12 CHINA'S STRUGGLE FOR TARIFF AUTONOMY THE FIVE PER CENT AD VALOREM TREATY TARIFF 13 themselves than from any positive design to thwart me.Others, G:Balfour,afterwards Consul at Shanghai,to take up their however,seem to me to be influenced by the latter motive alone, residence in the consoo house and to deal there with the co-hong and all have carried on their traffic of late years under a system merchants and the Chinese officials,but Morrison,alive to the which I am.quite certain is unparalleled in any other country, interpretation that would be placed on the acceptance of such and for adopting which the only excuse that can be made is an invitation,wisely declined it.At an early stage in the that it was universal,and that any individual shrinking from discussions,the Chinese delegates,who were supplied with copies it must have been outdone and ruined by his less scrupulous of the Imperial tariff and with details of all the local charges, mercantile competitors.The fact is every individual has.been and who were under pressure from those whose interests were used.to make the best bargain he could for himself and his threatened,handed to Mr.Thom a memorandum proposing that employers through hong merchants,linguists,and other such all articles of import and of export be listed,and that opposite persons;all open to corruption and ready to evade payment of each entry there be inserted in three columns-(a)the Imperial the just dues of the Chinese Government by the most baneful duty,(b)the officially recognized charges,and (c)all other fees and wholesale smuggling,which was moreover winked at and and charges.The proposers suggested that the two former be its unlawful gains shared in by the whole of.the local authorities left untouched,and that the third be divided into ten parts of from the highest to the lowest grade.The consequence is that which so many parts should be retained to cover all costs of no merchant can tell (even supposing he.wished it)what he Custom House maintenance,the remaining number of tenths has actually paid in the shape of duties."1 In spite of the to be done away with.The completed tariff would thus show co-hong and their natural desire to keep foreign traders in (1)the regular duties,that is the combined totals of (a)and ignorance of what actually were the officially recognized taxes (b)above,and (2)the recognized official levy to be used for on trade,that information by a little ingenuity and patience the upkeep of Customs offices and staff.?The proposal was could have been obtained by the foreign merchants if they had not acceptable to the British delegates,but the data tabled were. made up their minds to get it.For the British Plenipotentiary The final result of these tariff negotiations was embodied in a it was all-important that it should be obtained,and so.to make set of tables,prepared by Mr.Thom,giving for all the articles sure that he would have as much reliable data as possible he enumerated in the import and export schedules of the tariff deputed in January 1843 Messrs.J.R.Morrison and R.Thom (a)the duties and charges authorized by the old Imperial tariff, to proceed to Canton to carry out the necessary investigations, (b)the duties and charges actually levied by the Canton and to make preparations for putting into operation the new Customs authorities,(c)the duties proposed,(d)the average Customs procedure called for by the Nanking treaty.?The quantities annually exported or imported,(e)the average price, co-hong wished these deputies,who were assisted by Captain (f)the values of the total annual export or import,(g)the percentage of the proposed duties on these valuations,and (h) 1F.O.228/23;Pottinger to Aberdeen,desp.No.7;6th February 1843. the estimated annual amounts of duty to be realized by the Pottinger's opinion of the British merchants then trading in China was not a flattering one.Writing on 19th January,1843 to-Lord Aberdeen he rates proposed.s In addition to these carefully elaborated tables states:-"I am unwillingly forced to confess that I believe there are others there were also statements showing (a)a comparative estimate who from selfish and interested motives,regard with regret and dissatisfaction of the charges on shipping according to the old and the new the peace that has been concluded,and the prospect of things being placed on a permanent footing alike beneflcial to all the subjects of both Empires, systems,(6)how the apparent loss to the Imperial Treasury who are engaged in trade."F.O.228/23 desp.No.6.Again on the 6th on cotton manufactures,woollen manfactures,and shipping February of the same year he writes:"From some [British merchants]I under the new system is provided for,(c)a rough estimate of have experienced nothing but querulous cavilling and indirect opposition to my anxious measures to place the trade on a permanent and liberal.footing." the gross sum collected on the foreign trade with China under F.O.228/28,desp.No.7;while on 19th July when negotiationg for the tariff were practically completed,he puts it on record that"as a body I 1Ch.Rep.Vol.XII;1848.p.94.F.O.17/66;Pottinger to Aberdeen, can only repeat that the merehants have rendered me no kind of assistance." F.0.228/24desp.No.85. desp.No.6,6th February 1843. iF.O.17/66 F.O.228/23;Pottinger to Aberdeen;desp.No.7.6th 2F.O.228/28;Pottinger to Aberdeen;enelo.No.24 in desp.No.24, February 1843,enclo.No.14,Pottinger to Elipoo,2ist January,1843. 25th Mareh,1843 :3 B.P.P.Statement of the Foreign Trade with China,ete.1844
12 QHINA'S STRUGGLE FOR TARIFF AUTONOMY themselves than from any positive design to thwart me. Others, however, seem to me to be i1)fluenced by the latter motive alone, and all have carried on their traffic Qf late years undet a system which I am ,quite certain is unparalleled in any' other country, and for adopting which the only excuse that can be made is that it was universal, and that any individual shrinking from it must have been outdone and ruined by his less scrupu!OllS mercantile competit()rs. The fact is every individual has, been used. to make the best bargain he could for himself and his e:tllployers through hong merchants, linguists, and other such persons; all. open to. corruption and. ready to .evade payment of the just dues of the Chinese Government by the most baneful and wholesale smuggling, which was moreover winked at and its unlawful gains shared in.by the whol~ of.thelocaI authorities from the highest to the lowest grade. The consequence is that no .merchant ,can tell (even supposing he. wished it) what\he has actually paid in the shape of duties." 1 In spite of t'ije co~hong .and their n~tural desire to keep' foreign traders in' ignoranc'e of what actually wer.e the officially recognized taxes on' trade, that information by a little ingenuity and patience could have been obtained by the foreign merchants if they. had. made up their minds to get it. For the British Plenipotentiary it was all-important that it should be obtained, and so, to make sure that he would have as much reliable data as possible he deputed in January 1843 Messrs. J. R. Morrison and R. Thom to' proceed to Canton to carry out the neces:;;ary· investigations, . and to make. preparations for putting into operation the new c.ustoms procedure called for by the Nanking treaty.2 The co-hong wis~ed these deputies, who were 'assisted by Captain 1 F.O. 228/23; 'Pottinger to Aberdeen, des'p. No.7; 6th February 1843. Pottinger's' opinion of the British merchants then trading in China was not a flattering one. Writing on 19th January, 1843 to,Lord ,Aberdeen he states :-"1 am unwillingly forced to confess that 1 believe there are others. who from selfish and interested motives, regard with regret and dissatisfaction the peace that has been concluded, and the prospect of things being placed on a permanent footing alike beneficial to all the subjects of both Empires, who are engaged in trade." F.O.228/23 desp. No.6. Again on the 6th February of the same year he writes: "From some [British merchants] 1. have. experienced nothing but querulous cavilling and indirect oppositiontp my a.nxious measures to place the trade Q,rt a permanent and Jiberal.footing." F.O. 228/23, d~sp. No.7; while on 111th July when negotiation~ fOr the tariff were practically completed, he puts it on record that-"as a body I ca.n .only repeat that the merchants have rendered me no .kind of assistance." F.O. 228/24; desp. No. 85. 2 F.O. 17/66 F.O. 228/23; Pottinger to Aberdeen;desp .. No.7. 6th February 1843, enClo. No. 14, Pottinger to Elipoo, 21st January, 1843. THE FIVE PER CENTAD'VALOREMTREAT.Y TARIFF 13 G; Balfour, afterwards' Consul at Shanghai, to take up their residence in the consoohouseand to deal there with the co-hong merchants and the Chinese officials, but Morrison, alive to the interpretation that would be placed on the. acceptance of such an invitation, wisely declined it.I At an early stage ill the discussions, the Chinese delegates, who were supplied with copies of tM Imperial tariff and with details of all the local charges, and who were under pressure from those whose interests were threatened, handed to Mr. Thoma memorandum proposing that all articles of' import and of export be listed,. and that opposite each entry there be inserted in three columns-(a) the Imperial duty, (b) the officially recognized charges; and (c) all other fees and charges. The proposers suggested that the two· former be left untouched, and that the third be divided into ten parts of which so many parts should be retained to cover all costs of Custom House maintenance,the remaining nUmber of tenths to be done away with. The completed tariff would thus show (1) the reguhir duties, that is the combined totals of( a) and (b) above,.and (2) th~ recognized official levy to bensed for the upk€ep of Customs offices and staff.2 The proposal was not acceptable ~o the British delegates, but the data tabled were. The final result of these tariff negotiations was embodied in a set of tables, prepared by Mr. Thom, giving for all the articles enumerated' in the import and export schedules of the tariff (a) the duties and chatges authorized by the old Imperial tariff, (b) the duties and charges actually levied by the Canion Customs authorities, (c) the duties proposed,(d) the average quantities annually exported or imported, (e) the average price, (f) the values .of the total annuai export or import, (g) the percentage of the proposed duties on these valuations, and (h) the estimated annual amou.nts of duty to be realized by the ratesproposed. 3 In addition to these carefully elaborated tables there were also statements showing (a) a comparative estimate . of the charges on shipping according to the old and the new systems, (b) how the apparent loss to the Imperial Treasury on cotton manufactures, woollen manfactures, and shipping· under the new system is provided for, (.c) a rough estimate 'of the gross sum collected on the foreign trade with China under 1 Ch. Rep. Vol. XII; 1843.p. 94. F.b. 17166; Pottinger to Aberdeen, desp. No.6, 6th February 1843. 2 F.O. 228/23; Pottinger to Aberdeen; enclo. No .. 24 in desp. No. 24, 25th March, 1843 . 3 B.P.P. Stateme.nt of the . Foreign Trade Ulith China, etc. 1844
14 CHINA'S STRUGGLE FOR TARIFF AUTONOMY THE FIVE PER CENT AD VALOREM TREATY TARIFF the old system and its manner of distribution,and (d)a rough 15 estimate of the gross sums to be collected on the foreign trade For instance,among the exports,the rates for aniseed star, with China according to the new system and the probable camphor,gamboge,rhubarb,raw silk,and vermilion were manner of its distribution.By the middle of June the import reduced by approximately fifty per cent;those for capoor and the export schedules of the new tariff,showing the rates cutchery,glass beads,grasscloth and sugar candy by proposed were ready for submission to Sir Henry Pottinger. approximately sixty-six per cent;those for mats,nankeens,and He considered them very satisfactory,but,judging from other sugar by approximately seventy-five per cent;and those for information at his disposal,thought.that as regarded the china root,brass ware,and turmeric by approximately eighty import schedule-"the scale proposed ..is more advanta- per cent.The only two exports of importance which it was geous for the importer than even the merchants themselves thought should contribute a larger revenue were silk piece goods have ventured to bring forward."His only apprehension was and silver and gold ware,the rate for the former being that the Chinese Government might object to it as being too increased almost fifty per cent while the rate for silverware favourable to foreign importers.The same held true of the and goldware was more than trebled..The rate for tea,the export schedule,and if the Chinese Government were to raise most important export of all,was fixed at two and a half taels objections to either.schedule on the ground of the rates quoted a picul,a rate about twenty-five per cent higher than the old being too low,he authorized the British delegates to sanction rate,of combined imperial and local charges.Among the reasonable increases.1 By the 10th July the Chinese negotiators imports the duty on ginseng 1st quality was reduced by.sixteen had signified their approval of the proposed rates,but at the per cent;the rates for asafoetida,birds'nests 2nd quality, same time insisted that the tariff must be submitted to the long cloths,cow bezoar,lead,steel,tin and smalts were reduced Throne for approval,on the two-fold ground that the treaty by approximately fifty per cent;grey twilled cotton,cutch, stipulated that the tariff should be made known by the Board iron,nutmegs,pepper,putchuk,rattans,and long ells by of Revenue and that if the tariff were not clearly defined by approximately sixty-six per cent;raw cotton cambrics and Imperial decree it was to be feared that the various Customs muslins,gambier and sandalwood by approximately seventy-five Superintendents at the new treaty ports would refuse to act per cent;birds'nests 1st quality,cloves,broadcloth and Spanish in obedience to notifications issued only by the Chinese stripes by approximately eighty per cent;the rate on sapan negotiators.2 In view,however,of the fact that no fewer than wood by approximately eighty-seven per cent;and that on thirty British vessels were waiting to discharge their cargoes, Dutch camlets by approximately ninety per cent.On three but were unwilling to enter because the tariff and the new trade articles of import the duty was increased,namely,cochineal, regulations had not been promulgated,Keying yielded to linen,and quicksilver.In the case of the first article it was Pottinger's urgent representations and declared the port of more than doubled,and for the latter two almost doubled. Canton open under the new system from 27th July 1843. There is nothing to indicate that these new rates were worked Pending receipt of final instructions from Peking the other four out on a five per cent ad valorem basis,in spite of the note ports were,however,still to remain unopened.a The rates, appended to the tariff that articles not enumerated,whether then,of the new tariff agreed upon by the Chinese and the exports or imports,would be liable to duty at that rate.On British negotiators were based on those of the old Imperial the contrary,in the import schedule of the tariff it is expressly tariff of regular duties,exclusive of local charges and fees. stipulated that gums,metals,and woods not enumerated are to These new rates were in the great majority of cases for both pay duty at the rate of ten per cent ad valorem,a fact which exports and imports much lower than those formerly prevailing. clearly shows that a fixed inflexible five per cent ad valorem rate applicable in all cases was not then the fetich that it 1F.O.228/24;enclos.Nos.21 and 22 in desp.No.85,Pottinger to Aberdeen;19th July,1843. afterwards became.A further proof,however,of this will be 2Ibid.enelos.Nos.6;8 and 13 found in the returns of trade for Canton during the year ending 3 F.O.17/68;F.O.228/24;Pottinger to Aberdeen;enclo.No.15 in desp. 31st December,1844,as submitted by the British Consul at No.85,19 th July,1843. 1Ch.Rep.Vol.xI1;1843;pp.393-897
14 CHINA'S STRUGGLE FOR TARIFF AUTONOMY the. old system and its manner of distribution, and (d) a rough eS~lmate .of the gross sums to be collected on the foreign trade wIth Chma according to the new system and the probable manner of its distribution. By the middle of June the import and the export schedules of the new tariff, showing the rates propose~ were ready for submission to Sir Henry Pottinger. !Ie consIdered them very satisfactory, but, judging from other ~nformation at his disposal, thought, that as regarded the Import schedule-Hthe scale proposed . . . is more advantageous for the importer than even the merchants themselves have ventured to bring forward." His only apprehension was that the Chinese Government might object to it as being too favourable to foreign importers. The same held true of the . export schedule, and if the Chinese Government were to raise ob!ections to either. schedule on. the ground of the rates quoted bemg too low, he authorized the British delegates to sanction reasonable increases'! By the 10th July the Chinese negotiators had signified their approval' of the proposed rates but at the same time insisted that the tariff must be submitted to the T~rone for approval, on the two-fold ground that the treaty stipulated that the tariff should be made known by the Board of Re~enue and .that if the tariff were not clearly defined by Imperial decree It was to be feared that the various Customs Superintendents at the new treaty ports would refuse to act in obedience to notifi.cations issued only by the Chinese negotiators.2 In view, however, of the fact that no fewer than thirty British. v.essels were waiting to discharge their cargoes, but were unwIllmg to enter because the tariff and the new trade regulations had not been promulgated, Keying yielded to Pottinger's urgent representations and declared the port of Cant~n open. under the new system from 27th JUly 1843. Pendmg receIpt of final instructions from Peking the other four ports were, however, still to remain unopened. 3 The rates, then, of the. new tariff agreed upon by the Chinese and the Bri~ish negotiators were based on those of the old Imperial tanff of regular duties, exclusive of local charges and fees. These new rates were in the great majority of cases for both exports and imports much lower than those formerly prevailing. 1 F.O. 228/24; enclos. Nos. 21 and 22 in desp. No. 85 Pottinger to Aberdeen; 19th July, 1843. ' 2 Ibid. enclos. Nos. 6; 8 and 13 3 F.O. 17/68; F.O. 228/24; Pottinger to Aberdeen; enclo. No. 15 in desp. No. 85, 19th July, 1843. 'fHE FIVE PER CENT AD VALdREM TREATY TARIFF 15 For instance, among the exports, the rates for aniseed star, camphor, gamboge, rhubarb, raw silk, and vermilion were reduced by approximately fifty per cent; those for capoor cutchery, glass beads, grasscloth and sugar candy by approximately sixty-six per cent; those for mats, nankeens, and sugar by approximately seventy-five per cent; and those for china root, brass ware, and turmeric by approximately eighty per cent. The only two exports of importance which it· was thought should contribute a larger revenue were silk piece goods and silver and gold ware,therate for the former being increased .almost fifty per cent while the rate for silverware and goldware was more than trebled. The rate for tea, the most important export of all, was fixed at two and a half taels a picuI, a rate about twenty-five per cent higher than the old rate. of combined imperial and local charges. Among the imports the du'ty on ginseng 1st quality was reduced by. sixteen per cent; the rates for asafoetida, birds' nests 2nd quality, long cloths, cow bezoar, lead, steel, tin and smalts were reduced by approximately fifty per cent; grey twilled cotton, cutch, iron, nutmegs, pepper, putchuk, rattans, and long ells by approximately sixty-six per cent; raw cotton cambrics and muslins, gambier and sandalwood by approximately seventy-five per cent; birds' nests 1st quality, cloves, broadcloth and Spanish stripes by approximately eighty per cent; the rate on sapan wood by approximately eighty-seven per cent; and that on Dutch camlets by approximately ninety per cent. On three articles of import the duty was increased,. namely, cochineal, linen, and quicksilver. In the case of the first article it was more than doubled, and for the latter two almost doubled. 1 There is nothing to indicate that these new rates were worked out on a five per cent ad valorem basis, in spite of the note appended to the tariff that articles not enumerated, whether exports or imports, would be liable to duty at that rate. On the contrary, in the import schedule of the tariff it is expressly stipulated that gums, metals, and woods not enumerated are to -pay duty at the rate of ten per cent ad valorem, a fact which clearly shows that a fixed inflexible five per cent ad. valorem rate applicable in all cases was not then the fetich that it afterwards became. A further proof, however, of this will be found in the returns of trade for Canton during the year ending 31st December, 1844, as submitted by the Brltish Consul at / 1 Ch. Rep. Vol. XII; 1843;pp. 393-397
THE FIVE PER CENT AD VALOREM TREATY TARIFF 17 CHINA'S STRUGGLE FOR TARIFF AUTONOMY and paper the rate was five and a half per cent;for sugar six that port.1 Taking the values there given for the total quantity per cent;for sugar candy six and a half per cent;for alum of each article imported or exported,and assuming that these and aniseed star eight per cent;for China root eight and a values did not differ radically from those obtaining in the year half per cent,and for tea,the most important export of all, previous,we can,by applying the new treaty tariff to the total ten and three quarters per cent,-a rate which illustrates the quantity.of each article,contrast what would have been the monopoly then'enjoyed by China in this article,and contrasts outturn from a fixed five per cent levy and the total amount with the present duty-free treatment brought about by China's actually levied under the tariff rates.Such a contrast enables loss of leadership in this trade through failure or inability to the calculation,with approximate accuracy,of the percentage meet competition from other producing countries.The above of the new tariff rates on the values then prevailing.Applying ad valorem percentages,it should be noted,differ,in some cases this test we find conclusive evidence that the first treaty tariff widely,from those worked out by Mr.Thom at the time the was not constructed on the basis of an inflexible five per cent drafting of the tariff was in progress.According to the values ad valorem rate.Among the imports the only article which taken for the compilation of his tables the lowest duty percentage adhered to the five per cent rate was camlets,while that for on such values for imports was a quarter of one per cent for broad woollens was actually as low as four per cent,perhaps birds'nests,and the highest was eighty per cent for first quality purposely so in order to encourage trade in these goods.On ginseng.Between these two rates there were all varieties of the other hand,the rate on narrow woollens and Spanish stripes percentages;-two-thirds of one per cent for real gold or was as high as seven and a half per cent.On cochineal,grey silver thread,three-quarters of one per cent for imitation gold cotton long cloths,twilled cottons,and saltpetre the rate was or silver thread,one and a third per cent for mace,two per approximately five and a half per cent;on betel nuts,white cent for bicho-de mar,four per cent for fish maws,copper, cotton long cloths,and on cotton yarn it was six per cent;on quicksilver,nutmegs and sharks'fins,four and a half to four raw cotton six and a half per cent;on cotton handkerchiefs and three-quarters per cent for imitation camlets and flannel, a little over seven per cent;on sharks'fins eight per cent;on five per cent for beeswax,and for a number of ad valorem goods sandalwood and tin a little over eight per cent;on rattans nine such as clocks,watches,optical goods,dressing cases,cutlery, per cent;on ginseng,taking the whole import as second quality, perfumery,ginghams,dyed cottons,velveteens,silk and cotton almost ten per cent;on cotton chintzes and prints ten per cent; mixtures,woollen and cotton mixtures,fancy goods,glass and 'on pepper'and wrought iron eleven and a half per cent;and crystal ware,manufactured copper,wines,beer,and spirits, on lead,the highest rate of all,namely,thirteen per cent.The broadcloth,Spanish stripes,bunting and woollen yarn,five and rates for exports were fixed mostly below the five per cent a third per cent on cotton,grey cotton manufactures,twilled level,the object probably being to stimulate the export trade cotton cloth,cotton yarn,cotton thread,skins and furs,and and thus help to check the unwelcome outflow of silver then woollen blankets of all kinds,six per cent on linen,mother-of- neeessary to pay for the heavy import of smuggled opium.For pearl shells,tinplate,saltpetre,and English camlets,six and a fans the rate was as low as one and a half per cent;for half to six and three-quarters per cent on cochineal,white grasscloth one and three quarters per cent;for lacquered ware cotton longcleths,cow and ox hides,and Dutch camlets,seven and silk piece goods two and a half per cent;for silk ribbons per cent on camphor,eight per cent on canvas,unicorn and two and three quarters per cent;for nankeens and chinaware rhinoceros horns and long ells,nine per cent on betelnuts,gum a little less than three per cent;for rhubarb a little over three benjamin,buffalo and bullocks'horns,spelter,rattans,rose per cent;for silk refuse three and a half per cent;for mats maloes,soy,stockfish,seahorse teeth,and sapan wood,nine and and raw silk less than four per cent;for cassia lignea and a half per cent on second quality cloves,and tin,ten per cent cassia oil less than five per cent;though for cassia buds the on first quality cloves,cornelian beads,handkerchiefs,gum rate worked out at ten and a half per cent;for aniseed oil 1 On the other hand it should be remembered that at the time of the 1 B.P.P.Returns of Trade at the Ports of.Canton,Amoy and Shanghai, for the year 1844 received from Her Majesty's Plenipotentiary in China. signing of the Treaty of Nanking the import duty on tea into the United London1845;pp.24-25. Kingdom stood at rates yarying from 200 to 850 per cent ad valorem
16 CHINA'S STRUGGLE FOR TARIFF AUTONOMY that port,! Taking the values there given for the total quantity of each article imported or exported, and assuming that these values did not differ radically from tho.se obtaining in the year previous, we Gan, by applying the new treaty tariff to the total quantity. of each article, contrast what would have been the outturn from a fixed five per cent levy and the total amount actually levied under the tariff rates. . Such a contrast enables the calculation, ,with approximate accuracy, of the percentage of the new tariff rates on the values then prevailing. Applying this test we find conclusive evidence that the first treaty tariff was not constructed oh the basis of an inflexible five per 'cent ad valorem rate; Among the imports the. only article which adhered to the five per cent rate was camlets, while that for broad woollens was actually as low as four per cent, perhaps. purposely so in order to encourage trade in these goods. On the other hand, the rate on narrow woollens and Spanish stripes was as high as seven and a half per cent. On cochineal, grey cotton long cloths, twilled cottons, and saltpetre the rate was approximately five and a half per cent; on betel nuts, white. cotton long cloths, and on cotton yarn it was six per cent; on raw cotton six and a half per· cent; on cotton handkerchiefs a little over seven per cent; on sharks' fins eight per cent; on sandalwood and tin a little over eight per cent; on rattans nine per cent; on ginseng, taking the whole import as second quality, almost ten per cent; on cotton chintzes and prints ten per cent; 'on pepper· and wrought iron eleven and a half per cent; and on lead, the highest rate of all, namely, thirteen per cent. The rates tor exports were fixed mostly below the five per cent level, the object probably being to stimulate the export trade and thus help to check the unwelcome outflow of silver· then necessary to pay for the heavy import of smuggled opium. For fans the rate was as low as one and' a half per cent; for grass cloth one and three quarters per cent; for lacquered ware and silk piece goods two and a half per cent; for silk ribbons two and. three quarters per cent; for nankeens and chinaware a little less than three per cent; for rhubarb a little over three per cent; for silk refuse three and a half per cent; for mats and raw silk less than four per cent; for cassia lignea and cassia oil less than five per cent; though for cassia buds the rate worked out at ten and a half per cent; for aniseed oil . 1 B.P.P .. Returns of Trade at the Pot·ts 0/ Canton, Amoy and Shanghai, for the year 1844 received from Her Majesty's Plenipotentiary in China. London 1845; pp. 24-25. 'fHE FIVE PER CENT AD VALORElI1 TREATY TARIFF 17 and paper the rate was five and a half per cent; for sugar six per cent; for sugar candy six and a hal~ per cent.; for alum and aniseed star eight per cent; for Chma root eIght and a half per cent,. and· for· tea, the most import~nt ~xport of all, ten and three quarters per cent,-a rate WhICh Illustrates the monopoly then· enj oyed by China in this article, and cont~as:s with the present duty-free treatment brought about by Chma s loss of leadership in this trade through failure or inability to meet competition from other producing countries.1 The above ad valorem percentages, it should be noted, differ, in some cases widely, from tliose worked out by Mr. Thorn. at the time the drafting of the tariff was in progress. Accordmg to the values taken for the compilation of his tables the lowest duty percentage on such values for imports was. a quarter of one per cent for birds' nests and the highest was eighty per cent for first quality ginseng. Between these two rates there were all varieties of percentages ;-two-thirds of one per cent for .re~l ~old or silver thread, three-quarters of ohe per cent for ImItatIOn gold or silver thread, one and a third per cent for mace, two per cent for bicho-de mar, four per cent for fish maws, copper, quicksilver, nutmegs and sharks' fins, four and a half to foul' and three-quarters per cent for imitation camlets and flannel, tlve per cent for beeswax, and for a number of ad valorern goods such as clocks, watches, optical goods, dressing cases, cutlery, perfumery, ginghams, dyed cottons, velveteens, silk and cotton mixtures woollen and cotton mixtures, fancy goods, glass and crystal ~are, manufactured copper, ,wines, beer, and spirits, broadcloth, Spanish stripes, bunting and woollen yarn, five and a third per cent on cotton, grey cotton manufactures, twilled cotton cloth, cotton yarn,· cotton thread, skins and furs, and woollen blankets of all kinds, six per cent on linen, mother-ofpearl shells, tinplate, saltpetre, and English camlets, six and a half to six and three-quarters per cent on cochineal, white cotton longcleths, cow and ox hides, and Dutch camiets, seven per cent on camphor, eight per cent on canvas, unicorn and rhinoceros horns and long ells, nine per cent on betelnuts, gum benjamin, buffalo and bullocks' horns, spelter, rattans, rose maloes, soy, stockflSh, seahorse teeth, and sap an wood, nine and a half per cent on second quality cloves, and tin, ten per cent on first qua;lity cloves, carnelian beads, handkerchiefs, gum 1 On the other hand it should be remembered that at ~he time of .the signing of the Treaty of Nanking the import duty on tea mto the Umted Kingdom stood at rate~ varying from 200 to 350 per cent ad valormn. 2
18 CHINA'S STRUGGLE FOR TARIFF AUTONOMY THE FIVE PER CENT AD VALOREM TREATY TARIFF 19 myrrh,manufactured iron,unmanufactured steel,putchuck,and per cent ad valorem.1 In 1845 Parkes,when Consul at Amoy, ebony wood,ten and a half per cent on elephants'teeth,smalts, secured a reduction of the export duty on camphor from Tls. and sandal wood,eleven per cent on pepper,thirteen per cent 1.5.0.0 to Tls.1.0.0.0 per picul.Petitions for reduction of duty on asafoetida,cow bezoar,cutch,and unmanufactured iron, rates,however,were not always successful.Early in 1855 the fourteen per cent on flints,sixteen per cent on gum olibanum, merchants at Shanghai complained to the Taotai through their and fifty per cent on inferior ginseng.For exports the tariff Consuls that Chinese dealers were weighting their silk piece rates,based on Mr.Thom's valuations,worked out at one per goods by soaking them in a congee mixture,thus increasing cent for bone and horn ware,shoes,boots,and sandalwood ware, their weight by from ten to forty per cent.The request of one and a half per cent for copperware,tinware,pewterware, the complainants that the duty rate on these goods be reduced fans,furniture of all kinds,musk,silverware and goldware, proportionately2 was at first refused,but subsequently,in Febru- one to two per cent for tinfoil,and leather trunks,one to three ary 1856,granted to the extent of a ten per cent allowance off per cent for lacquered ware,paper fans,and rattan ware,one the duty.At the same time the Taotai consented to reduce the to five per cent for chinaware,and readymade clothing,two duty on the coarser deseriptions of refuse silk to five per cent per cent for bambooware,mother-of-pearl ware,and pictures, ad valorem,s and a month later,in view of their diminished value two and a half per cent for brass leaf,and tortoiseshell ware, to treat similarly chintzes and prints.+Taotai Chaou in his two to three per cent for grasscloth and ivoryware,three per time at Shanghai had reduced the duty on dyed cotton hand- cent for glass and glassware,lead white and red,nankeens, kerchiefs from Tls.0.0.1.0 per piece to five per cent ad valorem. cotton cloth,rhubarb,and tobacce,three and a half per cent These decisions,affecting treaty tariff rates,it should be noted for silk organzie,silk thread,and silk ribbons,four per cent were as a rule given by the local Chinese Customs officials,and for bamboo mats,straw mats,Nanking raw silk,and silk piece were not therefore regarded as being valid at other ports with- goods,four and a half per cent for cassia oil,corals,and glass out the consent of the authorities there concerned.This,of beads,five per cent for crackers and fireworks,false pearls, course,while in keeping with old-time Chinese procedure,was preserves,Canton coarse raw silk,and vermilion,five and a at variance with the purpose of the treaty tariff which was to half per cent for gamboge,and aniseed oil,six and a half per secure the application of the same rates at all the open ports. cent for bangles,canes,capoor cutchery,fish glue,orpiment, As free and easy arrangements,however,between the merchants paper of all kinds,Canton raw silk fine,and sugar candy,seven and the Custom House officials were in vogue at all the ports, per cent for kittysols,eight per cent for camphor,eight and a it may safely be assumed that no merchant suffered injustice half per cent for aniseed star,arsenic,and raw sugar white because of a reduced rate of duty in force at a port other than and brown,nine per cent for alum,galangal,soy,and turmeric, that in which he traded.Even after the negotiating of the ten per cent for cubebs,ten and a half per cent for marble Treaties of Tientsin with the consequent introduction of the slabs,eleven per cent for cassia buds,and twelve per cent for new uniform Customs system and the establishing of the Tsungli cassia and for tea of all descriptions.1-No matter which Yamen as the supreme centralizing Customs authority,the valuations are taken,whether those of the Consular reports tendency still persisted for local Customs authorities to make -which are probably the more accurate-or those of Mr. changes in tariff rates without first obtaining the approval of Thom,the conclusion that the rates of the Nanking treaty the Tsungli Yamen.It was not until 1866 that this pernicious tariff were not based on a rigid five per cent ad valorem practice was finally abolished.s standard remains unaffected:Even the rates then fixed were not regarded as unalterable,for in 1845 Sir John Davis, 1J:F.Davis:China during the War and since the Peace;London 2 vols. the British Superintendent of Trade at Hongkong,negotiated :1852;Vol.1,pp.88,89.B.P.P.Returns of the trade.of the various Ports with Keying a reduction of duty on earthenware,and in 1847 of China for the years 1847 and 1848;p.19;p.57. 2 N.C.H.No.244;31st March,1855. the lowering of the duty on rough timber from ten to five 8 Shanghai Customs Notification of 26th February,1856. 4 Shanghai Customs Notification of 26th March,1856 1 B.P.P.Statement of the Foreign Trade with China,ete.1844. 5 C.A.:I.G.Cire.No.12 of 1866
18 CHINA'S STRUGGLE FOR TARIFF AUTONOMY myrrh, manufactured iron, unmanufactured steel, putchuck, and ebony wood, ten and a half per cent on elephants' teeth, smalts, and sandal wood, eleven per cent on pepper, thirteen per cent on asafoetida, cow bezoar, cutch, and unmanufactured iron, fourteen per cent on flints, sixteen per cent on gum olibanum, and fifty per cent on inferior ginseng. For exports the tariff rates, based on Mr. Thorn's valuations, worked out at one per cent lor bone and horn ware, shoes, boots, and sandalwood ware, one and a half per cent for copperware, tinware, pewterware,. fans, furniture of all kinds, musk, silverware and goldware, one to two per cent .for tinfoil, and leather trunks, one to three per cent for lacquered ware, paper fans, and rattan ware, one to five per cent for chinaware, and readymade clothing, two per cent for bambooware, mother-of-pearl ware, and pictures, two and a half per cent for brass leaf, and tortoisesheil ware, two to three per cent for grasscloth and ivoryware, three per cent for glass and glassware, lead white and red, nankeens, cotton cloth, rhubarb, and tobacco, three and a half per cent for silk organzie, silk thread, and silk ribbons, four per cent for bamboo mats, straw mats, Nanking raw silk, and silk piece goods, four and a half per cent for cassia oil, corals, and glass beads, five per cent for crackers and firewQrks, false pearls, preserves, Canton coarse raw silk, and vermilion. five and a half per cent for gamboge, and aniseed oil, six and a half per cent for bangles, canes, capoor cutchery, fish glue, orpiment, paper of all kinds, Canton raw silk fine, and sugar candy, seven per cent for kittysols, eight per cent for camphor, eight and a half per cent for aniseed star, arsenic, and raw sugar white and brown, nine per cent for alum, galangal, soy, and turmeric, ten per cent for cubebs, ten and a half per cent for marble slabs, eleven per cent for cassia buds, and twelve per cent for cassia and for tea of all descriptions. 1 ·· No matter which valuations are taken, whether those of the Consular reports -which are probably the more accurate-or those of Mr. Thorn, the conclusion that the rates of the Nanking treaty tariff were not based on a rigid five per cent ad valorem standard remains unaffected: Even the rates then fixed were not regarded as unalterable, for in 1845 Sir John Davis, the British Superintendent of Trade at Hongkong, negotiated with Keying a reduction of duty on earthenware, and in 1847 the lowering of the duty on rough timber from ten to five 1 BoP.P. Statement of the Fore'ign Trade with China, etc. 1844. THE FIVE PER CENT AD VALOREM TREATY TARIFF 19 per cent ad valorem.' In 1845 Parkes, when Consul at Amoy, secured. a reduction of the export duty on camphor from 'I'ls. 1.5.0.0 to TIs. 1.0.0.0 per picu!. Petitions for reduction of duty rates, however, were not always successful. Early in 1855 the merchants at Shanghai complained to the Taotai through their Consuls that Chinese dealers were weighting their silk piece goods by soaking them in a congee mixture, thus increasing their weight by from ten to forty per cent. The request of the complainants that the duty rate on these goods be reduced proportionately2 was at first refused, but subsequently, in February 1856, granted to the' extent of a ten per cent allowance off the duty. At the same time the Taotai consented to reduce the duty on the coarser descriptions of refuse ::;ilk to five per cent ad vul.orem,3 and a month later, in view of their diminished value to treat similarly chintzes and prints.4 Taotai Chaou in his time at Shanghai had reduced the duty on dyed cotton handkerchiefs from TIs. 0.0.1.0 per piece to five per cent ad valorem. These decisions, affecting treaty 'tariff rates, it should be noted were as a rule given by the local Chinese Customs officials, and were not therefore regarded as being valid at other ports without the consent of the authorities there concerned. This, of course, while in keeping with old-time Chinese procedure, was at variance with the purpose of the treaty tariff which was to secure the application of the same rates at all the open ports. As free and easy arrangements, however, between the merchants and the Custom House officials were in vogue at all the ports, it may safely be assumed that no merchant suffered injustice because of a reduced rate of duty in force at a port other than that in which he traded. Even· after the negotiating of the Treaties of Tientsin with the consequent introduction of the new uniform Customs system and the establishing of the Tsungli Yamen as the supreme cent;ralizing Customs authority, the tendency still persisted for local Customs authorities to make changes in tariff rates without first obtaining the approval of the Tsungli Yamen. It was not until 1866 that this pernicious practice was finally abqlished.5 1 J: F. Davis: China dU"ing the War and since the Peace; London 2 vols, ·,1852; Vol. 1, Pp. 88, 89. B.P.P, lteturns of the tmde, of the ve!rious Ports of Chine! for ihe yee!rs 1847 and 1:848; p. 19; p. 57. 2 N.C.H. No. 244; 31st March, 1855. 3 Shanghai Customs :Notification of 26th· February, 1856, 4 Shanghai Customs. Notification of 26th March, 1856 5. C.A.: LG. Cire.No. 12 of 1866. / -
20 CHINA'S STRUGGLE FOR TARIFF AUTONOMY THE FIVE PER CENT AD VALOREM TREATY TARIFF 21 Treaty clause on $4.That the Nanking treaty tariff rates were of these three establishments only five are above half of transit dues not based on a strict five per cent ad valorem further proof the rates in the treaty tariff for the same articles,while four that tariff rates basis is further indicated by the treaty clause are actually higher than the corresponding full rates of the were not on regarding transit dues (Article X)which leaves in且exible five treaty tariff.In the import lists of these three establishments per cent ad unspecified the percentage rate to be levied on out of eighty-nine specific rates quoted thirteen are above calorem basis. British goods when conveyed into the interior half of the rates in the treaty tariff,while twenty-four are by Chinese merchants.The necessity of fixing these transit higher than the corresponding full rates of the treaty tariff. dues was pointed out by Sir Henry Pottinger to the Imperial All the remaining rates-sixty-three for exports and fifty-two Commissioners early in 1843 when he requested to be supplied for imports-are below the half of the treaty tariff rates.As with a "concise memorandum explanatory of the present system, the declaration of 26th June,18481 respecting transit dues, showing the authorized amount in each province,"pointing out complementing the treaty clause on this subject,definitely stip- at the same time "that whatever facilities may be outwardly ulates that the "transit duty shall not exceed the present rates, introduced for the export or import trade of the seaports,the which are upon a moderate scale,"it is clear that the idea of whole of those facilities may be rendered absolutely nugatory, fixing transit dues on a two and a half per cent ad valorem so far as the greater part of the empire is concerned,by such basis,or even on the basis of half the accepted treaty tariff onerous transit duties being demanded on goods passing through rates,was not then the guiding prineiple for such levies. the country as should amount to a positive prohibition of their transit.Likin,that fiscal clog on China's internal trade,off- $5.Opium and opium smuggling had been the spring of the Taiping Rebellion,was as yet non-existent;but Opium trade not immediate occasion of the war of 1839-1842,and dealt with by inland Customs offices at large commercial centres and at stra- Nanking treaty one would have thought that the problem would tegic points on the great internal trade routes had been func- Rapid growth of have been dealt with in the treaties restoring this contraband tioning for centuries,and at these offices or their barriers all trade.suecessive peace and establishing new trade relations.On goods in transit had to pay toll.It was to avoid the possibility, British Pleni-the contrary,all mention of this opium smuggling then,of the strangulation of foreign trade at these inland potentiaries urge problem was carefully avoided in these documents legalization. Custom Houses that necessitated the introduction of the transit although Article Iv of the Treaty of Nanking dues clause in the treaty.Ignorance,however,of the rates stipulated that six million dollars were to be paid to Great Britain actually in force at these inland Custom Houses presented a as the value of the opium delivered up at Canton.For the serious difficulty in deciding what duties should be authorized British two constructive courses were open,one was the root as leviable on British merchandise as transit dues,and practi- and branch suppression of the trade in British India,a course cally the only detailed and authoritative information Sir Henry not welcome to the Government of India which was fearful of Pottinger could obtain on the rates then levied was a translation losing the rich revenue involved,and solicitous that the trade of the official tariffs issued by the Hu Pu (or Board should be controlled rather than left to untrammelled develop- of Revenue2,giving the rates authorized by the three inland ment by the Indian Native States.To have suppressed the Custom Houses of Kanchow(赣州)，at the head of the Mei- trade in British India would have been in the eyes of the Govern- ling pass in Kiangsi;Taiping(太平)，in the province of ment a quixotic piece of idealism,which instead of benefiting Kwangtung;and Peihsing(北星)，near Hangchow.Com- China would probably have worked still greater harm by throw- paring the rates fixed by the new treaty tariff with the ing the trade into less scrupulous hands.The alternative course authorized rates of these three inland Custom Houses we find was to have the trade in China legalized,and to the British that out of seventy-two specific rates quoted in the export lists authorities then in power this seemed the only practical course. Such legalization,however,was to be induced not imposed,and both Elliot and Pottinger were given explicit instructionc on this 1Ch.Rep.Vol.XII;1843;p.46.F.O.17/66;Pottinger to Aberdeen, desp.No.7,6th February,1848. 2B.P.P.Statement of the Foreign Trade with China,ete.1844;p.13. 1 Date of the exchange at Hongkong.of the ratification of the Nanking freaty of 1842
20 CHINA'S STRUGGLE FOR TARIFF AUTONOMY Treaty clause on §4. That the Nanking treaty tariff rates were' transit dues .not based on a strict five per cent' a.d valorem further proof that tariff rates basis is further indicated by the treaty clause were not on regarding transit dues (Article X) which leaves inflexible five per cent ad' unspecified the percentage rate to be levied on valorem basis. British goods when conveyed into the interior by Chinese merchants. The necessity. of fixing these transit dues was pointed out by Sir'Henry Pottinger to the Imperial Commissioners early in 1843 when he requested to be supplied with a "concise memorandum explanatory of the present system, showing the authorized amount in each province," pointing out at the same time "that whatever facilities may be outwardly introduced for the export or import trade of the seaports, the whole o{ those facilities may be rendered absolutely nugatory, so far as the greater part of the empire is concerned, by such onerous transit duties being demanded 011 goods passing through the country as should amount to a positive prohibition of their transiU Likin, that fiscal clog on China's internal trade, offspring of the Taiping Rebellion, was as yet non-existent; but inland Customs offices at large commercial centres and at strategic points on the great internal trade routes had been functioning for centuries, and at· these offices or their barriers all goods in transit had to pay toll. It was to avoid the PQssibility, then, of the strangulation of foreign trade at these inland Custom Houses that necessitated the introduction of the transit dues clause in the treaty. Ignorance, however, of the rates actually in force at these inland Custom Houses presented a serious difficulty in deciding what duties should be authorized as leviable on British merchandise as transit dues, and practically the only detailed and authoritative information Sir Henry Pottinger could obtain on the rates then levied was a translation of the official tariffs issued by the Hu Pu (fi loti) or Board of Revenue2 , giving the rates authorized by the three inland Custom Houses of Kanchow (:a~ 1-"1 ), at the· head of the Meiling pass. in Kiangsi; Taiping ('* Zfi ), in the province of Kwangtung; and Peihsing (~!:£), near Hangchow. Comparing the rates fixed by the new treaty tariff with the authorized rates of these three' inland Custom Houses we find that out of seventy-two specific rates quoted in the export lists 1 Ch. Rep. VoL XII; 1843; p. 46. F.O. 17/66; Pottinger to AbeJ,deen, desp. No.7, 6th February, 1843. 2 B.P.P. Strttement of the For'eign Trade 'With China, .etc. 1844; p. 13. THE FIVE PER CENT:AD VALOREM TREATY TARIFF 21 of these three establishments only five are above half of the rates in the treaty tariff for the same articles, while four are actually higher than the corresponding full rates of the treaty tariff. In the import lists· of these three establishments out of eighty-nine specific rates quoted thirteen are above half of the rates in the treaty tariff, while twenty-four are higher than the corresponding full rates of the treaty tariff. All the remaining rates-sixty-three for exports and fifty-two for imports-are below the half of the treaty tariff rates. As the declaration of 26th June, 18431 respecting transit dues, complementing the treaty clause on this subject, definitely stipulates that the "transit duty shall not exceed the present rates, which are upon a moderate scale," it is clear that the idea of fixing transit dues on a two and a half per cent ad valorem basis, or even on the basis of half the ~ccepted treaty tariff rates, was not then the guidinQ' principle for such levies. §5. Opium and opium smuggling had been the Opinm tradenot immediate occasion of the war of 1839-1842 and dealt with by ld h h h" Nanking treaty. one wou ave t oug t that the problem would Rapid growth of have been dealt with in the treaties restoring this contraband d t bl" h' . trade. Successive peace an es a . IS mg new trade relatIOns. On Briti~h.Pleni. the contrary, all mention of this opium smuggling potentIarles urge bl f 11 . . . legalization. pro em was care u y aVOIded m these documents although Article IV of the Treaty of Nanking stipulated that six million dollars were to be paid to Great Britain as the value of the opium delivered up at Canton. For the British two constructive courses were open, one was the root and branch suppression of the trade in British India, a course not welcome to the Government of India which was fearful of losing the .rich revenue involved, and solicitous that the trade should be controlled rather than left to untrammelled development by the Indian Native States. To have suppressed the trade in British India would have been in the eyes of the Government a quixotic piece of idealism, which instead of benefiting China would probably have worked still greater harm by throwing'th~ trade into less scrupulous hands. The alternative course was to have the trade in China legalized, and to the British authorities then in power this seemed the only praCtical course. Such legalization, however, was to be induced not imposed, and both Elliot and Pottinger were given explicit instructionc on this 1 Date of the exchange at Hongkong,of the ratification of the Nanking t.~ea ty of 1842