No. 168.
Mr. Denby
to Mr. Bayard.
Legation of
the United States,
Peking, January 26, 1888.
(Received March 17.)
No. 554.]
Sir: I have the honor to inclose herewith a copy of
my communication to the Yamên on drawback certificates on the Yangtse.
I have only to state in addition that the consideration of this question by
my predecessor in 1883 resulted, December 19, 1883, in the adoption of a set
of rules by the Government.
The first rule was—
Drawbacks, whether for native produce or foreign imports, issued
after the 1st January, 1884, may be cashed or tendered for duties of
any kind at the option of the holder.
This rule was acceptable to the foreign merchants generally, but it was
canceled February 25, 1884. The only reason for this cancellation was that
the redemption of drawbacks would be detrimental to the customs
revenues.
In addition to the arguments advanced in the communication now sent, it may
be stated that shippers are compelled to insure the drawbacks. As matters
now stand, if a cargo intended for exportation is lost in transit to
Shanghai, the drawback certificate never issues, and the half duty paid is
lost. Hence the otherwise needless expense of insurance.
[Page 252]
Altogether it is estimated that on the one article of hides, which are
largely exported from Hankow, the drawback system produced a loss to the
shippers of 1,700 taels in 1886.
A serious effort will now be made by the ministers to restore Rule I, above
cited.
I have, etc.,
[Inclosure in No. 554.]
Mr. Denby to the
Foreign Office
January 23,
1888.
Informal.]
Your Imperial Highness and Your
Excellencies:
For a long time past the way in which the rule contained in article 5,
section 1, of the revised regulations (of 1862) of trade on the Yangtze
Kiang has been carried out, has given rise to numerous complaints on the
part of the foreign mercantile communities at the Yangtze ports.
Under this rule the shipper of native produce at a river port, on board a
steamer provided with a river pass, must pay both export and coast-trade
duty. If the native produce is exported from Shanghai within the twelve
months allowed, the shipper obtains from the Shanghai customs a
certificate of its re-exportation, on production of which at the river
port of shipment the customs at that port issue a drawback for the
amount of coast-trade duty paid.
This rule imposes already a certain amount of hardships upon the foreign
exporter, as he has to deposit with the Imperial Chinese customs the
amount of coast trade duty, even for goods intended from the beginning
for exportation, but the injury done to the foreign exporter becomes
still more apparent when one bears in mind that the drawback granted to
the exporter on production of the Shanghai certificate is neither
exchangeable for ready money nor can it be used for the payment of other
duties than coast-trade duties. The consequence of this state of things
is that the exporter has either to keep his drawback certificate for
many months, until he finds an opportunity for using it again, or has to
sell it to a third person at a considerable loss, amounting often to
more than 4 per cent.
A remedy to this state of things, very injurious to the foreign exporter,
could be easily found if the Chinese Government would consent to make
the drawback certificates for coast-trade duty exchangeable for ready
money, as is the case with drawback certificates for import duty.
It seems hardly just and equitable that the customs authorities should
withhold from the foreign exporter money which, after all, has been
deposited with them only as a security, and which should be returned to
him as soon as he has proved to the satisfaction of the customs
authorities that the goods shipped by him from the river port have been
exported from Shanghai.
Under these circumstances, I venture to hope that the facts which I have
had the honor to place before your highness and your excellencies will
meet with your favorable consideration, and that you will see your way
of doing away with a practice which, while unprofitable to the Chinese
Government, constitutes in fact a great hardship for the foreign
exporter.
I avail, etc.,
