No. 499.
Mr. Phelps to Mr. Bayard.

No. 628.]

Sir: Referring to your instruction numbered 654 of July 5 last, I have the honor to inclose herewith the copy of a communication which I have received from the foreign office with reference to the collection at Hong-Kong of lekin on kerosene oil, from which you will observe that the private collection of that tax has ceased.

I have, etc.,

E. J. Phelps.
[Inclosure in No. 628.]

Sir J. Pauncefote to Mr. Phelps.

Sir: Since the date of my note to you of the 31st ultimo I have been in telegraphic communication with Her Majesty’s minister at Peking regarding the question of the collection at Hong-Kong by Chinese officials of lekin on kerosene oil shipped thence to Canton.

Sir J. Walsham informs me that the private lekin collectorate at Hong-Kong, of which complaint was made, has ceased since Sir Robert Hart took charge of” the Chinese customs stations, which, except in regard to opium, have no concern with foreign trade ships or foreigners at Hong-Kong.

Kerosene oil shipped from Hong-Kong in Chinese crafts to a treaty port is subjected to a lekin duty which the Chinese customs service collects at Hong-Kong for the account of the Chinese provincial authorities of the port of destination, in addition to the native tariff duty; but if the oil is conveyed in a foreign vessel, the foreign importer pays import duty according to maritime tariff at the port of entry and the lekin duty is not levied until it passes into the hands of the Chinese dealer, and is then collected, not by the maritime customs service, but by native officials.

Sir J. Walsham further states that lekin on the oil in the Canton province has been considerably reduced, and that the import duties collected under the native tariff may perhaps shortly be so also.

Under the circumstances described by Sir J. Walsham, it does not appear that there is any ground for representations to the Chinese Government based on treaty rights, as there is no interference with foreign shipping, and the lekin is not levied on the oil so long as it remains in foreign hands.

I have, etc.,

J. Pauncefote.