THE FIVE PER CENT AD VALOREM TREATY TARIFF 43 42 CHINA'S STRUGGLE FOR TARIFF AUTONOMY down in the tariff and regulations of trade,you will take im- (3)Captain to present manifest.Penalty for false manifest, mediate measures for intimating the same to the Chinese high imposable by Consul on China's behalf,$500.(Br.Gen. Reg.8;Br.Hoomun.3;Am.Wg.10,[no fine.])1 officers of Customs,in order that they may,if they think proper, (4)Captain or consignee of vessel to obtain from Customs put a stop to such vessel either landing or shipping further cargo,as the case may be;and you will likewise apprise the general permit to discharge.Penalty for breaking master,owner or consignee of such ship of the steps you have bulk before obtaining permission,imposable by Consul on China's behalf;$500 and confiscation of goods so taken,and will acquaint them that any attempt to carry on discharged.(Br.Gen.Reg.3;Br.Hoomun.8;Am. their smuggling practices,or to trade in any shape,by force, Wg.10;Fr.Whp.18.) in opposition to the wishes and directions of the Chinese author- (5)No transhipment of goods without permission.Penalty ities,will oblige me to have such ship removed from the for illicit transhipment of goods;confiscation.(Br. river.1 Similar instructions mutatis mutandis were issued to Gen.Reg.11;Am.Wg.14;Fr.Whp.20.) the Consuls appointed to the other four treaty ports.As we (6)Vessels not permitted to trade at places not opened shall see,adherence to these instructions brought some of the by treaty.Penalty for violation of this rule;confisca- British Consuls into sharp conflict with their nationals,and tion of both vessel and cargo.(Br.Hoomun.4;Am. ended at last,after a decade of trial,in a complete breakdown Wg.3;Fr.Whp.2,[Cargo alone confiscable.]; of this Consular system of trade control,and the devising of [American offender also liable to be dealt with by law another modus operandi,which in turn developed naturally into of China;Wg.88.]) the Maritime Customs Service. (7) Smuggling at treaty ports.Penalty,confiscation of goods;prohibition of vessels implicated from further $10.Aside from the direct Consular intervention tiputioin of the British Consuls tosee that their nationals Preventive trading.(Br.Hoomun.12;Fr.Whp.8.) (8)Fraud in connection with duty-paid imports re-ex- early treaties.paid their just dues and duties,and did not engage ported from one treaty port to another.Penalty, Chinese preven-in smuggling practices,and apart from the tive laws in confiscation of goods.(Am.Wg.20;Fr.Whp.17.) force at time special stipulations in the Treaty of Hoomunchai of signing of (9)Trading in contraband.Penalty;offender to be dealt treaties. to control the trade carried by Chinese junks with according to law of China.(Am.Wg.33.) between Hongkong and the five open ports,the It must not be supposed that this treaty preventive law, preventive measures sanctioned by the early treaties may be if it may be dignified with such a title,was called into existence summarized as follows:- because there was a lack of such law in China at the time. (1)China to depute one or two trusty Customs officers to There was in fact no such lack.In the first place,at every every vessel on entry at a port to watch against frauds Custom House on the coast and on the interior waterways,which on the revenue.(Br.Gen.Reg.2;Am.Wg.9.) had been functioning for centuries before the coming of the (2)Captain of vessel within 24 hours of arrival to deposit modern foreign trader,there had gradually grown up a body ship's papers with his Consul.Penalty for non-obser- of regulations,prohibitions,penalties,etc.to meet local condi- vance imposable by Consul on China's behalf,$200. tions and requirements,some of them based on Imperial Edicts, (Br.Gen.Reg.8;Br.Hoomun.3;Am.Wg.10,[48 hours:no fine].Fr.Whp.13,[48 hours:fine of $50 1 It was not till 1863,several years after the signing of the Treaties of for each day's delay up to_a maximum of $200.]) Tientsin,that the American Government agreed to the imposition of a fine for the presentation of a false manifest.On 22nd October that year the U.S.Consuls were notified by despatch from their Legation that,pending reference to Washington,American Consuls were to follow the terms of 1F.O.228/24:Enclo.No.5 in desp.No.88:Pottinger to Aberdeen; 26th July,1843;B.P.P.Orders,Ordinances,Rules and Regulations concern- the British treaty in the "ase of false manifests.Seward,then Secretary of State,ratifed this arrangement by a despatch dated 29th February,1864 ing the Trade in China 1847;p.8:also quoted in Ch.Rep.Vol.XIII;1843; C.A.:I.G.Cires.No.10 of 1267 and No.24 of 1868. p.393
42 CHINA'S STRUGGLE FOR TARIFF AUTONOMY down in the tariff and regulations of trade, you will take immediate measures for intimating the same to the Chinese high officers of Customs, in order that they may, if they .think proper, put a stop to such vessel either landing or shipping further cargo, as the case may be; and you will likewise apprise the master, owner or consignee of such ship of the steps you have taken, and will acquaint them that any attempt to carryon· their smuggling practices, or to trade in any shape, by force, in opposition to the wishes and directions of the Chinese author-- ities, will oblige me to have such ship removed from the river.! Similar instructions mutatis mutandis were issued to the Consuls appointed to the other four treaty ports. As we shall see, adherence to these instructions brought some of the British Consuls into sharp conflict with their nationals, and ended at last, after a decade of trial, in a complete breakdown of this Consular system of trade control, and the devising of another modus opemndi, which in turn developed naturally into the Maritime Customs Service. § 10. Aside from the direct Cunsular intervention Preventive of the British Consuls to see that their nationals stipUlations in early treaties. paid their just dues and duties, and did not engage Clt~nese prev.en- in smuggling praCtices, and· apart from the tlve laws In • • • • . •. force at time speCIal stIpulatlons m the Treaty of Hoomunchal of signi.ng of 'to control· the trade carried by Chinese junks treatIes. h between Hongkong and the five open ports, t e preventive measures sanctioned by the early treaties may be summarized as follows :- (1) China to depute one or two trusty Customs officers to every vessel on enby at a port to watch against frauds on the revenue. (Br. Gen. Reg. 2; Am. Wg. 9.) (2) Captain of vessel within 24 hours of arrival to deposit ship's papers with his Consul. Penalty for non-observance imposable by Consul on China's behalf, $200. (Br. Gen. Reg. 3; Br. Hoomim. 3; Am. Wg. to, [48 hours: no fine J. Fr; Whp. 13, [48 hours: fine of $50 for each day's delay up to~a maximum of $200.]) 1 F.O. 228/24: Enclo. No.5 in desp. No. 88: Pottinger to Aberdeen; 26th July, 1843; B.P.P. Orders, Ordinances, Rules and Regulations concerning the Trade in China 1847; p. 1l: also quoted in Ch. Rep. Vol. XIII; 1843; p.393. _ THE FIVE PER :CE'NT AD VALOREM TREATY TARIFF 43 (3) Captain to present manifest. Penalty for false manifest, imposable by Consul on China's behalf, $500. (Br. Gen. Reg. 3; Br. Hoomun. 3; Am. Wg. 10,_ [no fine.])1 (4) Captain or consignee of vessel to obtain from Custo.ms general permit to discharge. Penalty for breakmg bulk before obtaining permission, imp os able by Consul on China's behalf; $500 and confiscation of goods so discharged. (Br. Gen. Reg. 3; Br. Hoomun. 3; Am. Wg. 10; Fr. Whp. 13.) (5) No transhipment of goods without permission. Penalty for illicit transhipment of goods; confiscation. (Br. Gen. Reg. 11; Am. Wg.14; Fr. Whp. 20.) (6) Vessels not permitted to trade at places not opened by treaty. Penalty for violation of this rule; confiscation of both vessel and cargo. (Br. Hoomun. 4; Am. Wg. 3; Fr. Whp. 2, [Cargo alone confiscable.]; [American offender also liable to be dealt with by law of China; Wg. 33.]) . (7) Smuggling at treaty ports. Penalty, confiscation of goods; prohibition of vessels implicated from further trading. (Br. Hoomun. 12; Fr. Whp. 8.) (8) Fraud in connection with duty-paid imports re-exported from one treaty port to another. Penalty, confiscation of goods. (Am.Wg. 20; Fr. Whp. 17.) (9) Trading in contraband. Penalty; offender to be dealt with according to law of China. (Am. Wg. 33.) It must not be supposed that this treaty preventive law, if it may be dignified with such a title, was called into existence . because there was a lack of such la\v in China at the time. There was in fact no such lack. In the first place, at every Custom House on the coast and on the interior waterways, which had been functioning for centuries before the coming of the modern foreign trader, there had gradually grown up a body of regulations, prohibitions, penalties, etc. to meet lo.cal co~diHons and requirements, some of them based on ImperIal EdIcts, 1 It was not till 1863, several years after the signin~ of t~,: Treaties of Tientsin, that the American G(wern~ent agreed to the ImpOSItion of a fine for the presentation of a false mamfest. On 22,nd Oct0?er that year ~he U.S. Consuls were notified by despatch from theIr LegatIOn that, pendmg reference to Washington, American Consuls were to follow the terms of. the British treaty in the ,ase of false manifests. Seward, then Secretary of State, ratified this arrangement by II despatch dated 29th February, 1864 C.A.: I.G. Circs. No. 10 of 1£67 and No. 24 of 1868
44 CHINA'S STRUGGLE FOR TARIFF AUTONOMY THE FIVE PER CENT AD VALOREM TREATY TARIFF 45 or instructions from the Hu Pu(与部)or the Kung Pu(工部)， reward to an informer in the case of a false manifest was Tls.20. or orders from the higher provincial authorities,but most of The final section of book V deals with arrears of duties,all of them embodying the decisions given by the local Taotai or which had to be made good within the year in which they were Superintendent of Customs.This was,and claimed to be due.Defaulters were to be punished with blows of the bamboo, nothing more than,case law applicable as a rule only within from a minimum of forty to a maximum of eighty according the jurisdictional area of the authority issuing the proclamation. to the extent of the default.The Superintendents of defaulting But in the second place,in addition to this local Customs law, Custom Houses were also to be punished,but in their case the there was the law of the land,promulgated by the Central number of blows ran from fifty to one hundred.Customs Government and applicable throughout the length and breadth clerks found guilty of rendering false accounts were to be of the Empire.At the time of the signing of the early treaties punished according to the law governing the embezzlement of the national law in force was the revised and enlarged version public funds.1 It was the inclusion of the extraterritoriality of that originally issued by the Emperor Shun Chih ( clauses in the early treaties which ruled out the applicability in the third year of his reign,1647,and known as the Ta Ch'ing to foreign vessels and foreign traders,enjoying this extrater- LiLi(大律例)，or Penal Code of the Ching dynasty.In ritorial status,of the provisions of China's preventive law as this code the whole of book V in the third division of the work, found in the Ta Ch'ing Lu Li and in the regulations and pro- which deals with fiscal laws,is devoted to the subject of duties cedure in force at the various Custom Houses.It was the and Customs.Of the eight sections composing book V three existence too of these extraterritoriality clauses which made it deal with the subject of salt,the measures to be taken for the necessary to include in the treaties those provisions which we prevention of clandestine trading in that article,and the punish- have designated as the treaty preventive law.If foreign ments to be meted out to those who violate the law by unauthor- traders and their vessels were to be removed from Chinese ized manufacture,transport,or sale of salt.Another section jurisdiction,common sense and justice demanded that,unless deals with the clandestine sale of tea,and yet another with the trade they carried on was to become utterly lawless,special the illicit manufacture and sale of alum.Then follows a section arrangements were necessary by which that trade should be on the evasion of Customs duties or smuggling in general,and controlled.The truth of this soon became evident.The signing here we find that offenders could be punished with fifty blows of the treaties did not put an end to smuggling.On the contrary, of the bamboo and forfeiture of half the value of the goods as we shall see,during the period 1843 to 1854,that is from smuggled,three-tenths of such forfeiture being given as a the signing of the treaties to the establishing of the system reward to the informer,but no reward being issuable to the of foreign Inspectors of Customs at Shanghai,clandestine Customs officer if the seizure were effected by him when on trading generally and the running of opium in particular regular duty.As a comment on this it may be noted that flourished like a green bay tree. punishment for offences against the revenue were.often in reality much heavier than those actually cited in the Code. $11.It is probably o exaggeration to say that Fines of one hundred times the duty were not unknown,while confiscation and destruction of a confirmed smuggler's vessel ritua r ot Nndwer British Treaty of Nanking,they were not fully was not an infrequent punishment.The next section enjoins autonomy. cognizant of its implications.They did not in upon owners and masters of merchant vessels the necessity of all likelihood realize that they were signing away presenting at the Customs a full and true manifest of all the China's tariff autonomy,and thereby laying up much trouble goods on board,so that the duties payable thereon may be in store for their country.Nor,for the matter of that,was assessed.Should a merchant fail to send in a manifest,or there any deep-laid plot on the part of the British negotiators should he send in a false or defective one,he was to be punished to infringe on China's sovereign rights beyond the arrangements with a hundred blows of the bamboo and the forfeiture of all the goods not reported.The receiver of non-reported goods was 1 For an English translation of this Penal Code,vide Sir.G.T.Staunton: Ta Tsing Leu Lee,being the Fundamental Laws and a Selection from the likewise to be punished,presumably by the bastinado.The Supplementary Statutes of the Penal Code of China;ete.London;1810
44 CHiNA'S STRUGGLE FOR TARIFF AUTONOMY or instructions from the H u Pu (pi $) or the Kung' Pu (I$), or orders from the higher provincial authotities, but most of t~em embodying the decisions given by the local Taotai or Superintendent of Customs. This was, and claimed to be nothing more than, case law applicable as a rule only within the jurisdictional area of the authority issuing the proclamation. But in the second place, in addition to this local Customs law, there was the law of the land, promulgated by the Central Goyernment and applicable throughout the length and breadth of the Empire. At the time of the signing of the early treaties the national law in force was the revised and enlarged version of that originally issued by the Emperor Shun Chih ()'1Ii #l ) in the third year of his reign, 1647, and known as the Ta Ch'ing Lii Li (* m t:t- 17iJ), or Penal Code of the Ching dynasty. In this code the whole of book V in the third division of the work, which deals with fiscal laws, is devoted to the subj ect of duties and ·Customs. Of the eight sections composing book V three deal with the subject of salt, the measures to be taken for the prevention of clandestine trading. in that article, and the punishments to· be meted out to those who violate the law by unauthorized manufacture, transport, or sale of salt. Another section deals with the clandestine sale of tea, and yet another with the illicit manufacture and sale of alum. Then follows a section on the evasion of Customs duties or smuggling in general, and here we find that offenders could be punished with fifty blows of the bamboo and forfeiture of half the value of the goods smuggled, three-tenths of such forfeiture being given as a r.eward to the informer, but no reward being issuable to the Customs officer if the seizure were effected by him when on regular duty. As a comment on this it may be noted that punishment for offences against the revenue were. often in reality much heavier than those actually cited in the Code. Fines of one hundred times the duty were not unknown, while confiscation and destruction of a confirmed smuggler's vessel was not an infrequent punishment. The next section enjoins upon owners and masters of merchant vessels the necessity of presenting at the Customs a full and true manifest of all the goods on board, so that the duties payable thereon may be assessed. Should a merchant fail to send in a manifest, or should he sen~ in a false or defective one, he was to be punished with a hundred blows of the bamboo and the forfeiture of all the g;oods not reported. The receiver of non-reported goods was likewise to be punished, presumably by the bastinado. The THE FIVE PER CEN'l' AD VALOREM TREATY TARIFF 45 reward to an informer in the case of a false manifest was TIs. 20. The final section of book V deals with arrears of duties, all of which had to be made good within the year in which they were due. Defaulters were to be punished with blows of the bamboo, from a minimum of forty to a maximum of eighty according to the extent of the default. The Superintendents of defaulting Custom Houses were also to be punished, but in their case the number of blows ran from fifty to one hundred. Customs clerks found guilty of rendering false accounts were to be punished according to the law governing the embezzlement of public funds. l It was the inclusion of the extraterritoriality clauses in the early treaties which ruled out the applicability to foreign vessels and foreign traders, enjoying this extraterritorial status, of the provisions of China's preventive law as found in the TaCh'ing Lti Li and in the regulations and procedure in force at the various Custom Houses. It was the existence too of these extraterritoriality claus.es which made it necessary to include in the treaties those provisions which we have designated as the treaty preventive law. If foreign traders and their vessels were to be removed from Chinese jurisdiction, common sense and justice demanded that, unless the trade they carried on was to become utterly lawless, special. arrangements were necessary by which that trade should be controlled. The truth of this soon became evident. The signing of the treaties did not put an end to smuggling. On the contrary, as we shall see, during the period 1843 to 1854, that is from the signing of the treaties to the establishing of the system of foreign Inspectors of Customs at Shanghai, clandestine trading generally and the running of opium in particular flourished like a green bay tree. Treaty tariff of Nanking and China's tariff autonomy. § 11. It is probably liO exaggeration to say that when the Chinese Plenipotentiaries signed the British Treaty of Nanking, they were not fully cognizant of its implications. They did not in all likelihood realize that they were signing away China's tariff autonomy, and thereby laying up much trouble in store for their country. Nor, for· the matter of that, was there any deep-laid plot on the part of the British negotiators to infringe on China's sovereign rights beyond the arrangements 1 For an English translation of this Penal Code, vide Sir. G. T. Staunton: Ta. Tsing Leu Lee, being the Fundamental Laws and a Selection from the Supplementa1'Y Statutes of the Penal Code of China; etc. London; 1810
e CHINA'S STRUGGLE FOR TARIFF AUTONOMY THE FIVE PER CENT AD VALOREM TREATY TARIFF 47 called for by the circumstances of the time.The tariff and such circumstances tariff reciprocity in the modern sense was not trade arrangements embodied in the treaty were "not adopted thought of. On the one side stood the victors dictating terms, as a sinister means of controlling the fiscal policies of the Chinese claiming in tariff duties fixed and moderate rates,and in other Government,but merely as a modus operandi devised to meet matters equality,while on the other side were the vanquished, and remedy a condition which had become a fertile source of who indeed recognized reciprocity as a philosophical ideal com- friction in the relations of China and the Powers,due to the mended by the greatest of their sages,but who as yet not being uncertainties connected with the rates and the methods of col- anxious to foster foreign trade saw no necessity of invoking lecting duties under the then existing tariffs."1 Tariff autonomy the aid of reciprocity to drive a tariff bargain.When,therefore, in those days,even in Europe,was not a doctrine embodying these importunate foreign traders at the point of the bayonet the same significance as it has in these days of pronounced demanded that in future there should be for foreign trade an nationalism.In China such a doctrine was then little thought up-to-date tariff with clearly stipulated rates,it probably seemed of,if at all.Tariffs,of course,were for the Government to to the Chinese Plenipotentiaries to be a matter of relatively decide,usually on the recommendation of the provincial authori- little importance,and that in acceding to this demand they were ties,and for these latter authorities to interpret and apply. not sacrificing their country's interests,either as regards tariff Their raison d'etre was to provide funds both for the Imperial autonomy or.reciprocal tariff treatment,provided the and the provincial treasuries.They were not an expression of rates of that tariff were such as to ensure a satisfactory any definite international trade policy,or of any scheme,vague revenue,and provided the application of.the tariff with or defined,for the protection of China's domestic industries. the collecting of the revenue remained in China's hands. These industries throve in providing goods for the home markets, The imposition on China of this treaty tariff may have and whatever surplus of their products went abroad was been unjust,but its enforcement from the point of view of on the whole advantageous both to the traders and to the revenue,at any rate up to the days of the Taiping Rebellion, Government.China's traditional isolation was still at that time was a success.We have the evidence of the Peking Gazette not only geographical and intellectual,but also commercial,and that the actual amount of revenue collected at the five ports, in consequence foreign trade played an insignificant role in the even under a lax administration,came as a surprise to the business life of the country generally.Such foreign trade as higher authorities at Peking.In 1847 that journal reported did exist was very small compared with the country's domestic that the receipts at the five Custom Houses.had increased so production,while what China actually did sell to foreigners she much that not only were the arrears liquidated,but there was did not herself export,but passively waited for the outsiders to a surplus of from 1,200,000 to 1,400,000 taels.The writer goes come and buy.The same held true for imports;they had to on to point out that it is very evident the State had not paid be energetically pushed.2 In the eyes of Chinese statesmen, sufficient attention to this branch of revenue."The laws are such foreign trade was not vital to their country's interests lax or not apposite;smuggling and other evils greatly diminish whatever it might be to the foreign countries whose traders persisted in the face of every discouragement in carrying it on.In the proceeds,and hence a reform is indispensably neces- sary."1 Half a century,however,was to pass before the des- 1 Mr.Kellogg,Secretary of State to the U.S.A.Government,in a speech perate need for funds caused by the China-Japan war of of 2nd September,1925 at Detroit before American Bar Association. Quoted in The Times (London),3rd September,1925. 1894-95 at last fully awakened the Chinese authorities to a a"They will not advanee towards foreigners to seek their trade,until realization of the fiscal fetters that had first been forged on foreigners have pressed it on them.Foreigners must provide the means them by the conventional tariff of the Treaty of Nanking.It of bringing different parts of the Empire into close communication.and required a further period of thirty-five years,during which they must also to a certain extent create the wants which they wish to supply by offering their goods and "introducing"them to their customers. China and the whole civilized world were subjected to cataclys- Commerce everywhere requires to be energetically pushed to be successful, mic experiences radically altering all international relations and this is peculiarly true of the trade in foreign manufactures in China." Report of the Delegates of the Shanghai General Chamber of Commerce on the Trade of the Upper Yangtse;Shanghai,1869.p.50. 1F.O.228/67:Davis to Palmerston,desp.No.140.7th August.1847: enclo.translation from the Peking Gazettes
46 CHINA'S STRUGGLE FOR TARIFF AUTONOMY called for by the circumstances of the time. The tariff and trade arrangements embodied in the treaty were "not adopted as a sinister means of controlling the fiscal policies of the Chinese Government, but merely as a modus operandi devised to meet :and remedy a condition which had become a fertile source of friction in the relations of China and the Powers, due to the uncertainties connected with the rates and the methods of collecting duties under the then existing tariffs."l Tariff autonomy in those days, even in Europe, was not a doctrine embodying the same significance as it has in these days of pronounced nationalism. In China SUGh a doctrine was then little thought ,of, if at all. Tariffs, of course, were for the Government to decide, usually on the recommendation of the provincial authorities, and for these latter authorities to interpret and apply. Their raison d' eire was to provide funds both for the Imperial and the provincial treas1,lries. They were not an expression of any definite international trade policy, or of any scheme, vague or defined, ,for the protection of China's domestic industries. These i~dustries throve in providing goods for the home markets, and whatever surplus of their products went abroad was oli the whole advantageous both tb the traders and to the 'Government. China's traditional isolation Was still at that time not only geographical and intellectual, but also commercial, and in consequence foreign trade played an insignificant role in the business life of the country generally. Such foreign trade as dId exist was very small compared with the country's domestic production, while what China actually did sell to foreigners she did not hers~lf export, but passively waited for the outsiders to come and buy. The same held true for imports; they had to be energetically pushed.2 In the eyes of Chinese statesmen, such foreign trade was not vital to their country's interests, whatever it might be to the foreign countries whose traders persisted in the face of every discouragement in carrying it on. In 1 Mr. Kellogg, Secretary of State to the U.S.A. Government, in a speech ,of 2nd September, 1925 at Detroit before American ·Bar Association. Quoted in The Times (London), 3rd September, 1925. 2 "They will not, advance towards foreigners to seek their trade, until ·foreigners have pressed it .on them. Foreigners must provide the means of bringing different parts of the Empire into close communication. and they must also to a certain eJetent create the wants which they wish to supply by offering their goods and "introducing" them to their customer~. Commerce everywhere requires to, be energetically pushed to be successful, and this is peculiarly true of the trade in foreign manufactures in China." Report of the Delegates of the Shanghai General Chamber of Commerce on the Trade of the Upper Yangtse; Shllnghai, 1869. p. 50. THE FIVE PER CENT AD VALOREM TREATY TARIFF 47 such circumstances tariff reciprocity in the modern sense was not thought of. On the one side stood the victors dictatin~ terms, claiming in tariff duties fixed and moderate rates, and III .other matters equality, while on the other side were t~e v~nqUlshed, who indeed recognized reciprocity as a philosophlcal Ideal commended by the greatest of their sages, but who ~s yet ~ot be~ng anxious to foster foreign trade saw no necessity of mv~kmg the aid of reciprocity to drive a tariff bargain. When, therefore, these importunate foreign traders at the point of the bayonet demanded that in future there should be for foreign trade an up-to-date tariff with clearly stipulated rates, it probably se~med to the Chinese Plenipotentiaries to· be a matter of relahvely little importance, and that in acceding to this demand they werE? not sacl1.ficing their country's interests, either as regards tariff autonomy or. reciprocal tariff treatment, provided the rates of that tariff were such as to ensure a satisfactory revenue,and provided the application of, the tariff with the coliecting of the revenue remained in China's hands. The imposition on China of this treaty tariff may have been unjust, but its enforcement from the point of view of revenue, at any rate up to the days of the Taiping Rebellion, was a success. We have the evidence of the Peking Gazette that the actual amount of revenue collected at the five ports, even under a lax administration, came as a surprise to the higher authorities at Peking. In 1847 that journal reported that the receipts at the five Cllstom Houses had increased so much that 'not only were the arrears liquidated, but there was a surplus of from 1,200,000 to 1,400,000 taels. The writer goes on to point out that it is' very evident. the State had not paid sufficient attention to this branch of revenue. "The laws are lax or not apposite; smuggling. and other evils greatly diminish the proceeds, and hence a reform is indispensably necessary."l Half a century, however, was to pass before the desperate need· for funds caused by the China-Japan war of 1894-95 at last fully awakened the Chinese authorities to a realization of the fiscal fetters that had. first been forged on them by the conventional tariff of the Treaty of Nanking. It required a further period of thirty-five years, during which China and the whole civilized world were subjected to cataclysmic experiences radically altering all international relations 1 F.O. 228/67: Davis to Palmerston, desp. No. 140, 7th August. 1847; enclo. translation from the Peking Gazettes
谷 CHINA'S STRUGGLE FOR TARIFF AUTONOMY THE FIVE PER CENT AD VALOREM TREATY TARIFF 49 and men's ideas of such relations,before China could regain the fiscal freedom her Plenipotentiaries had so unwittingly signed the matter of these shipping dues was clearly indicated,and away in 1842 that reform,it was finally agreed,should take the shape of abolition of all measurement,entrance,clearance,and other Abolition of $12.Besides doing away with the unauthorized fees then in force,and of substituting for them a uniform levy ship's measure.levies on goods the new treaty tariffs made a clean of five mace per registered ton,the ton being regarded as equal ment fees. sweep also of the notorious measurement feesi to the cubic content of one hundred and twenty two tou () Substitution of tonnage dues.levied on each ship,which varied from $650 for the which was taken as equivalent to the English standard ton. Passing of smaller ships to $3,000 for a vessel of about 1,300 Accordingly in July 1843 a proclamation was issued by four Co-hong. tons,and of all the other numerous and burdensome of the highest Chinese authorities then at Canton-the High exactions which had accreted under the heading of ship dues,such Commissioner,the Viceroy of the Liang Kwang,the Governor as entrance fee,clearance fee,grain commissioner's fee,tide- of Canton,and the Superintelident of Customs abolishing for waiter's fee,gratuity to Hoppo,collector's fee,and at least nine foreign shipping the old system of measurement by which a other charges of like nature.By the thirties of the nineteenth vessel's capacity was gauged according to its number of chang century these irregular charges,apart from the regular measure- ()the number of chang being calculated by taking the ment fees,had become consolidated into a fixed levy of Taels vessel's length between the fore and the mizzen masts,multiply- 1950 exacted from practically every ship,and was the subject ing this by its breadth amidships and dividing the product by of repeated but unavailing protests from its victims.2 The ten.2 In the Supplementary Treaty a modification was in- oppressiveness of these combined regular and irregular ships troduced (Article XVII)by which smaller vessels under 150 fees may be gauged from the fact that for many years prior tons register plying between Hongkong,Canton and Macao,if to the ratification of the Nanking treaty they amounted on the not carrying dutiable articles should be exempt from tonnage average to over six taels per registered ton,an exorbitant levy dues,but if carrying dutiable articles should be liable to a levy when it is remembered that nothing was provided in return in of one mace per ton every trip,the minimum charge being fixed the form of aids to navigation or harbour and docking facilities. at seven and a half taels,and the maximum at fifteen taels. Writing in January 1848 to the Chinese Imperial Commissioner Any vessel over a hundred and fifty tons was to pay at the Sir Henry Pottinger drew attention to this,pointing out that five mace.rate.Similar stipulations were embodied in the iafter the tariff and import and export duties,the anchorage American Treaty of Wanghea (Articles VI and VII)with the or harbour charges are to be settled,and the most simple mode additional provision that a vessel having paid tonnage dues at that occurs to me of doing this is to name a certain sum per any one of the five treaty ports and having occasion to proceed ton on the registered burden of every vessel (above a certain to any other of the said ports to complete the disposal of her size)that may enter the ports.In considering the anchorage cargo should not be called upon to pay such dues a second time. and harbour charges,it is to be borne in mind that the govern- The French Treaty of Whampoa repeats these stipulations ment of China has hitherto done nothing towards facilitating (Article XV),but states explicitly,what is clear only by infer- commercial intercourse by building lighthouses,laying down ence from the clauses in the British and the American treaties, buoys or moorings,and erecting beacons,and therefore it neces- that a vessel shall be liable to tonnage dues only once for each sarily follows that these charges should be exceedingly light trip from a foreign country to China.s Elipoo,who died on the and equally well defined as the duties."s Thorough reform in 4th March 1843,+during the negotiations put in a plea for the retention of the Chinese hong merchants,to which Pottinger 1 Ch.Rep.Vol.II,November 1833,pp.302-303:Wm.C.Hunter,The Fan Kwae at Canton,2nd edition,Shanghai,1911,pp.99-100. IC.A.:I.G.Cires.Nos.16 of 1870 and 18 of 1870. 2P.Auber;China:An Outline of its Government,Laws and Policy: 2 This system of ship measurement was up to recently still in foree at ete,London,1834;pp.148,162,163,166-168,174,202,and319. certain Native Customs establishments for the calculation of junk dues 3 F.O.17/66,Pottinger to Aberdeen,desp.No.7,6th February,1843. 3 Tout navire francais ne devant en etre passible qu'une seule fois a Memorandum of 21st January,1843 from Sir Henry Pottinger to Imperial chacun de ses voyages d'un pays etranger en Chine".Article XV.French Treaties 1844.Treaties Conventions;op.cit;Vol.I,D.778. Commissioners;Ch.Rep.Vol.XII;1843;p.45. 4 F.O.17/66 Pottinger to Aberdeen,desp.No.14,10th March,1843
48 CHINA'S STRUGGLE FOR TARIFF AUTONOMY and men's ideas of such relations, before China could regain the fiscal freedom her Plenipotentiaries had so unwittingly signed away in 1842. Ab I't' f § 12. Besides doing away with the unauthorized o I "IOn 0 . ship's measure- leVIeS on goods the new treaty tariffs made a clean mebutt'tfet~s. sweep also ·of the notorious measurement fees1 u S I U IOn I . d h' . . of tonnage dues. eVle on eac ShIP, whIch varied from $650 for the Passing of smaller ships to $3,000 for a vessel of about 1 300 Co-hong , . tons, and of all the other numerous and burdensome exactions which had accreted under the heading of ship dues, such as entrance fee, clearance fee, grain commissioner's fee, tidewaiter's fee, gratuity to Hoppo, collector's fee, and at least nine other charges of like nature. By the thirties of the nineteenth . century these irregular charges, apart from the regular measurement fees, had become consolidated into a fixed levy of Taels 1950 exacted from practically every ship, and was the subject of repeated but unavailing protests from its victims.2 The oppressiveness of these combined regular and irregular ships fees may be gauged from the fact that for many years prior to the ratification of the Nanking treaty they amounted on the average to over six taels per registered ton, an exorbitant levy when it is remembered that nothing was provided in return in the form of aids to navigation or harbour and docking facilities. Writing in January 1843 to the Chinese Imperial Commissioner ~ir Henry Pottinger drew attention to this, pointing out that "after the tariff and import and export duties, the anchorage or harbour charges are to be settled, and the most simple mode . that occurs to me of doing this is to name a certain sum per ton on the registered burden of every vessel (above a certain size) that may enter the ports. In considering the anchorage and harbour charges, it is to be borne in mind that the government of China has hitherto done nothing towards facilitating commercial intercourse by building lighthouses, laying down buoys or moorings, and erecting beacons, and therefore it necessarily follows that these charges should be exceedingly light and equally well defined as the duties."3 Thorough reform in 1 Ch. Rep. Vol. II, November 1833, pp. 302-303: Wm. C. Hunter, The Fan Kwae .. pt Canton, 2nd edition, Shanghai, 1911, pp. 99-100. 2 P. Aubel'; China: An Outline of 'its Government, Laws and Policy' etc. London, 1834; pp. 148, 162, 163, 166-168, 174, 202, and 319. ' 3 F.O. 17/66, Pottinger to Aberdeen, desp. No.7, 6th February, 1843. Memorandum of 21st January, 1843 from Sir Henry Pottinger to Imperial Commissioners; Ch. Rep. Vol. XII; 1843; p. 45. THE FIVE :PER CENT AD T/ALOREJM TREATY TARIFF 49 the matter of these shipping dues was clearly indicated, and that reform, it was finally agreed, should take the shape of abolition of all measurement,entrance, clearance, and· other fees then in force, and of substituting for them a uniform levy of five mace per registered ton, the ton being regarded as equal to the cubic content of one hundred and twenty two tou (-4-), which was taken as equivalent to the English standard ton.' Accordingly in July 1843 a proclamation was issued by four of the highest Chinese authorities then at Canton-the High Commissioner, the Viceroy of the Liang Kwang, the Governor of Canton, and the Superintelldent of Customs abolishing for foreign shipping the old system of measurement by which a vessel's capacity was gauged according to its number of chang (?J:: ), the number of chang being calculated by taking the vessel's length between the fore and the mizzen masts, multiplying this by its breadth amidships and dividing the product by ten. 2 In the Supplementary :Treaty a modification was introduced (Article XVII) by which smaller vessels under 150 tons register plying between Hongkong, Canton and Macao, if not carrying dutiable articles should be exempt from tonitage dues, but if carrying dutiable articles should be liable to a levy of one mace per ton every trip, the minimum charge being fixed at seven and a half taels, a"nd the maximum at fifteen taels. Any vessel over a hundred and fifty tons was to pay at the five mace rate. Similar stipulations were embodied in the American Treaty of Wanghea(Articles VI and VII) with the additionaJ provision that a vessel having paid tonnage dues at anyone of the five treaty ports and having occasion to proceed to any other of the said ports to complete the disposal of her cargo should not be called upon to pay such dues a second time. The French Treaty of Whampoa repeats these stipUlations (Article XV), but states explicitly, what is clear only by inference from the clauses in the British and the American treaties, that a vessel shall be liable to tonnage dues only once for each trip from a foreign country toChina.3 Elipoo, who died on the 4th March 1843,4 during the negotiations put in a plea for the retention of the Chinese hong merchants, to which Pottinger i C.A.: LG. Circs. Nos. 16 of 1870 and 18 of 1870. 2 This system of ship measurement was up to recently still in force at certain Native Customs establishments for the calculation of junk dues. 3 Tout navire fran~ais ne devant en etre passible qu'une seule fols a chacun de ses voyages d'un pays "tranger en Chine". Article XV. French Treaties 1844. Treaties & Conventions; op. cit; Vol. I, p. 778. 4 F.O, 17/66 Pottinger to Aberdeen, desp. No .. 14, 10th March, 1843
50 CHINA'S STRUGGLE FOR TARIFF AUTONOMY THE FIVE PER CENT AD VALOREM TREATY TARIFF 51 replied that he had no objection provided it was recognized that salient facts of the situation.The trade with China at that they had no official status,that they should not be fixed in number time was essentially a barter one,and her purchasing power so as to create a'monopoly,that the goods of any country or was represented by the two products mostly in demand among vessel-should not in future come in rotation under the manage- foreigners,namely tea and silk,which were exchanged princi- ment of this or that hong merchant,and that British merchants pally against cotton and woollen manufactures from England should be left absolutely free to choose to whom they would give and America and opium from India,while any balance due on their business.1 The co-hong as an official body disappeared,its account of the large and growing import of opium had to be constituent members remained as private brokers. made good in actual export of silver.It was in fact the unauthor- ized but thriving opium trade which was the principal factor $13.These trade liberating treaties and their at that time tending to curtail the market in China for other Trade depression annexed tariffs,however,did not at once prove of eighteen foreign goods.The remedy as it presented itself to the Com- forties npt due what their framers and the foreign merchants mittee.was that steps should be taken to encourage a larger to Customs expected them to prove,the "Open Sesame"to a duties in China. export of tea from China,and this depended on a reduction of wonderland of unlimited trading possibilities. the British import duty which stood at 200%on the average Expectation,as so often in China,over-reached itself,and the qualities and at over 350%on the worst qualities.This was new era of prosperity,so eagerly envisaged by both diplomats also the remedy indicated by the British officials on the spot. and traders failed to materialize.Sir Henry Pottinger,in what Writing in February 1847 the Consul at Canton remarks:"How it is charitable to suppose was a moment of unthinking enthu- long the Chinese will be able to sustain this continual drain [i.e., siasm had told the merchants of Manchester that he had opened of 82,000,000]of the precious metals is impossible to determine, up a new world to their trade so vast "that all the mills in but the fact being now well established that the export of tea Lancashire could not make stocking stuff sufficient for one of to England cannot be increased under the present system of its provinces."It was a tantalizing dream to be followed by duties it is not difficult to foresee that,unless a new opening be a rude awakening.The enthusiasts seemingly forgot the intense found for a larger consumption of China's exports in our markets, conservatism of the Chinese people,forgot their very limited a gradual reduction must take place,either in the quantity or purchasing powers,and forgot that for centuries China as a the prices of our imports in China,until they come to a proper market had been self-sufficing and that foreign imports-some level."2 The Committee was also of the opinion that the opening of which were ill-adapted to local requirements-would have to of Shanghai in the immediate neighbourhood of the silk pro- compete with the home products of the country's vast and long- ducing districts would tend to the development of the trade in established domestic industries.In the three years immediately silk,the export of which article was steadily on the increase. following the signing of the treaty an extravagant boom in All witnesses,however,to whom the question was referred the export trade from Great Britain led to the glutting of the were unanimous in testifying to the lightness of the duties levied China market with foreign imports,and as China's powers of in China under the treaty tariff,and the Committee,in declaring absorption were severely limited,the results for British traders, that a substantial'reduction in the British import duty on tea when the reaction came,were disastrous.Conclusive proof was essential to a healthy and an extended trade,states"that of this will be found in the voluminous evidences given to the it would be no more than is due to the Chinese,who tax our House of Commons Select Committee,which sat from March products so lightly,while we burthen theirs so heavily."s From to July 1847,evidence which brought out very clearly the which it is clear.that whatever other causes may have been to 1F.O.17/66 Pottinger to Aberdeen,desp.No.7,6th February,1843. 1 B.P.P.Report from the Select Committee 1847;p.V.In 1846 the 2 B.P.P.Correspondence relative to the Earl of Elgin's Special Miesions average price of tea ex bond in England was 1s.4d.per Ib.,while the im- to Civina and Japan,1857-1859 p.244.:F.O.17/286:Elgin to Clarendon, port duty was 2s.2%d.per Ib. enclo.in desp.No.69,81st March,1858. 2 B.P.P.Returns of the Trade of the various Ports of China for the year 3B.P.P.Report from the Select Committee on Commercial Relations 1846;p.36. 切ith China,1847. 3 B.P.P.Report from the Select Committee,1847;p.V
50 CHINA'S STRUGGLE FOR TARIFF AUTONOMY replied that he had no objection provided it was recog~ized tha,t they had no official status, that they should not be fixed m number so as to create a 0 monopoly, that the goods of any ocountry or vessel should not in future come in rotation under the management of this or that hong merchant, and that British merchants should be left absolutely free to choose to whom they would give their business. 1 The co-hong as an official body disappeared, its constituent members remained as private brokers. . Trade depression of eighteen forties npt due to Customs duties in China. § 13. These trade liberating treaties and their annexed tariffs, however, did not at once prove what their framers and the foreign merchants expected them to prove, the "Open Sesame" to a . wonderland of unlimited trading possibilities. Expectation, as so often in China, over-reached itself, and the new era of prosperity, so eagerly envisaged by both diplomats and traders failed to materialize. Sir Henry Pottinger, in what it is charitable to suppose was a moment of unthinking enthusiasm had told the merchants of Manchester that he had opened up a new world to their trade so vast "that all the mills in Lancashire could not make stocking stuff sufficient for one Of its provinces."2 It was a tantalizing dream to be followed by a rude awakening. The enthusiasts seemingly forgot tht:: intense conservatism of the Chinese people, forgot their very limIted purchasing powers, and forgot that for centuries China as a market had been self-sufficing and that foreign imports-some of \yhich were ill-adapted to local requirements- would have to compete with the home products of the country's vast and longestablished domestic industries. In the three years immediately following the signing of the treaty an extravagant boom in the export trade from Great Britain led to the glutting of the China market with foreign imports, and .as China's powers of absorption were severely limited, the results for British traders, when the reaction came, were :disastrous: Conclusive proof of this will be found in the voluminous evidences given to the House. of Commons Select Committee, which sat from March to July 1847, evidence which brought out very clearly the 1 F.O. 17/66 Pottinger to Aberdeen, desp. No.7, 6th February, 1843. 2 B.P.P. Correspondence relative to the Ea"lof E:lgin's Special Mig"ions to China etnd Japan, 1857-J.859 p. 244.·, F.O. 17/286: Elgin to Clarendon, enclo. in desp. No. 69, 31st March, 1858. .. 3 B.P.P. Repot·t fT'Om the Select Committee on: Comm·erc,at Relet/IOns with China, 1847. THE FIVE PER CENT AD VALOREjM TREATY TARIFF 51 salient facts of the .situation. The trade with China at that time was essentially a barter one, and her purchasing power was represented by' the two products mostly in demand among foreigners, namely tea and silk, which were exchanged principally against cotton and woollen manufactures from England and America and opium from India, while any balance due on account of the large and growing import of opium had to be made good in actual export of silver. It was in fact the unauthorized but thriving opium trade which was the principal factor at that time tending to curtail the market in China for other foreign goods. The remedy as it presented itself to the Committee o was that steps should be taken to encourage a larger export of tea from China, and this depended on a reduction of the British import duty which stood at 200% on the average qualities and at over 350% on the worst qualities. 1 This was also the remedy indicated by the British officials on the spot. Writing in February 1847 the Consul at Canton remarks: "How long the Chinese will bOe able to sustain this continual drain [i.e., of £2,000,000] of the precious metals is impossible to determine, but the fact being now well established that the export of tea to England cannot be increased under the present system of duties it is not difficult to foresee that, unless a new opening be found for a larger consumption of China's exports in our markets, a gradual reduction must take place, either in the quantity or the prices of our imports in China, until they come to a proper level."2 The Committee was also of the opinion that the opening of Shanghai in the immediate neighbourhood of the silk producing districts would tend to the development of the trade in silk, the export of which article was steadily on the increase. All witnesses, however,' to whom the question was referred were unanimous in testifying to the lightness of the duties levied in China under the treaty tarjff, and the. Committee, in declaring that a substantial' reduction in the British import duty on tea was essential to a healthy and an extended' trade,' states· "that it would be no more than is flue to the Chinese, who tax our products so lightly, while we burthen theirs so heavny~"3. From which it is clear. that whatever other causes may have been to i B.P.P. Repo1"t from the Select Committee 1847; p. V. In 1846 the . average price of tea ex bond. in England wa.s ls. 4d. per lb., while the import duty was 2s.2 1A.d.per lb. 2 B.P.P. Retu1"ns of the Trade of the various Ports of China for the year 1846, p. 3&. 3 B.P.P. Report from the Select COtnmittee, 1847; p. V