CHINESE MARITIME CUSTOMS 559 authorities could assert control over a new and badly needed source of revenue.Two years later,when H.N.Lay,the first I.G.,got into an open dispute with the Zongli Yamen about his role,and his proper relationship with Qing authorities,his threat to take over actual collection of taxes and insist on a veto on how these were used greatly contributed to his firing.23 Two examples from the 186os illustrate the ways in which Hart facilitated the work of the Zongli Yamen,and its leadership group.In the summer of 1862,during Hart's second visit to Beijing,the Yamen received permission to establish an interpreter's school(tongwen guan) to train interpreters and future diplomats.The funding for the school came from an obscure part of the Customs revenues-tonnage dues collected from each ship entering treaty ports-this presumably came at Hart's suggestion.The Yamen received 30%of these revenues, an amount which ranged over the next twenty years from a low of just under 45,ooo treasury (kuping)taels in 1863-64 to a high of over 93,ooo in 1882-83.This dwarfed the regular payment from the Board of Finance (which ranged between 7ooo and 8ooo taels)and was far in excess of the needs of the new Interpreter's School.The surplus funds were used for a variety of pet Zongli Yamen projects.These included the everyday needs of a new administrative office such as hiring night watchmen and providing money for tea and other minor necessities. It funded an archives bureau to organize and maintain records.There were regular contributions to pet projects:the Firearms Division(shenji ying referred to by foreigners as the Peking Field Force)a reorganized division of Banner troops,equipped with Russian rifles,French cannon and trained by British drillmasters,which was supposed to enhance defense of the capital.When Wenxiang took several thousand of these and other troops to suppress a rebellion in southern Manchuria in 1866,major contributions for the campaign came out of the Yamen's reserves,which originated in the 30%tonnage dues24 A second example of Hart's contribution to the Zongli Yamen comes from his intervention in foreign loan negotiations.Beginning in the 185os,provincial authorities had borrowed money from foreign 23 Horowitz,Mandarins and Customs Inspectors,44-7. 24 For a breakdown of income and expenditures,see Chen Wenjin,Qingdai zhi zongli yamen ji qi jingfei'Zhongguo jindai jingji shi yanjiu jikan,1.1 (1932),49-59- For 1864-66 the reports in the Grand Council files of the First National Historical Archives in Beijing provide more detail,see junjichu lufu yangwu 9430-15,9430- 31,9431-2.On the Firearms Division in the Manchurian campaign,see Wenxiang, 3:48-54
CHINESE MARITIME CUSTOMS 559 authorities could assert control over a new and badly needed source of revenue. Two years later, when H. N. Lay, the first I. G., got into an open dispute with the Zongli Yamen about his role, and his proper relationship with Qing authorities, his threat to take over actual collection of taxes and insist on a veto on how these were used greatly contributed to his firing.23 Two examples from the 1860s illustrate the ways in which Hart facilitated the work of the Zongli Yamen, and its leadership group. In the summer of 1862, during Hart’s second visit to Beijing, the Yamen received permission to establish an interpreter’s school (tongwen guan) to train interpreters and future diplomats. The funding for the school came from an obscure part of the Customs revenues—tonnage dues collected from each ship entering treaty ports—this presumably came at Hart’s suggestion. The Yamen received 30% of these revenues, an amount which ranged over the next twenty years from a low of just under 45,000 treasury (kuping) taels in 1863–64 to a high of over 93,000 in 1882–83. This dwarfed the regular payment from the Board of Finance (which ranged between 7000 and 8000 taels) and was far in excess of the needs of the new Interpreter’s School. The surplus funds were used for a variety of pet Zongli Yamen projects. These included the everyday needs of a new administrative office such as hiring night watchmen and providing money for tea and other minor necessities. It funded an archives bureau to organize and maintain records. There were regular contributions to pet projects: the Firearms Division (shenji ying referred to by foreigners as the Peking Field Force) a reorganized division of Banner troops, equipped with Russian rifles, French cannon and trained by British drillmasters, which was supposed to enhance defense of the capital. When Wenxiang took several thousand of these and other troops to suppress a rebellion in southern Manchuria in 1866, major contributions for the campaign came out of the Yamen’s reserves, which originated in the 30% tonnage dues24 A second example of Hart’s contribution to the Zongli Yamen comes from his intervention in foreign loan negotiations. Beginning in the 1850s, provincial authorities had borrowed money from foreign 23 Horowitz, ‘Mandarins and Customs Inspectors,’ 44–7. 24 For a breakdown of income and expenditures, see Chen Wenjin, ‘Qingdai zhi zongli yamen ji qi jingfei’ Zhongguo jindai jingji shi yanjiu jikan,1.1 (1932), 49–59. For 1864–66 the reports in the Grand Council files of the First National Historical Archives in Beijing provide more detail, see junjichu lufu yangwu 9430–15, 9430– 31, 9431–2 . On the Firearms Division in the Manchurian campaign, see Wenxiang, 3:48–54
560 RICHARD S.HOROWITZ merchants,pledged Customs returns as security.This informal system occasionally produced problems,but worked well enough for foreign merchants to continue to lend.25 But in 1867,the Zongli Yamen received a letter from an outraged Zeng Guofan,the Governor-General of Jiangnan and Jiangxi.The Shanghai Customs Commissioner,George FitzRoy had refused to sign a guarantee on a foreign loan negotiated by Zuo Zongtang to provide urgently needed financing for his campaign against Muslim rebels in the Northwest. Apparently FitzRoy believed that signing these notes would make him personally responsible for the loan repayment.Describing FitzRoy's action as 'inexcusably pigheaded'Zeng demanded that the Yamen order Hart to resolve the problem.The Yamen,in more temperate terms referred the issue to Hart,urging quick action.26 Hart responded with a fascinating letter,which both accepted the Yamen's order and turned Qing foreign loan policy in a new direction.If the government, he wrote, has urgent and important matters to deal with and no other resources with which to meet the need,then negotiating loans among the people is truly not something which could be said to be dishonorable.Indeed borrowing the peoples'wealth to be able to firmly administer affairs also has benefits for the people and indeed proceeds from the public interest.Furthermore,people who lend money to the government will want to bless the country with eternal glory.But if the loans are not repaid this is dishonorable. Hart goes on to comment on interest rates,pointing out that local governments had paid interest as high as 6%p.a.on foreign loans, equivalent to the rate paid by Chinese merchants for emergency loans. By contrast,he asserts,in Europe information on interest rates in all countries is readily available,and if investors heard of a secured short-term bond issue paying 6%interest they could not help quietly smiling at each other.'Hart concludes by reassuring the Yamen that he would write FitzRoy telling him that the loan was approved by the throne and he must endorse it.Further,Hart states that he would 25 The number of these loans is open to debate,Zhongguo renmin yinhang,comp, Zhongguo Qingdai waizhai shiziliao(Beijing:Zhongguo jin rong chu ban she,1991),137 lists eighteen,but the evidence is fragmentary (see the documentation pp.1-23). 26 Zongli Yamen Archives,Institute of Modern History,Academia Sinica,Taipei [hereafter ZY]01-32/1 (1),Zeng-Guofan-Zongli Yamen,TZ6.6.5 (July 6,1867). Zongli Yamen-Hede (Robert Hart)TZ6.6.13 (July 14,1867).On FitzRoy's concerns see China,Maritime Customs,Documents Illustrative of the Origin,Development and Activities of the Chinese Customs Service (Shanghai:Statistical Department of the Ins- pectorate General of Customs,1937-1940),vi,228
560 RICHARD S. HOROWITZ merchants, pledged Customs returns as security. This informal system occasionally produced problems, but worked well enough for foreign merchants to continue to lend.25 But in 1867, the Zongli Yamen received a letter from an outraged Zeng Guofan, the Governor-General of Jiangnan and Jiangxi. The Shanghai Customs Commissioner, George FitzRoy had refused to sign a guarantee on a foreign loan negotiated by Zuo Zongtang to provide urgently needed financing for his campaign against Muslim rebels in the Northwest. Apparently FitzRoy believed that signing these notes would make him personally responsible for the loan repayment. Describing FitzRoy’s action as ‘inexcusably pigheaded’ Zeng demanded that the Yamen order Hart to resolve the problem. The Yamen, in more temperate terms referred the issue to Hart, urging quick action.26 Hart responded with a fascinating letter, which both accepted the Yamen’s order and turned Qing foreign loan policy in a new direction. If the government, he wrote, has urgent and important matters to deal with and no other resources with which to meet the need, then negotiating loans among the people is truly not something which could be said to be dishonorable. Indeed borrowing the peoples’ wealth to be able to firmly administer affairs also has benefits for the people and indeed proceeds from the public interest. Furthermore, people who lend money to the government will want to bless the country with eternal glory. But if the loans are not repaid this is dishonorable. Hart goes on to comment on interest rates, pointing out that local governments had paid interest as high as 6% p.a. on foreign loans, equivalent to the rate paid by Chinese merchants for emergency loans. By contrast, he asserts, in Europe information on interest rates in all countries is readily available, and if investors heard of a secured short-term bond issue paying 6% interest ‘they could not help quietly smiling at each other.’ Hart concludes by reassuring the Yamen that he would write FitzRoy telling him that the loan was approved by the throne and he must endorse it. Further, Hart states that he would 25 The number of these loans is open to debate, Zhongguo renmin yinhang, comp, Zhongguo Qingdai waizhai shi ziliao (Beijing : Zhongguo jin rong chu ban she, 1991), 137 lists eighteen, but the evidence is fragmentary (see the documentation pp. 1–23). 26 Zongli Yamen Archives, Institute of Modern History, Academia Sinica, Taipei [hereafter ZY] 01-32/1 (1), Zeng-Guofan-Zongli Yamen, TZ6.6.5 ( July 6, 1867). Zongli Yamen-Hede (Robert Hart) TZ6.6.13 ( July 14, 1867). On FitzRoy’s concerns see China, Maritime Customs, Documents Illustrative of the Origin, Development and Activities of the Chinese Customs Service (Shanghai: Statistical Department of the Inspectorate General of Customs, 1937–1940), vi, 228