No. 140.
Mr. Denby to Mr. Bayard .

No. 281.]

Sir: I have the honor to inclose herewith the reply of the yamên to my communication relating to the tax levied on sugar in Formosa, of which a copy was sent to you with my dispatch No. 260, of December 2, 1886.

It will be seen that the yamên relies on Rule 7 of the trade convention of 1858 with the United States. The yamên states that it has deputized officials to consult and arrange the matter. I will communicate the result.

I have to state in this connection that I have noticed in the public press that the viceroy at Canton has levied a new tax on kerosene oil. When I receive official notice from the consul, to whom I have written, I will protest against this outrage of Chang Chi Tung. I shall thus largely avail myself of your fine argument in your dispatch No. 116, of March 8, 1886.

I have, etc.,

Charles Denby.
[Inclosure in No. 281.]

The Tsung-li yamên to Mr. Denby .

Your Excellency: Some time ago the prince and minister had the honor to receive a communication from your excellency in relation to the levying of lekin in Formosa, wherein you stated that it was important that the question be settled, etc.

At the time, the yamên sent instructions to Formosa, calling for a report upon the subject, and also acknowledged your excellency’s dispatch. This is a matter of record.

Now, it appears that the collection of lekin in the island of Formosa is at present confined to one route [one road]. Whenever foreigners proceed inland and purchase [Page 179] native produce, and do not apply for transit passes (to cover the goods in transitu), or when they purchase native produce at the treaty ports which have not paid lekin inland, in these cases it is right that the exaction of lekin should be levied on the goods. Since the collection of this tax is in lieu of the payment of the harrier, or transit tax, it can not he regarded as the imposition of an additional lekin tax from foreign merchants at the treaty ports.

The plan adopted in Formosa is not at variance with the provisions of Article VII of the trade regulations between the United States and China. Further, it is not altogether unlike the system governing the collection of lekin in the other provinces, although there are in the Formosa system slight points of difference. Instructions have already been sent by the yamên to the authorities of Formosa, as well as to the inspector-general of customs, to depute officers in Formosa to consult and properly arrange the matter.

As in duty hound, the prince and minister send this communication in reply for your excellency’s information.

A necessary communication, addressed to his excellency Charles Denby, United States minister, Peking.