The Legation sets forth certain arguments adduced by the Chinese
authorities in support of their contention that they have the right to
abrogate these Rules without consultation with the interested powers and
states that, although the Legation believes that it would be futile to
attempt to obtain a modification of this position of the Chinese
authorities, the Legation will, pending the receipt of instructions from
the Department, continue as heretofore to maintain that the Rules of
1868 remain in force until revised by mutual agreement and to reserve
the right of the United States and of American nationals with respect to
all acts by the customs and other authorities of the Chinese Government
in contravention of those Rules.
The Department is in accord with the Legation’s view that it would
probably be ineffective to make any further attempt at this time to
obtain a modification of the position of the Chinese authorities. The
Department is still of the opinion, however, that the Rules cannot be
legally abrogated or modified without the consent of the interested
governments, and it therefore approves the Legation’s decision to
continue, whenever necessary, to maintain that the Rules remain in force
until revised by mutual agreement, and to reserve the rights of the
United States and its nationals with respect to all acts by the [Page 586] customs and other authorities
of the Chinese Government in contravention of those Rules.
Although it is not deemed desirable at this time to continue the
controversial discussion of the status of the Rules of 1868, the
Department desires to emphasize the view previously communicated to the
Legation that the Sino-American Tariff Treaty of 1928 did not accord to
the Chinese Government any right to assume jurisdiction over the persons
or property of American nationals. It strongly dissents, therefore, from
the contention in the Foreign Office note of March 7, 1934, “that
confiscation and fines are administrative rights of the Maritime Customs
and have no relation at all to extraterritorial rights.”
Although certain provisions of treaties between the United States and
China might seem to constitute a waiver of American jurisdiction over
American citizens and their property in China, in certain cases
involving violation of the customs laws, the Department has, at least
for many years past, insisted that the determination of the alleged fact
of violation of any of the treaty provisions mentioned is the exclusive
right of the appropriate American officials, and it has refused to
permit Chinese authorities to fine American citizens or to confiscate
their property under the treaty provisions in question. The Department
is accordingly unable to admit the contention of the Foreign Office that
the Chinese authorities were empowered by the treaty provisions
mentioned in the Foreign Office note of March 7, “to dispose of the
property of foreign (American) merchants” without the intervention of
the appropriate American representatives.
Although the record of the negotiations leading to the adoption of the
Rules of 1868 indicates some recognition of the alleged right of the
Chinese authorities to confiscate goods of extraterritorial nationals
because of customs violations, it apparently was never admitted that the
Chinese authorities were competent to impose fines on extraterritorial
nations for alleged customs violations, and whatever authority the
Chinese Government may have claimed with respect to confiscation of the
goods of foreigners was definitely waived by the adoption of the Rules
of 1868, and no provision of the Sino-American Tariff Treaty of 1928 can
reasonably be held to affect the status of the Rules in any way.
As of possible assistance to the Legation in any further consideration of
the subject under reference, there is transmitted herewith a summary of
treaty provisions which appear to warrant examination in connection with
the question of the establishment and present status of the Rules of
1868, together with a brief discussion of the negotiations [Page 587] leading to the adoption of the Rules,
including pertinent excerpts from official correspondence on the
subject.64
The Department would be glad to learn the attitude of other interested
governments in regard to the Chinese Government’s disregard of the Rules
of 1868, and whether other foreign nationals have been adversely
affected by that action.
An extra copy of this instruction and enclosures therewith is enclosed
for the information of the Counselor of Legation at Nanking.
[Enclosure]
Summary of treaty provisions: Rules of 1868
Adopted by Agreement Between the Chinese Government and
Representatives of Foreign Powers Providing for Joint
Investigation by Chinese Authorities and Foreign Representatives
in Cases of Confiscation and Fines in Customs
Matters
The provisions of treaties between the United States and China which
are summarized hereinafter would appear to be of interest in
connection with the question of the adoption and present status of
the Rules of 1868.
The Chinese authorities apparently interpreted some of these treaty
provisions and similar provisions in treaties with other governments
as authorizing them independently to fine foreign nationals and to
confiscate their goods in cases of alleged customs violations. This
interpretation was contested by interested foreigners and resulted
in frequent disputes between foreigners and Chinese authorities.
Discussions between representatives of the foreign powers and the
Chinese Government were undertaken with a view to reaching a
mutually satisfactory agreement and these discussions finally
resulted in the adoption of the Rules of 1868, which were, in
effect, a compromise of conflicting views.
The Sino-American treaties of 1844 and 1858 imposed upon American
nationals with respect to trade certain obligations and
restrictions, as follows:
- 1.
- American nationals were not permitted to sell, purchase
and export merchandise, the importation or exportation of
which was prohibited by treaty (Article V of the 1844
treaty) or by Chinese law (Article XV of the 1858
treaty).
- 2.
- American nationals were required to pay import and export
tariff duties (Article II of the 1844 treaty and Article XV
of the 1858 treaty).
- 3.
- American nationals were required to pay tonnage dues
(Article VI of the 1844 treaty and Article XVI of the 1858
treaty).
- 4.
- American nationals were not permitted to repair to public
marts for the purpose of disposing of goods unlawfully and
in fraud of revenue (Article XVII of the 1844 treaty and
Article XII of the 1858 treaty).
- 5.
- American nationals engaged in clandestine trade or in the
opium or other contraband traffic were to be dealt with by
the Chinese authorities without protection of the American
Government (Article XXXIII of the 1844 treaty and Article
XIV of the 1858 treaty).
- 6.
- American vessels engaged in clandestine and fraudulent
trade were subject to confiscation, together with their
cargo (Article III of the 1844 treaty and Article XIV of the
1858 treaty).
- 7.
- American goods discharged without customs permit were
subject to forfeiture and the supercargo, master or
consignee were to incur a fine of $500 (Article X of the
1844 treaty and Article XIX of the 1858 treaty).
- 8.
- American goods transshipped without customs permit were
subject to forfeiture (Article XIV of the 1844 treaty and
Article XXI of the 1858 treaty).
- 9.
- American vessels transporting in time of war officers,
soldiers or cargo of an enemy to China were subject to
confiscation (Article XXII of the 1844 treaty and Article
XXVI of the 1858 treaty).
In subsequent treaties other pertinent provisions of similar
character were added, as follows:
- 1.
- American vessels were prohibited from importing opium into
China or transporting it from one Chinese port to another
(Article II of the 1880 treaty65).
- 2.
- American nationals were prohibited, with certain
exceptions, from importing morphine or instruments for its
injection (Article XVI of the 1903 treaty66).
- 3.
- Chinese subjects and American citizens engaged in opium
traffic were to be dealt with in accordance with appropriate
legislation on the part of China and the United States
(Article II of the 1880 treaty).
In addition to the aforementioned obligations and restrictions, there
are certain provisions of the earlier treaties which have a bearing
on the question of what authorities had jurisdiction in cases of
failure to observe these obligations and restrictions, as follows:
- 1.
- Merchant vessels at the treaty ports were to be entirely
under the jurisdiction of the American authorities (Article
XXVI of the 1844 treaty).
- 2.
- Merchants, seamen and other citizens of the United States
were to be under the superintendence of the appropriate
officers of their Government (Article XXIX of the 1844
treaty and Article XVIII of the 1858 treaty).
- 3.
- The regulation of such privileges and immunities in
respect of trade and navigation as are not provided for in
the treaties were not relinquished by China although the
regulation of such must be exercised in a manner or spirit
not incompatible with treaty stipulations (Article II of the
Additional Articles of 186867).
In connection with the above, it is interesting to note certain
observations of Minister Burlingame, as contained in an instruction
to Consul General Seward at Shanghai, under date June 15, 1864 (copy
of entire despatch attached as of possible interest68), as follows:
“That the Chinese Government having, by treaty yielded
jurisdiction over the persons of our citizens, so that it
cannot punish them even by fine, it is obligatory upon us to
punish them for infractions of the treaty and
regulations.…
“The Chinese Government cannot be compelled to plead in the
consular courts at the suit of any one; hence controversies
between the consulates and the customs, if they cannot be
arranged, become diplomatic questions to be referred to
Peking.…
“The Chinese Government may confiscate goods landed in breach
of port regulations; but only those in respect to which the
infringement of the regulation was committed;—that is to
say, those landed and not those still on board.…
“In cases of fine, where the words ‘not exceeding’ are
attached to the penalty, the consul may fix a smaller sum;
but where the sum is fixed there is no option, and the
consul upon proof must inflict the fine; and all efforts to
mitigate such fine must proceed upon equitable grounds, and
not as matter of legal right.…
“If the Chinese authorities confiscate without sufficient
proof of breach of regulations, then the aggrieved party
may, through the consul, appeal against such action to the
minister at Peking, whose duty it will be to reclaim against
the Chinese Government; but in no case is the citizen, or
the consul for him, to take the law into his own hands. This
would relieve the Chinese Government from that
responsibility which should attach to it, and render all
friendly relations impossible.…
“To secure an honest application of the confiscation power, I
have, in conjunction with my colleagues, urged the
establishment of a joint tribunal or mixed commission to sit
in confiscation cases. The Chinese authorities have yielded
this in principle, leaving the details to be arranged by the
consuls and local authorities, first at Shanghai
provisionally, and afterwards at the other treaty ports if
found to work well. This will satisfy both sides and
facilitate settlements at the ports; or if the cases shall
come to Peking by classification and arrangement of the
evidence make decisions practicable.…”
[Page 590]
The rules for joint investigation in such cases were first agreed to
in principle between China and the representatives of the foreign
powers about June 1864, as evidenced by despatch No. 82, under date
June 6, 1864, from Minister Burlingame (copy attached70). In 1868, these rules were finally agreed
upon and put into effect at all the treaty ports. Chargé S. Wells
Williams communicated pertinent information in regard thereto to the
Department in his despatch No. 17, under date July 2, 1868, and
enclosures (copies attached71). In connection with that
despatch and its enclosures, it is important to note certain
excerpts (underlining by the Department72) as follows:
“I have the honor to forward to you the eight rules agreed on
between Prince Kung and the foreign
ministers for the conduct of the joint tribunal in
cases of confiscation and fines for breach of revenue laws
…” (First paragraph of despatch No. 17).
“These eight rules are the result of several years’ efforts
to adjust the workings of a very difficult part of our
international obligations with due regard
to the entire independence of each party. The
experience of three years at Shanghai had shown the Chinese
authorities how advantageously the three Rules … relating to confiscation had worked, and
they were thus prepared with more confidence to add
similar ones relating to fines and disputed
duties.…” (Second paragraph of despatch No. 17).
“… These rules, for example, contain principles whose
equitable adjustment would have baffled them (the Chinese)
completely, even if they had been disposed to adopt them;
but guided by experience acquired elsewhere, the rights of each nation have been easily
guarded, and the Chinese themselves admit that no
infringement of their rights has been urged upon
them …” (Fifth paragraph of despatch No. 17).
Mr. Williams in the seventh [fourth] paragraph
of his note of February 17, 1868,73 to
Prince Kung stated:
“… It must constantly be borne in mind that the power to levy
fines upon American citizens belongs alone to the United
States’ Consuls; and that when the case has been tried, and
the money paid to him, he then will pay it to the Collector
of the Customs.”
In communicating the final draft of the Rules to Mr. Williams, Prince
Kung in the last paragraph of his note of May 29, 1868,74 stated as
follows:
“Exact copies of these eight Rules thus amended are now,
therefore, sent to the Foreign Ministers in Peking; and
orders have likewise been transmitted to the two
Superintendents of Trade for the northern and southern
ports, and to the Inspector-General of Customs, enjoining
[Page 591] their
observance of them. With the enclosed copy now sent to your
Excellency, I have to request that you
will direct them to be observed by the various consuls
of the United States in China.”
In his instruction of June 8, 1868, communicating the text of the
Rules to the American Consuls in China, Mr. Williams in the fourth
[third] paragraph of that instruction
stated views which the foreign ministers entertained at that time,
namely, that the Chinese authorities had under the treaties been
given the right to confiscate while the right to fine had been
retained by the foreign authorities, as follows:
“Growing out of this is the indication of the equality of the
native and foreign authorities when brought together on the
same tribunal. It has been arranged by requiring that cases
of confiscation (the power of doing which has been by treaty
yielded to the Chinese) shall be investigated and decided at
the customhouse; while cases of fining an American citizen
for breaches of revenue laws shall be tried at the
Consulate—in both cases the officers of both nationalities
sitting together on the bench.”
The foregoing establishes that the Rules of 1868 were agreed upon
between the foreign ministers and representatives of the Chinese
Government and they cannot therefore properly be abrogated or
amended except by consent of the interested governments. In the
opinion of the Department, therefore, the Rules continue in force
and it cannot admit the contention of the Chinese Government that
they were terminated or affected in any way by the Sino-American
Tariff Treaty of 1928.
