No. 180.
Mr. Angell
to Mr. Blaine.
Legation of
the United States,
Peking, September 24, 1881.
(Received November 19.)
No. 217.]Sir: It will be remembered by the Department that
Sir Thomas Wade has been charged by the diplomatic body here with the
conduct of the negotiations in their behalf with the Tsung-li Yamên
concerning a proposed substitution of an addition to the present import duty
in place of the lekin taxes, to which goods carried into the interior are
now subjected.
I have the honor to forward to you herewith copies of a communication from
the British minister to the Tsung-li Yamên and their reply. I received the
papers September 7; since that time no further progress has been made.
You will observe that the British minister, by the instruction of his
colleagues, pressed the foreign office with the inquiry how far they were
prepared to go, in really securing the emancipation of foreign goods from
the lekin burdens, provided an import duty of 10 per cent, was paid in lieu
of the 5 per cent, now levied, and informed them that he and his colleagues
could not recommend the adoption of this change to their respective
governments, unless certain other provisions asked in their collective note
of November, 1879, were conceded.
The Tsung-li Yamên express their readiness to abide by the proposition to
accept 10 per cent, import duty and abolish the lekin, but owing to the
demand for certain other regulations, defer action for the present.
It has been a tedious and difficult task to bring them to accept a
proposition for a 10 per cent, duty in lieu of the present duty and lekin.
There is every reason why they should prefer some such change as that
suggested, because the import duties collected by the so-called foreign
customs all go to the imperial treasury, while the lekin taxes go to the
provincial officers. But they have feared that the provincial authorities
would not endure the change.
The diplomatic representatives are, without exception, I think, of the
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opinion that, if certain
safeguards can be secured, it is worth the while to try, as an experiment,
say for five years, the scheme proposed. But all deem it necessary to have
some sort of court of reclamation, in which redress can be gained if lekin
is really assessed. Yet, it must be confessed, that it is very doubtful
whether, for some time to come, the government can prevent the levying of
lekin. The people hate the tax, and would gladly be rid of it. But it is
extremely convenient for the local authorities, and the whole weight of the
influence of the provincial officials will be thrown in favor of the
continuance of it. The temptation for them to collect it in violation of any
engagements made by the imperial government will be great—perhaps, in many
cases, irresistible. But the lekin assessment now loads foreign goods
circulating in the interior with so grevious burdens, and at a certain
distance from the ports, in so many cases, becomes prohibitory in effect,
that the representatives of the nations which trade with China agree in the
belief that some such arrangement as that now under consideration had best
be tried for a limited period.
Still, the negotiations have not proceeded far enough to justify any
prediction as to the time of their completion.
I have, &c.,
[Inclosure 1 in No. 217.]
The British minister to
the Tsung-li Yamên.
The undersigned has the honor to request the attention of the ministers
of the Tusng-li Yamên to the following observations on the subject of
taxation of imports inland.
The disputes arising out of the taxation of imports protested against by
foreign representatives, as in contravention of the treaties, had
extended over a long period. They may be said to have commenced, indeed,
from the day that the treaties of 1858 came into operation. There had
been other questions with regard to which foreign representatives
conceived themselves equally entitled to complain. In order to the
consideration of these they assembled in Peking in the autumn of 1879,
and upon the —— November of that year they communicated the result of
their deliberations to the Prince of Kung in a collective note.
The negotiation of the changes desired was intrusted to different
ministers. That regarding inland taxation of imports was committed to
the undersigned; his brief, so to speak, being a memorandum in twenty
articles, in which the difficulties alleged to embarrass both the import
and the export trade were set forth. The memorandum had formed an
inclosure in the collective note of the representatives.
So far as imports are concerned, the grounds of complaint exposed in this
memorandum might be stated generally under two heads:
- (1.)
- The taxation of imports in excess of treaty provisions both at
the ports and inland.
- (2.)
- The neutralization of the safeguards plainly provided by the
treaties against excessive taxation inland, either by the act or
the neglect of the Chinese authorities. By the treaties but two
forms of taxation are recognized. The tariff duty imposed at the
port of entry, when the imports are landed, and the transit
duty, equal to a half tariff duty, the payment of which is
optional, but the certificate attesting payment of which is held
under some of the treaties to free the imports certificated from
all further imports possibly leviable.
But the Chinese authorities, to state the case summarily, have conceived
themselves at liberty to impose inland taxation without limit on
imports, and the methods of levying this or other taxation when
denounced as objectionable by the foreigners, have been defended by the
Chinese authorities as in no way opposed to the treaties. In particular
has the interpretation of the transit duty clauses proved matter of
endless contention.
In a reply to the collective note dated ——, the Tsung-li Yamên informed
the foreign representatives who had signed it that there were three
courses open to them, the
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abandonment of the exterritoriality clauses, in which case natives and
foreigners would be treated alike; adherence to the existing treaty
provisions, or acceptance of the modifications of treaty stipulations
accepted by the late British minister, Sir Rutherford Alcock, in his
convention of 1869.
The certainty that it would be in vain to expect acceptance of the first
of these propositions by any one of the treaty powers has practically
excluded it from consideration, and as regards the second, the
undersigned has but expressed the unanimous feeling of his colleagues,
when he has declared that nothing would be more satisfactory than
adherence to the existing treaties, could but a common understanding be
arrived at regarding the meaning of some of their most significant
provisions. That such an understanding was clearly impossible, so long
as the provisions in question were so differently interpreted by the
Government of China and foreign powers.
There remained the convention of 1869 which, though it had been, in some
quarters, considered open to objection, was nevertheless admitted to
contain much that might be safely accepted. The Tsung-li Yamên
manifestly entertained the opinion that this convention must be adopted
as a whole or not at all.
It is not necessary here to retrace further the history of the
undersigned’s conferences with their excellencies the ministers upon the
subject. Upon the 29th June, 1880, the undersigned put the following
plain questions to their excellencies: Is there no arrangement under
which by a single payment of import duty at the port of entry all
further charges may be avoided? The object of the undersigned, as he
observed, was not more the alleviation of trade from taxation, which the
importer regarded as violation of treaty, than the termination of those
ever-recurring discussions to which such taxation gives rise.
The answer of their excellencies was in effect that to secure this end,
they saw no means but the one, an increase of the import duty.
This involving a reference on the part of the undersigned to his
colleagues, and on the part of the Tsung-li Yamên to the provincial
governments, a considerable time elapsed before negotiations were
resumed. When they were, the position of the question was, in a few
words, as follows: It was contended by the Yamên that, from inquiries in
the provinces, the lekin now imposed on foreign imports amounted to
something like three times the tariff duty. In other words the tariff
duty being generally taken to represent some 5 per cent. ad valorem, the
lekin and tariff together might be stated at 20 per cent, ad valorem.
Their excellencies, after some intermediate propositions, declared
themselves ready to advocate a single payment of Hi per cent, as the
equivalent of the present tariff duty plus inland taxation.
The undersigned and his colleagues, being of opinion that if the half
tariff duty, now paid only at the option of the importer when he elects
to certificate his goods inland, were levied simultaneously with the
tariff duty, the Chinese exchequer would receive not only far more than
now falls to its share, but to the full as much as it is fair to impose
upon imports, were nevertheless prepared to make an effort to meet the
Chinese Government. But the rise to 11½ was at once pronounced
excessive, and the proposition was rejected accordingly.
The undersigned having vainly suggested 8 per cent., 8½ per cent., or
even 9 per cent., as a maximum of increase, was finally given to
understand, on the 28th of March last, that their excellencies were
prepared to agree to 10 per cent, ad valorem as the amount that should
include tariff duty and all other charges.
As their excellencies are aware, the adoption of this or any other change
so important depends not only upon the acquiescence of the foreign
representatives now in China, but upon the assent of all foreign
governments having treaties with China, and as the Chinese secretary and
assistant Chinese secretary at the British legation were instructed on
the 21st May to intimate to their excellencies, it will be essential
that the Tsung-li Yamên should state explicitly to what extent the
Chinese Government is prepared to go in the emancipation of the import
trade, supposing that foreign governments agree to this last
proposition, which is in effect to double the import duty. To state the
question in other terms: before they consent to any increase of the
taxation to which they believe imports under the present treaties
liable, foreign governments will require the most explicit assurance
that by such increase imports shall be freed from all other imposts, no
matter what their denomination, and no matter in what part of the empire
or in whose hands, native or foreign, they may be found.
It may be at the same time considered certain that the increase of the
import duty, if sanctioned at all, will not be sanctioned otherwise than
as an experiment for a stated term of years. It will be regarded, and
had accordingly better be described, as a provisional increase (or an
increase upon its trial).
The Chinese Government will be expected to undertake that, if, when the
conditions of exemption from further taxation shall have been agreed
upon, it can be proved that imports are none the less taxed in excess of
the limit agreed to, the excess shall be made good without delay to the
party, interested; and that to this end some system of joint
investigation is to be established.
The Tsung-li Yamên was further reminded on the —— that there are other
provisions
[Page 313]
claimed for the
protection of trade in general in the collective note of November —,
1879, some of which have not been as yet conceded, and the support of
the proposition to increase the import duties is not to be counted upon
until reasonable satisfaction on these points be secured.
The taxation of opium has of necessity been referred to, both directly
and indirectly, in the discussions above referred to, and their
excellencies have more than once observed that the trade in opium is
exclusively a British question. It has further been urged by their
excellencies that its position differs from that of any other item of
the import trade within the scope of the collective note, in this, that
the undersigned had individually engaged to regulate the taxation of the
opium trade.
It is perfectly true that the opium imported into China is almost
exclusively the produce of British India. It is also true that the
undersigned did independently engage to attempt the regulation of its
taxation. But it is none the less true that opium is in the tariff of
almost every treaty power, and that, although there is reason to believe
that whatever the British Government may eventually agree to regarding
opium will not in the end be objected to by any other treaty power, it
is perfectly open to any treaty power that may consider its treaty
rights insufficiently respected to decline, until they be respected, the
adoption of any arrangement affecting opium taxation that may be
sanctioned either by Great Britain or any power. As their excellencies
are well aware, the undersigned has not used this argument for the
purpose of obtaining any advantage for the opium trade, but as one which
it behooves the Government of China not to lose sight of when
considering the complaints concerning the import trade advanced by the
powers in general.
The undersigned has to express his regret that the ministers of the
Tsung-li Yamên have had to wait so long for fulfillment of the promise
of the undersigned that he would address their excellencies a note in
this sense. For the delay which circumstances have made unavoidable,
none is responsible but the undersigned.
[Inclosure 2 in No. 217.]
Ministers of the Tsung-li
Yamên to Sir Thomas
Wade.
The ministers are in receipt of a note from the British minister, in
which he observes that the negotiation of the changes desired in the
matter of inland taxation has been committed to him, and that he was
given to understand on the 28th of March last that the ministers were
prepared to agree to 10 per cent, ad valorem as the amount that should
include both tariff duty and lekin. The adoption of any change so
important would, however, depend upon the assent of all foreign
governments having treaties with China, and it would be essential that
the Tsung-li Yamên should state explicitly to what extent the Chinese
Government is prepared to go in the emancipation of the import trade.
The change would be tried as an experiment for a stated term of
years.
The British minister added that there were other provisions claimed for
the protection of trade in the collective note of November, 1879, and
that the support of the proposition to increase the import duties is not
to be counted upon until satisfaction on these points be secured.
Referring to the opium question, the British minister remarked that
opium is in the tariff of almost every treaty power, and it is perfectly
open to any power to decline the adoption of arrangements affecting
opium taxation that may be sanctioned by Great Britain. The ministers
would observe, omitting from present consideration the question of
opium, which still remains to be discussed, that foreign goods which
have paid import duty at a treaty port are conveyed into the interior
under transit certificate, which frees them from all other levies after
payment of the transit duty. On the other hand, goods unprovided with
transit certificates are liable to duty and lekin at such stations as
they may pass. So much is clearly stated in the treaty regulations.
Sir R. Alcock’s supplementary convention of 1869 provided that certain
commodities of foreign origin, confined to three categories, should
circulate freely in treaty port provinces on payment simultaneously of
import duty and transit due, but in the case of non-treaty port
provinces the commodities having arrived at their place of destination
would thenceforth be liable to inland charges in the same manner as
native produce.
This arrangement, however, never came into force in consequence of the
regretable refusal of the British Government to ratify the convention.
The proposition of the British minister, who is now engaged with the
conduct of this question, to obviate inconvenient charges by a single
payment once for all, is in fact what Sir R. Alcock intended by the
simultaneous payment of import duty and transit due, and the ministers
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of the Yamên proposed at
the outset to adopt Sir R. Alcock’s project in its integrity. The
British minister not agreeing to this, the Yamên were inclined to make
some concession, and first proposed a general import duty of 20 per
cent, ad valorem, and subsequently of 11½ per cent. to cover all levies
en route to the place of destination, no
matter where. The British minister still held out, until at last the
Yamên, in a spirit of accommodation, went so far as to offer a still
further reduction to a rate of 10 per cent.
Under the conditions at present existing the import duty of 5 per cent.,
with the transit duty of 2½ per cent., amounts to a total levy of 7½ per
cent. ad valorem on foreign imports. The arrangement proposed would
increase the aggregate by no more than the amount of the transit duty,
and it would be very unsafe to assume that this addition will compensate
the Chinese Government for dues which at present are levied in transitu, or after the goods have passed the
place of destination. If, however, on the representation of the several
ministers the present proposal should obtain the sanction of the treaty
powers, regulations for its enforcement as an experiment during a
provisional term would of course be negotiated forthwith by the
representatives and the Yamên. The institution of such provisional
experiment would, for the moment, be premature, in view of the British
minister’s remark that “there are other provisions claimed for the
protection of trade in the collective note of November, 1879, and the
support of the proposition is not to be counted on until (reasonable
satisfaction on) these points be secured.” Nevertheless, now that the
general principle (of the proposed change) has been determined, there is
no harm in deferring for a time the discussion of its application in
detail.
