Mr. Rockhill to Mr. Hay.
Peking, China, June 25, 1901.
Sir: Article XI of the Joint Note of the 22d of December last stipu lates that “The Chinese Government agrees to negotiate theamendments deemed necessary by the foreign governments to the treaties concerning commerce and navigation and other subjects touching commercial relations, with the object of facilitating them.”
Throughout the present negotiations the representatives of the powers have deemed it advisable not to broach commercial questions, reserving their consideration until after the final settlement of the other articles of the Joint Note. The only exception which has been made was the agreement, which I secured during the recent discussions concerning the revenues to be used by China in the payment of interest on indemnities, to ask of China, in consideration of the increase of the tariff on imports to an effective 5 per cent, that the Chinese Government should undertake the improvement of the waterways leading to Shanghai and Tientsin, and also revise the customs tariff on imports.
All of my colleagues are of opinion that any negotiations on commercial subjects must be deferred until next winter at least, and many of them think it will be quite impracticable for all the powers to negotiate jointly on these subjects with the Chinese Government, most of them believing that if such a plan were adopted negotiations would be greatly protracted and probably no practical results obtained.
Most of the obstacles to trade, of which the American as well as other foreign merchants in China complain, are so intimately connected with the question of inland taxation that unless some method can be devised for either abolishing the inland tax or regulating it more satisfactorily than at present, it seems to me improbable that any great results can be expected from a revision of our commercial treaties.
Forseeing this difficulty to future negotiations, my Japanese colleague and I submitted to the diplomatic corps the memorandum, copy of which I sent you in my No. 114, of the 11th instant, advocating a raising of the tariff on imports to 10 per cent with compensating commercial advantages. It is a matter of great regret that the opposition of the British representative here prevented its discussion, for it was, in its general line, acceptable to the Chinese Government and, I believe, might have secured promptly to foreign commerce more advantages than it seems likely to gain for some years to come, if the plan of jointly negotiating treaty revision is carried out.
In your dispatch No. 20, of April 11 last, you outlined the views of the United States concerning treaty revision. As instructed by you, I have sounded my colleagues on the views contained in the instruction cited, and while many of the points you mention therein are in entire agreement with the instructions they have from their own governments [Page 253] and coincide with their own views, others, they are inclined to think, are of doubtful expedience, or impracticable. Among these latter I may mention the throwing open of the whole of China to foreign residence and trade, and the provision that the principal commercial powers should have advisory representation in the customs administration. The extraterritorial rights of foreigners would create endless difficulties to China and the powers if foreigners of all classes were given a free run all over the Empire. This is but one objection to the proposal; there are others of a political character, perhaps even more serious, * * * * * * *
As regards the proposal that the principal commercial powers shall have advisory representation in the customs administration, it is claimed, and think rightly, by my colleagues that it would be impossible to exclude any of the powers from such representation and, further, such representation would result in bringing about just what all of the powers have been seeking to prevent, i. e., direct international interference in the financial administration of the Empire.
As to your suggestion that some of the articles on the tariff of imports be subjected to a duty as high as 15 per cent, this will also be strongly objected to, especially by the Japanese, who will not, I have been repeatedly told, agree to any raising of the Chinese tariff above 10 per cent, which is practically all that Japan has been able to secure for herself under her recently negotiated treaties.
All of my colleagues approve, in principle, of the suggestion made by you “that the farming of China’s revenues should be restricted, if not wholly discontinued, and a uniform and honest Imperial fiscal system substituted;” but, while deeming it highly advantageous to China, as well as to foreign interests in China, they are of opinion that it must be the gradual outcome of general reform of the Empire, which we all hope for, but which few, if any, of us will live to see carried through, if present indications are not absolutely misleading.
I am, etc.,