to Mr. Bayard
Peking , February 25, 1887. (Received April 12.)
Sir: I have the honor to inclose herewith the original of a communication this day sent to the Tsung-li yamên by me.[Page 192]
The subject thereof is an energetic protest against the new tax of 6 mace (90 cents) on the case (two cans) of kerosene, lately levied as a lekin tax at Canton.
Little explanation is necessary, in addition to the contents of the said communication. I may mention that, in spite of the lekin of 40 cents per case which was levied in 1882, and for the privilege of collecting which the farmer thereof pays $63,000 per annum, the sale of kerosene has been rapidly increasing. Mr. Consul Seymour writes me that prior to the new tax it was anticipated that in 1887 the sale of kerosene imported at Canton would reach 400,000 cases, or 800,000 cans, or 3,000,000 imperial gallons, or 4,000,000 trade gallons. It is now proposed to raise 120,000 taels, or about $80,000, by this new tax. The original tax of 40 cents remains in force.
The farmer was offered the collection of this tax, but declined for fear of smuggling. So the lekin office will collect it by its own officials. The lekin tax alone now amounts to $30 per case. To this the import tax of 5 per cent. ad valorem must be added. To any article but kerosene this tax, being more than 50 per cent., would probably be fatal. But kerosene is so largely used, is so advantageous collaterally in permitting by its use native oils to be applied for food, and is so cheap, that it is difficult to forecast what effect on its consumption so enormous a tax may have.
The Chinese authorities have always contended, in the words of Tseng, uncle of the marquis, now viceroy of Nanking, that “once foreign goods have entered China and become the property of Chinese merchants, their taxation is a matter wholly and solely within the direction of China.”
One answer, at least, to this proposition is, that this right is subjected to the treaty stipulations. It is plain that the right of importation may be valueless if, as soon as goods land, they may be burdened with a prohibitory tax. Thus, by indirection, the treaties may be annulled.
I have endeavored in my communication to the yamên to found my argument on the proposition that the new tax was not only prohibitory in fact, but was levied for the purpose of prohibiting. To this end I have cited passages from the proclamations of the lekin board.
Logically the only difficulty is to determine at what point a tax becomes prohibitory. The extraordinary vitality of kerosene makes it doubtful when such a point will be reached.
We have taxed fire-crackers 100 per cent., and partly on the ground that they are hazardous. The Chinese are improving on our example.
The whole question, as you well know, is embarrassing and troublesome.
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I have, etc.,