Papers Relating to the Foreign Relations of the United States, Transmitted to Congress, With the Annual Message of the President, December 4, 1882
No. 77.
Mr. Holcombe to Mr. Frelinghuysen.
Peking, April 29, 1882. (Received June 16.)
Sir: Referring to my dispatch, No. 36, of December 27th ultimo, I have now the honor to furnish the Department with copies of further correspondence which has passed between Mr. von Brandt, as the representative of the diplomatic body, and the foreign office, upon the general subject of native produce bought and manufactured at the ports.
The foreign office has taken substantially the position:
- 1st.
- That foreigners have no right to engage in manufacturing operations in China; and
- 2d.
- That if they do, goods so manufactured must invariably be exported, and cannot be sold in China.
In the opinion of the entire diplomatic body, there is no treaty stipulation which can furnish a just basis for either of these assumptions.
There is no present prospect of reaching a satisfactory arrangement upon the question at issue.
I have, &c.,
Correspondence between Mr. von Brandt and Foreign Office, March, 1882.
In the interview which the undersigned, by order of the minister of the German Empire, had with the members of the Yamên, on the 22d of October, 1881 (their excellencies Wang-wên-shao, Mao Sin shu, Chung Si, and Sia chia hao being present), the Chinese ministers repeated, with as much emphasis as ever their argument that [Page 135] “foreign merchants are obliged to export all native produce they may have purchased, and that they are not at liberty to dispose of it at the open ports.” Wang-wên-shao expressed this several times in these words, that “there are no native goods but must be exported,” adding that the trade with native produce at the Chinese ports is a branch of commerce reserved to Chinese merchants.
In the further course of the conversation Wang-wên-shao granted that at the present moment the question was one of little moment for the Chinese Government. But if for instance, in future, cotton goods were manufactured at the ports from Chinese cotton, and if foreign merchants were permitted to sell such goods at the ports, then, the Chinese Government would lose, either the export duty on the cotton or the import duty on the goods manufactured from it. And if these manufactories were in Chinese hands, also the foreign merchants would be losers, for the foreign article would of course not be able to compete with the article manufactured in China, as the latter one had paid no import duty.
The Chinese Government desiring as little to give to the Chinese merchants an undue advantage over the foreigner as vice versa, had therefore already given orders that if the Chinese cotton goods manufactory in Shanghai came into existence, the articles manufactured in it should have to pay an impost, equal to the tariff import duty on foreign cotton goods.
Wang-wên-shao therefore proposed that in section III, 2 of the provisional rules no distinction should be made with reference to the period within which native produce is to be exported, between produce procured under transit pass from the interior and produce bought at the port.
Failing this, he pretended that all the concession contained in section I of the provisional rules were without value to the Yamên.
At a second interview on the 27th of December, 1881, Wang-wên-shao, in the presence, and with the consent of very nearly the same ministers who had been there on the 22d of October, said very briefly that the stand-point of the Yamên with reference to this question was still the same as heretofore. He did not even on this occasion try to veil the absolute denial implied by his words, with the usual phrases of the readiness of the Yamên to come to an understanding, and of its hope that an arrangement might easily be arrived at.
With reference to native produce the British minister stated to me some time ago, that when lately at the Yamên, the minister informed him, that after long discussion, the most perfect understanding had been arrived at between them and Mr. von Brandt on every point save one: namely, as to the manner of dealing with produce which having been brought down to the port uncertificated (i. e., not protected by transit duty certificate) or which having been purchased in a port and having there been manufactured it was not proposed to export.
As there appeared to me some disaccord between this statement and the letters addressed to me by the Yamên, as well as the notes taken by the interpreter of the Legation of conversations at the Yamên, I sent on the 9th day of the 12th moon (January 28) Mr. Arendt to the Yamên to ascertain what it was that had been said to the British minister.
The ministers present, unfortunately, were unable to give Mr. Arendt a definite answer or to say more than that some days hence it would be in their power to let him know everything for the information of his minister. Not having heard since from the ministers, I feel obliged to request the Yamên to refer to three sets of rules forwarded from the German legation on the 12th day of the 6th moon (July 7, 1881) and to the additional proposals presented by me in person on the 15th day of the 6th moon (July 10) and to state explicitly whether it (the Yamên) is prepared to give effect to all clauses (in the project referred at) with the sole exception of the clause providing for the treatment of produce brought down from the interior uncertificated or purchased in the port and manufactured, but which it is not proposed to export; so that this would be the only one clause with reference to which the Yamên still desires a modification.
I profit, &c.,
Kuangsu, 7th year, 12th moon, 24th day.
His excellency Monsieur von Brandt, Peking (a letter):
We have had the honor to receive your excellency’s letter by which you desired us to let you know whether, with regard to native produce, the question of the treatment [Page 136] of articles manufactured from produce brought down uncertificated to the port, or bought at the port, but not intended for exportation, was the only one point in which we still wished for some modification, whilst all the other points had our complete approval, or otherwise.
In reply to this question we beg before all to state that, during the frequent discussions which have taken place betwen your Excellency and ourselves regarding the regulation of the commerce with native produce, we are conscious of having always been actuated in all the transactions by a sincere desire of arriving at a friendly understanding. The proposals in three sections, transmitted to us by your Excellency on the 7th of July, appeared in fact to require a separate rearrangement only with regard to those two articles which had reference to articles bought or manufactured at the port, and their exportation; all the other articles, though some slight modification might be desirable in their wording, appeared, upon the whole, quite appropriate for leading to a definite settlement of the whole matter. All at once, however, on the 10th of July, your Excellency handed again to us personally a series of additional proposals. In the first of these it was proposed that the last clause of article 3, commencing with the words: in all cases in which goods are to be confiscated, should be removed from this place, and inserted as a separate article behind section 8, whereby the number of the articles would have been augmented to ten altogether. This proposal seemed quite acceptable. But with reference to uncertificated produce, no matter whether brought down to the port from the interior or bought at the port, it had already to be considered as a concession on our part that we had agreed to allow such produce to be subjected to a manufacturing process on previous notice being given to the customs authorities, and furthermore to abstain from demanding the production of the Likin and Inland Duty certificates; but with reference to such uncertificated produce, all the rules regarding limits of time, further conveyance, repacking and export, must be adhered to in exactly the same manner as with reference to produce accompanied by a transit certificate; for this is the only way by which the vital interest of Chinese merchants can be protected. Even therefore a proposal, should such a one be made, to free such produce from the compulsion of being exported against the payment of an additional duty would not do away with the objections which prevent us from agreeing to such a concession.
Your Excellency having honored us with a question, we have deemed it our duty to reply to it clearly, distinctly, and point by point.
We seize, &c.,
Cards from all the members of the Yamên (the Prince excepted).
Memorandum of a conversation had by Mr. Arendt with His Excellency Wang, the only minister present at the Tsungli Yamên, on February 15, 1882.
I. What do the characters tsze hsiang “this class” of uncertificated produce mean?
Wang. The words “this class” have no special meaning; they might as well be omitted; uncertificated produce, generally speaking, is meant.
I. But as you write “this class,” this might seem to imply that there is also “that class.”
Wang. * * * We Chinese do not make such nice distinctions. You might, I repeat it, as well omit the words “this class,” without modifying the meaning.
I. Then all uncertificated produce is meant?
Wang. (Looking at the letter after a short interval.) Yes; the uncertificated produce spoken of in the preceding sentences.
I. (Looking at the letter and reading from it.) Ah! I see; the uncertificated produce which has been subjected to a manufacturing process.
Wang. That does not necessarily follow; the uncertificated produce remaining in its original state is meant as well as that which is subjected to a manufacturing process. You must not make such nice distinctions.
I. Very well; I understand now, and believe I have caught your meaning.
The undersigned has the honor to inform His Imperial Highness the Prince Kung and their Excellencies the Ministers of the Tsungli Yamên that he has laid before his colleagues the Yamên’s note dated 29th September, 1881, as well as the other communications exchanged since that date, either verbally or in writing, between the German Legation and the Yamên on the subject of native produce. He has been authorized to state by his colleagues that they cannot but regard the declarations of the Yamên as very unsatisfactory and contrary, as well to the spirit as to the text of the treaties and that while they would be willing to discuss with the Yamên any fair proposal [Page 137] for the treatment of goods not intended for exportation, manufactured at a port from Chinese produce bought there or brought there not under transit pass, they do not feel at liberty to entertain the sweeping propositions of the Zamên, which, if accepted, would place foreign merchants in China in a worse position than Chinese merchants find themselves in any of the countries with which China entertains treaty relations.
The undersigned seizes.
The undersigned has the honor to inform His Imperial Highness the Prince Kung and their Excellencies the Ministers of the Tsungli Yamên that he has laid before his colleagues the Yamên’s note dated 29th September, 1881, as well as the other communications exchanged since that date, either verbally or in writing, between the German Legation and the Yamên on the subject of native produce.
The undersigned is requested by his colleagues to remind His Imperial Highness the Prince and their Excellencies, that the nationals of Belgium, France, and Germany, and by the favored nation clause the nationals of all the treaty powers, are entitled, by the express words of the Belgian treaty of 1865, Article XI, the French treaty of 1858, Article VII, and the German treaty of 1861, Article VI, to trade as merchants, and to trade as manufacturers “se livrer au commerce ou à l’industrie.” This is the indisputable meaning of the French text of the three treaties represented by the Chinese words, mau yi kung tso.
The construction which the Yamên seek to put upon the words kung tso would limit the exercise of the treaty privilege that they are intended to secure to acts which it would not have required any special treaty stipulation to enable a foreigner to perform.
The undersigned is therefore requested to invite His Imperial Highness the Prince, and their Excellencies to reconsider their opposition to the proposal to which they have objected.
A satisfactory understanding having been arrived at already on the subject of goods manufactured at the port from native produce brought there under transit pass, and not intended for exportation, the undersigned and his colleagues would be willing to discuss with the Yamên any fair proposal, for the treatment of goods not intended for exportation, manufactured at a port from Chinese produce bought there or brought there not under transit pass.
I profit, &c., &c.,