Mr. Denby to Mr. Blaine.

No. 1496.]

Sir: I have the honor to inform you that the local authorities at Canton some ten days ago ordered that all goods shipped at Canton on native junks should pay a smaller export duty than goods in foreign bottoms. The effect of this rule was to deprive the steamboat Hues plying between Canton and Hongkong, which are owned by foreigners, of a large portion of the carrying trade. Protests against this action were made by the Hongkong Chamber of Commerce, and were sent to Lord Salisbury, who ordered Her Britannic Majesty’s minister here to take up the question. As the foreign tariff is not technically interfered with, and the reduction applies to the native tariff only, an interesting question was involved. Sir John Walsham discussed the question with me. I advised him that in spirit at least such a discrimination was contrary to the third article of the American treaty of 1880. (See Treaties 1776–1887, p. 184.) This article reads as follows:

His Imperial Majesty the Emperor of China hereby promises and agrees that no other kind or higher rate of tonnage dues or duties for imports or exports or coastwise trade shall be imposed or levied in the open ports of China upon vessels wholly belonging to citizens of the United States or upon the produce, manufactures, or merchandise imported in the same from the United States or from any foreign country, or upon the produce, manufactures, or merchandise exported in the same to the United States or any foreign country or transported in the same from one open port of China to another, than are imposed or levied on vessels or cargoes of any other nation, or on those of Chinese subjects.

While it might be argued that the foreign tariff is not at all changed by reducing export duties in the native tariff, still it is plain that such reduction operates exactly as if the foreign tariff were increased, and [Page 100] secures a great advantage to the owners of native junks. If goods shipped on native junks were to pay no export duty it is plain that all goods would be shipped on native junks to the exclusion of foreign bottoms. It is always desirable in construing a treaty to look at instruments contemporaneous with the execution of the treaty. Following this rule in this case I found at pages 198, 199 of Foreign Relations, 1881, the history of the preparation and adoption of Articles of the treaty of 1880 above referred to.

The existence of the two tariffs, the foreign and native, is mentioned by the commissioners. The dangers of abuse of the native tariff are discussed. The article, which was proposed by the Chinese commissioners, was agreed to by the American commissioners on two grounds:

  • First. Because it makes the Imperial Government directly responsible to us for any maladmistration in the Chinese customs of which we may have reason to complain.
  • Second. A treaty stipulation like this tends to diminish the power of provincial officers and to increase that of the imperial authorities.

I think that it is fair to conclude that the action taken by the Canton authorities is contrary to the treaty.

Sir John Walsham had, on the 20th instant, an interview with the Yamên, and complained of the action stated, and believes that the action of the Canton authorities will be rescinded.

I have, etc.,

Charles Denby.