62 CHINA'S STRUGGLE FOR TARIFF AUTONOMY THE FIVE PER CENT AD VALOREM TREATY TARIFF 68 transit dues which he thought should be paid on both exports reduction on tea,aniseed oil and cassia oil;thirty-three per and imports at the same time with the tariff duties.He con- cent on cassia lignea and cassia buds;twenty per cent on raw curred in the proposal that new ports should be opened and silk and on sugar;seventeen per cent on silk piece goods and that foreign traders should be allowed,under restrictions,the on vermillion,and fourteen per cent on sugar candy.They right of travelling and carrying on business in the interior.He also suggested that as the Chinese Government had done little was strongly of opinion that all the ports open to foreign trade or nothing in providing aids to navigation the tonnage dues should be on precisely the same footing as regards the collection rate should be reduced by one half,while vessels engaged in of duties,but he was not satisfied with the foreign Inspectorate the coasting trade should not be required to pay tonnage dues as then in operation at Shanghai,and suggested that instead of oftener than once in six months.They also drew special atten- it the British Government-in the spirit of Article II of the tion to the question of inland transit dues and recommended Treaty of Nanking.Article XII of the Supplementary Treaty,and that "if permitted to continue at all,they should be well defined, Article XV of the General Regulations-should appoint an officer to superintend at the Custom House the collection of dues and of moderate application throughout the Empire,never leviable more than once,and incapable of modification except through duties from British subjects,"and as the Chinese Government a revision of the treaty."Liberty to travel and trade in any will benefit by this arrangement,it should pay for these ser- part of the Empire,and the adoption of a uniform currency in vices a percentage on the duties collected,not to exceed the which Customs duties and trading accounts could be settled present salaries given."In other words,the Chinese Govern- would also be blessings to be much deired.Im a lengthy mem- ment was to have the privilege of paying for an employee orandum on these suggestions the Consul at Canton endorses appointed by an alien Government,without any concomitant the proposed reductions in the tariff rates,and suggests at the right of controlling that employee's actions or of dismissing same time a wider employment of the ad valorem principle on him if unsuitable!Luckily for all parties,wiser counsels pre- the ground that with a barter trade and in a country where vailed. there is no regulated and uniform currency the ad valorem principle is easier of application than specific rates.In order Reduction,and 18.The British merchants at Canton,1 while to encourage coastwise shipping in foreign bottoms,as well as other proposals asserting that the existing tariff "affords little to afford much-needed facilities to the Chinese,he advocates made by foreign ground for complaint,as we are not aware that the lifting of the embargo on the export of grain and of copper merchants of a much more liberal one exists in any country in Canton. cash at least so far as inter-port traffic is concerned.As regards the world,"nevertheless took the view that on the coast trade generally,he points out-in opposition to the account of the'fall in values a large number of the rates in the Canton merchants-"the desirability of applying the same scale import list of the Nanking treaty tariff should be reduced. of duties to merchandise conveyed in foreign as in native ves- Out of eighty-eight specific rates cited in this list they recom- sels.”This“fundamental principle,”as the Consul calls it, mended definite reductions in twenty-nine,the average reduction contains,as we shall see later,the germ of the Coast Trade Duty being such as to yield a rate about one-third lower than the as collected by the foreign-controlled Maritime Customs on existing one.The rate on first quality ginseng,they suggested, native produce conveyed coastwise in foreign vessels.Only two should be lowered from thirty-eight to ten taels a picul,and changes in the levy of tonnage dues are,he considers,necessary the former ten per cent ad valorem levy on all unenumerated The one is that vessels either arriving or departing in ballast gums,metal,and woods should be reduced to five per cent. should pay only half the tonnage dues,and the other is that as Glassware,copper,wines,beer,and spirits,when imported for tonnage dues on the small vessels engaged in the coasting trade the use of foreigners,should in their opinion be duty free.The have been very irregularly levied,the dues should either be export list was not so drastically revised,but they recommended reduced or made payable at fixed intervals of six months.As fifty per cent reduction of the rate on camphor,forty per cent a solution of the transit dues problem,he suggests that for goods going inwards "the original duty paid at entry in the 1 F.O.17/276:Elgin to Clarendon,desp.No.64,23rd November,1857. port of import might be held to cover such charges,but for
62 CHINA'S STRUGGLE FOR TARIFF AUTONOMY transit dues which he thought should be paid on both exports and imports at the same time with the tariff duties. He concurred in the proposal that new ports shbuld be opened and that foreign traders should be allowed, under restrictions, the right of travelling and carrying on business in the interior. He was strongly of opinion that all the ports open to foreign trade should be on precisely the same footing as regards .the collection of duties, but he was not satisfied with- the foreign Inspectorate as then in operation at Shanghai, and suggested that instead of it the British Government-in the spirit of Article II of the Treaty of Nanking, Article XII of the Supplementary Treaty, and Article XV of the General Regulations---:-should appoint an officer to superintend at the qustom House the collection of dues and duties from British subjects, "and as the Chinese Government will benefit by this arrangement, it should pay for these services a percentage on the duties collected, not to exceed the present salaries given." In other words, the Chinese Government was to have the privilege of paying for an employee appointed by an alien Government, without any concomitant right of controlling that employee's actions or of dismissing him if unsuitable! Luckily for all parties, wiser counsels prevailed. R d t · 'd § 18. The British merchants at Canton,! while e uc IOn, an . h' t' 'ff ":If d i'ttl other proposals assertmg that t e eXIS mg tarl a or s I e made by foreign ground for complaint, as we are not aware that merchants of a much more liberal one exists in any country in Canton. the world," nevertheless took the view that on account of the fall in values a large number of the rates in the import list of the Nanking treaty tariff should be reduced. Out of eighty-eight specific rates cited in this list they recommended definite reductions in twenty-nine, the average reduction being such as. to yield a rate about one-third lower than the existing one. The rate on first quality ginseng, they suggested, should 'be lowered from thirty-eight to· ten taels a picul, and the former ten per cent ad valorem levy on all unenumerated gums, metal, and woods should be reduced to five per cent. Glassware, copper, wines, beer, and spirits, when imported for the use 'Of foreigners, should in their opinion be duty free. The export list was not so drastically revised, .but they recommended fifty per cent reduction of the rate on camphor, forty per cent 1 F.O. 17/276: Elgin to Clarendon, desp. No. 64, 23rd November, 1857. THE FIVE PER CENT AD FALOREM Tll,EATY TARIFF 63 reduction on tea, aniseed oil and cassia oil; thirty-three per cent on cassia lignea and cassia buds; twenty per cent on raw silk and on sugar; seventeen per cent on silk piece goods and on vermillion, and fourteen· per cent on sugar' candy. They also suggested that as the· Chinese Government had done little or nothing in providing aids to navigation the tonnage dues rate should be reduced by one half, while vessels engaged in the coasting trade should not be required to pay tonnage dues oftener than once in six months. They also drew special attention to the question of inland transit dues ·and recommended that "if permitted to. continue at all, they shOuld be well defined, of moderate application throughout the Empire, never leviable more than once, and incapable of mo.dification except through a revision of the treaty." Liberty to. travel and trade in any part of the Empire, and the adoption of a uniform currency in which Customs duties and trading accounts could be settled wo.uld also be blessings to be much deired. In a lengthy memorandum on these suggestions the Consul at Canton endorses the proposed reductions in the tariff rates, and suggests .at the same time a wider employment of the ad valorem principle on the grouhd that with a barter trade and in a country where there is. no regulated and uniform currency the ad valorem principle is easier of applicatio.n than specific rates. . In order to encour'age coastwise shipping in foreign bottoms, as well as to afford much-needed facilities to the Chinese, he advo.cates the lifting of the embargv on the export of grain and 0] copper cash at least so far as inter-port traffic is concerned. As regards the coast trade generally, he points out~in opposition to the Canton merchahts-"the desirability of applying the same scale of duties to merchandise conveyed in foreign as in native vessels." This "fundamental principle," as the Consul calls it, contains as we shaH see later, the germ of the Coast Trade Duty as colle~ted by the foreign-controlled Maritime Customs on native produce conveyed coastwise in foreign vessels. Only two changes in the levy of tonnage dues are, he considers, necessary. The one is that vessels either arriving or departing in ballast should pay only half the tonnage dues, and the other is that as tonnage dues on the small vessels engaged in the coasti,ng trade have been very irregularly levied, the dues should either be reduced or made payable at fixed intervals of six months. As a solution of the transit dues problem, he suggests that for goods going inwards "the original duty paid at entry in the port of import might be held to cover such charges, but for
64 CHINA'S STRUGGLE FOR TARIFF AUTONOMY THE FIVE PER CENT AD VALOREM TREATY TARIFF 65 outward transit dues he has nothing more helpful to suggest coasting trade-which was the only foreign shipping trade with than the right to protest "to the Central Power against the which Ningpo was concerned-British vessels were at a great exclusive selection,by the decree of any needy Provincial Gover- disadvantage through being compelled by Consular action to pay nor,of the great articles of foreign export for increased or tonnage dues each trip,while large numbers of vessels under disproportionate taxation,when articles confined to native use Dutch,German and other continental fags,not being under are unsubjected to the same."He supports the proposal that Consular restraint,went scot free.The Consul was in favour of the whole country should be thrown open to foreign trade,but, opening at least four coast ports to the north of Shanghai,and for practical Customs administration in such case,suggests thought that more attention should be paid to the sites for that "the levying of duties on articles of foreign growth should foreign settlements.As an enclosure the Consul forwarded a be restricted to ports where Consuls possessed of the necessary letter from the senior British merchant of the port in which the jurisdiction should be appointed to reside,it being provided that latter remarks that the foreign merchants at Ningpo have such duty-paid articles shall not be subject to any further impost nothing to complain of in the way the duties are collected,and as the ultimate place of discharge to which it will have been recounts the interesting fact that ten years previously when he probably carried in a small foreign coasting vessel."In the first established his business the Customs'officers begged him to light of subsequent developments such a suggestion to-day keep his vessels outside for a year "as they wished to return to involuntarily raises a smile. their superiors no foreign trade,and said they would allow me to import and export all cargo free of duties for that period,as $19.At Ningpo there was no Chamber of Com- the average of the three first years of trade at all the ports was Views of merce to express views on the tariff and its allied taken as the amount of the Imperial duties from that source British Consul at Ningpo. subject,but the Consul there,Mr.T.T.Meadows, henceforth to be paid!"This merchant had no complaint to submitted a dissertation on the theme:-"attend make of the tariff rates,and submitted a table of the principal less to Chinese Custom Houses and more to Consular Court- imports and exports comparing the rates paid by native mer- houses."To the discussion on the tariff,however,he contribut- chants with those paid by foreigners.Of eleven import rates ed in a semi-philosophical discourse the suggestion "that all quoted seven were in favour of the Chinese merchant,three in goods,whether foreign or Chinese,brought into a port by favour of the foreigner,while one was alike for both.Of the foreigners should be delivered to the Chinese buyer,duty payable five export rates quoted all were in favour of the Chinese by the Chinese buyer;and that all goods exported by foreigners merchant.Against this,however,had to be set the fact that to should be received by the foreign buyer as having already paid the foreign merchants re-exporting duty-paid imports was given duty"-a suggestion which if acted on would in practice have a certificate exempting the goods from import duty at any other turned all the treaty ports into free areas so far as foreign port,while a Chinese merchant was obliged to pay not only on imports were concerned.Of the foreign Inspectorate then the import and export of all goods but also on re-importing them operating only in Shanghai,he has nothing good to say and is into any other port. strongly opposed to any extension of the system on the ground that such a system is "an usurpation of an essential function of $20.Article XXVI of the Treaty.of Tientsin every healthy administration."In spite of this,however,he sees Constitution and provided that the two contracting Powers should no inconsistency in warmly advocating that the Treaty Power appoint officers to hold a conference at Shanghai Consuls should be entrusted by the Chinese Government with commission. for the purpose of revising the tariff rates on a the collection of port dues,instead of tonnage dues,and that five per cent ad valorem basis,and of settling these port dues should be at the disposal of the Consuls for the the rates of transit dues.The treaty was signed on the provision and maintenance of aids to navigation!His reason 26th June (1858)and was the only one of the four concluded for this,to modern ears extraordinary,proposal was that in the at that time which called for a present revision of the tariff. 1 F.O.17/286:Elgin to Clarendon:desp.No.44,27th February,1858 1 In 1856 thirty British and forty-eight non-Treaty Power vessels cleared from Ningpo;in 1857 the numbers were eighteen and thirty respectively
64 CHINA'S STRUGGLE FOR TARIFF AUTONOMY outward transit dues he has nothing more helpful to suggest than the right to protest "to the Central Power against the exclusive selection, by the decree of any needy Provincial Governor, of the great articles of foreign export for increased or disproportionate taxation, when articles confined to native use are unsubjected to the same." He supports the proposal that the whole country should be thrown open to foreign trade, but, for practical Customs administration i1'1 such case, suggests that "the levying of duties on articles of foreign growth should be restricted to ports where Consuls possessed of the necessary jurisdiction should be appointed to reside, it being provided that such duty-paid articles shall not be subject to any further impost as the ultimate place of discharge to which it will have been probably carried in a small foreign coasting veSsel." In the light of subsequent developments such a suggestion to-day involuntarily raises a smile. Views of British Consul at Ningpo. § 19. At Ningpo there was no Chamber of Commerce to express views on the tariff and its allied subject, but the Consul there, Mr. T. T. Meadows, submitted a dissertation' on the theme :-"attend less to Chinese Custom Houses and more to Consular Courthouses."l To the discussion on the tariff, however, he contributed in a semi-philosophical discourse the suggestion "that ail goods, whether foreign or Chinese, brought into a port by foreigners should be delivered to the Chinese buyer, duty payable by the Chinese buyer; and that all goods exported by foreigners should be received by the foreign buyer as having already paid duty"-a suggestion which if acted on would in practice have turned all the treaty ports into free areas so far as foreign imports were concerned. Of the foreign Inspectorate then operating only in Shanghai, he has nothing good to say and is strongly opposed to any extension of the system on the ground that such a system is "an usurpation of an essential function of every healthy administration." In spite of this, however, he sees no inconsistency in warmly advocating that the Treaty Power Consuls should be entrusted by the Chinese Government with the collection of port dues, instead of tonnage dues, and that these port·dues should be at the disposal of the Consuls for the provision and maintenance of aids to navigation! His reason for this, to modern ears extraordinary, proposal was that in the 1 F.O. 17/286: Elgin to Clarendon: desp. No. 44, 27th February, 1858. THE FIVE PER CENT AD VALORE,M 'l'REATY TARIFF 65 coasting trade-which was the only foreign shipping trade with which Ningpo was coneerned-British vessels were at a great disadvantage through being' compelled by Consular action to pay tonnage dues each trip, while large numbers of vessels under Dutch, . German and other continental flags, not being under Consular restraint, went scot free.1 The Consul was in favour of opening at least four coast ports to the north of Shanghai, and thought that more attention should be paid to the sites for foreign settlements. As an enclosure the Consul forwarded a letter from the senior British merchant of the port in which the latter remarks that the foreign merchants at Ningpo have nothing to complain of in the way the duties are collected, and recounts the . interesting fact that ten years previously when he first established his business the Customs' officers begged him to keep his vessels outside for a year "as they wished to return to their superiors no foreign trade, and said they would allow me to import and export. all cargo free of duties for that period, as the average of the three first years of trade at all the ports was . taken as the amount of the Imperial duties from that source henceforth to be paid!" This merchant had no complaint to make of the tariff rates, and submitted a table of the principal imports and exports comparing the rates paid by native merchants with those paid by foreigners. Of eleven import rates quoted seven were in favour of the Chinese merchant, three in favour of the foreigner, while one was alike for both. Of the five export rates quoted all were in favour of the Chinese merchant. Against this, however, had to be set the fact that to the foreign merchants re-exporting duty-paid imports was given a certificate exempting the goods from import duty at any other port, while a Chinese merchant was obliged to pay not only on the import and export of all goods but also on re-importing them into any other port. Constitution and activities of tariff revision commission~ § 20. Article XXVI of the Treaty. of Tientsin provided that the two contracting Powers should appoint officers' to hold a eortference at Shanghai for the purpose of revising the tariff rates on a five per cent ad valoyem basis, and of settling the' rates of transit dues. The treaty was signed on the 26th June (1858) and was the only one of the four concluded at that time which called for a present revision of the tariff. 1 In 1856 thirty British and forty·eight non-Treaty Power vessels cleared from Ningpo; in 1857 the numbets were eighteen and thirty respectively
66 CHINA'S STRUGGLE FOR TARIFF AUTONOMY THE FIVE PER CENT AD VALOREM TREATY TARIFF 67 By the middle of July an Imperial Edict had been issued draft of the revised tariff came to be presented to the Imperial ordering the Imperial Commissioners who had negotiated the Commission it had,as a draft,not only received the blessing of treaty along with the Nanking viceroy and two other high Peking the three leading Powers interested but was also the result of officials to proceed to Shanghai and there.arrange all matters a full consideration of all the facts and opinions previously put relating to trade and tariff.With these were associated the forward by the merchants and Consuls at Canton and Shanghai. provincial treasurer of Kiangsu and the provincial judge.the This draft was submitted to the Commissioners on the 12th latter being also the officiating Superintendent of Customs,and October,1858,and on that and the three following days it,and to these two the Chinese authorities were content to leave the the allied questions of transit dues,tonnage dues,aids to naviga- actual work of attending the conference and taking part in its tion,legalization of opium,coast carriage of grain and copper deliberations.As British delegates Lord Elgin appointed Mr. cash,and uniformity of Customs system were threshed out in Laurence Oliphant,Acting Secretary of Legation,and Mr. detail.?Thanks to Mr.H.N.Lay,who was able to place not only Thomas Wade,Chinese Secretary,and at the same time notified his own knowledge but also the very full records for the previous the Chinese Imperial Commissioners that,although he could not three years of the Shanghai Custom House at the disposal of the attach Mr.Horatio N.Lay officially to the commission.owing to commission,and to Mr.Wells Williams,who had acquired an his tenure of the post of Inspector of Customs in the service of extensive knowledge of Chinese goods and their values,the draft the Chinese,yet he desired Mr.Lay-on whom much of the submitted by the British members of the commission to the burden of negotiating the treaty itself had fallen-to attend the Chinese Imperial Commissioners was a thoroughly reliable and meetings of the commission in order to give it the benefit of his comprehensive document,containing 165 specific rates in the wide knowledge and experience.2 Neither the French nor the import list and 179 such rates in the export list,and detailing American Minister appointed official representatives to sit on against each article its average value,the duties proposed by the this-the'first-tariff revision commission,the latter declining. Shanghai and the Canton Chambers of Commerce,the duty then to do so on the ground that,as the American Treaty of Tientsin in force,and the proposed duty,calculated in the case of the which had been signed eight days before the British one,did imports strictly on a five per cent ad valorem basis,and in the not call for tariff revision,it would be in form irregular for him case of exports also on the same basis,with the notable excep- to appoint a delegate.3 American interests,however,were duly tions of the rates on tea and silk which were left unchanged.To consulted and protected by informal discussions between the have lowered the duty on tea to the five per cent standard would British delegates and,Mr.Williams,the Secretary of the have reduced the rate between forty to sixty per cent according American Legation,and the result of their consultations was the to the variety,and would have resulted in depriving the Chinese draft of a revised tariff to be submitted to the Imperial.Com- Government,on the basis of the export then prevailing,of some missioners.Monsieur Edan,the French Consul at Shanghai, TIs.800,000 a year.On the other hand,to have raised the duty acted similarly on behalf of French interests,5 so-that when the on silk to the five per cent.standard would have increased the rate some twenty per cent and,providing the trade remained unaffected,would have enriched the revenue only by some Tls. 1 B.P.P.Correspondence relative to the Earl of Elgin's Special Missions to China and Japan,1857-59;p.364.F.0.17/290:Elgin to Malmesbury, 150,000 a year.Added to this ultimate loss would be the opposi- desp.No.162,29th July,1858. tion of the French,whose trade at that time was confined almost 2 B.P.P.Correspondence relative to the Earl of Elgin's Special Missions to China and Japan.1857-59;p.392;p.438.Vide also B.P.P.Correspond- entirely to silk.Obviously,the wise poliey was to let well alone. ence with Mr.Bruce;ete.1860.p.31.L.Oliphant.Narrative of the Earl of Elgin's Mission to China and Japan in the Years 1857-'58-59;2 vols. 1F.O.1'/291:Elgin to Malmesbury,desp.No.190,21st October.1858. Edinburgh and London.1859.Vol.2,p.272.F.O.17/291:Elgin to "I am endearouring to construct an amended Tariff,which all the Treaty Malmesbury,desps.No.188 189,19th October,1858. Powers will accept as otherwise great confusion and much injustice to 3 B.P.P.Correspondence relative to the Earl of Elgin's Special Missions China must be the result." t0Chn4 and Jap0a鬼1857-59：p.400. B.P.P.Correspondence relative to the Earl of Elgin's Special Missions 2 B.P.P.Correspondence relative to the Earl of Elgin's Special Missiona 0Ch4 and Japa算，1857-59；p.393, to China and Japan,1857-59;pp:400-403. 5 Tbid.p.437. 3 Oliphant.op.cit.Vol.2;p.275
66 CHINA'S STRUGGL£ FOR TARIFF AUTONOMY By the middle of July an Imperial Edict had been issued ordering the Imperial Commissioners who had negotiated the treatyalong with the Nanking viceroy and two other high Peking officials to proceed to Shanghai and there. arrange all matters relating to trade and tariff.1 With these were associated the provincial treasurer of Kiangsu and the I provincial judge, the latfer being also the officiating Superintendent of Customs, and to these two the Chinese. authorities were content to . leave the actual work of attendihg the conference and· taking part in its deliberations. As British delegates Lord Elgin appointed M1'. Laurence Oliphant, Acting Secretary of Legation, land Mr. Thomas Wade, Chinese Secretary, and at the same time notified the Chinese Imperial Commissioners that, although he ~ould not attach Mr. Horatio N. Lay officially to the eomrr,ission. owing to his tenure of the post of Inspector of Customs in the service of the Chinese, yet he desired Mr. Lay-on whorr: much of the burden of negotiating the treaty itself had fallen-to attend the meetings of the commission in order to give it the benefit of his wide knowledge and experience. 2 . Neither the French nor the American Minister appointed official representatives to sit on this-'-the first-tariff revision commission, the latter declining. to do so on the ground that, as the American Treaty of Tientsin, which had been signed eight days before the British one, did not call for tariff revision, it would be in form irregular for him to appoint a delegate. 3 American interests, however, were duly consulted and protected by informal discussions between the. British delegates and, Mr. Williams, the Secretary of the American Legation, and the result of their consultations was the draft of a revised tariff to be submitted to the Imperial. Commissioners.4 Monsieur Edan, the French Consul 'at Shanghai, acted similarly on behalf of Frenchinterests,5 so· that when the 1 B.P.P. CM'respondence Telati'lfe to the EaTI of Elgin's Special Missions to China and Japan, 1857-5.9; p. 364. F.O.17/290:' Elgin to Malmesbul'Y, desp. No. 162, 29th July, 1858. . 2 B.P.P. COl'respondence Telative to the Ea.'l of Elgin;'. Special Missions to China and Japan. 1857-59; p. 392; p. 438. Vide also B.P.P. Correspondence with M1'~ Bruce; etc. 1860. p. 31. L. Oliphant. NaTTative of the EUTI of Elgin's Mission to China and Japan in the Ye(ws 1857-'.58-'59; 2 vals. Edinburgh. and London. 1859. Vol. 2, p. 272. F.O. 17/291: Elgin to Malmesbury, desps. No. 188 & 189, 19th October., 1858. 3 B.P.P. COTrespondence Telative to the EaTI of Elgin:'s Sr;ecial Missions to China and Japan 1857-59: p. 400. 4 B.P.P. COTrespondence "elative to the EaTl of Elgin's Special Missions to China and Japan, 1857-59; p. 393. . 5 Ibid. p. 437. THE FIVE PE.R CENT AD VALOREM TREATY TARIFF 67 draft of the revised tariff came to be presented to the Imperial Commission it had, as a draft, not only received the blessing of the three leading Powers interested. but was also the result of a full consideration of all the facts and opinions previously put forward by the merchants and Consuls at Canton and Shanghai,! This draft was submitted .to the Commissioners on the 12th October, 1858, and on that and the three following days it, and the alli"ed questions of transit dues, tonnage dues, aids to navigation, legalization of opium, coast carriage of grain and copper cash, and uniformity of Cus~(lms system were threshed out in detai1.2 Thanks to Mr. H. N. Lay, who was able to place not only his own knowledge but also the very full records for the previous three years of the Shanghai Custom House at the disposal of the commission, and to Mr. Wells Williams, who had acquired an extensive knowledge of Chinese goods and their values, the draft submitted by the British members of the commission to the Chine~e Imperial Commissioners was a thorougl)ly reliable and comprehensive document, containing 165 specific rates in the import list and 179 such rates in the export list, and detailing against each article its average value, the duties proposed by the Shanghai and the Canton Chambers of Commerce, the duty then in force, and the proposed duty, calculated in the case of the imports strictly on a five per cent ad valorem basis, and in the case of exports also on the same basis, with the notable ex~eptions of the rates on tea and silk which were left unchanged. To have lowered the duty on tea to the five per cent standard would have reduced the rate between forty to sixty per cent according to the variety, and would have resulted in depriving the Chinese Government, on the basis of the export then prevailing, of some 'TIs. 800,000 a year. On the other hand, to have raised the duty on silk to the five per cent standard would have increased the rate some twenty per cent and, providing the trade remained unaffected would have enriched the revenue only by some -TIs. 150,000 a ~ear. Added to this ultimate loss would be the opposition of the French, whose trade at that. time was confined' almost entirely to silk. Obviously, the wise poliey was to let well alone.3 1 F.O. 1'/291: Elgin to Malmesb)1ry, desp. No. 190, 2~st October. 1858. "I am endee.vouring to construct an amended Tariff, which all the Treaty Powers will accept as otherwise great confusion and u:>-uch injustice to China must be the result." 2 B.P.P; GorTespondence Telative to the EaTI of Elgin's Special Missions to China and Japan, 1857-59; pp: 400-403. 3 Oliphant. op. cit. Vol. 2; p. 275
68 CHINA'S STRUGGLE FOR TARIFF AUTONOMY THE FIVE PER CENT AD VALOREM TREATY TARIFF 69 Comparing these suggested rates with those of the Nanking treaty tariff it is interesting to note that for the imports 38 are Failure of early $21.The most far-reaching change,however, efforts to in the import tariff was beyond question the lower than the old rates,18 higher,and 32 remain unchanged, legalize opium trade.Growth of introduction of opium as a legalized article of while for the exports 22 are lower than the old rates,16 higher and disorders import at a duty of thirty taels a picul.1 As we and 24 remain unchanged.The deliberations of the full commis- eaused by the trade. have seen,Sir Henry Pottinger on several occa- sion resulted in some minor changes in this draft,such as slight Legalization of sions,when negotiating the Treaties of Nanking changes in some of the rates for both imports and exports; opium trade. and of Hoomunchai,had suggested to the Chinese the deletion of bees-wax,cinnamon,gamboge,glue,gold thread, Plenipotentiaries the advisability in the interests of China of isinglass,oil cake,olives,dried prawns,quicksilver,salt fish, legalizing the opium trade,and in memoranda on th subject sinews and doe and rabbit skins from the export list;the deletion had pointed out that legalization meant not only the sweeping of straw and rattan mats,and sugar,brown and white,from away of the abuses that then characterized the trade,but also the import list,and the addition of coal,lucraban seed,copper, the directing.of the trade into channels where it could easily be yellow metal,teak,watches,Japan wax and camagon wood to it. controlled,and thus bring in revenue to the Imperial exchequer.? Far-reaching changes in the export table were the inclusion of The suggestions fell on barren soil.The Chinese negotiators beans,peas and beancake,which except from the ports of Teng- whatever their private opinions may have been,knew full well chow (Chefoo)and Newchwangi were permitted on payment that they could not place themselves in the impossible position of tariff duty to be exported in British vessels either coastwise of requesting their Imperial Master to eat his own words.The or abroad,and the insertion of rice and other grains as a permi- trade,therefore,had remained on the unsatisfactory basis of ssible export coastwise under bond,-a privilege which was also being legally contraband,but actually tolerated and even en- extended to the coastwise movement of copper cash.In the couraged.Sir Henry Pottinger's proclamation of 1st August, import table saltpetre,sulphur,brimstone,and spelter,being 1848 warning British merchants that those engaged in this munitions of war,make their appearance as permissible imports traffic could not expect to meet with any support or protection only when under requisition of the Chinese Government,or for from Her Majesty's Consuls or other officers had fallen unheeded sale to Chinese duly authorized to purchase them. or was regarded as an official face-saving device.The trade went on and flourished;in fact,the destruction of the accumu- 1 Ibid.p.276. lated stocks by Commissioner Lin gave it a distinet fillip.To This partial prohibition,was made in deference to powerful Newchwang and Chefoo junk interests.Writing in 1860 the British Minister,Mr. many Chinese to whom the war of 1839-1842 had been primarily Bruce,stated that the number of junks at that time engaged in the a war waged on behalf of the opium trade,it was a surprising Shanghai-Chefoo-Newchwang trade was estimated at 3,000 and the thing that the victors had not insisted as a condition of peace capital invested at 87,500,000.B.P.P.Correspondence respecting Afairs that it should be legalized. in China,1859-1860;Chairman,Shanghal Chamber of Commerce to Mr. Nevertheless the Imperial Govern- Bruce,13th April,1860;p.45.Thanks to Bruce's efforts this partial ban ment had lost prestige,and it was this loss of prestige together was removed in 1861 by Imperial Edict.During that year he had a long with the chaotic conditions which preceded and accompanied the correspondenee with Prince Kung,which "led to the repeal of the prohibition Taiping Rebellion that emboldened smugglers to push the trade, of the export of pulse and beancake in foreign bottoms from the ports of Newchwang and Yentai.I have arranged that the trade in these articles not only at the treaty ports,but at every point on the coast of produce shall stand on the same footing as the general coaseing trade, where a demand for the drug could be found. At Namoa and namely,payment of tariff duty at.the port of shipment,and of half duty at the port of discharge,and I have agreed to an alteration in the trade regulations,appended to the tariff,which had placed this trade at other 1Oliphant;op.cit.vol.2;pp.278-282. than the northern ports on a different footing in this respect."F.O.17/370: 2 Pottinger's memorandum of 27th August,1842 to Imperial Commis- Bruce to Russell,desp.No.11,24th February,1862.In 1865 Chinese sioners,Pottinger's memorandum of 22nd January,1843,Morrison's merchants were forbidden by the local authorities to employ foreign vessels memorandum of 29th June,1843,Pottinger's memorandum of 30th June, in this coastwise trade.The ban on this trade,however,was completely 1843,Pottinger's memorandum of 8th July,1843,Pottinger's despatch to removed by instructions from the Tsungli Yamen in 1869,from which date Keying of 30th October,1843,B.P.P.Papers relating to the Opium Trade peas,beans,and beancake were permitted to be exported directly abroad as in China,1848-1856,pp.1,3,5,6,8,and 13.For the latest and most well as coastwise from any port.C.A.I.G.Cires.Nos.18 and 22 of 1869. F.O.17/477:Alcock to Stanley,desp.No.157,ist Oetober,1867. 8mP8e8acoaa:89H2180onDE,Bra所
68 CHINA'S STRUGGLE FOR TARIFF AUTONOMY Comparing these suggested rates with those of the Nanking treatY' tariff it is interesting to note that for the imports 38 are lower than the old rates, 18 higher, and 32 remain.unchanged, while for the exports 22 are lower than the old rates, 16 higher and 24 remain 'unchanged. The delibeI'ationsof the full commission resulted in some minor changes 'in this draft, such as slight changes in some of the rates for both imports and exports; the deletion of bees-wax, cinnamon, gamboge, glue, gold thread, isinglass, oil cake, olives, dried prawns, quicksilver, salt fish, sinews and doe and rabbit skins from the export list; the deletion of straw and rattan mats, and sugar, brown and white, from the import list, and the addition' of coal, lucraban seed, copper, yellow metal, teak, watches, J'apan Wax and camagon wood to it .. Far-reaching changes in the export table were the inClusion of beans, peas and beancake, which except from the ports of Tengchow (Chefoo) and Newchwang1 were permitted on payment of tariff duty to be exported in British vessels either coastwise or abroad, and the insertion of rice and other graIns as a permissible export coastwise under bond,-a privilege which was also extended to the coastwise movement of copper cash. In the import table saltpetre, sulphur, brimstone, and spelter, being munitions of war, make their appearance as permissible imports only when under requisition of the Chinese Government, or for sale to Chinese duly authorized to purchase them. ' 1 Ibid. p. 276. This partial prohibition, was made in deference to powerful N ewchwang and Chefoo junk interests. Writing in 1860 the British Minister, Mr. Bruce, ~t.ated that the number of junks 'at that time engaged in the Shanghai-Chefoo-Newchwang trade was estimated at 3,000 and the capital invested at £7,500,000. B.P.P. COr1"espondence respecting Affairs in China, 1859-1860; Chairman, Shang'nai Chamber of Commerce to Mr. Bruce, 13th April, 1860; p. 45. Thanks to Bruce's effOl"ts this partial ban was removed in 1861 by Imperial Edict. During that year he had a long correspondence with Prince Kung, which "led to the repeal of the prohibition of the export of pulse and beancake in foreign bolttoms from the ports of Newchwang and Yentai. 1 have arranged that the trade in 'theRe articles of produce shall stand on the same footing as the gener'al coa~dng trade, namely, payment of tariff duty a.t, the port of shipment, and of half duty at the port of discharge, and I hs.v:e agreed to 'an alteration in the trade regulations, appended to the tariff, Which had placed this trade at other than the northern P01'ts on adifferem ifooting in this respe~t." F.O.17/370: Bruce to Russell, desp. No. 11, ,Z4t):l Eebruary, 1862. In .1865 Chinese merchants were forbidden by the lQcaI authorities to employ foreign vessels in this coastwise trade. The ban on this trade, however,. was completely removed by instructions from the T8ungli Yamen in 1869, from which date peas, beans, and beancake were permitted to be. exported directly abroad as well as coastwise from any port. C.1\:. LG. Circs. Nos. 18 and 22 of 1869. F.O. 17/477: Alcock to Stanley. desp. N~. 15'7,-181; October, 1867. THE FIVE PER CENT AD VALOREM TREATY TARIFF 69 § 21. The must far-reaching change, however, Failure of early efforts to in the import tariff was beyond question the legalize opium introduction of opium as a legalized article of trade. Growth of and disorders import at a duty of thirty taels a picul.1 As we caused by have seen, Sir Henry Pottinger on s.everal occa- the trade. Legalization of sions,when negotiating the Treaties of Nanking opium trade. and of Hoomunchai, had suggested to the Chinese Plenipotentiaries the advisability in the interests of China of legalizing the opium trade, and in memoranda on tl.". subject had pointed. out that legalization meant not only the sv,·eeping away of the abuses that then characterized the trade, but also the directing of the trade into channels where it could easily be controlled, and thus bring in revenue to the-Imperial exchequer.2 The suggestions fell on barren soil. The Chinese negotiators, whatever their private opinions may have been, knew' full well that they could not plaee themselves in the impossible position of requesting their Imperial Master to eat his own words. The trade, therefore, had remained on the unsatisfactory basis of being legally contraband, but actually tolerated and even encouraged. Sir Henry Pottinger's proclamation of 1st August, 1843 warning British merchants that those engaged in this traffic could not expect to meet with any support or protection from Her Majesty's Consuls or other officers had fallen unheeded or was regarded as an official face-saving device. The trade went on and flourished; in fact, the destruction of. the accumulated stocks by Commissioner Lin gave it a distinct fillip; To many Chinese to whom the war of 1839-1842 had beeh primarily a war waged on behalf of the opium .trade, it was' a surprising thing that the victors had not insisted as a condition of peace that it should be legalized. Nevertheless the Imperial Government had lost prestige, and it was this loss of prestige together with the chaotic conditions which preceded and accompanied the Taiping Rebellion that emboldened smugglers to push the trade, not only at the treaty ports, but at every point on the coast where' a demand for the drug could be found. At Namoa and 1 Oliphant; op. cit. vol. 2; pp. 278-282. 2 Pottinger's memorandum of 27th August, 1842 to Imperial .Commissioners, Pottinger's memorandum of 22nd January, 1843, Morrison'S memorandum of 29th June, 1843, Pottinger's memorandum of 30th June, 1843, Pottinger's memorandum of 8th July, 1843, Pottinger's despatch to Keying of 30th October, 18'43, B.P.P. Pape'rs relating to the Opium Trade in China, 1842-1856, pp. 1, 3, 5, 6, 8, and 13. For the latest and most authoritative discussion of British opium policy, vide Owen, D. E., British Opiu'm Policy .in China andJndia; New Haven, 1934
0 CHINA'S STRUGGLE FOR TARIFF AUTONOMY THE FIVE PER CENT AD VALOREM TREATY TARIFF 71 Cumsingmoon,places interdicted by treaty,these drug purveyors states:"At present the trade is carried on publicly at this port. built houses,constructed roads,and enjoyed the most perfect All boats laden with opium daily and unhesitatingly pass security,a striking contrast to Canton,where at that time(1846) the Custom House boats,unchecked and.unexamined,and in the no British subject could move about without molestation.1 At cases now reported to Your Excellency I have ascertained that Shanghai the opium receiving ships,the number of which in the highest Chinese officers of this place.were acquainted with the early days of the port varied from three to six,were anchored the transhipment of the opium before I obtained information, outside the harbour limits at Woosung,and the opium sold from and yet no notice was taken and no measures were adopted by them was conveyed by the Chinese purchasers in swift boats up them."The Consul in fact found that he was "placed between the Whangpoo to Shanghai.Balfour pointed out to the the cupidity of the dealers in opium and the apathy and in- Superintendent the facility that this practice offered to the difference of the authorities."1 Pottinger supported the Consul's smuggling of general merchandise as well as opium,and the action,but directed that the fines for transhipping without Superintendent decided that any vessel anchoring outside to sell permission should be remitted.2 The view of the Shanghai opium should not .be permitted afterwards to enter Shanghai Superintendent of Customs on this and similar cases was that as a regular trader.2 Like so many other good resolutions,this so long as opium was kept on board foreign vessels it must be decision lacked fulfilment.In spite of Pottinger's warning dealt with according to the laws of the country concerned "and proclamation,early in February 1844,the master of the brig that it necessarily falls under the laws of China when landed "Amelia"on entering Shanghai presented a manifest stating or purchased by natives of the country."s In other words,China that there was one chest of opium on board.On the Consul's did not then claim the right,common to every sovereign state advice this entry was erased,and the master afterwards claimed of searching for and seizing contraband carried in foreign vessels, that,also on the Consul's advice,he had thrown the chest in even when such vessels were admittedly within the territorial question overboard.Actually,the "Amelia"carried at the time waters of the prohibiting country.Had the Superintendent been twenty-seven chests,which were transhipped without permission alive to the legal implications involved he would have claimed to the barque "William the Fourth",which had already received that sovereign rights not definitely yielded by treaty are just as its grand chop and was ready to clear.At the same time the definitely retained.Legalization of the opium trade for control master of the barque "Maingay"presented defective papers for and for revenue was the obvious remedy,but legalization the his ship,accompanied by no bills of lading.Consular enquiry Chinese Government would not have.Successive British Pleni- revealed that he had brought in one hundred and one chests of potentiaries urged this course,but in vain.Following the opium,which on hearing of the trouble in which the "Amelia" example of his.predecessors Sir John Davis in February 1846 was involved,he had surreptitiously transhipped also'to the besought the Imperial Commissioner Keying to use his influence "William the Fourth".Balfour,the Consul,acted promptly. to bring the trade under control by having it placed on a legal He fined each of the three vessels $500 for transhipping cargo footing."I have often reported to.Your Excellency that the without permission,thet“Amelia'”.and the“Maingay'”each illicit trade in opium,under the connivance of the mandarins, another $500 for false manifest,the "Maingay"a further $500 is the source of innumerable evils.Were the trade legalized the for breaking bulk 'without permission and $200 for having whole of the foreign ships would be collected within the five ports, irregular papers.The transhipped goods he ordered to be under the control of the Consuls.They would all pay tonnage confiscated,the seizure and confiscation to be carried out by dues,and about 2,000,000 dollars would easily be collected on the the Chinese authorities.In defending this latter action he opium.At present this profit is obtained by corrupt officers of stated:"I do not consider it to be the duty of the Consular Officers government;the ships wander to all parts of the coast,and the to carry out the excise laws of China as regards prohibited smugglers form settlements on shore.While this is openly con- articles."Commenting on the opium trade at Shanghai he nived at,I cannot interfere;but were the trade legalized,I could 1 Davis to Aberdeen,24th February,1846,B.P.P.Correspondence 1F.O.228/31:Balfour to Pottinger,desp.No.8;12th February,1844. respecting Insults in China;1857;p.37,p..40. 2 F.O.228/31:Balfour to Pottinger,desp.No.33,9th April,1844. 2F.O.228/31:Balfour to Pottinger,desp.No.33,9th April,1844. 3 F.O.228/31:Balfour to Pottinger,desp.No.13,20th February,1844
70 CHINA'S STRUGGLE FOR TARIFF AU1'ONOMY Cumsingmoon, places interdicted by treaty, these drug purveyors built houses, constructed roaas, and enjoyed the most perfect security, a striking contrast to Canton, where at that time (1846) no British subject could move about without. molestation.1 At Shanghai the opium receiving ships, the number of which in the early days of the port varied from three to six, were anchored outside the harbour limits at Woosung, and the opium sold from them was conveyed by the Chinese purchasers in swift boats up the Whangpoo to Shanghai. Balfour pointed out to the Superintendent the facility that this practice offered to the smuggling of general merchandise as well as opium, and the Superintendent decided that any vessel anchoring outside to sell opium should not be permitted afterwards to enter Shanghai as a, regular trader.2 Like so many other good resolutions, this decision lacked fulfilment. In spite of Pottinger's warning proclamation, early in February 1844, the master of the brig "Amelia" on entering Shanghai presented a manifest stating that there was one chest of opium on board. On the Consul's advice this entry was erased, and the master afterwards claimed· that, also on the Comlul's advice, ·he had thrown the chest in question overboard. Actually, the "Amelia" carried at the time twenty~seven chests, which were transhipped without permission to the barque "William the Fourth", which had already received its grand chop and was ready to clear. At the same tillle the master of the barque "Maingay" presented defective papers for his ship, accompanied by no bills of biding. Consular enquiry revealed that he had brought in one hundred and one .chests of opium, which on hearing of the trouble in which the "Amelia" was involved, he had surreptitiously transhipped also· to the "William: the Fourth". Balfour, the Consul, acted promptly. He fined each of the three vessels. $500 for transhipping cargo without permission, the "Amelia" and the "Maingay" each another. $500 for false manifest, the "Maingay" a further· $500 for breaking bulk without permission and $200 for having irregular papers. The transhipp.ed goods he ordered to be confiscated, the seizure and confiscation to be carried out by the Chinese authorities.. In defending this latter action he stated: "I do not consider it to be the duty Of the Consular Officers to carry out the excise laws .of China as regards prohibited articles." Commenting on the opium trade at Shanghai he 1 Davis to Aberdeen, 24th February, 1846, B.P.P. Correspondence respecting Insults in China; 1857; p. 37, p .. 4.0. 2F.O. 228/31:BalfQut' to Pottinger, desp, NQ. 33, 9th April, 1844, THE FIVE PER CENT AD VALOREM TREATY TARIFF 71 states: "At present the trade is carried on publicly at this pert. . All boats laden with opium daily and unhesitatingly pass theCustOl;n House boats, unchecked and· unexamined, and in the. cases now reported to Your Excellency I have ascertained that the highest Chinese officers of this place. were acquainted· with the transhipment of the opium before I obtained information, and yet no notice was taken and no measures were adopted by them." The Consul in fact found that he was "placed between the cupidity of the dealers in opium and the apathy and indifference of the authorities." 1 Pottinger supported the Censul's action, but directed that the fines for transhipping without permission should be remitted.2 The view of the Shanghai· Superintendent of Customs on this and similar .cases was that so long as opium was kept on board foreign vessels it must be dealt with according to the laws of the country concerned "and that it necessarily falls under the laws of China when landed or purchased by natives of the country."·3 In other words, China did not then claim the right, common to every sovereign state, of searching for and seizing contraband carried in foreign vessels, even when such vessels were admittedly within the territorial . waters of the prohibiting country. Had the Superintendent been alive to the legal implications involved he would have claimed . that sovereign rights not definitely.yielded by treaty are just as definitely retained. Legalization of the opium trade for control and for revenue was the obvious remedy, but legalization the Chinese Government would not have. Successive British Plenipotentiaries· urged this cours~ but in vain. Following the example of his predecessors Sir John Davis in February ·1846 besought the Imperial Commissioner Keying to use his influence to bring the. trade under control by having it placed on a legal footing. "I have often reported to· Your Excellency that the illicit trade in opium, under the connivance of the mandarins, is the source of innumerable evils. Were the trade legalized the whole of the foreign ships would be collected within the five ports, under the control of the Consuls. They would all pay tonnage dues, and about 2,000;000 dollars would; easily be collected on th€ opium. At present this profit is obtained· by corrupt officers of government; the ships wander to all parts of the coast, and the smugglers form settlements on shore. While this is openly connived at, I cannot interfere; but were the trade legalized, I could l.F.O. 228/31: Balfour to Pottinger, desp. No.8; 12th February, 1844. 2 F.O. 228/31: Balfour to Pottinger, desp. No. 33, 9th April, 1844. 3 F.O. 228/31: Balfour to Pottinger, desp. No. 13, 20th February, 1844