which transit passes must be used and within which native produce brought down under transit passes must be exported, as well as all the rules contained in section I of the proposals, are so many concessions, and important concessions, made by the foreign representatives to the Tsung-li Yamên; even rule 9, instituting a joint investigation in cases of fines and confiscations, arising under the stipulations contained in section I, may be fairly considered at least partly a concession to the Yamên, as by treaty the investigation of cases of fines belongs solely to the consul of the defendant.

While thus showing their earnest desire to consult the wishes of the Chinese Government and to comply with them, it was the duty of the foreign representatives to see at the same time that also the causes of those complaints were removed, which had been repeatedly urged by them upon the attention of the Tsung-li Yamên.

It was for this cause that sections II and III were introduced into the new proposals.

Neither the one nor the other claims any new advantages for the treaty powers, but they simply reassert rights granted to them by former treaties, a reassertion rendered necessary by the persistent efforts of some local authorities to ignore them.

Section II reasserts the right that certain articles of native produce, very few in number and very unimportant indeed, are free from export duty under Rule II of the regulations for trade. Alinea 2, of Rule I, of the regulations for trade, &c., mentions the articles in the list of duty-free goods as exempt from the ad valorem duty, which is paid by articles mentioned neither in the import nor in the export tariff. It is not necessary to enter upon a discussion of the Chinese text of the rules in question, as under article 5 of the German treaty of 1861, in cases of dissent, the French text is the one to be relied upon. I have the honor to hand herewith to the Yamên the French text of Rules I and II of the German treaty, and I have full confidence in the good faith and impartiality of the Chinese Government in expressing the conviction that in the face of this French text the pretentions of some local authorities to levy export duty on the articles mentioned in trade Rule II as duty free will be done away with forever.

But even in this section a concession is made to the Yamên by the foreign representatives in admitting the levy of a coast-trade duty on duty-free native produce, a new proof of the conciliatory and friendly spirit in which these proposals have been [Page 228] draughted, a spirit which, I am sorry to say, seems to he understood or appreciated neither by the provincial authorities nor by the Yamên itself.

Section III also contains nothing new, but reasserts only the right of foreign merchants to buy native produce at the ports and to export it without being bound to produce receipts for the payment of inland taxes, this latter rule holding good only for produce bought by foreigners in the interior and brought down under transit passes. The rule that on goods manufactured at the ports only export duty shall be levied is also in entire conformity with the stipulations of the treaties.

The undersigned trusts that this short review of the rules contained in the proposals submitted by him in the name of his colleagues to the Yamên will convince their excellencies that while these proposals contain many new and important concessions to the Chinese Government they contain nothing to which the treaty powers have not a full and undoubted right under the former treaties. It is for these reasons that the undersigned cannot admit that only one or two of the sections composing the proposals are accepted, while the other sections are rejected. The proposals stand as a whole, and have to be accepted or rejected as a whole. They were made by the foreign representatives in a spirit of moderation and friendliness, and the Yamên will have to bear the responsibility of their rejection.

As the decision of the Yamên in the one or the other direction will involve instructions to be forwarded to the German consular authorities in the provinces, the undersigned would feel obliged to their excellencies for a speedy reply. The undersigned is, at the same time, authorized by his colleagues, the representatives of France, Great Britain, Spain, Russia, and the United States, to state that they are equally unable with him to understand on what grounds the Chinese Government objects to the adoption of sections II and III, without which the arrangement would not be acceptable to them.

I avail myself,

[Inclosure 2 in No. 95.]

Tsung-li Yamên to Mr. von Brandt.

A few days ago the ministers of the Yamên received a note from his excellency Mr. von Brandt to the effect that he had been charged by his colleagues, the representatives of the treaty powers, to state that the provisional rules in three sections for the regulations of transit trade outwards must be accepted in their entirety. The note was accompanied by a document in a foreign language.

The ministers would observe that the Chinese text of Rule II of the regulations for trade, appended to the treaties, with reference to duty free goods, contains the word “foreign” only, while the text, which runs on consecutively without a break, does not specially indicate which are native goods and which are foreign. As, however, at the close of this same rule it is distinctly stated that all goods sent into the interior will, as in other cases, pay a duty of teals 2.5, it may be seen that it is foreign goods which are referred to.

A translation of the foreign document forwarded by Mr. von Brandt has now been made (and it is found) that here also only the word “foreign” is employed with reference to the articles enumerated in this document, the word Chinese not occurring at all. A Chinese translation of the document in question is forwarded for his excellency’s perusal.

The note under acknowledgment observes that the few articles of (native) produce that are duty free are unimportant (lit. fractional and miscellaneous). Since they are few and since they are unimportant, the duty upon them would not probably amount to much, and the Yamên have to request Mr. von Brandt to furnish them with a list of the names of these “few and unimportant articles of native produce.”

As regards the (sections relating to the) purchase of native produce by foreign merchants, one is to the effect that goods purchased in the interior under transit pass shall pay the export duty as well as the half duty. The other is to the effect that produce brought down by native merchants upon which inland dues and lekin have been paid, shall, when purchased by a foreigner at a treaty port, be liable only to the export duty and not to the half duty as well.

The arrangements proposed under the above two sections being already stipulated for in the treaties and trade regulations should be enunciated (afresh), but there can be no necessity for the introduction of other remarks, which would lead to considerable confusion. Again, if foreign merchants be permitted to manufacture native produce before submitting it to the inspection of the customs, many abuses will most [Page 229] certainly arise in consequence of the confusion caused by the substitution of one article for another.

The provision for inspection is intended only to guard against abuse.

If Monsieur von Brandt will agree to the adoption of an arrangement in the spirit of these two rules, as previously forwarded to him by the Yamên, the question of their being given effect to can be considered simultaneously with the rest.

Compliments, &c.

[Inclosure 3 in No. 95.]

Rule II.

The following goods shall be duty free:

of foreign manufacture or origin. of foreign or native manufacture or origin.
Foreign coins,
Foreign confectionary, Gold and silver in bullion,
Foreign clothing, Flour,
Foreign candles, Indian meal,
Foreign tobacco, Sago
Foreign cigars, Biscuits,
Foreign medicines, Preserved meats and vegetables,
Foreign plated-ware, Cheese,
Foreign perfumery, Butter,
Foreign wine, beer, and spirits, Jewelry,
Foreign stationery, Soap,
Foreign carpeting, Charcoal,
Foreign druggeting, Fire-wood,
Foreign glass and crystal-ware. Household stores,
Ship stores,
Personal baggage,

The above, when of foreign manufacture or origin, pay no import duty nor coast-trade duty; when of native manufacture no export duty nor coast-trade duty; but if duty-free goods of foreign manufacture or origin are transported into the interior they will, with the exception of personal baggage, gold and silver bullion, and foreign coins, pay a transit duty at the rate of 2½ per cent, ad valorem.

Paragraph 3, as before.