Mr. Denby to Mr. Bayard.

No. 778.]

Sir: I have the honor to call attention to some features of taxation in Peking, and incidentally in other parts of China, which present a contrast to systems elsewhere prevalent. The method of securing funds for the needs of the Government has been brought to its present form through many centuries, but it is probable that improvement in means of intercommunication will, in the near future, render necessary some fundamental changes.

The city of Peking is situated in the prefecture of Shun T’ien Fu, i. e., the region enclosing the imperial capital. It is divided into two listen or districts, viz, Wan Ping Hsien and Ta Hsing Hsien, comprising roughly the western and eastern portions of the city, respectively.

These two districts within the city, together with twenty-two districts and departments outside of Peking, including Tungchou, Ch’angping-chou, Pa-chou, San-ho-hsien, Wu-ching-hsien, etc., make up the above-mentioned fu or prefecture.

All of these places pay, through their respective district or department magistrates, a land tax on arable land only, which tax goes not to the provinicial treasury at Pao Ting Fu (the capitol of this province), but [Page 89] to the imperial board of revenues at Peking. This tax varies when the land is held from the Emperor from that levied when within the domain allotted to a prince for his support, being larger in the latter case. Taxes vary also with the crop producing quality of the soil from 10 cents to $1.50 an acre, the land in each district being returned by officers designated for the purpose, as good or bad, high or low.

Inside the city of Peking there is no tax on land, houses, or personal property. Goods brought through the city gates pay a lekin tax, but are exempt from taxation afterwards. The only tax on land and houses in Peking is the tax on the transfer of real estate, amounting to about 10 per cent, of the price paid. This tax is exacted on sale of property, whether in or out of the city, whenever the change of title is registered by the parties in the registry at the magistrate’s yamên, and a red deed is given.* This exaction is said, however, not to be uniform. Transfer may be made by white deed without paying this tax, and, as the title still remains recorded in the original owner’s name, this transaction resembles more mortgage with transfer of the property than sale.

In the city there is a tax on shops resembling license fees. A pawnshop pays 50 taels per annum; manufacturers of wine, 48; other shops less, the sum varying according to the size of the establishments. Peddlers and others having no fixed place of business pay nothing. Carters, donkey-drivers, etc., pay a charge of one cash (one-fifth of 1 cent) for each passenger they carry, which sum goes to the police for the repair and lighting of streets.

Outside of Peking, Chinese subjects (not bannermen) are liable to be called on to perform military duty, such as repairing roads, conveying chairs, etc., on the Emperor’s visits to the eastern tombs or other places. This may be commuted by payment of a small tax for each person and each horse. In other parts of China this duty takes the form of devoting a certain number of days to assisting in the shipment of tribute rice, salt, etc. The requisition for men for these purposes is usually met by each locality furnishing its quota of men, who are paid by all liable to serve.

All moneys spent on public account in Peking come from the imperial treasury, and this expenditure is not limited to funds raised by taxation from the city itself.

This résumé of taxation in Peking shows that the bulk of the people pay no taxes whatever. The man who owns his house and lot, his implements of labor, enjoys his earnings without toll or deduction. In China the chief tax is on land. There is no tax on personalty. The land tax, the salt monopoly, lekin, foreign and native customs duties, and the proceeds of sales of honors and offices make up the revenue of the state.

To the absence of taxation of the body of the people may well be ascribed the permanence of the Government and the tranquillity and contentment of the Chinese race.

I have, etc.,

Charles Denby.
  1. Deeds of this character are always written on red paper, the following on white paper; hence the names “red” and “white” deeds.