《近代中国对外关系史 The History of Modern China's Foreign Relations》课程教学资源（阅读材料）CHINA'S STRUGGLE FOR TARIFF AUTONOMY（1843 -1938）

52 CHINA'S STRUGGLE FOR TARIFF AUTONOMY THE FIVE PER CENT AD VALOREM TREATY TARIFF 53 blame at that time for the decline in China's foreign trade,heavy helped materially to develop the coasting trade of foreign vessels import and export taxation was not one of them. in native produce.Banditry,and more especially the Taiping Rebellion (1850-1864)-which originated in the province of $14.The trade depression,which had reached Kwangsi and spread with devastating fury through Hunan and Growth of opium trade its lowest point at the time the Committee was down the Yangtze Valley-not only prevented trade from reach- Efect of Taiping prosecuting its enquiries,passed,and by the early ing the development it would otherwise have attained,but also trade.Origin fifties the tide had turned.In the quinquennium Rebellion on penalized what did exist by forcing it out of its natural channels. and development 1843-1847 the average export of tea from China The rebellion did more.The suppressing of it caused such of likin. to all countries was about sixty-six million pounds a drain upon the Imperial exchequer,or rather upon the pro- per annum;in the following quinquennium 1848-1852 it had vincial treasuries feeding that exchequer,that special measures risen to approximately eighty-six million pounds per annum, had to be devised for the raising of the necessary funds to while during the next five years 1853-1857 it rose to one hundred maintain the Imperial troops.In such circumstances,the tax- and nine million pounds per annum. Similarly,the export of ation of trade has always commended itseif to Chinese.rulers silk for the two ports of Canton and Shanghai rose from an as being the easiest,quickest and most productive way of raising average of eleven thousand seven hundred and fifty bales per money.The treaty tariff stood in the way of raising the duty annum for the years 1848-1852,to an average of sixty-one rates on foreign imports and on native goods when actually thousand five hundred and ninety bales per annum for Shanghai exported abroad,while the treaty declaration fixing the inland alone for the years 1883-1837.Other articles of which the Customs rates then prevailing as the rates leviable on foreign export now began to show signs of expansion were cassia merchandise when conveyed inland presented,or was intended lignea,grasscloth,sugar and sugar candy,although the growth to present,a similar barrier against increasing taxation on such in the sugar trade was largely an inter-port one cultivated mainly inland transit goods,but there was the vast domestic inter- as a means of placing funds in Shanghai.All the same,this provincial trade with which foreigners were in no way concerned development was not such as to bring about a large increase in and there was also the trade in native produce while en route the import of cotton and woollen goods,but it benefited the to a treaty port and destined for eventual export abroad,both opium trade,the average annual import of which.during the of which were then free from treaty restrictions and both of quinquennium 1858-57 practically doubled what it had been which could be made to bear a fair share of the state's financial during the period 1848-47,and this too,in spite of the fact that burden.Out of these circumstances arose likin,which,although at this time the drug was being produced on a large scale in originally meant to be a sales tax,became,shortly after its China by the Chinese themselves.In fact,while China's pur- origin in 1851,simply a transit tax on native produce passing chasing power increased rapidly during the fifties through the from one province to another or even from one town to another growth of its export trade in tea and silk,the advantage went within the same province.1 Gradually the levy was extended not to British manufacturers,but mainly to the opium dealers of India,so that the former found themselves in the position 1 According to the historieal work Yung Haien Chai (of Ch'en Ch'i-ytan(魄共元)the likin tax was first devised by Lei I-ch'eng of having to make good the balance against them by shipments (衢以城)，then in charge of the districts of Huaian(把安)and Yangchow of treasure,which was a complete reversal of the position that (论州)in Kiangpel(江北)，who is3 aid to have got the idea from a form had obtained a few years earlier.Other factors,however,besides of taxation that was in force during the Sung dynasty.Lei memorialized the Throne and obtained permission to establish stations and collect a tax that of trade penetration were now making their influence felt, of what was originally meant to be one per mille,but speedily became one factors which in the long run affected vitally not only the rates per cent on the value of all goods passing through his district.This was about 1850 or 1851,and the purpose of the tax was to provide funds for of the tariffs,but also the administration of that tariff.As the suppression of the Nien-fei (insurrection.In 1852 Hu Lin-i so often in history,the cessation of war was followed by an (胡林织)，an Imperial Commissioner in charge of train-bands in Hunan aftermath of disorder,of piracy at sea,and banditry and rebel- and subsequently Governor of Hupeh,followed the example of Lei I-ch'eng, lion on land.Piracy made trading unsafe for native shipping and petitioned for,and received Imperial authority to levy likin in the two Hu provinces.By this time the Taiping Rebellion was in full swing,and and,by driving Chinese merchants to employ foreign vessels, the demands in consequence on the military exchequers of the provinces

52 CHINA'S STRUGGLE FOR TARIFF AUTONOMY blame at that time for the decline in China's foreign trade, heavy import and export taxation was not one of them. § 1<1. The trade depression, which had reached G.rowtth °df its lowest point at the time the Committee Was opIUm ra e. Eff.ect Ilf Taiping prosecuting its enquiries, passed, and by the early t~:3:.IliOri~~n fifties the tide had turned. In the quinquenni~m and development 1843-1847 the average export of tea from Chma of Ukin. to all countries was about sixty-six million pounds per annum i in the following quinquennium 1848-1852 it had risen to approximately eighty-six million pounds per annum, while during the next five years 1853-1857 it rose to one hundred and nine million pounds per annum. Similarly, the export of silk for the two ports of Canton and Shanghai rose from an average of eleven thousand seven hundred and fifty bales per annum for the years 1848-1852, to an average of sixty-one thousand five hundred and ninety bales per aimum for Shanghai alone for the years 1833-1837. Other articles of which the export now began to show signs of expansion were cassia lignea, grasscloth, sugar and sugar candy, although the growtp. in the sugar trade was largely an inter-port one cultivated mainly as a means of placing funds in Shanghai. All the same, this development was not such as to bring about a large increase in the import of cotton and woollen goods, put it benefited the opium trade, the average annual import of which, during the quinquennium 1853-57 practically doubled What it had been during the period 1843-47, and this too, in spite of the fact that at this time the drug was being produced on a large scale in China by the Chinese themselves. In fact, while China's pur- . chasing power increa!\ed rapidly during the fifties through the growth of its export trade in tea and silk, the advantage went not to British manufacturers, but mainly to the opium dealers of India, so that the former found themselves in the position of having to make good the balance against them by shipments of treasure, which was a complete reversal of the position that had obtained a few years earlier. Other factors, however, besides that of trade penetration were now making their influence felt, factors which in the long run' affected vitally not only the rates of the tariffs, but also the administration of that ta.riff. As so often in history, the cessation of war Was followed by an aftermath of disorder, of piracy at sea, and banditry and rebel￾iion on land. Piracy made trading unsafe for native shipping and, by driving Chinese mercJ1ants to employ foreign vessels, THE FIVE PER CENT AD VALOREM TREATY TARIFF 53 helped materially to develop the coasting trade of foreign vessels in native produce.. Banditry, and· more especially the Taiping Rebellion (1850-1864) -which originated in the province of Kwangsi and spread with devastating fury through Hunan and down the Yangtze Valley-not only prevented trade from reach￾ing the development it would otherwise have attained, but also penalized what did exist by forcing it out of its natural channels. The rebellion did more. The suppressing of it caused such a drain upon the Imperial exchequer, or rather upon the pro￾vincial treasuries feeding that exchequer, that special measures had to be devised for the raising of the necessary funds to maintain the Imperial troops. In such circumstances, the tax- ' .ation of trade has always commended itself to Chinese rulers as being the easiest, quickest and most productive way of raising money. The treaty tariff stood in the way of raising the duty rates on foreign imports and on native goods when actually exported abroad, while the treaty declaration fixing the inland Customs rates then prevailing as the rates leviable on foreign merchandise when conveyed inland presented, or was intended to present, a similar barrier against increasing taxation on such inland transit goods, but there was the' vast domestic inter￾provincial trade with which foreigners were in no way concerned and there was also the trade in native produce while en route to a treaty port and destined for eventual export abroad, both of which were then free from treaty restrictions and both of which could be made to bear a fair share of. the state's financial burden. Out of these circumstances arose liki'T", which, although originally meant to be a sales tax, pecame, shortly after its origin in 1851, simply a transit tax on native produce passing from one province to another or even from one town to another within the same province.i Gradually the levy was extended 1 A~cording to the historical work Yung HBien Chai (II fJll ~) of Ch'en Ch'i-yuan (lIJIt ~ :7G) the likin tax was first devised by Lei I-ch'eng ('lit ~ ID.~ ), then in charge of the districts of Huaian ('i'fii '!i ) and Yangchow (~ j>1'1 ) in Kiangpei (iI =It), who is said to have got the idea from a form of taxation that was in force during the Sung dynasty. 'Lei memorialized the Throne and obtained permission to establish stations and collect a tax of what was originally meant to be one per mille, but speedily became one per cent on the value of all goods passing through his district. This was about ·1851') or 1851, and the purpose of the tax was to provide funds for the suppression of the Nien-fei (til; Jil!'.) insurrection. In 1852 Hu Lin-i (M 01* lit), an Imperial Commission-er in charge of train-bands in Hunan and subsequently-Governor of· Hupeh, followed the example of Lei I-ch'eng, and petitioned for, and received Imperial authority to levy likin in the two Hu provinces. By this time the Taiping Rebellion was in full swing, and the demands in consequence on the military exchequers of the provinces

CHINA'S STRUGGLE FOR TARIFF AUTONOMY THE FIVE PER CENT AD VALOREM TREATY TARIFF 55 54 to foreign duty-paid imports going inland,in defiance of the foreign Inspectorate of Customs.The story of that event will clause in the French treaty that the transit taxes on such goods be told in a subsequent chapter:but here it should be noted that were not to be increased.The rate of the levy was nominally it was the establishment of the foreign Inspectorate with its one per mille on the value of the goods,but this rate was a "element of probity and vigilance,"which undoubtedly saved polite fiction,the actual rates levied being settled on the principle the treaty tariff,and as that Inspectorate was created for the of extracting as much as the trade could stand.The tax had express purpose of seeing to it that the dues and duties 'sanc- the Imperial sanction,but all details as to rates and methods tioned by that tariff were to be impartially applied to all foreign of collection were left to the provincial authorities.The new shipping and trade,it naturally came about that the treaty tax spread like an epidemic,and by the time of the signing of tariff and the Service built up by the foreign Inspectorate under the Treaty of Tientsin in June 1858 it was firmly established all the jurisdiction of the Chinese Government became from the along the Yangtze River and in practically every province south very outset inseparably bound together as component parts of a of it.So wide-spread and deeply-rooted a system of internal whole,the raison d'etre of that Service,in the eyes of Chinese trade taxation,with practically no limits to its exactions and and foreigners alike,being the honest and efficient administra- operations,made actual the very danger which Sir Henry tion of the treaty tariff,of treaty provisions governing foreign Pottinger had hoped to guard against by the transit dues clause trade,and of Customs regulations framed in accordance with in the Treaty of Nanking,1 and became the reason for the inser- and on account of the trade articles in the treaties.Subsequent tion of much more comprehensive provisions in the Treaty of events enlarged considerably the activities of that Service,but Tientsin and its supplementary Rules of Trade.2 throughout all developments its primary and most important function has remained unchanged,namely "to give the most Capture of $15.A second development of the Taiping complete execution to the treaty provisions for the equal collec- Shanghai by Rebellion,affecting not,like likin,the treaty tariff tion of duties,and in all cases of fraud or irregularity rigorously rebels.Origin treatment of goods native and foreign but the to enforce the penalties."1 That such an institution for such of the foreign Inspectorate of administration of that tariff,was the capture on a purpose should be necessary throws a sidelight on the condi- Customs. 7th September,1853 of the Shanghai native city tions under which foreign trade was then conducted at Shanghai, Prevalence of by the Triad Society(三合會)，the looting of and illustrates the truth of the statement just made that the smuggling at the Custom House,the flight of the Taotai,or establishment of this institution saved the treaty tariff Shanghai and Shanghai in the decade since its opening to foreign trade had other treaty Customs Superintendent,and the consequent ac- tion of the British and the American Consuls to forged quickly ahead,and by this time (1853)occupied the ports. ensure the payment of the dues and duties rightly payable to proud position of being the premier port.Unfortunately,with China,action which eventually led to the establishment of the that distinction she stood preeminent also in smuggling and in all manner of Customs malpractices.In spite of the fact that affected were ineessant and inereasingly heavy.The new tax became the tariff rates were now known to all,and in spite of the fact popular with harrassed officials and not omly spread rapidly to every that those rates were admittedly most moderate in character, provinee on the lower and middle Yangtze but also rose in some places to as high a rate as five per cent.It was not till 1857 or 1858 that the evasion of payment of those rates at every possible opportunity tax was introduced into Kwangtung,also to provide for military expenditure. was widespread among both Chinese and foreign merchants. Generally speaking,likin was divided into hsing-li(行)and tao-li(坐整) The Customs officials,too,from the Taotai downwards,connived the former levied on goods in transit,and the latter on goods at place of produetion and/or of consumption.Theoretically,hsing-li and tso-li were at these malpractices and benefited by them by acting in collusion each divided into two levies of two per cent each,the one known as ch'i-li with dishonest traders to defraud the revenue.2 At that time (起t)and the other as yen-li(驗)，Wherever these four levies were exacted it meant that the goods in question were called on to pay eight .per cent on their value.In practice,however,there was wide diversity both I Offcial notification issued on 6th July,1854 at Shanghai by the British, in the number of levies and in.the rates levied,each province being in fact the American,and the French Consuls in consequence of the agreement a law to itself in this respect. entered into on 29th June,1854 with the Taotai.Vide N.C.H.No..206;8th 1 Vide ante $4. y,1854:p.194. 2 Treaties and Comventions;op.eit.Vol.I;pp.412-413;426-427. 2 B.P.P.Further Papers relating to the Rebellion in China 1863;p.174,59

54 CHINA'S STRUGGLE FOR TARIFF AUTONOMY to foreign duty-paid imports going inland, in defiance of the Clause in the French treaty that the transit taxes on such goods were not to be increased. The rate of the levy was nominally one. per mille on the' value of the goods, but this rate was a polite fiction, the actual rates levied being settle<tpn the principle of extracting as much as the trade could stand. The' tax had the Imperial sanction, but all details as to rates and methods of collection were left to the provincial authorities. The new tax spread like an epidemic, and by the time of the signing of the Treaty of Tientsin in June 1858 it was firmly established all along the Yangtze River and in practically every province south of it. So wide-spread and deeply-rooted a system of internal trade taxation, with practically no limits to its eX;l.Ctions and operations, made actual the very danger which Sir Henry Pottinger had hoped to guard against by the transit dues clause in the Treaty of Nanking,l and became the reason for the inser￾tion of much more comprehensive provisions in the Treaty of Tientsin and its supplementary Rules of Trade. 2 Capture of § 15. A second development of the Taiping . 'Shanghai by Rebellion, affecting not, like l'ikin, the treaty tariff rebels. Origin of the foreign treatment of goods native and foreign but the Inspectorate of administration of that tariff, was the capture on Customs. 7th September, 1853 of the Shan¥hai native city Prevalence of by the Triad Society (=: f,- if), the looting of smuggling at the Custom House, the fl.ight of the Taotaf, or Shanghai and other treaty Customs Superintendent, and the consequent ac- . ports. tion of the British and the American Consuls to ensure the payment of the dues and duties rightly payable to China, action which eventually led to the establishment of the affected were incessant and increasingly he.avy. The new tax became popular with harrassed officials and not oUly spread rapidly to every province on the lower and middle Yangtze but also rose in some places to as high a rate as five per cent. It was not till 1857 or 1858 that the tax was introduced into Kwangtllng, also to provide for military expenditure. Generally speaking, likin: was divided into hsing-Ii (11 lli) and tso-Ii (~ lI:) the former levied on goods in transit, and the latter on goods at place of .producti.on and lor of consumption. Theoretically, hsing-li and tso-Ii were each divided into two levies of two per cent each, the one known as ch'i-li (j\g .) and the other as yen-Ii (~If). Wherever these four levies were exacted it meant that the goods in question were called on to pay eight .per cent on their value. In practice, however, there was wide diversitv both in the nu~ber of levies and in· the rates levied, each province being in fact a law to itself in this respect. 1 Vide ante §4. 2 Treaties and Conventions; op. cit .. Vol. I; pp. 412-413; 426-427. THE FIVE PER CENT AD VALOREM TREATY TARIFF 55 foreign Inspectorate of Customs. The story of that event will be told in a subsequent chapter; but here it should be noted that it was the establishment of the foreign' Inspectorate with its "element of probity and vigilance," which undoubtedly saved the treaty tariff, and as that Inspectorate was created for the express purpose of seeing to it that the dues and duties 'sanc￾tioned by that tariff were to be impartially applied to all foreign shipping and trade, it naturally came about that the treaty tariff and the Service built up by the foreign Inspectorate under the jurisdiction of the Chinese Government became from the very' outset inseparably bound together as component parts of a whole, the raison d'etre of that Service, in the eyes of Chinese and foreigners alike, being the honest and efficient administra￾tion of the treaty tariff, of treaty provisions governing foreign trade, and of CustO)TIS regulations framed in accordance with and on account of the trade articles in the treaties. Subsequent events enlarged considerably the activities of that Service, but throughout all developments its primary and most important function has remained unchanged, namely "to give the most complete execution to the treaty provisions for the equal collec￾tion of duties,and in all cases of fraud or irregularity rigorously to enforce thfl penalties." 1 That such an institution for such a purpose should be necessary throws a sidelight on the condi￾tions.under which foreign trade was then conducted at Shanghai, an.d Illustrates the truth of the statement just made that the establishment of this institution saved the treaty tariff. Shanghai in the decade since its opening to foreign' trade had forged quickly ahead, and by this time (1853) occupied the proud position of being the premier port. Unfortunately, with that distinction she stood preeminent also in smuggling and in all manner of Custom's malpractices. In spite of the fact that the tariff rates were now known to all, and in spite ~f the fact that those rates were admittedly most moderate in character evasion of payment. of those rates at every possible opportunit; was widespre!l:d among both Chinese and foreign merchants. The Customs officials, too, from the Taotai downwards, connived at these malpractices and benefited by them by acting in .collusion with dishonest traders to defraud the revenue. 2 At that time . 1 Official notification issued on 6th July, 1854 at Shanghai by the British the American, and the French Consuls in consequence of the agreement entered into on 29th June, 1854 with the Taotai. llide N.C.H. No .. 206; 8th July, 1854; p. 194. 2 B.P.P.Further Papers relating to the Rebellion in Chi= 1863; p. 174, §9

56 CHINA'S STRUGGLE FOR TARIFF AUTONOMY THE FIVE PER CENT AD VALOREM TREATY TARIFF 57 Shanghai was crowded with "a most ungovernable collection of at Amoy at this time the British Consul there states that- abandoned adventurers"of all nations,many of them the back- "smuggling has now so greatly increased,and has been so wash from the California gold rush,drawn to China by the actively carried on,particularly by foreign ships"'that he found hope of gain,which they intended to make out of the disturbed a "difficulty in assigning a reasonable limit to the value of the political and lawless trade conditions then prevailing.2 Ruther- goods smuggled."He deplores that much of this clandestine ford Alcock,at that time British Consul at Shanghai,drew trade goes on under the British flag,but the chief person to be attention to this danger."The worthless character of a num- blamed for the prevalence of these corrupt practices is,in his erous gathering of foreigners of all nations,under no effective opinion,the Tartar Brigadier General in charge of the Amoy control,is a national reproach as well as a public calamity. Custom House.1 Parkes,writing in 1853,reported that "At They dispute the field of commerce with honest men,and convert Amoy it is well known that scarcely one half of the imports privileges of access and trade into means of fraud and violence. are reported,and that the Custom House accounts of exports are In this career of license,unchecked by any fear of their own little more than nominal."2 Canton with its long tradition of Governments,and protected,in a great degree,by treaties from illicit trading had the same tale to tell of lawless evasion of the action of the native authorities,the Chinese are the first treaty tariff duties and of defiance of treaty stipulations,while and greatest,but by no means the only sufferers.There is no the extent of smuggling at Foochow and Ningpo was restricted Government or nation of the great European family that does only by the opportunities offered.At Ningpo the doings of the not suffer in character,and insofar as they have any interests coasting trade lorchas,and their convoying activities had become at stake in China,in these also,both immediately and prospec- an open scandal.In checking this lawlessness the foreign- tively."s Successful smuggling on so extensive a scale as then controlled Custom House at Shanghai,sponsored at its inception prevailed not only robbed the revenue,but inevitably brought by the Consular authorities of the three leading Powers,but down market prices for goods of the same nature as those functioning subsequently under the control of the Taotai and smuggled in and tended to raise the price of goods of the class confining its activities solely to the enforcement of the treaty smuggled out,thus penalizing honest traders who found them- tariff and rules of trade,was from the first a marked success, selves obliged either to practise dishonesty themselves or go in spite of the strong opposition of those who had profited by out of business.Small wonder,then,that "foreign merchants the slack methods of the past.It swept away the accommodat- in direct Custom House relations with Chinese authorities,all ing bargain method of settling duties payable,insisted upon more or less venal and corrupt,launched into a wholesale system complete and accurate declaration of all cargo shipped or of smuggling and fraudulent devices for the evasion of duties. landed against pain of fine or confiscation for false declaration, Chinese laws and treaty stipulations were alike disregarded, saw to it by proper examination that the goods tallied with the sometimes by one party with forcible infractions of port regula- declaration,took care that all duties leviable were assessed and tions,oftener by bribery and collusion between the native autho- paid in full,and rendered to the authorities concerned full and rities and the foreigners.The Imperial revenue was defrauded detailed accounts of all duties levied.In all this it was simply by both;and foreign trade was demoralized and converted into making effective the terms of the treaty and of the treaty tariff, a game of hazard and overreaching."4 This state of affairs was and in so doing it saved both from becoming a dead letter.The by no means confined to Shanghai.Writing of the conditions outburst of angry protest and of vilification which greeted its ineeption gradually died down,so that by the time Lord Elgin 1 B.P.P.Memorials-to the British Minister on-Revision of the Treaty came to conduct the negotiations for the Treaty of Tientsin all of Tientsin 1868;p.31. honest merchants were in favour of the new institution,although 2 Tyler Dennett:Americans in Eastern Asia,New York,1922: some of them,-forgetful,so far as the British were concerned. pp.188-189. 3 B.P.P.Correspondence relative to the Earl of Elgin's Special Missiona to China and Japan 1857-1859,p.55. 1 B.P.P.Returns of the Trade of the Various Ports of China for the 4B.P.P.Correspondence relative to the Earl of Elgin's Special Missions year81847td1848.p.30 and pp.92-93. to China and Japan 1857-1859;p.56.: 2F.O.228/151:Bonham to Clarendon,desp.No.84,9th August,1853

56 CHINA'S STRUGGLE'FOR'TARIFF AUTONOMY Shanghai was crowded with "a most ungovernable collection of abandoned adventurers"l of all nations, many of them the back￾wash from the California gold rush, drawn to China by the hope of gain,. which they intended to make out of the disturbed political and lawless trade conditions then prevailing.2 Ruther￾for¢! Alcock, at that time British Consul at Shanghai, drew attention .to this danger. "The worthless character of a num￾erous gathering of foreigners of all nations, under no effective control, is a national reproach as well as a public calamity. They dispute the field of commerce with honest men, and convert privileges of access and trade into means of fraud and violence. In this career of license, unchecked by any fear of their own Governments, and protected, in a great degree, by treaties from the action of the native authorities,· the Chinese are the first and greatest, but by no means the only sufferers. There is no Government or nation of the great European family that does not suffer in character, and insofar as they have any interests at stake in China, in these also, both immediately and prospec￾tively."3 Successful smuggling on so extensive a scale as then prevailed not only robbed the revenue, but inevitably brought down market prices for goods of the same nature as those smuggled in and tended to raise the price of goods of the class smuggled out, thus penalizing honest traders, Who found them￾selves obliged either to p,ractise dishonesty themselves or go out of business. Small wonder, then, that "foreign merchants in direct Custom House relations with' Chinese uL1thorities, all more or less venal and conupt, launched into a wholes.:!le system of smuggling and fraudulent devices for the evasion of duties. Chinese laws and treaty stipUlations were alike disregarded, sometimes by one party with forcible infractions of port regula￾tions, oftener by bribery and collusion between the native autho￾rities and the foreigners. The Imperial revenue was defrauded by both; and foreign trade was demoralized and converted into a game of hazard and overreaching."4 This state of affairs was by no. means confined to Shanghai. Writing of the conditions 1 B.P.P. Memorials-to the British Minister on-Revision of ,the Treaty. of Tientsin 1868; p.31. . 2Tyler Dennett: A'mericans in Eastern Asia, New York, 1922: pp. 188-189. 3 KP.P. Correspondence relative to the Ea1'l of Elgin's Special Missions to China and Japan 18.57-1859, p. 55. . 4 B.P.P. Corre'spondence relative to the B,WI or Elgin's Special MissiOns to C~ina and .Japan 1857-1859; p" 56.: -THE FIVE PER CENT AD VALOREM TREATY TARIFF 57 at Amoy at this time the British Consul there states that-- "smuggling has now so greatly increased, and has been so actively carried on, particularly by foreign ships" that he found a "difficulty in assigning a reasonable limit to the value of the goods smuggled." He deplores that much of this clandestine trade goes on under the British flag, but the chief person to be blamed for the prevalence of these corrupt practices is, in his opinion, the Tartar BrIgadier General in charge of the Amoy Custom House.l Parkes, writing in 1853, reported that "At Amoy it is well known that scarc€ly one half of the imports are reported, and that the Custom House accounts of exports are little more than nominal."2 Canton with itf: long tradition of illicit, trading had the same tale to tell of lawless evasion of treaty tariff duties and of defiance of treaty stipulations, while the extent of smuggling at Foochow and Ningpo was restricted only by the opportunities offered. At Ningpo the doings of the coasting trade lorchas, and their convoying activities had become an open scandal. In checking this lawlessness the foreign￾controlled Custom House at Shanghai, sponsored at its inception by the Consular authorities of the three leading Powers, but functioning subsequently under the control of the Taotai and confining its activities solely to the" enforcement of the treaty tariff and rules of trade, was from the first a marked success, in spite of the strong opposition of those who had profited by the slack methods of the past. It swept away the accommodat￾ing bargain method of settling duties payable, insisted upon complete and accurate declaration of all cargo shipped or landed against pain of fine or confiscation for false declaration, saw to it by proper examination that the goods tallied with the _declaration, took care that all duties leviable were assessed and paid in full, and rendered to the authorities concerned full and detailed accounts of all duties levied. In all this it was simply making effective the terms of the treaty and of the treaty tariff, and in so doing it saved both from- becoming a dead letter. The outburst 6f angry protest and of vilification which greeted its inception gradually died down, so that by the time Lord Elgin came to conduct the negotiations for the Treaty of Tientsin all honest merchants were in f!l-vour of the new institution, although some of them,-forgetful, so far as the British were concerned. ~ B.P.P. Returns of the Trade of the Various Ports of China for the yea,'s 181,7 ,and 1848. p. 30 and pp. 92-93. 2 F.O. 221>/151: Bonham to Clarendon, desp. No, 84, 9th August, 1853

THE FIVE PER CENT AD VALOREM TREATY TARIFF 59 CHINA'S STRUGGLE FOR TARIFF AUTONOMY of the clear implications of Article II of the Treaty of Nanking, fifty tons,granting to coasting vessels the privilege of paying of Article XII of the Treaty of Hoomunchai and of Article XV these tonnage dues only once every four months,and providing for the maintenance of lights,buoys,and beacons out of tonnage of the General Regulations of Trade of 1843,all of which articles, although unilaterally renounced by the British Government in dues receipts (XXIX and Rule 10);the stipulating that duties May 18511 were yet not formally abrogated,objected to the shall be paid to bankers authorized by the Chinese Government prominent part taken by the Consular authorities in promoting and shall be either in sycee or in foreign money'according to and supporting the new establishment,an objection shared also the assay made at Canton on 13th July 1843 (XXXIII),the making of the master of.a ship liable to a fine of five hundred by some of the officials both in China and in the home countries. Another and more reasonable objection was that as long as taels for presentation of a false manifest,and the ordering of the foreign inspectorate system was confined to Shanghai and the deposit,within twenty-four hours of a ship's arrival,of her not made operative also in the other open ports where free and papers with the Consul,who in his turn,also within twenty-four easy Customs methods still prevailed,so long would Shanghai hours,is to report details of the ship and the nature of her cargo merchants and Shanghai trade be at an unfair disadvantage. to the Superintendent of Customs (XXXVII);the right of re- This objection,as we shall see,was effectively dealt with in export of duty-paid imports entitling the merchant to a duty the Treaty of Tientsin. exemption certificate if the goods were re-exported to another treaty port,and to a drawback if re-exported abroad (XLV); Tariad16.With the political events which directlyo and the enforcement at all ports of one uniform system for the indirectly occasioned the.Treaty of Tientsin protection of the revenue,which in practice meant the extension cfTreaty(1858)with its appended Rules of Trade,made to all the open ports of the organization created under the foreign of Tientsin.in pursuance of Article XXXI of that treaty,and Inspectorate at Shanghai (Rule 10).To make clear,however, the supplementary Convention of Peking (1860)we are not the Chinese nature and control of this organization,this rule here concerned,but the changes in the tariff and in the treaty stipulates that the High Officer appointed by the Chinese articles concerning trade and the conditions which necessitated Government to superintend foreign trade shall.be "at liberty these changes demand consideration in detail.Chief among of his own choice and independently of the suggestion or these changes were the definite acceptance of five per cent nomination of any British authority,to select any British subject ad valorem as a uniform basis for the calculation of all specific he may see fit to aid him in the administration of the Customs rates;the enlargement of both the import and export schedules revenue;in the prevention of smuggling;in the definition of the tariff so as to include a much greater number of articles of port boundaries;or in discharging the duties of harbour of trade;the legalization of the opium trade (Rule V);the master;also in the distribution of lights,buoys,beacons and opening of Tiertsin,Newchwang,Tengchow,2 Swatow,Kiung- the like;the maintenance of which shall be provided for out chow,Taiwan in Formosa,and Chinkiang with right of access of tonnage dues." to three other ports on the Yangtze as soon as conditions would warrant it (X,XI and IV of Peking Convention);agreement $17.As the tariff was to be one of the main Tariff reduetion, that duties on goods should be payable on the landing for im- and other issues for discussion and settlement the Earl of ports and on shipment for exports (XXV),the fixing of a ten proposals of Elgin,even before his arrival in China,addressed year limit for revision of tariff and commercial articles Shanghai a circular to all the British Consuls then in China Chamber of (XXVII);the fixing of transit dues both inwards and outwards requesting them to put themselves in touch with at half the tariff rates or two and a half per cent ad valorem Commeree.the Chambers of Commerce and leading mer- (XXVIII and Rule 7);lowering of tonnage dues from five mace chants so as to obtain from them reliable information on the to four mace per ton for vessels of more than one hundred and effect of the existing tariff rates on British import trade.1 This 1 Vide supra $2,p.8 footnote,and Chap.II,$2,pp.86-91. 1F.O.17/275:Elgin to Clarendon,desp.No.33,9th August,1867. B.P.P.Correspondence relative to the Earl of Elgin's Special Miasions 2Chefoo,having a better harbour,was subsequently substituted for to China and Japan,1857-59;p.32. this port

58 CHINA'S STRUGGLE FOR TARIFF AUTONOMY of the ~lear implications of Article II of the Treaty of Nanking, of Article XII of the Treaty 'of Hoomunchai and of Article XV of the General Regulations of Trade of 1843, all of ,which articles, although unilaterally renounced by the British Government in May 18511 were yet not formally abrogated, objected to the prominent part taken by the Consular authorities in promoting and supporting the new establishment, an objection shared also by some of the officials both in China and in the home countries. Another and more reasonable objection was that as long as the foreign inspectorate system was confined to Shanghai and not made operative also in the other open ports where free and easy Customs methods still prevail~d, so long would Shanghai merchants and Shanghai trade be at an unfair disadvantage. This objection, as we .shall see, was effectively dealt with in the Treaty of Tientsin. Tariff and trade ~ 16: With the ~olitical events which directly or I f 'T t mdlrectly occaSIOned the Treaty of Tientsin causes 0 rea y '. ' f T· t' (1858) WIth its appended Rules of Trade made o len sin. . . ' m pursuance of Article XXXI of that treaty, and the supplementary Convention of Peking, '( 1860) weare not here concerned, but the changes in the tariff and in the treaty articles concerning trade and the conditions which necessitated these changes demand consideration in detail., Chief/among these changes were the definite acceptance of five/ per cent ad valorem as a uniform basis' for the calculation of all specific rates; the enlargement of both the import and export schedules of the tariff so as to include a much greater number of articles of trade; the legalization of the opium trade ,(Rule V); the opening of Tiertsin, Newchwang, Tengchow,2 Swatow, Kiung￾chow, Taiwan in Formosa, and Chinkiang, with right of access to three other ports on the Yangtze as soon as c~nditions would warrant it (X, XI and IV of Peking Convention); agreement that duties on goods should be payable on the landing for i~­ ports and on shipment for exports (XXV), the fixing of a ten year limit for revision of tariff and commercial articles (XXVII) ; the fixing of transit dues both inwards and outwards at half the tariff rates or two and a half per cent ad; valorem (XXVIII and Rule 7) ; lowering of tonnage dues from five mace to four mace per ton for vessels of more than one hundred and 1 Vide supra §2, p. 8 footnote, and Chap. II, §2, pp. 86-91. • 2 Chefoo, having a better harbour, was subsequently substituted for thIS port. THE FIVE PE'R CENT AD VALOREM TREATY TARIFF 59 fifty tons, granting to coasting vessels the privilege of paying these tonnage <;lues only once 'every four months, and providing for the maintenance of lights, buoys, and beacons out of tonnage dues receipts (XXIX and Rule 10) ; the stipulating that duties shall be paid to bankers authorized by the Chinese Government and shall be either in sycee or in foreign moneY'according to the assay made at Canton on 13th July 1843 (XXXIII), the making of the master oLa ship liable to a fine of five hundred taels for presentation of a false manifest, and the ordering of the deposit, within twenty-four hours of a ship's arriva,l, of her papers with the Consul, who in his turn, also within twenty-four hours, is to report details of the ship and the natu're of her cargo to the Superintendent of Customs (XXXVII); the right of re￾export of duty-paid imports entitling the merchant to a duty exemption certificate if the goods were re-exported to another treaty port, and to a drawback if re-exported abroad (XLV); and the enforcem~nt at all ports of one uniform system for the protection of the revenue, which in practice meant the extension to, all the open ports of the organization created under the foreign Inspectorate at Shanghai (Rule 10). To make clear, 'however, the Chinese- nature and control of this o-rganization, this rule stipulates that the High Officer appointed by the Chinese Government to superintend foreign trade shall, be "at liberty of his own choice and independently of the suggestion or nomination of any British authority, to select any British subject he may see fit to aid him in the administration of the Customs revenue; in the prevention of, smuggling; in ~he definition of port boundaries; or in ,discharging the duties of harbour , master; also in the distribution of lights, buoys, beacons and the like; the maintenance of which shall be provided for out of tonnage dues." T ' 'ff d . § 17. As the tariff was to be one of the main arl re uctlOn, . f d' ,. d t I h Elf and other Issues or ISCUSSlOn an se t ement tear 0 propos'als of Elgin, even before his arrival in China; addressed Shanghai a circ:lJar to all the British Consuls then in China Chamber of requesting them to put themselves in touch with Commerce. the Chambers of Commerce and leading mer￾chants so as to obtain from them reliable information on the effect of the existing tariff rates on British import trade.! This 1 F.O. 17/275: Elgin to Clarendon, desp. No. i33, 9th August; 1867. B.P.P. Corre"pondenee relative to the Earl of Elgin's Special Missions to China and Japan, 1857-59; p. 32

60 CHINA'S STRUGGLE FOR TARIFF AUTONOMY THE FIVE PER CENT AD VALOREM TREATY TARIFF 61 called forth replies from the Chamber of Commerce at Shanghai,1 though the average rate on tea-worked out on the values the British mercantile community at Canton?and the British prevailing over a period of twelve years-was as high as twelve Consuls at Shanghai,Canton and Ningpo.*These replies cover and a half per cent.The average rates on silk,on the other the whole field of commercial relations with China;and discuss hand,calculated on the values prevailing over.a period of eight in considerable detail the tariff rates then in force with sugges- years,worked out to 4.82 for raw silk and to 4.20 for thrown tions for revision.The Shanghai Chamber of Commerce,after silk.The Chamber also advocated that the trade in opium pointing out that trade generally has not showed satisfactory should be legalized and a moderate duty levied on the drug; progress,states that some of the existing tariff rates bear heayily that the existing rate for tonnage dues should be retained pro- upon certain imports,and that this is due to the fall in value vided it be arranged by treaty stipulation that the cost of light- in the case of certain goods,and to the lower quality and there- ing and marking the entrance to ports etc.be paid from these fore cheaper varieties in the case of other goods.Taking current dues,but that tonnage dues on coasting vessels should be levied average prices the Chamber accordingly recommends that the only once every six months;that to.check extortion the exact duty rates on twelve specified articles of import be reduced in amount of transit dues leviable should be clearly laid down, each case by about fifty per cent.These articles include cotton and that a revision of the tariff should take place every five and woollen manufactures,black pepper,sandalwood,iron in years.The Chamber also declared that not only should more rods and bars,and pig lead.It also gives a lengthy list of ports be opened,but that steps should also be taken to secure imports which it recommends for duty-free treatment,promi- liberty of travel and of residence in the interior of the country, nent among which are all articles for the use of foreigners such and that the Customs foreign inspectorate system should be as household stores,wines,beer.and spirits,and clothing as extended to all ports.Commenting on this communication the well as articles which it was desired Chinese should be encour- British Consul at Shanghail endorsed the Chamber's statement aged to buy,such as cutlery,perfumery,soap,canvas,cambrics that the import trade did not show satisfactory progress,and and muslins,linen,glassware,gums,copper,blankets,flannels, ascribed this to a variety of causes,such as (a)the fact that, iron,wood and building materials.The Chamber was of opinion as China had manufactures for her own requirements,imports that all rates of imports chargeable with duty should be based have to compete with the native products;(b)the heavy charges on five per cent of the average value,and that in the case of levied upon imports when sent inland,and (c)the power of goods "the values and descriptions of which are too varied to the Chinese merchants by their guilds to regulate supplies in admit of specific classification,an ad valorem rate of five per accordance with their interests.In support of the Chamber's cent should be levied,calculated on the invoice value,with ten contention that the staple articles of import on account of the per cent added for charges at the exchange of the day." As fall in value were paying a heavier duty than formerly he sub- regards exports,the Chamber proposed that cotton from mitted a table showing that on prevailing average values white Shanghai and wool should be free;that export of treasure and shirtings were paying a duty of more than ten per cent and grain should no longer be prohibited,and that all the other grey shirtings,camlets,and long ells of more than seven per rates in the export schedule should remain unchanged,even cent.The Consul's remedy,however,was not a reduction in duty,but a total remission of all duties on foreign manufactured 1 Ibid pp.61-76.Also Further Papers relating to the Rebellion in China 1868;pp.184-191.F.O.17/277:Elgin to Clarendon desp.No.94;22nd goods,while to cover the loss that would thereby be sustained December,1857:F.O.17/276,.Elgin to Clarendon,desp.No.64,23rd by the Chinese exchequer he proposed that the export duty on November,1857. raw and thrown silk should be raised from ten to fourteen taels 2B.P.P.Correspondence relative to the Earl of Elgin's Special Missions a picul,and that on silk piece goods from twelve to sixteen taels to China and Japan 1857-59;pp.70-76. a picul.He likewise recommended a reduction of tonnage dues 81bdpp.104-121;168-175,194-205and205-212. from five to one mace per registered ton,a revision of the 4In August 1853 Shanghai merchants stated in a letter to Sir George Bonham,the British Plenipotentiary,-"that upon all staple imports from Great Britain the duties at present amount to 12 to 28 per cent.ad valorem". 1F.O.17/286:Elgin to Clarendon:desp.No.23,1st February,1858: N.C.H.,Vol.No.162;3rd September,1853. F.O.17/277:Elgin to Clarendon,desp.No.94,22nd December,1857

60 CHINA'S STRUGGLE FOR TARIFF AUTONOMY called forth replies from the Chamber of Commerce at Shanghai,l the British mercantile commu.nityat Canton2 and the British Consuls ht Shanghai, Canton and Ningpo,3 These replies cover the whole field of commercial relations with China; and discuss in considerable detail the tariff rates then in force with sugges￾tions for revision. The Shanghai Chamber of Commerce, after pointing out that trade generally has not showed satisfactory progress, states that some of the existing tariff rates bearheayily upon certain imports,4 and that this is due to the fall in value in the case of certain goods, and to the lower quality and there￾fore cheaper varieties in the case of other goods. Taking current average prices the Chamber accordingly recomMends that the duty rates on twelve specified articles of import be reduced in each case by about fifty per cent. ' These articles include cotton and woollen manufactures, black pepper, sandalwood, iron in rods and bars, and pig lead. It also gives a lengthy list of imports which it recommends for duty-free treatment, promi-, nent among which are all articles -for the use of foreigners such as household stores, wines, beer· and spirits, and clothing as well as articles which it was desired Chinese should be encour￾aged to buy, such as cutlery, perfumery, soap, canvas, cambrics and muslins, linen, glassware, gums, copper, blankets, " flannels, iron, wood and building materials. The Chamber was of opinion that all rates of imports chargeable with duty should be based on five per cent of the average value, and that in the case of goods "the values and descriptions of which are too varied to admit of specific classification, an ad valorem rate of five per cent should be levied, calculated on the invoice value, with ten per cent added for charges at the exchange of the day." As regards exports, the Chamber proposed that cotton from Shanghai and wool should be free; that export of treasure and grain should no longer be prohibited, and that all the other rates in the export schedule should remain unchanged, even 1 Ibid pp. 61-76. Also Further Papers relating to ,he Rebellion in China 1863; pp. 184-191. F.O. 17/277: Elgin to Clarendon desp. No. 94; 22nd December, 1857: F.O. 17/276" Elgin to Clarendon, desp. No. 64, 23rd November, 185,7. ' 2 B.P.P. Correspondence relative to the Earl of Elgin's Special Missions to China and Japan 1857-59; pp. 70-76. a Ibid pp.104-121; 168-175, 194-205 and 205-212. 4 In August 1853 Shanghai merchants stated in a letter to Sir George Bonham, the British Plenipotentiary,-"that upon ali staple imports from Great Britain the duties at present amount to 12 to 28per cent. ad valorem". N.C.H., Vol. No. 162; 3rd September, 1853. THE. FIVE PER CENT AD VALOREM TREATY, TARIFF 61 , ,though the average rate on tea-worked out on the values prevailin,g over a period of twelve years-was as high as twelve and a half per cent. The average rates on silk, on the other hand, calculated on the values prevailing over, a period of eight years,worked out to 4~82 for raw silk and to 4.20 for thrown silk. The Chamber also advocated that the trade in opium should be legalized and a moderate duty levied on the drug; that the existing rate for tonnage dues should be retained 'pro￾vided it'be arranged by treaty stipUlation that the cost of light￾ing and marking the entrance to ports etc. be .paidfrom these dues, but that tonnage dues on coasting vessels should be levied only once every six months; that to, check extortion the exact amount of transit dues leviable should be clearly laid down, and that 'a revision of the tariff should take place every five' years. The Chamber also declared that not only should more ports be opened, but that steps should also be. taken to secure liberty of travel and of residence in the interior of the country, and that' the Customs foreign inspectorate system should be extended to all ports. Commenting on this communication the British Consul at Shanghai! endorsed the Chamber's statement that the import trade did not show satisfactory progress, and ascribed this to a variety of causes, such as (a)" the fact that, as China had manufactures for her own requirements, imports have to compete with the native products; (b) the heavy charges 'levied upon imports when sent inland, and ( c ) the power of the Chinese merchants by their' guilds to regulate supplies in accordance with their interests. In support of the Chamber's contention 'that the staplearticies of import on account of the fall in value were. paying a heavier duty than formerly he sub￾mitted a table shOWing that on prevailing average values white shirtings' were paying a duty of more than ten per cent and grey shirtings, camlets, and long ells of more than seven per cent. The Consul's remedy, however, was not a reduction in duty, but a total remission of all duties on foreign manufactured goods, while to cover the loss that would thereby be sustained by the Chinese exchequer he -proposed that the export duty on raw and thrown silk should be raised from ten to fourteen taels a picul, and that on silk piece goods from twelve to sixteen taels a picul. He likewise recommended a reduction of tonnage dues from five to one mace per registered ton, a revision of the 1 F.O. 17/286: Elgin to Clarendon: desp. No. 23, 1st February, 1858: F.O. 17/277: Elgin to Clarendon, desp. No. 94, 22nd December, 1857