rnia 
 1
 
 THE 
 
 TREATY-RIGHTS 
 
 OF THE 
 
 FOEEIGN MEECHANT, 
 
 AND THE 
 
 TEANSIT-SYSTEM, 
 
 IN 
 
 CHINA; 
 
 Considered ivith special reference to the vietvs and opinions of Her 
 
 Majesti/s Board of Trade, Her Majesty's late and present 
 
 Representatives in Peking, the Tsung-li Ya-men, the 
 
 Foreign Inspectorate-General of Chinese Maritime 
 
 Customs, and the Shanghai General 
 
 Chamber of Commerce, 
 
 SUPPOETED TEROUGHOUT BY OFEICIAL DOCUMENTS, 
 PAIITLY UNPUBLISHED. 
 
 7 4«.5"> 14X BY 
 
 JOHANNES VON GUMPACH. 
 
 Fi-ee Transit through China. ' Nothing short of this will prevent future wars. 
 
 WiNGBOVE Cooke.
 
 Printed at Ths Celestial Empire Office.
 
 HF 
 \733 
 
 £ ■; 
 
 O • 
 
 CONTENTS: 
 
 Pbeface P« IX' 
 
 I. 
 
 Intkoductory Kemarks. 
 
 Political bearing of the Subject under discussion — Non-observance of 
 
 Treaty-stipulations by the Chinese Government — Sur Frederick 
 
 Bruce's protestations and warnings — Prince Kung's recrhninations 
 
 —Sarcastic and offensive tone of the Tsung-li Ya-men's despatches 
 
 — The Hon. J. Ross Browne and Dr. WilHams on Chinese obstruc- 
 
 tiveness — Mr. Wade on the disregard of Art. xxviii of the Treaty of 
 
 o Tientsin — The le-Jdn — Apologists for Chinese "poverty" and "fee- 
 
 OT bleness " — True position of the Tsung-h Ya-men — Provincial Au- 
 
 <M thorities and "the Central Government" — Tatar policy of pohtical 
 
 and commercial isolation p. 3. 
 
 (M 
 
 o 
 o 
 
 n. 
 
 The Transit-Question. 
 
 Vital Importance of the Transit-question — Pubhc attention recalled to it 
 by a " communicated" article in the North- China Herald — Motives 
 for the appearance of the paper — Its author — The paper repro- 
 duced — Mr. Wade's Memorandum of December, 1868 — His views 
 relative to the Transit-question transcribed — Their adoption by Her 
 Majesty's Government — The Board of Trade to the Foreign Office — 
 Stand-point taken up by the Tsung-H Ya-men at the Bevision of 
 the Treaty of Tientsin — New Regulations proposed by the Ya-men 
 — Concurrence of authorities in favour of the ''in transitu " theory — 
 Differing views of the Merchants — Latest opmion of Sii" Rutherford 
 Alcock p. 14. 
 
 III. 
 
 Preliminary Inquiries. 
 What is to be understood by the " Transit- System " in China ?— Usual 
 charges leviable on inland traffic in China— Peculiarities of the 
 
 S5G11-^
 
 u 
 
 Chinese system of financial Administration — The Sacred Edict on 
 the payment of duties— rracticc and theory— Fiscal corruption in 
 China— Chinese sources of revenue — Effects of the first Enghsh 
 war and the Tai-ping rebellion — Introduction of the le-kin as^ a war- 
 tax Rapid extension of the new impost — Barriers and Custom- 
 houses—Chinese ** squeezuig "-The Peking Board of Ptevenue and 
 the le-kin — The chow-fang tax — Historical sketch of its introduction 
 — Objects for which the le-hin was professedly imposed — Those ob- 
 jects have ceased to exist — AboHtion of the tax proposed to the 
 Tsuug-U Ya-mcn and declmed — Causes of the failure of the Enghsh 
 Revision of the Treaty of Tientsin — Sir Rutherford Alcock's 
 diplomatic incapacity — Real purposes, to which the le-kin is de- 
 voted p. 47. 
 
 IV. 
 Treaty Rights of the British Merchant. 
 The Enghsh Treaties of Nanking and Tientsin — Main object of the war 
 of 1812 — Aet. X of the Treaty of Nankuag — The Hongkong De- 
 claration^Thc Supplementary Treaty of Hoomun-Chac — Commer- 
 cial advantages secured by the Treaty of Nanking — Art. ix, xiii, 
 • xxiv, xxviii, and lIv of the English Treaty of Tientsin — Rules v, 
 vii, and viii of the Siipplementary Agreement of Shanghai — Art. viii 
 of the Enghsh Convention of Peking — ^Art. xxiii and xxvii of the 
 , French Treaty of Tientsin — Art. iii and iv of the Russian Treaty 
 of Tientsin — Akt. iv, v and vii of the Russian Convention of Peking 
 — Main object of the war of 1859-60 — The principle of free transit 
 through China upheld in the Enghsh Treaty of Tientsin, but 
 swerved from in the subsequent Trade Rules — Errors committed in 
 framing the Trade Rules — Summary of the Provisions of the 
 Treaty of Tientsin relative to Trade — Real meaning of the terms 
 " transit-certificate" and " transit-dues " — Lord Elgin on the com- 
 muted Transit-dues tax — The optional clause of Art. xxviii of the 
 Treaty of Tientsin abrogated by Rule vii of the Shanghai Agree- 
 ment — Confusion of views on the subject — Commutation-tax in- 
 cludes lc-l,in and all other inland charges whatsoever — No taxes on 
 Foreign Commerce lawfully leviable in China, save those agi-eed 
 upon by Treaty — Illegal system of taxation resorted to by the 
 Chinese Government — Liabihty of the Chinese Government to
 
 m 
 
 British demands for compensation, and of Chinese Ciisfoms-ofi&cials 
 to judicial punishment — Payment of Commutation-tax exempts 
 merchandize, on which it is paid, irrespective of ownership — Conchi- 
 sive evidence adduced to this effect — Testimony of Lord Elgin, the 
 Tsung-li Ya-men, and the highest native Provincial Authorities — 
 Perfidy of the Chinese Government p. 72. 
 
 V. 
 
 ExAJnNATION OF AUTHORITATIVE ViEWS. 
 
 Position of the Foreign Inspector-General in the Chinese Customs' Ser- 
 vice — Value to he attached to his opinions — Obstructive tendency 
 of his views illustrated — The "cream" of the Transit- System — 
 The Inspector-General's mis-statements, duphcity of sight, and 
 logical inconsistency — Prince Kung's "sincerity" — The Tsung-h 
 Ya-men's newly proposed Eegulations discussed — Sir Pu Alcock's 
 opinions in 1868 and 1870 contrasted — His ill-judgment and bad 
 taste — A novel doctrine — What gives vahdity to Chinese State- 
 papers — The Great Imperial Seal and the Stamp, by the Tsung-H 
 Ya-men attached to International Treaties — " The Emperor's gem" 
 and Mr. Wade — Mr. Wade's errors of translation — Unsatisfactory 
 diplomatic state of our Treaty-relations with China — Sir R. Alcock's 
 ignorance of Chinese State affairs — Mr. Wade's Memorandum of 
 1868 characterised — His inaccuracies and self-contradictions — Mr. 
 Wade, the le-kin tax, and the Foreign Customs— His pro-Chinese 
 bias and warm apology for the le-ldn— His two-sided exaggerations 
 — Amount of Chinese Eevenue — " The Central Government " want- 
 ing, not in the power, but in the will to abrogate the le-Jdii — Prince 
 Kung's "timidity" — His Imperial Highness in disgrace— Mr. 
 Wade's strange fiscal notions — Untenable character of the " in 
 transitu " theory demonstrated — Its first originator — The theory re- 
 futed — Pernicious doctrines involved in Mr. Wade's \'iews — The 
 Lords of the Committee of the Pri\'y Council for Trade misled by 
 Mr. Wade— Mr. Wade's impressions and Lord Elgin's written 
 statements — Alleged right of the Chinese Government to tax ad 
 libitum foreign merchandize, which has paid the Commutation-dues, 
 after passing into Chinese possession — Confusion of ideas on the 
 subject — Sir Frederick Bruce's views — Mr. Wade's key-note to the 
 whole (luestion— Its false and discordant sound— The real natiu'c of
 
 the problem stated — Justice versus Expediency — Two unholy wars 
 against China — Sinful policy of Lord Palmerston and atoning policy 
 of the Bight Hon. W. E. Gladstone p. 113. 
 
 VI. 
 
 Practical Working of the Transit-System. 
 Alleged abuse of Treaty-provisions on the part of Foreign merchants — 
 Sale of Transit-certificates, in 186G, at Ningpo — The Commissioner of 
 Customs' unfair statement of the case — The Foreign Custom-house 
 responsible for the practice of open infringement of Customs' rules 
 — What became of a sum, exceeding £5,000, paid, in 18G6, by way 
 of Commutation -dues at Ningpo ? — What of a sum total of about 
 £70,000 of similar origin ? — Faulty arithmetic of the Inspector- 
 General — Errors in Customs' Returns — Fines and Confiscations — 
 State of the Wusung Bar — The Chinese Customs, Mr. Wade, and 
 the British Merchant — Mr. Wade's groundless alarm — Tendency of 
 British Eepresentatives in Peking to favour the Chinese — History 
 of the confiscation-case of Messrs. Bower & Hanbury — Illegality of 
 the confiscation proved — How the British Merchant in China is 
 protected by the British Minister — The Sun-yang claims of Messrs. 
 Jardine, Matheson & Co. — Disadvantages, under which foreign 
 merchants are placed touching the payment of Ic-kin — The Tsung-li 
 Ya-men's " own Hart " — Fii-st-fruits of Mr. Hart's appointment — 
 The Ya-men proposes new regulations respecting trade on the river 
 Yangtsze, the Transit- System, and the Coast- Trade — Sir Frederick 
 Bruce's Notification of his " Revised Provisional Regulations for 
 British Trade in the Yangtsze River," and "Regulations (sanctioned 
 by Mr. Bruce) regarding Transit-Dues, Exemption Certificate?, 
 and Coast-Trade Duties " — Promulgation of corresponding docu- 
 ments by the Tsung-li Ya-men — Offensive style of the latter — Sir 
 Frederick Bruce represented as in the Service of China — Transla- 
 tion of the Ya-men's proposed " Five Regulations respecting War- 
 Taxes payable at inland stations, Coast-Trade Duties, and Exemp- 
 tion Certificates " apparently withheld from the knowledge of Her 
 Majesty's Government — Essential discrepancies between the English 
 text of Sir Frederick Bruce's "Regulations regarding Transit- Dues," 
 etc., and Mr. Wade's Chinese version, as officially pubhshed by the 
 Tsung-li Ya-men — The latter grants to China the unrestricted im-
 
 position of le-kin—Boih. the Euglish text and the Chinese version 
 violate Treaty-provisions and mislead the mercantile community — 
 Who is responsible ? — Imperative necessity for an explanation on 
 Mr. Wade's part — " T'u's five Rules " — Attempt, made by the Na- 
 tive Intendant, and Foreign Commissioner, of Customs at Shang- 
 hai, to place the Transit- System on a new basis — Tseng Kwo-fan's 
 despatch of Nov. 5, 1868, to the Shanghai Customs Authorities 
 ignored, and his instructions disobeyed — Eesponsibihty incurred by 
 the Inspector-General and the Shanghai Commissioner of Customs 
 — '* A new and valuable Chinese Concession " — The Transit-dues 
 question and the local Press p. 224. 
 
 VII. 
 
 Illegal Taxation. 
 Tabular view of the amount of illegal taxation and total amount of im- 
 posts, levied on Foreign Trade, during the year 1870, by the Chi- 
 nese Government — Complementary "Stationary" trade taxes — 
 Produce taxes — Comparison of the Tabular view with the similar 
 Table, pubhshed in 1869, by the Shanghai Commissioner of Cus- 
 toms, Mr. Dick — The latter, including only a portion of the native 
 charges known to be levied, designed to mislead — Taxes on Opium 
 and Cotton Goods — Principle of Chinese illegal Taxation — Taxes 
 on Woollen Goods, Metals and sundry articles of importation — 
 Taxes on Silk, Tea, and sundry articles of exportation — General 
 remarks — The Commissioner of Customs at Kiukiang on le-Jdn — 
 Unreliability of his special data — Examination of details, on which 
 Mr. Dick's Table is based — His Table officially admitted to be 
 restricted to inland charges, collected at, or near, the ports — Its 
 arithmetical errors and incongruities — Object of its pubhcation — 
 Alleged " loss to Chinese Revenue by Hongkong being a free port " 
 — Mr. Dick's " Hongkong Claims " — Smuggling in Opium — Ineffi- 
 ciency of the Foreign and Native Customs- Service — Corruption of 
 Chmese officials — India versus China — The British Possession of 
 Victoria a thorn in Mr. Dick's side — His "Hongkong Claims" 
 examined — They vanish into au' — Mr. Dick defeats his own argu- 
 ments — The Chinese Customs -tariff compared with the tariffs of 
 some other countries — Opium not taxed more heavily in China, 
 than are imports generally — Defence of the Opium trade — Opium^
 
 as a stimulant, peculiarly adapted to the physical constitution of 
 the Chinese — Its use and abuse — Deceptive and hypocritical charac- 
 ter of the Tsung-li Ya-mCn's Opium Memorial — The Memorial 
 essentially the composition of a foreigner — Its leading motive — The 
 growth of the poppy in India a legitimate branch of agricultural 
 industry — Duty of Her Majesty's Government to protect it — Annual 
 amount of illegal taxation to which Foreign Trade is subject in 
 China — The Tonnage-dues — The Inspector-General's anticipated 
 Memorandum on the subject — Systematic fabrication of Chinese 
 public accounts — Differential Coast-trade duties — They constitute 
 an indirect tax, imposed contrary to Treaty and justice, on foreign 
 shipping — Mr. Dick's threatened " Withdrawal of the Department 
 from its connection with the Home trade " — Amount of imposts, 
 inclusive of coast-trade dues and excess of export duties, by the 
 Chinese Government annually levied on Foreign Trade in open and 
 systematic violation of Treaty-stipulations — Share (at the present 
 time exceeding £3,000,000 a year) falhng upon British Trade — 
 Estimate of the accumulated debt, thus surreptitiously contracted 
 by China towards England since the Treaty of Nanking p. 306. 
 
 VIII. 
 
 Conclusion. 
 
 Law, Morality, and Expediency — The principle of " Free Transit 
 through China " shown to rest on both human law and divine — 
 War a necessary factor of Progress, Development, and Civilisation 
 in the economy of native and human destiny — The morality of the 
 Opium trade, and the justice of the stipulations of the Treaty of 
 Tientsin vindicated — Pohtico-social state of England — Conflict 
 between Labour and Capital — Necessity of finding wider employ- 
 ment for home Labour — Obstructive policy of the Tsuug-H Ya-mcn 
 — Expansibility of the China Trade — Actual state of affairs — 
 Warning to the Manchu Government p. 401. 
 
 Index P- !•
 
 NOTE. 
 
 The following work was commenced liy the Baron yon Guivlpach 
 some two or three years ago, and came into my hands for publication 
 last March. For some months it was printed under the personal 
 supervision of the author himself; but his sudden death on the 31st 
 July left the completion of his task to me, and I have no choice but 
 to fulfil the responsibility thus devolving upon my shoulders. I 
 wish however most distinctly to state that my connection with the 
 present volume is of a purely commercial nature. In accepting the 
 position of editor, I entirely repudiate that of sponsor; I commit 
 myself to no single theory or statement put forward by the \mter; 
 nor do I in any way endorse the spirit of insinuation which under- 
 lies the whole. It is undeniable that the Baron yon Gumpach was 
 not only a man of Inilliant parts, but endowed . with a capacity for 
 labour and research that was truly marvellous. Heterodox to the 
 verge of monomania on many scientific theories of universal accepta- 
 tion, the works he has left behind him all bear the impress of an 
 unusually powerful but badly-balanced mind. Untrammelled by the 
 slightest fear of ridicule or retaliation, — higher considerations being 
 quite beside the mark — his attacks on existing institutions were fear- 
 less and virulent, and might have led to real enquiry and reform had 
 they not been so highly coloured with individual bias. The present 
 work however deals with facts, and facts the importance of which it 
 would be impolitic to ignore. It is of the highest moment that the 
 position of British subjects in China should be clearly defined, 
 and the trading rights and privileges secured to them by Trea-
 
 ty pliiccd ill a clear and proper light. Had the spirit of onr 
 Treaties been enforced by our Ministers with the same energy 
 and determination wnth which the letter of tliem was dictated 
 by the Plenipotentiaries who drew them up, no uncertainty 
 and indecision would ever have prevailed; tlie Chinese offi- 
 cials would have submitted, as none can do better, to a force 
 majeure, the people would have known and felt the hand of the 
 foreigner whose arms they had learnt to respect, the clear understand- 
 ing arrived at upon the conclusion of peace at Tientsin would have 
 been maintained, and foreign goods and foreign enterprise would 
 have penetrated from one end of the Empire to the other. Instead 
 however of this clear enforcement of our prerogatives, our Ministers 
 have tacitly allowed the Chinese authorities to annul the spirit 
 and even to encroach uj)on the letter of our hard-earned Treaty 
 rights. The events of the past few months, too, have exposed much 
 misapprehension on the part of foreigners as to the true import of 
 many of the provisions contained in the Treaty of Tientsin; misap- 
 prehensions which have arisen partly from sheer apathy on the part 
 of those most interested, and partly from the loose and uncertain 
 phraseology employed in the Treaty itself. Moreover, the present 
 moment is eminently opportune for the free and unbiassed discussion 
 of every i)oint bearing upon our rights in China. We are now 
 passing through a period in the history of our relations with the Mid- 
 dle Kingdom which has attracted unusual attention from all quar- 
 ters, fraught with results which cannot fail to exercise a powerful 
 influence uj)on those relations in the future ; and the position of affairs 
 in the North is at present both anomalous and critical. We are 
 in a transitioQ-state. The first Chinese Ambassador to England 
 has recently been appointed; the relative position of .the two Em-
 
 xi 
 
 pires has received a severe shock, and the shock has been immediate- 
 ly followed by an apparent, strong reaction. The time is rapidly 
 approaching when China will, by force of circumstances, emerge from 
 the cloud of exclusiveness and conservatism under which she has 
 been so long obscured, and which has been so stern a barrier in her 
 path of progress ; the oldest people upon the face of the Earth will be 
 at last compelled to take their place in what is euphemistically called 
 tlie comity of nations, and to participate in, and contribute to, the 
 universal weal. In view therefore of the growing importance of all 
 questions bearing upon our Treaty rights in China, I feel less reluc- 
 tance than I otherwise should, in discharging my present function. 
 The Baron voN Gumpach's latest book may furnish some quota, in 
 the way of suggestion, to the general enlightenment; I therefore 
 publish it as it stands, upon its merits. 
 
 FftEDERic H. Balfour. 
 
 Office of the Celestial Empire, 
 Shanghai, October, 1875.
 
 Xll 
 
 PREFACE. 
 
 At the actual crisis of our political and commercial relations with 
 this country, combined with the growing conflict between labour and 
 capital at home, and the necessity of finding additional markets and 
 outlets for our staple-articles: it occurred to the author, that a 
 thorough discussion of the Treaty-rights of the British merchant, and 
 what is usually termed the Transit-system, in China, by an unbiassed 
 and disinterested critic, — a stranger alike to diplomacy and trade, — 
 might prove of public utility, and throw new light upon a subject 
 which for practical importance yields to no other question of the 
 day. He gladly, therefore, undertook a task neither attractive nor 
 remunerative in itself, and now submits to the leader the results of 
 his inquiry in the shape of the present volume; while, as a comple- 
 ment to it, he is preparing for the press a series of shorter essays 
 chiefly of a political and politico-commercial tendency.* Should 
 the two works, viewed as a whole, fail to influence the future policy 
 of Her Majesty's Government in regard to Cliina, and to hasten 
 the final consummation of the opening up of the Tatar Dominions to 
 foreign commerce : the fault will entirely rest with the author's im- 
 perfect treatment of his subject or the supineness of British states- 
 men ; — certainly not with the inadequacy of the materials produced, 
 or of the magnitude of the interests at stake. 
 
 China offers to British industry and enterprise a field, compared 
 with which the similar field of our Indian Possessions sinks into in- 
 
 * China and the West ; being a Series of Essaj's and Eeviews on questions, 
 mostly political and commercial, bearing on the future of China and her relations 
 with the Great Western Powers.* 
 
 Tbe Earou left this mauuscript nnfinisheil. — Ed.
 
 XUl 
 
 significance. Actual experience shows, that the trade iu our staple- 
 manufactures alone is susceptible of an expansion to the annual 
 value of from sixty to eighty million pounds sterling, provided that 
 the principle of free transit through the Interior be honestly carried 
 out, and the mineral resources of the country be sufficiently developed 
 to keep the balance of trade in a state of due equilibrium. The great 
 expectations, in this sense entertained at the conclusion of the last 
 war, were disappointed, not because they rested on an eiToneous 
 foundation, but solely because their realisation has been frustrated by 
 the obstructive policy of the Manchu Government, more or less 
 countenanced by the Representatives of England in Peking, and ac- 
 tively supported by the foreign mn'ployis of the Tsung-li Ya-men. 
 
 The proofs to this effect will, no doubt, be accepted without sur- 
 prise by many. Few readers will be prepared to learn that the 
 amount of illegal taxation, with which, in open and systematic de- 
 fiance of existing Treaties, British trade is, and for years past has 
 been, burdened in China, now reaches a yearly total of six million 
 pounds sterling ; that the major portion of this amount is expended 
 by the Chinese Government, — seemingly more than ever bent, not 
 only on a return to the old system of political and commercial isola- 
 tion, but on the expulsion of " the outer barbarian " from " tlie 
 bayonet-ploughed soil of Cathay," as China has been designated — for 
 purposes of military armaments, or is being accumulated, as a reserve 
 fund ; and that the aggregate sum, which thus gradually and at a 
 progressive rate has been levied by China upon British trade since 
 the conclusion of the Treaty at Nanking, may be estimated at some 
 thirty million pounds sterling. 
 
 In connection with these facts, the author would call attention to 
 certain remarkable discrepancies, which there exist in that important
 
 XIV 
 
 doaiment, the " Regulations sanctioned by Mr. (suljsequeritTy Sir 
 Frederick) Bruce (then Her Majesty's Minister Plenipotentiary and 
 Chief Superintendent of British Trade in China) regarding Transit 
 Dues, Exemption Certificates, and Coast-Trade Duties," between the 
 official English text, and its official Chinese version made, it has to 
 be concluded, by the then Chinese Secretary to the British Legation 
 in Peking. In the English text, which was, in 1861, transmitted by 
 the British Minister to Her Majesty's Government and publicly noti- 
 fied, at Shanghai, to the British mercantile community iu China for 
 their guidance, there occurs no mention of li-lcin or war-taxes. In 
 the Chinese version, which, at the same time, was by the Tsung-li 
 Ya-mSn commnnicated to the Chinese Provincial Authorities for their 
 guidance, the unrestricted right of levying such li-kin or war-taxes 
 upon British trade, is in explicit terms conceded to the Chinese 
 Government, — apparently without the cognizance and sanction of 
 Her Majesty's Government. But it is by means of these very im- 
 posts, that the Chinese Government has inflicted, and continues to 
 inflict, on the Commerce of England that onerous amount of illegal 
 taxation, just refen^ed to. 
 
 An apology for, and a discourse in support of the maintenance of, 
 this taxation, both as remarkable as the discrepancy, on the sole 
 ground of which the impost rests, — which were submitted to the con- 
 sideration of Her Majesty's Government by His Excellency the pre- 
 sent Eepresentative of England at Peking, Thos. Francis Wade, Esq., 
 C.B., in an official Memorandum, dated December, 1868, add much 
 to the gravity of a question, which seems to the author so deeply to 
 affect both the interests of British commerce and the character of 
 British diplomacy, as to present a case of positive necessity for Par- 
 liamentary inquiry.
 
 XV 
 
 It is not" that the Chinese Government, being unaware of the true 
 state of nmtters, had on its own part acted in good faith respecting 
 the £*-^m clause. Proofs will be foimd below, that the Tsung-li 
 Ya-nien and the highest Provincial Authorities from first to last dis- 
 tinctly admit the " war-tax " to be imposed on foreign commerce in 
 violation of existing Treaty-provisions. Nor is it the case, as is 
 generally asserted and believed, that tliis impost weighs equally 
 Leavy on the native ti-ade. Comparatively speaking, it hardly 
 touches any branch of Chinese inland traffic, save those branches 
 which are carried on in foreign imports, and native produce destined 
 for exportation to foreign parts. The li-kin, in fact, was introduced, 
 at the termination of the war of 1842, on the Chinese principle of 
 paying the outer barbarian with his own money, and for the purpose 
 of obstmcting foreigii trade to the utmost by taxing it to the utmost. 
 
 Notice may here also be directed to a document bearing upon the 
 same subject, and wliieh originated almost simultaneously with the 
 Memoi-andum referred to. It was printed, a year later, in December, 
 1869, by order of the Foreign Inspectorate-General of Chinese Mari- 
 time Customs, at the Shanghai Customs' Press ; but has become little 
 knowa in "Far Cathay." This official pamphlet, calculated to mis- 
 lead the Eui'opean reader, served as the basis for another official 
 essay^ published by the same authority in the same year, with the 
 object of, showing, that the annual total " Excess of taxes collected 
 by the Cliinese Authorities over Treaty-rates " amounted, in reality 
 and considering a yearly loss of Taels 300,000, wliich, it is asserted, 
 the Chinese Government experiences owing to Hongkong a free port, 
 to barely half a million pounds sterling, and the aggregate of the 
 imposts, to which foreign commerce is subject in China, to twelve 
 per cent ad valorem only. In the sequel, positive proof will Ije
 
 XVI 
 
 ofTered, that tlio. fuvmev now amounts annually to twenty-two and a 
 half per cent, tlie latter to thirty per cent., ad valorem. 
 
 In unison with this system of overburdensomc inland taxation, the 
 author would invite further attention to the new Regulations touch- 
 ing Foreign trade with the Interior of China, by the Tsung-li Ya-men 
 in December, 1872, submitted to the Representatives of Foreign 
 Powers in Peking, and of which a translation, from an authentic 
 copy of the Chinese text, is here for the first time presented to the 
 public. The document, held a diplomatic secret by the Foreign 
 Ministers, is an important one, inasmuch as it deliberately proposes, 
 by means of Chinese Rules of Trade to place the commercial relations 
 of England with this country, as established by the Treaties of Nan- 
 king and Tientsin, on a different basis ; whilst it, at the same time, 
 forcibly shows, not only that the commercial obstructiveness of the 
 Chinese Government rests on a principle of policy, but that the 
 settled aim of that policy is to close the inland marts of the Ta-Ching 
 Empire against all direct foreign trade and, so far as present circum- 
 stances wUl permit, against foreign trade generally. The Regula- 
 tions, under instructions from the Tsung-li Yamen, were framed 
 conjointly by the Foreign Inspector-General, and the Tautai of Shang- 
 hai as native Commissioner, of Chinese Maritime Customs ; and one 
 of the objects being to legalise both the illegal inland taxes them- 
 selves, and, by stealth, their amount : it thus came to pass that this 
 amount, in the form of " ten times the half-duty," was introduced 
 into the document in question, placing upon the evidence as to the 
 height to which, from one-tenth per cent in 1844, the Ic-kin tax has 
 been gradually raised, evidence, previously and independently col- 
 lected by the author, the conclusive official seal. 
 
 That Her Majesty's Chief Superintendent of British Trade in
 
 China should, under such circumstances, have deemed it his duty to 
 withhold from the mercantile community in China a well considered 
 and matured plan of the Chinese Government, so vitally affecting, 
 in the future even more than in the present, the vast interests of 
 British merchants, trading with this country on their faith in exist- 
 ing Treaties, appears almost a contradiction in terms, and is well 
 -calculated to suggest matter for grave consideration to those whose 
 fortunes are at stake. 
 
 There is, amidst a variety of moTe or less important subjects 
 touched upon in the following pages, only one more point, to which 
 the author desu-es to advert in this place. The foreign and com- 
 mercial policy of the late Administration of the Eiglit Hon. W. K 
 -Gladstone, and the action of the Representatives of England in 
 Peking, have at the same time imperilled our trade, and brought 
 the country to the verge of another war with China. Whether it be 
 still possible to avoid such a war by the adoption of a different policy, 
 the display of a strong naval force in Chinese waters, the insisting 
 on the strict fulfilment of Treaty-obligations, and the firm pressure 
 of the right of free transit through the lenuth and breadth of the 
 Ta-Ching Dominions, in connection with the immediate abrogation 
 of the Ic-liu tax upon foreign trade, may be a question open tc- 
 a difference of opinion. The experiment, more especially in view of 
 the actual political state of Europe appears not undeserving of a trial. 
 Under any circumstances, Her Majesty's present Administration, 
 unless they be prepared either to carry on a costly and inefficacious 
 armed contest with China every decennium, or else to allow the 
 Manchu Government to gradually repulse British trade, British 
 merchants, and British subjects from the soil of Cathay, will have to 
 contemplate the early contingency of a new war with that Govern-
 
 XVI 11 
 
 jut^ut^ — a war which, <jnce tliat it is actually forced upon England,, 
 should be undertaken and carried through with the clearly defined 
 object of precluding the necessity for further wars, and of regulating 
 the future of China accordingly. 
 
 Shanghai, May, 1875.
 
 INTEODUCTORY EEMxVEKS. 
 
 Political bearing of the subject uncler discussion — Non-obscrvaucc of 
 Treaty- stii^ulatious hj the Chinese Government — Sir Frederick 
 Bruce's protestations and warnings — Prince Kung's recrimina- 
 tions — Sarcastic and offensive tone of the Tsung-li Ya-men's des- 
 patches-^The Hon. J. Ross Browne and Dr. "Williams on Chinese 
 obstructiveness — Mr. Wade on the diregard of Art. xxviii of the 
 Treat}^ of Tientsin — The Ic-kin — Apologists for Chinese "poverty " 
 and "feebleness" — The position of the Tsung-li Ya-mcn — Provin- 
 cial Authorities and "the Central Government" — Tatar poHcy of 
 political and commercial isolation. 
 
 There are few subjects, not excluding the Audience ques- 
 tion,* of greater moment to the best interests of China and 
 the maintenance of friendly relations between the Peking 
 Government and Western Powers, than is a satisfactory- 
 settlement of the so-called Transit-system, involving, as it 
 does, the effective opening up of the Ta-Ching dominions 
 to foreign commerce, in accordance with existing treaties. 
 More than once Sir Frederick Bruce, who represented the 
 British Government at Peking fi'om 1860 to 1865, had to 
 call the attention of the Tsuno'-li Ya-men to a violation of 
 
 * The audience question is commonly understood to have been finally solved, And in 
 a very satisfactory manner, too, by the so-called "audience" which, on Sundiiy, the 29th 
 June, 1873, was " granted to the Foreign Ministers resident in Peking, by the Emperor of 
 China." Such, however is far from being the case. The character, import, and tendency 
 of that singular formality have been entirely misrepresented to the Western public. It 
 constitutes a complete triumph of Chinese, over European, diplomacy ; and, in my humble 
 opinion, the Representatives of Foreign Powers, in acceding to the terms of studied 
 insult and political dependence, on which they were permitted to appear in the distant 
 presence of •' the One Vice-gerent of Heaven and Autocrator of the Earth," have on this 
 occasion betrayed the first duty they owed to their Sovereigns and theii" Countries, and 
 incurred a grave responsibility.
 
 4 THE TREATY RIGHTS OF THE 
 
 tlio transit-])r()visioiis of those treaties as a matter of the 
 highest importance to " the peace of the Empire in its ex- 
 ternal relations," and the necessity of doing away with a 
 system of deliberate obstruction, which might ultimately 
 force the British Government to adopt proceedings " in- 
 consistent with amicable relations, and which had proved 
 the source of disaster to China before ;" and in his des- 
 patch to Prince Kung, as President of the Tsung-li Ya-men, 
 of November 9th, 1868, Sir Rutherford Alcock, Sir Frede- 
 rick Bruce's successor as British Minister at " the Northern 
 Capital," expressed himself in these terms : — ** I still hope 
 Your Imperial Highness and the Ministers of the Ya-men 
 collectively, will see that the time has arrived for removing 
 all just cause of complaint and placing the trading-relations 
 of British subjects in the Interior on a footing of security 
 and immunity from illegal taxation and obstruction, without 
 which the Treaty itself becomes a dead letter. This day 
 eight years ago Lord Elgin and the army that accompanied 
 him left the gates of Peking, after having secured the rati- 
 fication of the Treaty of Tientsin, and, in negotiation with 
 Your Imperial Highness, a further convention that, in the 
 terms of Your proclamation then issued, ' Hereafter the 
 weapons of war may for ever be laid aside, and all should 
 
 join together in the work of promoting peace,' f and I 
 
 wall not allow myself to think that there can be any ulti- 
 mate failure, whatever difficulties may have been ex- 
 
 t Sir R. Alcock appcai-s not to have been aware that the passage, marked by Prince 
 Kung, was repeated from the proclamation of the notorious Yeh, Governor-General of the 
 Two Kuang, on the occiii^ion of the signing of the Supplementary Treaty of Hoomun-Chae, 
 informing the Chinese of the conclusion of the Treaty of pei-petiial Peace and Friendship of 
 Nanking. His Imperial Highness, in promulgating, a few years subsequently, the notifi- 
 cation of another Treaty of perpetual Peace and Priendship, indulges in a humor, which 
 takes delight in intensifying the " solemnity " of proclaiming such a peace with " the outer 
 barbarian,'' by an admixture of that broad and cynical sarcasm peculiar to him. .
 
 forekJn merchant in china. 5 
 
 pGrienced hitherto in coming to a mutual understanding on 
 the important subjects under consideration". 
 
 Indeed, ever since the conchision of the Treaty of 
 Tientsin, signed on the 2Gth June, 1858, and ratified at 
 PekingI on the 24th October, 1860, and the attempts made, 
 on the part chiefly of British subjects, to carry its pro- 
 visions relative to trade with the Interior of China into 
 practical effect, those provisions have proved little more 
 than an abundant source of correspondence to diplomatists 
 and statesmen; of annoyance, vexation, and disappoint- 
 ment to foreign merchants ; of "squeezes" and extortion 
 to native officials and their underlings ; and of practice in 
 duplicity and evasion to the Tsung-li Ya-men. Thus, Sir 
 Frederick Bruce, than whom a more easy-going Eepresen- 
 tative of the interests of his country and one more favorably 
 and indulgently disposed towards the Chinese the Ya-mcn 
 could hardly have wished to deal with, found himself under 
 the necessity of writing to Prince Kung, on June 16th, 
 1863 :— 
 
 Your Imperial Highness will have received the note I had the honor 
 to address you on the 9th instant, inclosing a memorandum of the 
 substance of certain observations I had felt it my duty to make when I 
 met Your Imperial Highness on the 7th instant. As regards the first of 
 the two important subjects to which my observations related, the foreign 
 pohcy of Cliina, I shall add nothing to what I have already said, upon 
 the danger which the Empire will incur, should its Government fail 
 promptly and completely to satisfy the Kepresentatives of other States, 
 
 J The Capital of China, ^[^ ^ Peking, i.e. " the Northern Capital,"— as distinguished 
 from f^ T^, Nan-Icing, i.e. " the Southern Capital," — is so designated by foreigners only. 
 The Chinese call it simply ^^ King, (in the north pronounced Tjing), "the Capital,'' 
 namely, of the Ching Empire Universal. The real name of the City is M ^ RSF, Shoii 
 T'ien Fu, and so, of course, it should be styled in all official documents. The use ot Peking 
 by foreign diplomatists implies, on their part, an acknowledgement of the contended- for 
 Chinese autocracy of the world. The proper name of "the (former) Southern Capital", 
 Nanking, is -^ ^ jj5f , Kiang Ning Fu.
 
 G THE TREATY RIGHTS OF THE 
 
 wlio arc awiiiiing its action. My present business is witli tlic claim of 
 my own Governinciit. 1 pat first on the list the forcible exclusion of 
 Her Majesty's Consul from Cbao-Cbow-Foo, and the refusal of the Au- 
 thorities at Ningpo and Shanghai to refund transit-duties surcharged to 
 British subjects. I place these foremost because Your Imperial High- 
 ness has fully admitted the justice of ray representations regarding those, 
 and has more than once promised that the wrong done should be set 
 right. But complaints arc incessant from almost every port, of entire 
 iudiflcrcncc, on the part of the authorities, to the provisions of the Trea- 
 ties affecting transit duties passports, the free employment of Chinese, 
 the acquisition of building-sites, and the recovery of debts. Your Im- 
 perial Highness assured me that a circular of instructions, which you 
 communicated to me, would obtain the desired end (of persuading the 
 local Authorities of the fact that the Treaties form part of the law of the 
 land, and that neglect or violation of their provisions will be denounced 
 and published as breaches of the law), and as I was indifferent to the 
 form, I insisted no further. But it is not too much to affirm that up to 
 the present time the circular has produced no effect whatever. The 
 grievances then unredressed remain unredressed still, and fresh grievances 
 are constantly occurring. At Hankow, the Authorities dehberately 
 violate the Treaties in the matter of transit-duties, and at Swatow they 
 refuse to issue passports unless the words " for purposes of trade" be 
 excluded, alleging that this departure from the letter of the Treaty is in 
 obedience to the express command of the Tsung-li l''a-men (Foreign 
 Board). Under these circumstances, I am driven to one of two conclu- 
 sions. Either the Imperial Government is unwilling to use its influence 
 to cause the Treaty to be fairly carried out, or it has not the power to 
 cause its orders to be obeyed. It then becomes my duty to bring these 
 facts under the consideration of Her Majesty's Government as soon as 
 possible, in order that it may decide on the propriety of discontinuing 
 the moral and material aid hitherto afforded to the Chinese Govern- 
 ment, and confine its efforts to the protection of its own interests in China. 
 
 In the Tsung-li Ya-mun's answer, dated June 19tli 1863, 
 we read : — 
 
 The Prince was considering a reply to the British Minister's note of 
 the 9th, when His Excellency's despatch arrived. "With reference to the 
 proposition on which it insists, that the Treaty should rank with the
 
 FOREIGN MERCHANT IN CHINA. 7 
 
 law, tlie Priuce has to observe that the principle that the Treaty is idcu- 
 tical with the laws of the Imperial Governmeut, aud that breach of 
 Treaty is the same thing as violation of the law, is the principle on 
 which the Government of China proceeds, aud that its only desire is 
 that foreign nations should regard the Treaty in the same light, as there 
 would then, to the end of time, be peace between the native and the 
 foreigner. As regards the cases still undetermined in the provinces, the 
 Prince hopes that the British Minister will refer to the record and in- 
 form him, case by case, of the particulars of each, and the Ya-men will 
 at once write to the Provincial Governments concerned, to hurry them 
 with the cases enumerated. The Ya-men wiU on its part, supply the 
 British Minister with a list of the cases still undecided by British Au- 
 thorities, and will request His Excellency to send them orders to use 
 equal expedition. Under these conditions neither side will have a pretext 
 for complaint. 
 
 To this communication, the sarcastic and offensive tone 
 of which characterises but too many of the despatches, 
 addressed by the Tsmig-H Ya-men to the Representatives 
 of Foreign Powers, and which, in official translations 
 like those here quoted from, usually assume a very mild 
 and subdued form. Sir Frederick Bruce replied, on July 
 3, 1863, as foUows :— 
 
 I have received the reply of Your Imperial Highness to my despatch 
 of the IGth of June. Your Imperial Highness states in exphcit terms 
 that the Government of China recognizes the Treaties as the law of the 
 Empire in its relations with foreigners, and that breaches of Treaty are 
 considered as violations of those laws. But the despatch of Your Im- 
 perial Highness contains nothing to show that this principle will be 
 carried out in practice. I stated instances at Hankow and Swatow in 
 which the Authorities, in spite of the remonstrances of Her Majesty's 
 Consuls, have deliberately set aside the letter of the Treaty for no other 
 object than to curtail the privileges of Her Majesty's subjects. Your 
 Imperial Highness in your reply does not allude to these cases, nor do 
 you inform me that any steps have been taken to remedy these grievances, 
 or to prevent a repetition of such conduct. I am simply requested to 
 send in a list of the grievances complained of, and I am informed that
 
 8 THE TREATY lUOIITS OF THE 
 
 the local Authorities will be urged to settle them with speed. Such a 
 proi)osal is entirely unsatisfactory, for, what reason have I to 8ui)pose 
 that the instructions now to be sent by Your Imperial Highness will bo 
 obeyed, when those for the redress of outrages, such as that committed 
 on Her Majesty's Consul at Chao-chow-foo, and for the repayment of 
 surcharges at Shanghai and Hankow have been disobeyed ? Moreover, 
 I do not complain of particular acts only ; I complain of the disregard 
 generally shown to Treaty obligations by the local Authorities, and to 
 the constant complaints I receive from the ports of the levy of excessive 
 duties, and of the refusal to repay surcharges improperly levied, &c. . . . 
 With respect to the deUberate breach of Treaty stipulations, of which I 
 gave instances both at Hankow and Swatow, I have simply to observe 
 that, as long as the Imperial Government refuses to proceed in the usual 
 Chinese form against local oflficers against these breaches of law, the 
 Government becomes itself responsible for these acts by the impunity it 
 accords to its subordinate agents. I feel convinced that, if Your Imperial 
 Highness had obtained a decree in the terms I suggested eighteen months 
 ago, and the provincial authorities had seen that it would be really en- 
 forced, the subsequent acts complained of would not have been com- 
 mitted. 
 
 At about the same period, the United States' Minister, 
 " Mr. Burhngame," — his successor, the Hon. J. Ross 
 Bro^vne, observes in his strictures upon Mr. Hart's " Note 
 on Chinese Matters," in 1868, — " made similar complaints, 
 and said that the tergiversations of the officers, who ad- 
 ministered the Government, rendered it difficult to hold 
 relations with them without a sacrifice of personal dignity. 
 Dr. Williams, in 1866, (then American Charge d'Affaires), 
 stated that " the effects of the lesson, taught by the war of 
 1860, were passing away and the Eulers were becoming 
 more obstructive and impracticable than ever." 
 The Hon. J. Ross Browne himself ^vi'ites : — 
 The whole diplomatic corps at Peking up to the present time (18GG) 
 have, during the entire term of their residence at the Capital, been 
 chiefly engaged in making protests and remonstrances against the n's 
 ineitiii: and shuffling evasions of the Imperial Government. The mer-
 
 FOKEIGN MERCHANT IN CHINA. 9 
 
 cbants at the Treaty-ports, through their Chambers of Commerce, have 
 filled the archives of the Legations with i^roofs of the persistent manner, 
 in which trade has been obstructed and Treaty-rights violated ; in fact 
 there is no difference of opinion on the subject among foreigners in 
 China. Is this universal testimony to be disregarded ? To whom are 
 we to look for the truth, if not to our own Eepresentatives, and to all 
 classes who hold intercourse with the Chinese ? 
 
 The present British Minister in Peking, Thomas 
 Francis Wade, Esq., in his " Memorandum respecting the 
 Revision of the Treaty of Tientsin," written in December, 
 
 1868, states :— 
 
 It is on the injury inflicted on their business by the non:observance of 
 Aet. xxviii. that the Merchants, one and all, most loudly complain ; 
 and that the burden that has fallen upon their trade is indeed hard to 
 
 bear, no one will attempt to deny The more serious drawback 
 
 on the development of foreign trade is occasioned by the fitful and irre- 
 gular incidence of local taxation upon the trade of the native community 
 
 Even in time of peace a very slight plea of local necessity will 
 
 enable a Provincial Governor to increase the amount of the dues to be 
 collected, or to impose provisionally a tax upon trade, if I may use the 
 
 expression. Ml si^M Though ostensibly a voluntary contribution, 
 
 the le-kin is in reality a tax of great elasticity upon all trade, and one 
 which, in course of time, becomes as grievous in the arbitrariness of its 
 
 imposition as the 'benevolence' of our Kings of old Through 
 
 the native trade, undoubtedly, the le-kin hits our own trade hard, and 
 
 for more reasons than one we are justified in crying out I have 
 
 said that Art. xxviii. (of the Treaty of Tien-tsin) has been ill observ- 
 ed. Whenever a Chinese authority has refused to issue a transit-duty 
 certificate, or has disregarded the certificate presented, a breach of 
 Treaty has been committed, and I regret to say that of the latter offence 
 more particularly there are instances enough on record, and that the 
 claims of applicants for reimbursement of the dues levied in excess, 
 have been left, after much argument and correspondence, unsatisfied. 
 I shall presently have to explain what it is that has tempted the Pro- 
 vincial Governments to these acts of undoubted illegality, and why it is 
 that the Central Government has been so slow to redress the wrong 
 when appealed to.
 
 10 THE TREATY KIOHTS OF THE 
 
 TIjg various official testimonies, here adduced, can, 
 qui to independently of those of the foreign merchants 
 tlienisolves and a reference to special cases, leave no man- 
 ner of doiiht as to the hroad fact, that, owing to the oh- 
 structiveness of native officials, the treaties, concluded 
 hetwoen China and Western Powers at Tientsin in 1858 
 and 1861, have, so far as regards their provisions for the 
 opening up of the Interior of the Tatar Empire to foreign 
 commerce, virtually remained, and remain, " a dead letter." 
 Apologists, however, as the concluding words of our quota- 
 tion from Mr. Wade's memorandum show, are not wanting, 
 who would fain relieve the Chinese Government of its 
 responsibility for this grave state of matters, and transfer 
 it to the shoulders of the Provincial Authorities. The 
 British Minister, in continuance of the observations just 
 cited, goes on to say : — " It is the poverty of the exchequer 
 and the feebleness of the Central Government which ex- 
 plain, though they do not excuse, the disregard of the 
 transit duty clauses. The Provincial Governors, knowing 
 that their general necessity is beyond dispute, have over- 
 taxed the native, and, when they could reach him, the 
 foreigner ; not, as I believe, at the instance, very probably 
 often in defiance, of the Central Government ; and the 
 Central Government, though not powerless, would it but 
 exert itself, has been scared by the bug-bear of war expen- 
 diture from interference in provincial finance. The Central 
 Government will not, of course, avow such feeble- 
 ness when defending itself." — I am unable to agree in 
 these views with his Excellency, who, indeed, so far 
 as the alleged feebleness of the Chinese Government is con- 
 cerned, falls into such palpable self-contraditions as to cause 
 his argument to defeat itself. Constitutionally and practical-
 
 FOREIGN MERCHANT IN CHINA. 11 
 
 ly the Chinese Government is, for all purposes of internal 
 administration, the strongest Government in tlie world. Mr. 
 Wade manifestly confomids it herewith the *'Tsimg-li Ya- 
 men," — as itsof&cial title designates, a mere temporary " Im- 
 perially-appointed Commission for the General Control of 
 the (Commercial) Affairs of the Individual (Tributary) 
 States of the Ta-Ching Empire," — (such as England, the 
 United States, France, Russia, and Germany,) — under the 
 Presidency of Prince Kung.|| Certain members of this, 
 of itself powerless Commission, including His Imperial High- 
 ness, are also members of the Chinese Government in the 
 wider acceptation of the term, i. e. of the Emperor's Privy 
 Council and State Secretariate; but the Foreign Ministers 
 at Peking, unless we exclude the Eepresentative of Russia, § 
 come only in contact with them in their former capacity. 
 
 In that capacity Prince Kung delights in the British Mi- 
 nister's theory of the feebleness of the Central Government, 
 because this imagined feebleness constitutes the Tsung-li 
 Ya-men's strength. Occasionally, it is true, when the Ya- 
 men is by the Representative of England charged with hav- 
 ing expressly commanded the Provincial Authorities "to 
 depart from the letter of the Treaties," i. e. to set the treaty- 
 provisions systematically at naught, the Prince, as we have 
 seen, does not even trouble himself to deny the charge. 
 Upon other occasions, however, when His Imperial Highness 
 may have found it more expedient, as President of the Tsung- 
 li Ya-men, to assure the British Minister that instructions 
 
 ]| The origin and position of the Tsung-li Ya-men, usually, but in our seuse erroneously, 
 rendered " the (Chinese) Foreign Office," will be fully explained in another place. 
 
 § By Art. iL of the Russian Treaty of Tientsin, of June 1/13, 1868, the Russian Foreign 
 Office and the Russian Minister at Peking have the right of correspondence, and the latter 
 that of personal communication, with the oldest member of the Privy Council, or the First 
 Minister at Peking Cle membre ain6 du Conseil d'Etat ou le premier Ministrc k P(ikin), — 
 that is to say, according to the Russian-French version. The Chinese text reads very 
 differently.
 
 12 THE TREATY IIIGIITS OF THE 
 
 for the redress of a certain grievance have actually been sent 
 to the Provincial Governors, and, perchance, to communicate 
 to him a copy of the very despatch conveying them, whilst, 
 as a Member of the Privy Council, the Prince submits to the 
 Chinese Government the propriety of ordering those instruc- 
 tions to be rescinded, which is done accordingly : what could, 
 in subsequent explanation of the fact that "it is not too 
 much to say that the circular of His Imperial Highness has 
 produced no effect whatever," be more acceptable to Prince 
 Kung than, despite of a life-time's experience of Chinese 
 duplicity, the British Minister's persistent belief in the 
 Ya-men's good faith and "the feebleness of the Central 
 Government ?" Wliat more grateful, than Mr. Wade's plea 
 in favor of that " poor, feeble" Government, which finds 
 millions to waste upon military armaments against the 
 West and, in the consciousness of its imagined strength, 
 challenges to mortal combat the whole civilized world by 
 conniving at, and exultingly accepting the responsibility of, 
 the Tientsin Massacre, that, in the matter of commercial 
 treaty-violations, it is the financial necessity of Provincial 
 Governors, which forces them to act " in defiance " of the 
 Imperial commands ? 
 
 If, then, in combination with the broad and unques- 
 tionable fact, pomted out in a preceding paragraph, we 
 consider that the policy of the Chinese Government has 
 ever been one of commercial and political isolation ; that a 
 departure from that policy has only been forced upon it at 
 the cannon's mouth; and that, of late years, its tendency, 
 not to say its determination, to return to a state of hereditary 
 seclusion, has assumed a form and expression, increasing in 
 energy and boldness with its increasing strength, since 1841-42 
 so greatly impaired by foreign invasion and internal rebel-
 
 FOREIGN MERCHANT IN CHINA. 13 
 
 lion : it appears to me difficult for any unbiassed and soberly- 
 thinking person to avoid the conclusion, that the systematic 
 violation and evasion of the provisions of the Treaties of 
 Tientsin respecting trade with the Interior of China, on the 
 part of native officials, has not only been sanctioned and 
 supported by, but has been, and is being, carried out at 
 the instance of, the Imperial Government itself. The 
 positive proof to this effect will be furnished in the sequel.
 
 14 THE TREATY RIGHTS OF THE 
 
 II. 
 
 THE TEANSIT-QUESTION. 
 
 Vital importance of the Transit- question — Public attention recalled to it 
 by a " eommuuicated " article in the North- China Herald — Motives 
 for the appearance of the paper — Its author — The paper reproduced 
 — Mr. Wade's Memorandum of December, 1868 — His views rela- 
 tive to the Trausit-qnestion transcribed — Their adoption by the 
 British Goveniment — The Board of Trade to the Foreign "Office — 
 Stand-point taken uj) by the Tsuug-li Ya-men at the Eevisiou of 
 the Treaty of Tientsin — New regulations proposed by the Ya-men 
 — Concurrence of authorities in favor of the "in transitu" theory 
 — Diffeiing views of the Merchants — Latest opinion of Sir Euther- 
 ford Alcock. 
 
 It is quite recently only that, althougli occasionally com- 
 mented on in the local papers, public attention has been 
 more generally directed to the subject introduced in the 
 l)receding section, notwithstanding that it is one of such vital 
 importance both to China and the West. I am alluding to a 
 " communicated " article on " The Transit-system," which 
 appeared in the North-China Herald of the 1st November, 
 1871, and the reputed author of which is the Inspector- 
 General of Chinese Maritime Customs, Mr. Robert Hart. 
 Some six months previously an attempt had l^een made by 
 Mr. T'u, the then Tau-tai and native Intendant, — in concert 
 with Mr. Dick, the then foreign Conimissioner, — of Customs 
 in Shanghai, to place the transit-system, so far at least 
 as this port was concerned, on a new basis. It led to an 
 energetic counter-action on the part of the General Cham- 
 ber of Commerce, and the whole Consular Body ; and the
 
 FOREIGN MERCHANT IN CHINA. 15 
 
 matter was referred to Pcldng. Awaiting the result of this 
 appeal, at a meeting of the Treaty Consuls on Octoher 16th, 
 1871, " The Senior Consul " — I quote from the Minutes of 
 the Meeting — " said, that he had asked Mr. Hart to state 
 the action which had been taken at Peking and had been told 
 that the first intimation received at Peking that a new in- 
 terpretation had been placed upon the Transit Dues stipu- 
 lations at Shanghai, had come up in the newspapers. Mr. 
 Hart at once brought the subject before the Foreign Office 
 [as the Tsung-li Ya-men is here erroneously styled] , and 
 asked that clear instructions should be sent to the ports. 
 He at the same time reminded the Board that the subject 
 had been discussed in 1868, and the point then decided that 
 passes might be taken out by Chinese or by foreigners. 
 He understood that the Ya-men at once assented to his 
 statement and recommendation, and had sent orders ac- 
 cordingly to the ports." — Under these circumstances, the 
 Inspector-General is supposed to have " communicated " to 
 the Press the memorandum alluded to, with the view of 
 setting himself right at the same time with the Tsung-li 
 Ya-men, the Consular Body of Shanghai, and the pubhc. 
 Hence, also, we find the anonymous writer to speak as one 
 having authority and equally enjoying the confidence, if not 
 of the Chinese Government, certainly of the Ya-men alluded 
 to, the Foreign Representatives at Peking, and the Inspec- 
 tor General of Chinese Maritime Customs. 
 
 In order to avoid any misunderstanding as to the exact 
 import and bearing of the article itself, I will here repro- 
 duce it in extenso : — 
 
 THE TRANSIT SYSTEM. » 
 
 [^Communicated.^ 
 The treaty of Nankin stipulated for tlie conveyance of foreign mer- 
 cliautlise, that is merchandise of foreign origin, into the interior by
 
 in TTTE TREATY lilGIITH OF THE 
 
 Chiucso under a transit system ; and the treaty of Tientsin arranged 
 the procedure and fixed the amount of the Transit Dues, and it further 
 provided for what the treaty of Nankin had left untouched — the con- 
 veyance of native, or Chinese, produce, intended for shipment foreign, 
 from the interior to a treaty port under a Transit system. 
 
 In discussing Transit questions, it must he kept in mind that there 
 are two kinds of transit, viz., outward and inward, and that each has its 
 own peculiarities. 
 
 When the ratifications of the Tientsin Treaty were exchanged in 18G0, 
 the Transit system stood thus : (outward) Foreign merchants were au- 
 thorised to go inland, purchase and convey to a treaty port native pro- 
 duce intended for shipment foreign, and (inward) Foreign and Chinese 
 merchants were authorised to convey foreign merchandise from a treaty 
 port to a specified mart in the interior ; and, in each case, exemption from 
 taxation en route was to be procured by the payment of a single tax — 
 the treaty or tariff Transit Due. The first question that came up under 
 the Transit system as established in 18G0, was the following : — Must 
 the Foreigner in person be with his merchandise en route, entering or 
 leaving the interior ? The Authorities at Peking took a co mmon sense 
 view of the matter ; and at once decided, in 1861, that the Foreigner 
 need not accompany his goods ; he may employ any agents for their 
 conveyance, but Agent, Goods and Certificate must travel in company, 
 to secure exemption. 
 
 It was not till 1868 that any other question was referred to Peking. 
 Meanwhile, however, the Transit stipulation outward was abused, and the 
 double malpractice which constituted the abuse of the transit privilege 
 or treaty right, induced inland officials to object to the Transit system 
 as a whole. The malpractice was of this kind : whereas it was only for 
 native produce intended for shipment furdijn that the Transit system out- 
 ward was devised, there were now Foreign merchants who brought from 
 the interior native prodxice owned by themselves but intended for other 
 ports of China, and who protected such produce fi'om ordinary inland 
 taxation by carrying it under the Transit system and as though intended 
 for honajide export ; and there were other foreign merchants who brought 
 down native produce from the interior in the same way, — produce, whicli 
 was not their own but Chinese property, and in respect of which the 
 Chinese owners paid the Foreign merchant a more or less remunerative 
 fee for the assistance which enabled the produce to evade local taxation
 
 FOREIGN MERCHxVNT IN CHINA. 17 
 
 inland. Chinese officials naturally objected to this abuse ; and, while 
 they allowed foreigners in charge of goods to pass on without difficulty, 
 they carried their, opposition to the abuse, so far as to make it almost 
 impossible for the native agent of the foreigner to bring down native 
 produce really entitled to transit privileges. In some places, less ex- 
 perienced officials began to suppose that even foreign merchandise going 
 inland, if under Chinese protection, was evading taxation, and therefore 
 subject to confiscation. From 1861 to 18G8 the Provincial Officials were 
 constantly complaining at the Ya-mtin of the abuse of the Transit sys- 
 tem ; and the abuse of the system as intended for Produce Outward, 
 added to the neglect to distmguish clearly between Transit Inward and 
 Transit Outward, threatened to make the whole system inoperative. 
 
 In 18G8, the question which came up was this. The Taotai at Ningpo 
 had seized some goods of foreign origin which a Chinese merchant was 
 carrying under a Transit Pass into the interior ; the goods were Chinese 
 property : had the Chinese merchant a right to the Transit privilege ? 
 The Taotai at Ningpo, on receipt of a note from the Consul questionmg 
 the propriety of the seizure, referred the matter to the Imperial Com- 
 missioner, Tsong-kwo-fan, who in turn referred it to the Ya-mCn, The 
 Ya-men at once wrote back to say, that the Taotai's desire to guard 
 against evasion of inland taxes had blinded him to his duties under 
 foreign treaties, and ruled that, putting the stipulations of the Nanldn 
 and Tientsin Treaties side by side, their meaning clearly is that mer- 
 chandise of foreign origin, no matter to whom belonging, may be taken 
 into the interior by either foreigner or native, and participate in all the 
 -advantages of the Transit system, if provided with and accompanied hij a 
 Transit certificate (shai tan.) The Imperial Commissioner was in- 
 structed by the Ya-m6n to acquaint the various Custom-houses with the 
 reply sent to the question that had arisen at Ningpo, for their guidance. 
 The despatch is in the archives of each Custom-house, and a former 
 Taotai at Shanghai printed and published it in a volume of regulations, 
 as an authoritative interpretation of a treaty point that had been mis- 
 understood. 
 
 The question as to the rights of foreign merchandise purchased by 
 Chinese, had not come up for discussion before 18G8, and Avhen Sir Ku- 
 therford Alcock was in communication with the Ya-m6n on the point, 
 a jiroj)os of revision, the Ya-mOn held that, under the Tientsin Treaty, 
 taken Ijij itnijf foreign merchandise could only claim the Trauait right
 
 18 THE TIIEATY RlfJIITS OF THE 
 
 whWc belonging to Foreign mcrcliants. Sir Pintlicrforcl Alcock pointed 
 out that, nntler tlio Niinkin Treaty, renewed l)y that of Tientsin, or///</t 
 and not (iinirrsliip was the condition ; the Ya-men replied that it had no 
 copy of the Nankin Treaty (the original copy having been carried away 
 from either the Imperial Commissioner Yeh's Ya-men or the Yuan-Ming- 
 Y'uan) ; a copy was thereon procured, and Sir Rutherford Alcock's in- 
 terpretation was held to be correct. It was just at this time that the 
 Ningpo question came forward, and the Ya-men's instructions were 
 issued, in reply to it, without any foreign pressure or suggestion. WTien 
 it was thus authoritatively stated that Chinese as well as Foreigners 
 might be the owners of goods of Foreign origin entering the interior in 
 transit, it naturally followed that, for such goods, Chinese as well as 
 Foreigners might apply for Transit Passes. And as the Y''a-men's 
 action in 1868 was the issuing, for Chinese guidance, of what was merely 
 a clearer statement of a rule already made public by the notification of 
 Treaties, it was not thought in any way necessary to communicate the 
 despatch to Foreign officials. 
 
 Some months back, the newspapers stated that the Shanghai Customs 
 required Foreign merchants to declare that they themselves owned the 
 merchandise for W'hich they applied for Transit Passes. The moment 
 this was knowTi at Peking, the Y^'a-men directed the Imperial Commis- 
 sioner, Tseng-kwo-fan, to inform the Taotai that merchandise of foreign 
 origin can be taken into the interior in transit as well by Chinese as by 
 Foreigners, and that consequently his action, which might lead to a repe- 
 tition of the mistake made at Ningpo in 1868, ought to be discontinued- 
 Since the receipt of those orders, the Transit Pass for goods of foreign, 
 origin about to oe sent inland, and which are the property of Chinese, 
 has been issued to Chinese on application. The Y'^a-men's instructions 
 ■were issued before the Consuls addressed the Taotai on the subject, and 
 were neither more nor less than a repetition, addressed specially to Shang- 
 hai, of instructions issued for the information of all the Ports in 1868. 
 
 The instructions lately received by the Taotai at Shanghai have not 
 been sent to the Taotai at Ningpo ; and the proclamation recently trans- 
 lated as published at Ningpo refers to a distinct and separate question. 
 
 The position in which ti'ansit business now stands, as understood by 
 the Ya-men and Foreign Eepresentatives at Peking, is as follows : — 
 
 1. Inward Tkansit.^ — Goods of foreign origin, no matter whether 
 owned by natives or foreigners, may be carried inland, from a port to
 
 FOREIGN MERCHANT IN CHINA. 19 
 
 the mart named in the certificate, in transit, and the certificate may be 
 apphed for by native or foreigner without distinction. The certificate 
 lapses on arrival at the place specified, and thereafter the goods, having 
 once entered the stream of general Chinese trade, are liable to the .ui- 
 cidence of local taxation. The certificate is simply a Transit certificate ; 
 it proti'cts from a jwrt to a place. 
 
 2. Outward Transit. — Native Produce purchased by Foreigners or 
 by Natives the agents of Foreigners, if intended for exportation, that is 
 for shipment to a foreign country, may be brought from the interior to 
 a Treaty Port in transit by Foreigners or their agents. Produce not 
 intended for shipment foreign is not entitled to the Transit privilege, 
 even should it be the bond fide property of Foreigners. Produce which 
 is the property of Chinese is not permitted to be covered by Transit 
 certificates : Chinese applicants are not allowed to take out such native 
 produce certificates, and Foreigners who lend their names to Chinese to 
 procure such certificates, are abusing a Treaty right and assisting 
 natives to evade the authorised taxes of the interior. 
 
 As regards Inward Transit, it has been supposed that Sir Eutherford 
 Alcock at one time upheld the broad interpretation which allows Chinese 
 to take foreign merchandise inland in transit, and that at a late period 
 both H. E. himself and the British Government withdrew from that 
 interpretation. Such is not the case, however ; from first to last, Sir 
 Eutherford Alcock maintained that origin and not otrnersJtiji W'as the 
 condition, but, at one time, H. E. went further than the British Gov- 
 ernment could authorise : he maintained that a transit due once paid, 
 frees merchandise from all other taxation, and in that view he was 
 wrong, for the only taxation which the payment of a transit due frees 
 from is taxation en route from a Trcati/ Port to a specified place, no matter 
 how dis^p-nt from the port that place may be. Sir Eutherford Alcock 
 did not make use of such exact language as should make his meaning 
 unmistakeable, but if the reader will remark the difference between In- 
 ward and Outward Transit, and will also recollect that, in respect of 
 Inward Transit, foreign merchandise may be viewed in three distinct 
 stages, H. E.'s remarks will be ({uite intelligible. There is a time, first 
 of all, during which Inward certificates can be obtaiued, and that time 
 is while the goods are still at tliC' Treaty Port; there is, secondly, 
 a time during which such Inward certificates are valid and to bo res- 
 pected, and that time is while the goods arc travelling from the Treaty
 
 20 THE TKEATY IlIGIITS OF THE 
 
 Port to ,1 specified place, accompanied by that certificate ; and there 
 in, histly, a time after which ceilificates cannot be obtained, or 
 after which certificates previously obtained are no longer of any value, 
 and that time is wlion, in the vicinity of the port, goods that have 
 not taken out Transit certificates mingle in the stream of Chinese traffic, 
 or when, in the interior, goods which have been protected by a certifi- 
 cate liave arrived at the place specified or cease to be accompanied by 
 tiie certificate. "What Sir Rutherford Alcock's remarks meant was that, 
 during the first period and at a port. Transit Certificates ought to bo 
 issued to foreign merchandise irrespective of ownership, — that, during 
 the second period, e)i route from a jiort to a place. Inward Certificates 
 ought to protect Foreign Goods, no matter by whom owned or conveyed, 
 from taxation, — and that, during the third period, after arrival at the 
 place specified, not even the fact of a transit due having been paid in 
 the first instance nor continued foreign ownership could protect from 
 taxation Foreign Goods unaccompanied by a valid certificate. 
 
 In issuing its instructions in 1868, and in repeating them to the 
 Shanghai Customs in 1871, the Ya-men has made no new concession in 
 respect of Inward Transit, but has merely honestly ordered subordinate 
 offices to give full and proper effect to a previously existing right. In 
 1870, however, and in respect of Outu-ard Transit, the Ya-mCn did make 
 a concession : in the Revised Treaty, rejected at the prayer of the Mer- 
 cantile Communities, the Ya-mOn had agreed to regard destination and 
 not on-ncrship as the condition of the title of Xatire Produce to the Transit 
 privilege. 
 
 Similar views regarding the treaty-provisions relative to 
 trade with the Interior are entertained by the British Ee- 
 presentative in Peking, Mr. Wade. They may be gathered 
 from his " Memorandmn respecting the Revision of the 
 Treaty of Tientsin," to which reference has been already 
 made, and which was submitted by liim, when on leave of 
 absence in England, in December 1858, to his Govern- 
 ment. In this memorandnm we read : — 
 
 What we are, in my opinion, by Treaty, really entitled to, will be best 
 shown by a brief review of the antecedent history of the transit-duty 
 question. "When the Treaty of 1812 opened the trade at Canton, till
 
 FOREIGN MERCHANT IX CHINA. 21 
 
 then tlie close monbpoly of a privileged association, it was stipulated 
 that there should be established at the five ports, at which we were uow 
 authorised to trade, a fair Tariff of import and export customs, aud 
 that the Tariff duty ouce paid at any open port, our imports should be 
 conveyed by Chinese to any province or city in the interior, on a pay- 
 ment of a further amount as transit duty. This was not to exceed a 
 certain per-centage upon their Tariff' values, the amount of which per- 
 centage was to be presently declared. 
 
 A fair Tariff was published in 18-13, but the promised declaration, by 
 which the inland transit duty was to have been regulated, never ap- 
 peared*; and before many years elapsed, it was seen that the foreign 
 merchants' business in imports, aud in exports no less, was affected, at 
 a rate annually increasing, by what his broker or his native constituents 
 represented to be charges imposed by the local or provincial authorities 
 upon merchandise in transita. In normal times, that is to say, when the 
 country is undisturbed, the transit dues are le\dable only at certain fixed 
 points or barriers, a list of which is pubhshed in the Code of the Board 
 of Revenue. It was, doubtless, of the rates to be charged at these bar- 
 riers, that the declaration required by Sir Henry Pottinger, in 1842, 
 was demanded. The provincial governments do not, legally, possess 
 the right to multiply these collectorates without reference to the Board 
 of Kevenue ; nor can their number be added to by the Board itself, 
 without the sanction of an Imperial Decree 
 
 Through the native trade, undoubtedly, the le-kin hits our own trade 
 hard, and for more reasons than one we are justified in crying out ; but 
 again we must be careful to remember what the tax really is. Its nature 
 appears to me to be singularly misunderstood. Since the last payment 
 of our indemnity in 1805, only, has the central government caused two- 
 fifths of the customs receipts (the amount that the French and ourselves 
 di-ew annually from 18G0 to 1805) to be remitted to Pekiugf . The re- 
 maining three-fifths are applied to the expenditure of the Provinces. 
 So they were throughout the whole five yeiU'S of indemnity payments ; 
 aud, except the Canton quota, which, up to a certain date, liad always 
 gone to the piuse of the Imperial household, so, for the last fifteen years 
 of trouble, have the whole of the maritime duties, collected on foreign 
 trade, been applied. The " squeezes " of the local authorities, that is, I 
 
 * This, as will be seen hereafter, rests on an erroneous impression on Mr. Wade's part. 
 
 t The umoiint is undeistuod to have been even somewhat less, viz. two-sevenths.
 
 22 THE Tr.EATY RIGHTS OF THE 
 
 lircsurae, tlic h'-f;iii or war-tax, of tlic al)uses connected with which I 
 shall have enough to say, owe their existence ant! evil growth to the 
 same doniancl for supplies, not to any action taken by or through the 
 Customs Inspectorate. In some form or degree the impost is of far 
 older birth than the Inspectorate, and must be at this moment a chief 
 resource of the government in regions far beyond the influence of that 
 institution. 
 
 In the earlier years of the open trade, it is true, from 1843 to 1850, 
 it is much to be doubted, that the tolls of the Provincial governments 
 hindered circulation of our imports to anything hke the extent that the 
 native mtermediary was pleased to allege. The foreigner, restricted by 
 Treaty to the five ports open, was powerless to test the truth of asser- 
 tions that it might suit interested natives to make touching either the 
 conditions of the markets or the proceedings of the authorities inland, 
 and it is not to be supposed that his Chinese broker would not turn this 
 ignorance to account. So lately as 1858, when dh-ect communication 
 between Shanghae and Hankow had been more or less interrupted by 
 the j)resence of the Taeping insurgents in the valley of the Great Eiver 
 for upwards of five years, Lord Elgm found British unports seUing in 
 Hankow at rates that by no means bore out the statements of the 
 Chinese at Shanghai regarding the onerousness of the transit duties. 
 From the outbreak of the Taeping insurrection in 1852, no doubt, the 
 patriotic contribution was very freely exacted, but whether in the pro- 
 portions affirmed we were not as yet in a position to ascertain. On the 
 other part we do now Imow that until the insurrection of 1853 began to 
 tell on the tea duties, the port of Foo-chow was closed to that trade by 
 Imperial authority. Teas were diverted by the government from Foo- 
 chow up to the year 1854. Whatever the truth, however, all trade 
 suffered severely ; and in 1858, the inland charges upon tea coming 
 from Hankow to Shanghae amounted, according to the native brokers, 
 to nearly cent per cent upon its value : in some ten years they had 
 about trebled themselves. 
 
 By Art. ix of the Treaty of Tientsin, Lord Elgin obtained for the 
 British merchant the right to travel with a passport, on busmess or for 
 pleasure, to any part of the Empire. This gave him personal access to 
 the markets whether as buyer or seller, and secured him, at aU events, 
 against false information.! By Art. xxviii it was agreed that within 
 
 J This was baiiUy the c:ise. Mr. Wade overlooks that few, if any, of the foreijju mer-
 
 FOREIGN MERCHANT IN CHINA. 23 
 
 four months from the signature of the Treaty, there should be published 
 at every port, on application of the Consul to the Superintendent of 
 Customs, a notification of the amount of duties to be levied on 
 produce passing from the place of production to the port of the Consul 
 applying, and on imports from the same port to the inland markets 
 named by the Consul ; or that it should be at the option of the mer- 
 chant to clear his goods, inland or portwards, by one single payment to 
 be fixed as near as possible at 2^ per cent upon tlieir Tcxritf value. This 
 stipulation, like that in the Treaty of Nanking, had reference to the 
 ban-iers that had been sanctioned by the Board of Eevenue.|| The new 
 Tariff was negotiated at Shanghae within four months after the sig- 
 nature of the Treaty ; but it was found that in the flien conditions of the 
 interior, and especially of the valley of the Great Eiver, the required 
 notification, if producible at all, could not be looked for without very 
 considerable delay. By the 7th of the Rules appended to the Tariff, 
 therefore, the inland duty on all imports and exports therein enu- 
 merated was limited to a sum equal to 2^ per cent upon value ; exemp- 
 tion from any additional impost i)i trnnsita being secured by certificate. 
 There is this difl'erence, then, between the transit duty clauses of the 
 two Treaties of 1842 and 1858. The earlier claimed to clear imports 
 alone, carried inland in Chinese hands ; the later, to clear both imports 
 and exports, if certificated, whether carried by a Chinese or a foreigner. 
 I am not in a position to state whether Sir Henry Pottinger supposed 
 that the single payment by which he stipulated the Chinese merchant 
 was to compound for his barrier dues, would exempt the goods he car- 
 ried inland from all farther taxation. I suspect that he did ; and the 
 mercantile community, though, with reason, not sanguine that the 
 promised scale of inland duties would ever be published at all, were, 
 I think, under the same impression as to the sense of the Treaty sti- 
 pulation. Lord Elgin, I am certain, did not look for more than the pro- 
 tection, in transitu, of certificated goods. 
 
 chants possess a sufficient knowledge of the Chinese hmguage and its numerous dialects, to 
 converse directly with the natives. I apprehend, the distmguished sinologue himself 
 would make but an indifferent and not very reliable interpreter between his countrymen 
 and the tea- and silk-woi'm- farmers of China. 
 
 II Mr. Wade seems to be so little accjuainted with the subject, that he constant- 
 ly confounds the Custom-houses, ^^, '• sanctioned by the Board of Revenue", with the 
 newly added barriers, -^. The Treaty of Kan-king refers to the former only, because the 
 latter had then not as yet been invented. Tlie Treaty of Tientsin refers to bot/i, i. e. to toll, 
 octroi, and any impost whatever, levied inland.
 
 •21 THE TREATY RIGHTS OF THE 
 
 So far as Art. ix of the treaty of Tientsin is concerned, it is ray 
 impression that the privilege it guarantees has been fairly enjoyed. 
 The Article accords us the right to travel inland for business or for 
 pleasure. It docs not accord us, nor, as I have argued elsewhere, does 
 any other Article accord, the right of residing otherwise than a tourist 
 or mercantile traveller may reside, in any part of China but the Con- 
 sular ports. The personal access which it does authorize to whatever 
 places the foreigner desires to visit, has been, with rare exceptions at 
 all events, conceded him. As an exporter he may not have benefited 
 by the exercise of his right to the extent anticipated ; but that is not 
 the fault of the Treaty provision or of the Chmese government. At 
 Shanghae, notwithstituding our power of visiting the producing districts^ 
 tea and silk are procurable on as good terms at the port as up the 
 country, if not on better, but this because the native community have 
 the wit to combine. The foreign community invariably compete. The 
 combination of the tea-growers proves, I fancy, too much even for the 
 native brokers. 
 
 The anticipations founded on Art. xxviii regarding our trade, and 
 particularly our import trade, have been no less disappointed ; 
 but again admitting that its conditions have been in some, indeed 
 in many, instances ill observed, I must, on the other part, contend 
 that much, though not all, of the disappointment which is set 
 down to the non-fultilment of these conditions is due to the fact, that a 
 far greater measure of freedom has been expected of them than the 
 framers of the Treaty contemplated their providing. The Article pro- 
 mises exemption from all charges in tramitu over and above those 
 specified in the Treaty on imports passing from a port to an inland 
 market, or on produce from an inland market to a port of shipment, 
 provided always, as Sir Frederick Bruce read the Treaty, that such 
 imports or produce, being bond jide British-owned, were accomptuiied by 
 a certificate. Lord Elgin did hope that imports so certificated might 
 not only be carried by travellers from one centre of traflic to another, 
 but disposed of in parcels along the hne, an order of proceeding not 
 impossible in quieter times ; but I remember his Lordship expressly 
 stating that he did not see his way to the farther protection of imports 
 against taxation once they had passed into the hands of a Chinese jjur- 
 chaser. They must then, said he, take their chance. 
 
 I do not pretend that, in 1858, Lord Elgin, any more than any one
 
 FOREIGN MERCHANT IN CHINA. 25 
 
 else, contemplated as possible such a weight of taxation as now indi- 
 rectly oppresses our trade. Neither at Shanghae nor elsewhere had the 
 le-kia attained the dimensions to which, since 18G0, it has swollen in 
 those provinces where trade is hkely to feel it most. But, could the 
 rebel-movement of 18G0-18G5, to which we owe the great rise of war- 
 taxes throughout the valley of the Great Paver, have been predicted, no 
 Treaty provision could, in my behef, have been devised that would have 
 afforded imports the protection that our merchants conceive they are 
 entitled to. The protection of imports, and of exports no less, in tran- 
 sit a, is a different matter, and we were entitled to hope§ that the terms 
 of Art. xxviii, as interpreted by the Tariff rule, would have been res- 
 pected ; for the charge of 2^ per cent, therein agreed to, was beHeved, 
 on good authority, to exceed the sum of the barrier dues heretofore 
 levied on goods carried by the native trader, at all events between 
 Shanghae and its natural markets, and it was not unreasonable to argue 
 from this to other lines of communication. 
 
 Now I have said that this Article has been ill observed The 
 
 great weight, however, pressing upon the import and export trade of 
 the British merchant, is the weight of the U-kia contribution as distinct 
 from the transit-dues. But this import, although in its excessive degree 
 objectionable, is not in its nature more open to objection than our own 
 income-tax, nor, indeed, than any extraordinary tax by which a state, 
 
 short of money, may recruit its finances 
 
 I hold that the transit duty, defined by Treaty, once paid, the certi- 
 ficate thereon granted should clear the foreign payer's imports of transit 
 dues to any inland market he may choose, or his exports, purchased 
 inland, to any open port. Eefusal to issue a certificate is a breach of 
 Treaty ; so is the levy of any due in excess of the payment for which 
 the certificate is, in fact, a receipt. But the certificate will not except 
 the goods, cleared under it, from the Ic-kin, or from any other tax once 
 they have become Chinese property. The merchants hold that it should ; 
 and more, conceiving that transit dues and le-kin are identical, they con- 
 tend that to levy the le-kiii on duty-paid goods in the port-town at which 
 they are sold, or in the country betwean the port- town and the transit- 
 duty collectorates surrounding it, on ground, that is, that has to be tra- 
 versed before a transit-duty can become leviable, is a violation of the 
 
 § It is characteristic of Mr. Wade's manner of viewing things, that he considers positive 
 Treaty stipulations to merely ciUlule to the hojjc of their being observed on the part of China.
 
 20 THE TREATY RIGHTS OF THE 
 
 treaty I have laboured at great length to show that the le-Jdn and 
 
 the transit dues arc, so far as we are concerned, imposts of a totally dif- 
 ferent character ; that we may fight any augmentation of the latter by 
 Treaty, but that the treaty will not help us against the le-kin. On the 
 suggestions, therefore, that it should be wholly, or even partially, sup- 
 pressed, I shall offer but this additional remark, that, if we could drive 
 the Chinese to admit that the present mode of levying the war tax is in 
 breach of Treaty, there is, in my behef, nothing to prevent them turning 
 our flank by a change in its denomination. A house-tax, shop-tax, or 
 corporation tax, would effect the same object, and press almost, if not 
 quite, as grievously as the le-kin on our trade. 
 
 What greatly adds to the importance of these views is 
 their having been adopted by the British Government. We 
 learn this from a letter, addressed by the Secretary of the 
 Board of Trade to the Hon. J. Hammond, then Permanent 
 Under-Secretary of the Foreign Office, and dated "Office of 
 Committee of Privy Comicil for Trade," May 19th, 18G0. 
 I extract from it what relates to our subject, besides its in- 
 teresting and suggestive introduction : — 
 
 In reply to your letter of the 4th March. I am dii-ect^d by the Lords of 
 the Committee of Privy Council for Trade to request that you will inform 
 the Earl of Clarendon, that they have carefully considered the various 
 questions raised in the correspondence transmitted to them by his Lord- 
 ship on the subject of the commercial relations between this country and 
 China, more especially in connection with the proposed revision of the 
 Treaty of Tientsin. 
 
 Two distinct and conflicting lines of policy are presented for the con- 
 sideration of Her ilajesty's Govennncnt on the occasion of a revision of 
 our Treaty relations with China : — 
 
 1. To insist not only upon the efi'ectual execution of existing engage- 
 ments, but also upon new and important concessions with a view to what 
 is called "opening up^' China to foreign trade, and introducing "Western 
 civilisation into the Empire. 
 
 2. To confine the present negotiations to the assertion of admitted 
 Treaty rights essential to the gradual progress of foreign trade, to the 
 removal of such defects in the Chinese Administration aflectin" foreign
 
 FOREIGN MERCHANT IN CHINA. 27 
 
 trade, as the Cliinese Government is willing and able to undertake to 
 remedy, and to the acceptance of some spontaneous concessions. 
 
 It appears to my Lords, after reading this correspondence, that if any 
 doubt at any time existed as to the impossibihty of obtaining at the pre- 
 sent time, except by force, the larger concessions which are called for by 
 the mercantile body in China, such as the right of residence in the in- 
 terior and of working mines, the introduction of raikoads and telegraphs, 
 and inland steam-navigation, — such doubts can no longer be entertained. 
 
 Sir R. Alcock, who at some stages of the transactions under review, 
 especially at the date of his despatch of the 10th November, 18G8, seems 
 to have been to a certain extent under the influence of his more sanguine, 
 and less responsible, diplomatic colleagues,*^ and of the order of ideas 
 inspired by the display of force at Yang-chow, arrives, at the close of the 
 correspondence, at the conclusion that the results of the labours of the 
 Mixed Commission, ■■^' reported in his despatch of the 6th December, 1868, 
 are all that can be obtained by negotiation at the present time ; and that, 
 unless Her Majesty's Government is prepared to resort to other means 
 than those which he has felt authorised to employ, and with a clear con- 
 tingency of war for the attainment of the main points insisted on by the 
 merchants and by his colleagues generally as alone important and essen- 
 tial to all effective progress, they must be content with much less, and 
 with the somewhat vague hope of gradual progress. 
 
 My Lords believe that this view is, moreover, shared by Mr. Wade, 
 by whom, in accordance with Lord Clarendon's suggestion, they have 
 conferred upon this subject, and many other persons, whose opinion is 
 deserving of great consideration. 
 
 It is true, that the Memorials, which have been addressed to Her 
 Majesty's Government and to Sir R. Alcock by the British mercantile 
 body in China, are generally in favor of what is termed a more vigorous 
 pohcy, and that the language of the foreign Eepresentatives at the Court 
 of Peking,! and especially that of the United States' Minister, Mr. Ross 
 
 ^ I have good reason to doubt the correctness of this statement. So far as personal 
 knowledge entitles me to speak, I may affirm that rather the reverse was the case. 
 
 * " The Mixed Commission ", in tlie sense in which it is here used, was virtually a mis- 
 nomer. The one feeble English element, which entered into its composition, was the then 
 senior second Secretaiy of Legation, Mr. Hugh Fraser. 
 
 t " At the Court of Peking ". Were their Lordships unaware of the humiliating fact, 
 that the Representatives of Western Powers were then, and are as j-et, only suffered " a 
 temporary sheltei-" in the Capital of " the One Autocrator of the Earth", and that they are 
 excluded from the verv threbhbld of. his Palace ?
 
 28 THE TREATY IlIGHTS OF THE 
 
 Brown (altliougli even that gentleman himself admits in his letter to 
 Sir 11. Alcock of 17th December, 1808, that "all has been accomplished 
 which can at present be achieved by diplomatic means"), load to the in- 
 ference tJiiit tlicy incline to the same view. 
 
 It is unnecessary for my Lords to observe, that they have every dispo- 
 sition to give duo weight to the representations of those who are more 
 directly interested than any other class of Her Majesty's subjects in the 
 question under discussion, but they cannot forget (as is stated in Sir R. 
 Alcock's despatch of 23rd December last) that "our position in China 
 has been created by force — naked physical force ; that any inteUigent 
 attempt to improve or maintain that position must still look to force in 
 some form, latent or expressed, for the results"; and the responsibilities 
 and sacrifices involved in the exercise of force must fall upon the British 
 nation, and not upon that section of its people which is engaged in the 
 trade with China. 
 
 The same remark applies with scarcely less weight to the case of the 
 Eepresentatives of other countries at Peking. Any policy which led to 
 the interruption of peaceful relations with China would be attended with 
 far greater danger to British interests than to those of other nations, and 
 in advocating a course hable to such contingencies both merchants and 
 Ministers are lu'ging on a policy in the fruits of which, if successful, they 
 would largely share, and in which the consequences of failure would fall 
 chiefly upon other interests than those which they rej>resent. 
 
 The course, therefore, which my Lords woiald recommend for the con- 
 sideration of Her Majesty's Government under existing circumstances is 
 as follows : — 
 
 1. To endeavour to arrive at an imderstanding with the Government of 
 China by which the formal revision of the Treaty of Tientsin may be 
 deferred until the majority of the Emperor, which Sir E. Alcock states 
 wull take place in 1872 or 1878. Such a postponement of the revision is 
 in my Lords' opinion desirable for three reasons : fa.) There will then be 
 a "personal and tangible" power with whom to deal, (h.) It may be 
 hoped tliat in five years there may exist a greater disposition to extend 
 foreign trade and relations than at present, (c.) The claim for revision 
 will then coincide in point of time with that of the last Treaty power en- 
 titled to prefer it, and it may be hoped that the simultaneous action and 
 co-operation of all those Powers may then be secured. 
 
 2. That in the meantime, and pending such general re\'ision, Sir E.
 
 FOREIGN MERCHANTS IN CHINA. 29 
 
 Alcock should be instructed to obtaiu, if possible, the consent of the 
 Chinese Government to such arrangements as they have already ex- 
 pressed their willingness to adopt in view of an immediate revision, such 
 arrangements to be effected either by a short Convention, if this be ne- 
 cessary, or by mdependent action. 
 
 These arrangements are stated in Sir E. Alcock's despatch of the 6th 
 December, and are the result of the negotiutious conducted by the Mixed 
 Commission, which was appointed at his retpiest to arrive at a prelimi- 
 nary understanding as to the basis of revision. 
 
 My Lords will enumerate them in order, and whenever necessary make 
 such remarks upon them as occur to them in connection with the ques- 
 tions to which they respectively refer: — 
 
 TEANSIT DUES. 
 
 This proposal is nothing more than a literal fulfilment of existiug sti- 
 pulations in the Treaty of Tientshi, and involves no new concessions 
 whatever. 
 
 The question of transit dues is stated by all the authorities on this 
 subject to be the next important point in connection with the present 
 negotiations. A considerable difference of opinion exists in different 
 quarters as to the precise nature of the claims which, in vu-tue of 
 the 7th Supplementary Treaty rule, in execution of Art. xxviii. of the 
 Treaty of Tientsin, Her Majesty's Government is equitably entitled to 
 assert. 
 
 • My Lords entertain no doubt that the view expressed in some of the 
 Memorials, and even at one time by Sir E. Alcock himself, viz., that the 
 payment of the transit dues ought to be held to exempt the goods upon 
 which it has been paid from all subsequent internal taxation, and to in- 
 sure the sale of the goods to their ultimate consumer with no enhance- 
 ment of cost derived from taxation, save that represented by the import 
 and transit duties, is a view which cannot be entertained by Her Majesty's 
 Government. There is nothing hi the terms of the Treaty which appears 
 to my Lords to justify such a sweeping demand, and in view of the in- 
 ternal taxation to which native goods are subject in China, it would be in 
 their opinion both unjust and inexpedient to enforce such a demand, even 
 if it were warranted by the terms of Treaty stipulations. 
 
 All that Her Majesty's Government can claim in this respect, appears 
 to my Lords to be, that in the Treaty ports the impui-ter shall have the 
 right to sell his goods in the market, after payment of Customs duties
 
 30 THE TREATY RIGHTS OF THE 
 
 stipulated, and tliat he shall have the right to send goods to any internal 
 market which lie may select, free from any other charge than the Cus- 
 toms duty on importation, and the stipulated transit duty; but that both 
 at the port, and at the internal market, when once the goods have passed 
 out of his hands they must take their chance in common with native 
 goods, and bear whatever impositions the rapacity or necessities of Chi- 
 nese administration may inflict. 
 
 It must also be remembered, that the imperfect execution of the Treaty 
 of Tientsin in this particular, is due not alone to the weakness or inaction 
 of the Chinese Government, but also to the fraudulent evasion by British 
 merchants of the obligations and conditions which it imposes. 
 
 My Lords refer to the sale of transit certificates to the Chinese, by 
 which malpractice the difficulties in the way of a just administration were 
 greatly increased. A stricter execution of the stipulation on the English 
 side should be, if possible, enforced, as well as on the part of China. 
 
 Under these circumstances my Lords are of opinion that the arrange- 
 ment which, after much discussion and correspondence, appears to have 
 been considered satisfactory by Sir E. Alcock may be approved by Her 
 Majesty's Government. The terms accepted by the Yamen seem in 
 themselves perfectly equitable, and entirely in accordance with what my 
 Lords believe to have been the intention of the stipulation to which it 
 relates. It is to be hoped that the renewed adhesion of the Chinese 
 Government to the principle therein asserted, and the measures which 
 they propose to take with a view of making known and enforcing the 
 provisions of the stipulation will operate in diminishing and restraining, 
 if not in removing, the obstructions caused to the circulation of foreign- 
 owned goods in the interior by the exactions of the Provincial Go- 
 vernment. 
 
 The general character and principles of this arrangement are as fol- 
 lows: — "1. To allow all foreign goods to circulate freely on payment of 
 import duty and transit duty together. 3. To enable aU Chinese produce 
 to get to foreign markets, after payment of transit duty and export duty 
 simply. 3. To place native produce, with the exception of Government 
 monopohes, such as salt, to be traded in, in China, on the same footing 
 as it is when traded in, in China, by Chinese." 
 
 These general principles appear to my Lords to have been obsei-ved in 
 the arrangements ultimately proposed by the Chinese Government, and 
 they tliiuk they should receive the approval of Her Majesty's Government
 
 FOREIGN MERCHANTS In CHINA. 31 
 
 subject to any modificatioiis of the details, which further experience may 
 have led Sir E. Alcock to deem desirable. 
 
 The most favorable aspect, under which the Transit-ques- 
 tion was regarded by the Tsung-h Ya-men, and we have 
 therefore to conchide, by the Chmese Government, in 1869, 
 may be inferred from the repudiated "Supplementary Con- 
 vention of Peking, of October 2nd, 1869," the provisions of 
 which relative to inland trade had been framed to the fol- 
 lowing effect : — 
 
 Aet. III. — It is agreed that articles of the following classes and deno- 
 minations, namely, Cottons, Linens, Woollens and Cotton Mixtures, &c., 
 imx^orted by British merchants, shall pay both Import Duties and Transit 
 Dues simultaneously at the time of importation ; on the other hand China 
 agrees that the above mentioned commodities imported by British mer- 
 chants and having paid Import Duties and Transit Dues simultaneously 
 at the time of importation, shall be exempt from all other taxes and 
 charges whatever, in treaty port provinces. 
 
 Art, IV. — It is agreed that Native Produce purchased in the interior by 
 British merchants furnished with the documents prescribed by the Sup- 
 plementary Kegulations shall pay all inland dues and charges on its way 
 to the treaty Ports ; on the other part China agrees that any such native 
 produce, having paid all inland dues and charges on the way to the port 
 from the place of purchase, shall be entitled to the return of any amount 
 that may have been thus paid over and above the treaty Transit Due 
 (half Export Duty) provided the exportation by British merchants to 
 foreign ports takes place within twelve months. It is further agreed that 
 native produce shipped to other treaty Ports shall not be entitled to such 
 refund. 
 
 Art. v. — It is agreed that Chinese produce shipped from Hongkong to 
 a Treaty Port, shall not be carried inland under the Transit Rule, but 
 shall pay dues, duty and inland charges with all other native produce at 
 all barriers passed; on the other part, China agrees to issue to native 
 produce shipped by British merchants, from Treaty Ports to Hongkong, 
 the ordinary duty proofs, and to collect on such produce on theij: arrival 
 at the second Treaty Port, the ordinary Coast Trade (half import) 
 duty....
 
 32 TTTF, TREATY RIGHTS OF THE 
 
 8UPPLEMENTARY RULES AND TARIFF. 
 
 Whereas it is expedient that Supplementary Regulation? should be 
 drawn up for the better explanation of the Articles of this Convention, 
 the plenipotentiaries do hereby agree that the appended Tariff and Kules, 
 the latter being in ten Articles following, shall be equally binding on the 
 Governments and subjects of both countries with the Convention itself. 
 In witness whereof they thereto affix their seals and signatures. 
 
 Rule i. — The Convention permits certain specified commodities of 
 foreign origin to circulate freely in Treaty-Port provinces, without further 
 liabihty to inland dues or charges, on payment simultaneously of Import 
 Duty and Transit Dues at the time of Importation — when taken inland 
 by British merchants in person or by Chinese, the Agents of British 
 merchants, or by Chinese purchasers, while the British merchant will be 
 required, as provided by the Treaty of Tientsin, to travel provided with 
 the usual passport, the commodities aforesaid may be conveyed unac- 
 companied by any Transit certificate and may be sold freely and at 
 pleasure along the road without being in any place called on to pay 
 further dues and duties or inland charges. The various Customs' stations 
 passed by such commodities will, however, make such examination as is 
 usual, in order to provide against fraudulent substitution and the trans- 
 port of prohibited articles. 
 
 (2.) With the exception of those classes of commodities w^hich are to 
 pay Import Duty and Transit Dues simultaneously, all other foreign 
 Merchandize, carried inland will continue to be exempt from all Dues 
 and charges en route, provided, having paid full Import Duty on Im- 
 portation and the Tariff Transit Due when leaving the port to enter the 
 interior, it is found to be accompanied by the ordinary proof of payment 
 of Transit Dues, namely a Transit Certificate. Such goods wiU be hable 
 to all Dues, Duties and Charges, whenever found inland unaccompanied 
 by Transit Certificates; both British and Chinese merchants will be 
 treated in accordance with the provisions herein set forth. 
 
 Since that period, however, the views of the Tsmig-li 
 Ya-meii have entered into a still more retrogressive phase. 
 For, already in a circular despatch, dated March 23rd, 1872, 
 the Ya-men submitted to the Foreiirn Ministers in Pekinc^-, 
 in reference to Drawbacks, Exemption-Certificates, and 
 Transit-Dues, the followmg New Kegulations, framed by the
 
 FOREIGN MERCHANTS IN CHINA. 33 
 
 Foreign Inspector-General, in concert with the Taii-tai as 
 the Native Intendant of Customs at Shanghai, and which, 
 with a view to the sequel, I will mark "Regulations A." 
 The translation of these documents is reproduced from the 
 North-China Herald. 
 
 The Tsung-li Ya-men's Circular Despatch of March 23, 1872. 
 
 Prince Kung and the Ministers whose cards are enclosed make the 
 following communication : — 
 
 In the 7th moon of last year (August 1871) the Prmce and the Minis- 
 ters instructed Mr. Hart, Inspector- General of Customs :{: to pi'oceed 
 to Shanghai, and, in concert with the Intendant Tautai, who is Super- 
 intendent of Customs at that port, to prepare rules for the satisfactory 
 regulation of drawbacks, transit-certificates inwards and transit-certifi- 
 cates outwards. 
 
 In the 11th moon (December- January) the Inspector-General sub- 
 mitted the Eules framed in consultation as above for the consideration 
 (of the Prince and Ministers by whom) they have been again and again 
 discussed, the desideration being that, while trade should not be incon- 
 venienced, no loss should either be sustained by the Customs revenue ; 
 that not only wrong doing on the part of foreign merchants should be 
 guarded against, but that various mal-practices of Chinese merchants, 
 such as misrepresentation and collusion (with the former) should also 
 be put a stop to. 
 
 Upon the rules relating to the drawback and to transit-certificates in- 
 wards, the Ya-men has come to a decision, but it will be necessary 
 to forward them to the Ministers Superintendent of Trade for the Nor- 
 tliern and Southern ports, who will instruct the Intendants being Su- 
 perintendents of Customs to examine them most carefully. 
 
 The Chinese Government has the right at every port to adopt the 
 means best calculated to secure the revenue against fraud and smug- 
 gling ; (this is not only the spirit but) the plain language of the Treaty. 
 The Intendants appointed to the Custom-houses at the ports being the 
 officers (whose business it is) and consequently the persons best in- 
 formed in all particulars respecting this, it is of course right that they 
 should be directed to (look into what is proposed) with very great care, 
 
 X I reproduce here an oflRcial translation with all its imperfections, and inaccuracies, as 
 published iu the North-China Herald ol April 27, 1862.
 
 34 TTIE TREATY RIGHTS OF THE 
 
 that so, Avlieu they shall have thoroughly digested these regulations, re- 
 gulations may then be so framed as to leave them without occasion for 
 pretending that they are inconvenient, and that they are consequently 
 unable faithfully to abide by arrangements to which the Chinese (Au- 
 thorities or Government) have agreed. 
 
 When the two Ministers Superintendents shall have replied, (the 
 Prince and Ministers) will, after due deliberatioTi, address an official 
 communication to the American Minister and the Ministers of other 
 Powers, in order that they may instruct their subordinates accordingly. 
 Meanwhile they forward, in this note, the drafts of the regulations 
 affecting drawbacks and transit-certificates inwards, which have been 
 considered with the Inspector-General, for the information of the Ame- 
 rican Minister to whom they will be obliged for an early reply. 
 
 As to the rule to affect the memorandum and transit-certificate for 
 produce, the Ya-mou has not yet satisfied itself. As, however, in ac- 
 cordance with the spirit of the Treaty, no produce but produce destined 
 for a foreign port can be allowed to come within the scope of the Transit- 
 Kegulations, and merchants will be of necessity obliged to pay Barrier- 
 duties at the Barriers, and le-kin duties at the lekin stations]} on all pro- 
 duce not destined to be carried to another Treaty-port, (the writers) will 
 be obliged to the American Minister to issue instructions to the foreign 
 merchants at the ports in this sense. 
 
 As regards drawbacks at Shanghae, the Ya-men is writing to the 
 Minister Superintendent of Trade in the Southern Ports to instruct the 
 lutendaut to issue drawbacks in all cases occurring before the end of 
 the 10th foreign mouth of the 17th year of Tung Chih (31st October, 
 1871), where it is ascertained that drawbacks have been applied for and 
 refused. From the above date forward merchants applying will of course 
 have to conform to the new regulations. Such is the object of this note. 
 
 Compliments, 2nd moon, 11th day (23rd March, 1872). 
 
 (rkgulations a.) 
 diiawbacks and exemption cektificates. 
 
 EiTLE I. — If a merchant desires to rc-expprt Imports that have paid 
 Tariff duty to a foreign country, it wiU be his business to give notice to 
 the Customs, and the officer deputed by the Superintendent having as- 
 
 II The translator has misapprehended the text from his unacquaintance with the true dis- 
 tinctive meaning of ^ and -fe.
 
 FOREIGN MERCHANT IN CHINA. 35 
 
 certained by inspection that the goods are the original goods imported, 
 and in the original package, and that none have been withdrawn or 
 exchanged, the issue of a drawback to the applicant will be authorised, 
 provided that the application shall have beeu made in thirty months 
 from the day the Imports entered the port. (If the time the goods have 
 been in port) exceed this term (the importer) will not be authorised to 
 take out (lit. apply for and receive) a drawback ; and if the goods be 
 found to be other than the goods they are stated to be, the drawback 
 will be refused, and the goods will farther be confiscated, in accordance 
 with the Treaty. 
 
 EuLE ii.^Merchauts sending Imports that have paid the full duty at 
 one port, to any other of the Northern or Southern ports, excepting 
 always the ports on the Yang-tze at which no Import-duty is collected, 
 are free to apply either for an exemption-certificate or a drawback, as 
 it may suit their convenience. The, drawback can only be claimed, as 
 in the case of Imports re-exported to a foreign port, within the Umit of 
 thirty months, and in all particulars affecting it the provisions of Rule i. 
 must be abided by ; but the exemption-certificate will have to be dealt 
 with as the Treaty farther prescribes. 
 
 Rule hi. — If the merchant, applying for drawback or exemption- 
 certificate, be other than the original importer, the apphcation must bear 
 not only his own signature, but also the signature of the original im- 
 porter. 
 
 If the estabhshment of the latter shall have been closed, it will be 
 simply necessary that the goods be identified by inspection, and the 
 signature of the original importer can be dispensed with. 
 
 Rule iv. — Application for drawback or exemption-certificates on Im- 
 ports re-exported must be made before the ship's port clearance is issued, 
 and the document applied for will be issued, if the Customs find that 
 the goods concerned are the original goods unchanged. Wiieii a ship's 
 accounts are closed and her clearance is issued, inasmuch as examina- 
 tion and identification of goods, for which a drawback or certificate is 
 claimed, is no longer possible, the Customs cannot in such a case enter- 
 tain the application. 
 
 TRANSIT DUES. 
 
 Rule i. — Apj)lication for Transit-passes, under wiiich to carry Im- 
 ports inland, must be made by the merchant who originally imported
 
 30 THE TREATY RIGHTS OF THE 
 
 tlie goods. He must state the denomination and quantity of the goods ; 
 the name of the ship in -wliicb they wore imported, and the date of lior 
 arrival ; the place to which they are to be carried and tlie name of the 
 person who is to carry them. 
 
 Rule ii. — If the applicant be not the original importer, in addition to 
 the information required by the foregohig rule, to which he will sign 
 his own name, he must state who the original importer was, and he 
 must cause the original importer to certify that it was he who imported 
 the goods, on the face of his application. Should the firm of the 
 original importer have been closed, he need not requu-e the original 
 importer to sign the application. 
 
 Exile m. — The information required by the two foregoing rules having 
 been furnished under signature, the certificate (or pass) will be issued 
 on paj'ment of the half-duty, and the goods can then be carried inland 
 covered by this certificate, whether the trader carrying be Chinese or 
 foreign. To enable traders, Chinese or foreign, however, to carry goods 
 inland under cover of the certificate, it is essential that the goods be 
 really foreign imports. 
 
 EuLE IV. — The certificate obtained as above, for the carriage of the 
 foreign goods inland, must be exhibited at every barrier or duty-station 
 along the line of transit, and any such office having ascertained by 
 mspcction that the goods are really the goods certificated, and are not 
 carried by any other than the route by which they should be canied, 
 will then stamp the certificate and allow the goods to proceed without 
 pajanent of leldn charges. If it be found, on inspection of the certificate, 
 that the goods are not on the line on which they ought to be, or that 
 they are other than the goods for which the certificate was taken out, 
 these bemg acts of departure from the proj)er route and smuggling, the 
 whole will be confiscated, as provided by Eule vii. of those appended to 
 the Tariff. 
 
 The certificate (or pass) here spoken of is .available only as security 
 against taxation in addition (to the duties ah-eady paid on goods) 
 I'll route from port to inland destination. On the arrival of the goods it 
 covers at the place of destination specified in it, it ceases to have any 
 value, and should be immediately presented to the nearest authority, 
 who will enter upon it the date on which the merchant specified arrived 
 with the goods specified, and will affix his seal to it, and hand it back 
 to the merchant presenting it, to serve as his guarantee against levy of
 
 FOREIGN MERCHANT IN CHINA. 37 
 
 U-kin or other tax in the place, to which the goods have been carried, 
 so long as they remain unsold. 
 
 If, on arrival of the goods at their point of destination, the certificate 
 be not presented as above, an additional half tariff-duty will be levied 
 upon them as a fine. When they shall have been sold, the local gov- 
 ernment will of course levy the le-kin of the buyer, and with this levy 
 the dealer who brought up the goods will have no concern. 
 
 EuLE v. — Whenever a certificate (or i>ass) is applied for for tlie carriage 
 of Imports inland, a term will be fixed for its reproduction, the number 
 of days being calculated according to the distance between the port 
 where the aj)plication is made, and the place of destination as declared 
 by the apphcant, and so many days being allowed for every 100 U ; and 
 a note will accordingly be made upon the certificate, that it was issued 
 on such a date by the Custom-house specified to the merchant specified, 
 and that he is to surrender it in so many days to the Ya-men or inland 
 duty station specified. The certificate will be stamped with the official 
 seal (of the Superintendent), and on issuing it, he will advise the proper 
 authority at the place entered as the place to which the imports are to 
 be carried, who, at any time before the expiry of the transit-term, will 
 put his visa on the certificate. On the sale of the goods he will call in 
 the certificate and will forward it to the Custom-house which issued it, 
 to be cancelled. 
 
 (Original note). The Superintendent of Customs and the Inspector- 
 General will settle together the number of days to be -allowed with re- 
 ference to such or such a distance, as the term within which the certi- 
 ficate is to be surrendered. 
 
 KuLE VI. — Imports carried inland under certificate must be accom- 
 panied by the certificate. Where a trader is carrying foreign imports 
 not enumerated in his certificate, or goods without any certificate at all, 
 if he be bund jide prepared to pay the barrier duties and le-kin charges 
 at the different stations he passes, it will be his duty as he arrives at the 
 barriers and stations, to give notice that his goods are uncertificated, in 
 order that these duties and charges may be levied thereon. If he does 
 not give such notice, his goods will be dealt with as contraband. 
 
 If the goods carried be other goods than those particularised on the 
 certificate ; or if they exceed the quantity specified in it ; the barrier or 
 station detecting (the irregularities) is authorised to detain the goods, 
 and to make a written report to the Custom-house which issued the certi- 

 
 88 THE TREATY EIGHTS OF THE 
 
 ficate, and -wliicli, in accordance witli the Ti^eaty, "will investigate the 
 case and (if ucccssaxy) confiscate the goods. 
 
 These Eeguktions (a.) were communicated to the Shang- 
 hai General Chamber of Commerce, and piibhshed at the 
 time, ehciting from the Chamber a letter to the British Chief 
 Superintendent of Trade in China, dated June 21st, 1872, 
 which will be placed before the reader, and animadverted 
 upon, further on. 
 
 * . Apparently in consequence of its contents, or of certain 
 points of its contents, the Tsung-li Ya-nien instructed 
 the Inspector-General, Mr. Hai-t, in commmiion with the 
 Tao-tai of Shanghai to revise the Regulations (a.) in ques- 
 tion, which, together with the new Eegulations, relative to 
 the transit of Chinese exports, framed by the same officials, 
 were thereupon, in a circular despatch of December 25th, 
 1872, by the Tsung-li Ya-men transmitted to the Foreign 
 Ministers. The last-named documents, which I will mark 
 •* Regulations B," and " Regulations C," respectively, have 
 been, and still are, kept a diplomatic secret. An authentic 
 copy of the Chinese text, however, is now lying before me ; 
 and I am thus in a position to subjoin a translation of 
 both papers. The former Rules concerning Drawbacks and 
 Exemption CertiiGicates, having undergone no essential mo- 
 difications, arc not here repeated. 
 
 (regulations b.) 
 Fiulcs relative to the Transit of Foreiyn Goods to the Interior. 
 Rule i. — 1. As regards all foreign goods Chinese as well as foreign 
 merchants may apply to the Customs for a duty-certificate (or "transit- 
 pass ") for the purpose of conveying such goods into the Interior, and 
 there shall, according to Treaty, no fresh taxes be le^-ied on them, 
 lint they must be really goods imported from abroad, for which a duty- 
 certificate is to be granted. Native goods, resembhng foreign, which 
 have been imported in foreign ships from another port and have paid
 
 FOREIGN MERCHANT IN CHINA. 39 
 
 duty as foreign goods at the Custom-house, are not included in these 
 Regulations. 
 
 2. Whenever a merchant desh-es to apply for a certificate, he must 
 hand in a written statement, in which he truly declares the denomina- 
 tion and the quantity of the goods, as well as the name of the place to 
 which they are to be conveyed, and sign that declaration with his own 
 hand. Whereupon the Custom-house oflice will cause to be ascertained, 
 whether the goods are truly foreign goods and whether the declaration 
 has been correctly made ; after which it may issue the duty-certificate. 
 
 3. Whenever in the certificate one province shall have been designated, 
 and the merchant goes with the goods to another province, the certificate 
 shall be no longer of use, and the customary duties will be levied. 
 
 4. The duty-certificate is nothing more than a token to show that no 
 further duties are to be levied on the road {i. e. in transitu). When 
 once the goods shall have arrived at their place of destination, the cer- 
 tificate, even though the stipulated term have not yet expired, must be 
 taken to the local Custom-house or barrier offices for the purpose of 
 examination ; and should the place have neither Custom-house nor 
 Barrier, the merchant has to take the certificate to the local Magistrate. 
 
 5. So soon as the goods shall have been landed or stored, the mer- 
 chant, without waiting till he has deposited the certificate, is bound to 
 pay all the customary taxes levied at the place ; only that he may not 
 be charged, in addition to them, any further transit-(orroad)-duties. 
 
 EuLE II. — 1. All persons, conveying goods into the Interior without a 
 duty- certificate, must pay duties at every Custom-house and Barrier they 
 pass. When, however, they have taken out a certificate for a place 
 previously designated, they must follow the direct road to it. If, 
 without an understanding, they take a bye-road, they will have to pay 
 the usual charges at all the Custom-houses and Barriers which they 
 pass, notwithstanding their being furnished with a duty-certificate. 
 
 2. The duty-certificate and the goods conveyed under its protection, 
 must always travel and remain together. If the certificate be sent on 
 before and the goods follow, or vice versa, the goods, which are accompa- 
 nied by no certificate, shall pay the usual duties. 
 
 3. If Chinese merchants, under cover of such a certificate, convey 
 foreign goods into the Interior, they shall in no case be permitted to use 
 foreign letters or devices and fiags; and if they act in opposition to this, 
 the whole of the goods shall be confiscated.
 
 40 THE TREATY RIGHTS OF THE 
 
 KuLE III. — 1. Tliose, who convey goods, under cover of the said cer- 
 tificate, into the Interior, must stop at each Custom-house and Barrier, 
 and display them lor examination. 
 
 2. Each Custom-house or Barrier office, having ascertained that the 
 goods agree with the certificate, that they are in reality foreign goods, 
 and that no bye-road has been taken in conveying them, shall thereupon 
 affix its stamp and let the goods pass without further payment of duties. 
 
 3. In case of goods being conveyed besides those declared in the duty- 
 certificate, information must be given beforehand at the Custom-houses 
 and Barriers, as to what portion of the goods are not included in the certifi- 
 cate, in order that the usual duties may be levied thereon. If no informa- 
 tion of this is given beforehand, all such goods shall be confiscated. 
 
 4. If certain goods are named in the duty-certificate and the mer- 
 chant, under cover of the latter, should convey other goods, or if he 
 should declare native goods to be foreign goods, then, so soon as this 
 is discovered, all such goods shall be confiscated, and information given 
 to the Custom-house which has issued the duty-certificate, in order that 
 inquiry may be instituted. 
 
 EuLE IV. — 1. Whenever a Custom-house grants a duty-certificate, it 
 shall, in accordance with the merchant's declaration of the place for 
 which the goods are destined, always and beforehand fix a term, within 
 which the duty- certificate must be again delivered up. For the same 
 province this term shall be fifty days ; for an adjoining pronnce one 
 hundi'ed days ; and for a more distant province two-hundred days. 
 
 2. If, within such an ample term a merchant should twice convey 
 goods under cover of the same certificate, the Custom-house or Barrier- 
 offices on discovering this, shall, although the term have not expired, 
 confiscate all the goods and record the name of the merchant, to whom 
 no duty-certificate shall ever be granted again. 
 
 3. If any term should be allowed to expire without the duty- certificate 
 being delivered up to the Magistrate of the place for which the goods 
 are destined, or if the certificate be retained and not given up at all, the 
 Custom-house or Barrier-officials, or the local Authorities shall, after 
 inquiry, give information thereof to the Custom-house of the sea-port, 
 in order that it may register the name of the merchant, and never again 
 allow him to apply for a certificate. 
 
 4. The term must be fixed at the same time that the* duty-certificate 
 is granted, and information be given of it at once to the local Autho-
 
 FOREIGN MERCHANT IN CHINA. 41 
 
 titles and the Custom-house and Barrier-offices of the place for wliicli 
 the goods are destined, in order that they, after the merchant shall 
 have arrived with his goods and delivered up his duty-certificate, the 
 same may be returned for cancelling to the sea-port Custom-house, by 
 which the certificate was originally issued. 
 
 (regulations c.) 
 
 Eegulations concerning the purchasing of native produce in the Inte- 
 rior, and the conveying it to a treaty-port for exportation abroad by 
 foreign merchants. 
 
 KuLE I. — 1. When a foreign merchant desires to proceed to the Inte- 
 rior and buy produce of the soil for exportation abroad, he may apply at 
 the Custom-house for a "direction" (^) or a "directing" pass in three 
 parts. 
 
 2. In his application he must distinctly state that the goods, which he 
 intends to buy, shall be really exported abroad, and, if this be not done, 
 that he is willing to pay the prescribed fine, in proof of which he must 
 affix his own signature to the application. He must further state therein 
 the name of the province, the district, and the place he is going to ; what 
 articles he wants to purchase ; and whether he will go himself, or send 
 a person or (persons) of his household (p^ J^). 
 
 3. This being clearly explained by the Custom-house, a pass may be 
 granted in three parts, two of which shall contain the application, and 
 one be left in blank for tha transit, the whole of the three parts forming 
 one sheet. 
 
 4. The application, duly signed, is handed over to an official, appointed 
 for the purpose, to be kept by him and entered in a register, so that 
 matters connected with it may be investigated at any time and treated 
 according to these regulations. 
 
 EuLE II. — 1. When a foreign merchant, provided witli such a tri- 
 partite pass for the purchasing of native produce, shall have arrived in 
 the prefecture, district, and village or mart stated, and producing the 
 things named by him in his application, and bought such goods, he has 
 to enter the name of the person charged with tlieir conveyance, the name 
 of his firm, and the number of packages and weight of the goods in the 
 two first parts of the pass, containing the application. 
 
 2. At the first Custom-house or Barrier on the way back to the port, 
 the tripartite pass has to be presented for inspection. The Custom-house 
 or Barrier officials, after ascertaining that the goods agree with the
 
 42 THE TREATY RIGHTS OF THE 
 
 declaration, cut ofT and keep the two first parts of the pass, while they 
 fill up with its diii'erent items the transit-pass until then left in blank ; 
 adding the date and the stamp of the Custom-house or Barrier. 
 
 3. The transit-jiass is hereupon handed to the merchant, who may 
 now proceed with his goods ; but must, according to Treaty-stipulations, 
 at every Custom-house and Barrier on his way present the pass for ex- 
 amination and stamping. 
 
 4. If the goods agree with the pass, the Custom-house and Barrier 
 affixes to it a stamp, to the effect that the goods have been examined 
 and passed without paying duty ; and the merchant is allowed to pro- 
 ceed without delay. 
 
 5. If there are goods found, not mentioned in the pass and conveyed 
 secretly by the merchant, or if the goods fall short of the quantity de- 
 clared in the pass, which shows that they have been secretly sold on 
 the way, the Custom-house or Barrier Ofidce shall seize the whole of the 
 goods and confiscate them by way of punishment ; giving information 
 to the Custom-house which has granted the pass. 
 
 6. On the merchants' arrival at the last Custom-house or Barrier 
 before the sea-port, he must deliver u^ the transit-pass and pay the 
 half-duty ; and the official of the sea- port Custom-house, appointed to 
 this charge, shall issue a certificate to the effect that the half-duty has 
 been paid, and allow the merchant to pass the Barrier ; and he shall 
 likewise enter the list of the goods declared in the pass and the date of 
 their arrival at the port in the register containing the appUcation, so 
 that the details may at any time be referred to. 
 
 7. If any one passes a Barrier on the road without subjecting to in- 
 spection, or if he pass the last Custom-house or Barrier without first 
 paymg the half-duty : all the goods that have passed the Barrier shaU 
 be confiscated. 
 
 8. Native produce, not covered by a transit-pass, must pay duties at 
 every Custom-house and le-kin at every Barrier on the road ; but native 
 produce, not covered by such a pass, shall not be brought for inspection 
 to any Custom-house or Barrier simultaneously with goods covered by a 
 pass. If this be not attended to, the Custom-house or Barrier shaU 
 confiscate all the goods. 
 
 Rule hi. — 1. When the foreign merchant has brought native produce 
 down to the sea-port and paid the half-duty, he must go to the Custom- 
 house and pay the export-duty thereon. A term of twelve months is
 
 FOREIGN MERCHANT IN CHINA. 43 
 
 granted to him for exporting the goods. If, at the expiration of this 
 term he has not effected their exportation, on his stating true and good 
 reasons for it, the term may be prolonged for one month. But if, at 
 the end of thirteen months, the goods are still not exported to a foreign 
 country, or have been sold at the port, this shall be ascertained by offi- 
 cials appointed for the purpose by the Commissioner of Customs, and 
 the merchant, who has made the original appHcation shall be fined ten 
 times the half duty, in order to compensate for the duties and the Ic-Jcin, 
 the payment of which he has avoided on the road. 
 
 2. Native produce, which has been conveyed to a port under cover of 
 a transit-pass, must be exported to a foreign country, and if the merchant 
 attempt to ship them to another Chinese port, no matter whether within 
 thhteen months or otherwise, he shall not only be fined in the payment 
 of ten times the half-duty ; but he shall moreover pay the export-duty at 
 the first port, and at the other the half-duty for reimportation: after 
 which he will be free to sell the goods. 
 
 3. If a merchant should state that goods have been exported abroad, 
 and he should subsequently ship them to another Chinese port, the whole 
 of such goods shall be confiscated. 
 
 EuLE IV. — 1. In all cases, in which a foreign merchant apphes for a 
 tripartite transit-pass, the following limits shall be fixed, reckoned from 
 the day that the pass is dehvered by the Custom-house up to the day 
 that the pass is again presented, viz., for places in the same province a 
 hundred days ; for adjoining provinces two-hundred days ; and for other 
 provinces four hundred days. 
 
 2. — If, at the expiration of these terms respectively, the transit-pass 
 shall not have been presented again, the name of the merchant shalfbo 
 registered, andhe shall never again be permitted to apply for such a pass. 
 
 3. Th-e time of the expiration of the pass shall be stated on it by the 
 Custom-house, which shall also send information to the local Authorities 
 of the Custom-house and Barrier at the place where the goods are to be 
 purchased, in order to enable them to act m concert. 
 
 4. If the pass, which is brought back, should be found not to bear the 
 stamps of all the Custom-houses and Barriers passed on the waj', it shall 
 fall under the provisions of Kule ii. (§ 7.) " If any one passes a Bar- 
 rier," etc., and the goods shall be confiscated. 
 
 5. After the first Custom-house or Barrier has cut off and retained 
 two parts of the tripartite pass, one of those parts shall be kept in the
 
 44 THE TREATY RIGHTS OF THE 
 
 arcliivcs of the said Custom-house or Barrier, anil the other be sent to 
 the Custom-house, which has issued the pass ; and when the merchants 
 shall have returned to the ports with their goods and again delivered up 
 up the transit-pass, the second parts of the passes alluded to, shall be 
 scut monthly to the Tsung-h Ya-m6n for inspection. 
 
 The one important point, then, referred to in these docu- 
 ments and upon which the British Board of .Trade and the 
 Representative of England in Peking, Mr. Wade, — sui)ported 
 by the latest opinion of Sir R. Alcock, Mr. Wade's predeces- 
 sor, — arc foimd to agree with the Tsimg-li Ya-nien and the 
 Foreign Inspector-General of Chinese Maritime Customs, is 
 this : that the provisions of the existing Treaties between 
 Western Powers and China exempt, by the payment of the 
 stipulated " transit "-duty, foreign merchandise destined for 
 consumption in the Interior, and native produce destined 
 for exportation to foreign ports, from certain inland " bar- 
 rier " dues in transitu only, and not, as the merchants hold, 
 from war-and aU other taxes, to which such goods may 
 by Chinese Officials be subjected in the Interior, to the detri- 
 ment of trade. 
 
 The latest known view of the late versatile Pieprescnta- 
 tive of England at Peking, Sir Rutherford Alcock, to which 
 reference has been made, was expressed by him in an offi- 
 cial " Memorandum on Fm-ther Memorials respecting the 
 China Treaty Convention ", dated May 3, 1870, m these 
 
 terms : — 
 
 The assertions contained in the first part of the Eesolution [of the 
 East India and China Association, transmitted to Lord Clarendon] that 
 the proposed distinction between Treaty and non-Treaty provinces is 
 contrary to the interests of commerce, retrograde in policy, and entails 
 the forfeiture of former Treaty privileges, rest upon a total misapprehen- 
 sion of what those privileges are. The merchants have persistently main- 
 tained both in regard to the Akt. xxviii of the Treaty of Tientsin aiad 
 Kule 7, an interjiretation distinctly and authoritatively rcjwdiatcd by tlie
 
 FOREIGN MERCHANTS IN CHINA. 45 
 
 only competent autborities in such a matter — the two High Contracting 
 Parties, the British and Chinese Government. Neither the opinion of 
 the Law Officers of the Crown as to the legal and proper interpretation of 
 these Articles, nor the equally clear testimony of the late Sir F. Bruce 
 and Mr. Wade, both engaged as the Secretaries of Lord Elgin in draw- 
 ing up the several clauses of the Treaty, as to the true meaning and 
 intent of those Articles in his Lordship's conception, have availed to 
 deter the merchants from reiterating a fallacy, and insisting upon an in- 
 terpretation, which rests upon no better foundation than their own 
 opinion against all evidence and authority. 
 
 But Treaties are not of private interpretation, according to the interests 
 or caprice of individuals trading under their stipulations. What the 
 Treaty of Tientsin does grant in this matter of transit both Governments 
 are agreed, and their joint decision is without appeal. By that Treaty, 
 the importer of foreign goods has the right to sell them at the port with- 
 out habihty, while they remain his property, to any other duty than 
 the import duty, or to send them to any internal market he may 
 select, free from any other chai'ge than the Customs dues on importa- 
 tion and the stipulated Treaty duty of 2^ per cent. But both at the port 
 and at the internal Market, when once the goods have passed out of his 
 hands, they are Uable to bear whatever taxes or duties the Chinese ad- 
 ministratiou may see fit to levy on them in common with similar goods 
 of Chinese origin. This is the authoritative reading of the article in 
 question, accepted by Her Majesty's Government. 
 
 At present, under the Treaty of Tientsin, the British merchant is en- 
 titled by a payment of a half duty rate of 2-| per cent, to have all his im- 
 ports protected while in transit to any place in the interior from further 
 charge if they continue his own property, not otherwise ; and any Chinese 
 produce he may have purchased in the interior is in like manner pro- 
 tected by a transit certificate to the port of shipment 
 
 That the merchants contend for a different interpretation of the rights 
 secured by Art. xxviii of the Treaty of Tientsin and Eule 7, appended 
 to the same, has already been shown. But these are the conditions of 
 trade, as determined by the only authoritative reading of existing Trea- 
 ties. There are foreign merchants, it is true, in China, British and 
 others, who contend nevertheless, that both foreign goods and Chinese 
 produce, not foreign owned, are entitled to the protection of transit-certi- 
 ficates, besides insisting upon that protection extending to exemption
 
 4G THE TREATY RIGHTS OF THE 
 
 from all inland taxation whatever, antl have acted accordingly by selling 
 certificates for Chinese owned goods and produce [destined for expor- 
 tation to foreign ports] ; but that does not prove that the Treaty gives 
 any such rights. 
 
 The opinion here expressed by Sir Rutherford Alcock is 
 in diametrical opposition to the opinion so warmly main- 
 tained by him in the summer of 18G8, as will be presently 
 seen. Still, the array of authorities against the view taken 
 by the body of foreign merchants in China is a formidable 
 one. Before, however, proceeding to its examination, it 
 will be necessary, for a clear apprehension of the case, to 
 enter upon one or two preliminary inquu'ies.
 
 FOREIGN MERCHANTS In CHINA. 47 
 
 III. 
 
 PEELIMINAEY INQUIRIES. 
 
 "What is to be understood by " the Transit- System " in China ? — Usual 
 charges leviable on inland traffic in China — Peculiarities of the 
 Chinese system of financial Administration — The Sacred Edict on 
 the payment of duties — Practice and theory — Fiscal corruption in 
 China — Chinese sources of revenue — Effects of the first Enghsh 
 war and the Tai-ping rebellion — Introduction of the le-km as a war- 
 tax — Rapid extension of the new impost — Barriers and Custom- 
 houses — Chinese " squeezing" — The Peking Board of Revenue and 
 the le-kin — The chow-fang tax — Historical sketch of its introduction 
 — Objects for which the le-kin was professedly imposed — Those 
 have ceased to exist — Abolition of the tax proposed to the Tsung-li 
 Ya-men and decHned — Causes of the failure of the English Revision 
 of the Treaty of Tientsin — Su' Rutherford Alcock's diplomatic inca- 
 pacity — Real purposes, to which the le-kin is devoted. 
 
 The first question, which our subject suggests, is : — What 
 are we to understand by a *' Transit-System " and '' Transit- 
 Dues " in China ? In Europe, when there are two inde- 
 pendent States separated by a third independent State, and 
 merchandise is for local consumption or sale conveyed from 
 either of the former into the other through the territory of 
 the latter, this third independent State, in consideration of 
 the merchandise being permitted thus to pass through its 
 independent territory, used to levy upon such merchandise 
 a certain tax, as a source of revenue to the public exche- 
 quer, in the shape of transit -dues. Invariably small in 
 comparison with the corresponding import duty, these Dues 
 have now altogether ceased to be imposed by England,
 
 48 THE TREATY RIGHTS OF THE 
 
 Germany, Austria, and other European States, even by 
 Turkey. In China no conditions similar to those referred 
 to exist. Irrespective of the claim of " the Son of Heaven" 
 to Universal Supremacy, his dominions constitute an ab- 
 solute monarchy. No Chinese province possesses the right 
 to prohibit or interdict the conveyance of merchandise, 
 through its territory, from one adjoining province into an- 
 other one ; and, consequently, on the frontiers of no Chinese 
 province or dependency does a system of levying Transit- 
 Dues obtain. Nor does such a system obtain at any place 
 in tlie Interior of the country relative to merchandise con- 
 veyed thither fi'om any Chinese port. 
 
 Hence, the Transit-Duty system in China cannot be un- 
 derstood in the European sense. It must necessarily be 
 construed to refer to certain inland taxes, to which all 
 merchandise generally, whether of foreign or home origin, 
 is subject in the Interior of the Empire ; and that such is 
 indeed the case is positively proved by the fact, that the 
 Chinese themselves know nothing of a " transit-system," 
 nor even of "transit "-duties, and tliat in the Chinese Treaty- 
 texts the latter are correctly designated as p^ M ^, 7iei-ti- 
 sliui, literally : "inland taxes" or "inland duties;" and the 
 "transit-certificate" as ^H, shul-tan, "a receipt for du- 
 ties paid." Without, however, stopping to di-aw, for the 
 present, any conclusion from this fact, our next inquu-y will 
 have to be : What is the nature and approximate amoimt 
 of those taxes ? 
 
 The constitution of the Chinese Government presents a 
 remarkable blending of divine absolutism and modern cen- 
 tralisation with profane democracy and ancient feudahsm. 
 Its power is of the nature of the former, its mode of ad- 
 ministration partakes of that of the latter, element. Taxes^
 
 FOREIGN MERCHANTS IN CHINA. 49 
 
 in China, are imposed by the Imperial Government, while 
 their collection, and to some small extent their appropria- 
 tion, is left to the Provincial Authorities ; a certain propor- 
 tion only, both in money and kind, being transmitted to the 
 Capital for general purposes. The fourteenth apothegm 
 of the Sacred Edict of the Emperor Sheng Tsu Jen (K'ang- 
 hsi, 1662-1723) instructs the people : — " Be punctual in the 
 payment of taxes, and you will avoid the collector's impor- 
 tunities." In amplification of which maxim, the Emperor 
 Shih TsimgHsien; (Yung-Cheng, 1723-1736) states:— 
 *' From the highest antiquity the country has been divided 
 into shires, and taxes have been paid in proportion to the 
 
 productiveness of the land Since the establishment of 
 
 Our Dynasty, the rates of revenue have been fixed by an 
 universally approved statute, all unjust impositions being 
 completely done away with, and not a farthing in excess 
 required from the people." The purposes to which the 
 taxes are applicable, we find described by Wang Yu-Po, in 
 his paraphrase of the Sacred Edict, thus : — 
 
 You people, being without undcrstancTiug, fancy that the Emperor 
 requires the whole for the support of his own household, and do not con- 
 sider the numerous ends to which these taxes are applied. Are not the 
 salaries of the officials paid out of the revenue ? They are bestowed on 
 them in order that, possessing adequate means of support, they may be 
 able to attend the more carefully to the regulation of your affairs. The 
 pay of the army, also, is taken from the revenue, and given for the sup- 
 port of the soldiers, that you may have protection against robbers and 
 thieves. It is out of the revenue, moreover, that grain is bought for 
 storage in the granaries, to prevent, in years of famine, yonr dying of 
 hunger. Besides these, there are numberless other purposes for which 
 the taxes are made to serve, such as the repair of cities ; the dredging of 
 the beds of rivers, § and the preservation of their embankments; the fit- 
 
 § The Kev. Mr. Milne (The Sacred Edict, Shanghai, 1870, 8° p. 168) translates : " clear- 
 ing out tlie bottoms of rivers." The text has sirnplj' : ^ ^pf, •'* to clear out " or •' dredge
 
 50 THE TREATY RIGHTS OF THE 
 
 ting out of ships for the conveyance of the taxes paid in lu'ncl; the pur- 
 diasc of copper for the coinage; the repair of pubhc buildings. All this 
 is done with your money; and all this money is expended on your own 
 behalf. 
 
 Tractice and theory are wont to differ widely. Nowhere 
 more so than in China. The great stumhhng-block of her 
 fiscal system is, that the miinterrupted tenure of office of the 
 mandarins is always more or less uncertain ; that the class 
 of candidates for office far exceeds the requirements of the 
 State ; that most of the officials in actual service are under- 
 paid ; and that their numerous " expectant " inferiors and 
 underlings are not paid at all. Hence, in combination with 
 other causes, has arisen an unparalleled state of fiscal cor- 
 ruption and extortion — or " squeezing," as the process is 
 technically called in China, — which has gradually, in dif- 
 ferent forms, permeated all classes of society, and consti- 
 tutes one of the most characteristic features of the every-day 
 intercourse of the whole people. The mandarin in office, 
 *' making hay while the sun shines," strives to provide for 
 the future or to amass wealth within the shortest possible 
 period ; and the crowd of subordinates attached to his ya-men 
 have to gain, as best they may, at least the means of exist- 
 ence : the Government shutting its eye to evils which its 
 own policy has originated, and extending the utmost cle- 
 mency to individual delinquents, in cases of more flagrant 
 corruption or extortion brought under its special notice, so 
 long as the taxes themselves are forthcoming and the imhlic 'peace 
 is not disturhed. From these circumstances it will be readily 
 inferred that, although taxation in China be nominally light, 
 it is by no means so in reality. 
 
 the rivers ;" but the meaning is plain, and how Hia Highness Prince Knng and the Tsting- 
 li Ta-men are able to reconcile their opposition to the dredging of the Wusung bar ^vith 
 the sacved injunctions of tlie Emperors Sheng Tsn Jen and Shih Tsung Hsien, twice a 
 month to be pxibliclj explained to the people, is not readily intelligible.
 
 FOREIGN MERCHANT IN CHINA. 61 
 
 The main source of revenue to the Chinese Government 
 is a land-tax, varying according to the nature and quality of 
 the soil, and in the mean equal to about one shilling and six- 
 pence or more probably two shillings per acre, payable partly 
 in silver, partly in kind. It yields more than eight-tenths 
 of the entire public income ; the remainder being derived 
 from the salt-monopoly, the Customs, house- and shop-taxes, 
 licenses, river- and road-toUs, etc. The latter tax forms an 
 insignificant item. In ordinary times the revenue amply 
 suffices for the wants of the Empire, and twice during the 
 prosperous reign of Kuo Tsung Shun IT (Cliicn-luncj, 1736- 
 1796J, the enthe land-tax was remitted by that munificent 
 and conquering Monarch to his subjects. It is in times of 
 national disaster that the Government finds it difficult to 
 meet the exigencies of the State by extraordinary taxation. 
 The fiscal system, deranged in consequence of the English 
 war with China in 1811-1842, and disastrous inundations of 
 the Yellow Kiver and the Yang-tze, had scarcely returned to 
 something like its normal condition, when, in 1850, the 
 Tai-ping rebellion broke out, and an incapable and corrupt 
 sovereign, the Emperor Wen Tsung Hsien (Hsien-fing 1851- 
 1862 j, succeeded to the throne. The rebeUion soon assumed 
 large proportions. Its leader, formerly a poor student of 
 Christianity, in 1853 established his rule in the *' Southern 
 Capital," Nanking, under the title of T'ien Wang, " Heaven's 
 
 ^ The Emperors of China, during their life time, are simply designated as " the Emperor," 
 namely, according to Chinese ideas, of '^^ , literally '• all there is under Heaven " i. e. 
 the Earth. It is only after their death, that a historical or Temple-name is given to them. 
 Their milk-name, so long as they occupy the throne, no Chinaman is permitted either to 
 write or to pronounce. In the case of the present Ruler and his two predecessors only, 
 this rule has been restricted to the second element of the name. What is, in the West, 
 mistaken for the Chinese Sovereign's name, such as Chien Lung, S'ien Feng, T'ung Chili, 
 is a motto or epithet of good augury, by which it is desired and hoped that ilie }X'rwd of 
 the veifjn may be distinguished. It is, therefore, as inappropriate to speak f. i. of K;io 
 Tsung Shun as "His Majesty the Emperor Chkn Lttng'", as it would be to speak f. i. of 
 George IV of England as " His Majesty Kuig Annf) Domini 1820-30/'
 
 52 THE TREATY RIGHTS OF THE 
 
 Monarch." Yet, in 1859 the Chinese Government felt 
 strong enough to provoke the English-French war of 1859- 
 18G0. The Tai-pings, profiting hy the opportunity, marched 
 to the capture of Suchow, and committed the error of attack- 
 ing Shanghai. Thereupon the Treaty of Tientsin was rati- 
 fied, and Western support given to the Manchu Government, 
 then carried on by an Imperial Council in the name of the 
 Boy-Emperor Tsai-Chun, who succeeded his father in Au- 
 gust, 1861, against the rebellion. It was crushed in 1864; 
 and followed by the Mahometan rising in Shen-si and Kan- 
 su, and the Nien-fei troubles in Chih-li and Shan-tung. In 
 1868, the Empire relapsed into its wonted state of ruffled 
 stagnation, with a largely increased amount of corruption, 
 ruin, and devastation, but only the usual extent of chronic 
 insurrection in one or two of the provinces, and a settled 
 determination, on the part of the anti-foreign Tatar Govern- 
 ment, to " wipe out China's shame," which, already in 1870, 
 led to the Plot of the Summer- Solstice, its partial carrying 
 into effect by the successful massacre of foreigners at Tien- 
 tsin, and those vigorous efforts for its devoutly desired con- 
 summation, to which all the energies and resources of the 
 present administration continue to be directed. 
 
 Under these circumstances and at an early period of the 
 Tai-ping rebellion, the Chinese Government, in order to pro- 
 vide for the financial necessities of the State, resolved on 
 having recourse to, among other measures, that of collect- 
 ing a war-tax, under the peaceful name of Ic-hin, at a rate 
 ofaboutj^ per cent., — on an extended scale- upon the mland 
 commerce of the country, by the multiplied machinery of 
 the old established river- and road-custom- and toll-houses. 
 It was only, however, after the ratification of the British 
 Treaty of Tientsin, and u-ith the special view of paralysing, as
 
 FOREIGN MERCHANT IN CHINA. 53 
 
 far as practicahje, its provisions relative to foreign inland trade 
 and, whilst burdening that trade to the utmost, to benefit the public 
 Exchequer to a corresponding extent, that the scheme was fully 
 organized. " Now, with regard to war-taxes"; a Memoran- 
 dum addressed by the Tsmig-li Ya-men to the British Minis- 
 ter on June 28th, 1868, observes, "the fundamental revenue 
 of China is the land tax, the system of national loans being 
 unknown. But during the rebellion His Majesty has, out 
 of compassion for the suiferings of his people," as the Me- 
 morandum naively has it, " remitted the land tax, wholly or 
 partly, in the disturbed districts; and, as a temporary measure, 
 consequently, the national necessities must be supplied by 
 these extraordinary levies." And in the official Minute of 
 the Proceedings, March 3rd, 1868, of the Mixed Commis- 
 sion on the Eevision of the Treaty of Tientsin, we read : 
 '' Mr. Tsai accounted for the origin of the war-tax by stating, 
 that, as some of the richest cities in China, particularismg 
 Nanking, Suchow (taken in May 1860, re-taken in December 
 1863) and Hang-chow, had been destroyed by the Tai-pings, 
 and numbers of what had been wealthy districts so de- 
 vastated that it was impossible to le^-y the accustomed land- 
 tax, the Government had no choice but to invent such a tax 
 as the le-kin. He said, a system of loans, prevalent in 
 Western countries, would not work in China, where there 
 are few great capitalists, and fewer stiU who would be willing 
 to lend money to the State." 
 
 " The Provincial Governments," Mr. Wade states in his 
 memorandum of 1868, " do not, legally, possess the right 
 to multiply the coUectorates or barriers, a list of which is 
 pubhshed in the Code of the Board of Revenue, without 
 reference to that Board ; nor can their number be added to 
 by the Board itself without the sanction of an Imperial
 
 5-1 THE TREATY laOIITS OF THE 
 
 Decree." But his Excellency, lest, perchance, he should 
 compromise the " Provmcial Governments " * omits to in- 
 form his own, whether such a multiplication of "barriers " 
 has taken place, and, if so, whether with or without the 
 sanction of an Imperial Edict. I am not aware of the ex- 
 istence of such an Edict ; whereas the multiplication of 
 barriers is simply a fact. Indeed, the old inland Custom- 
 houses, levying their accustomed duties, continue in ope- 
 ration independently of the subsequently established offices 
 or " barriers" for the collection of the M ^> le-kin, — or what 
 might not inappropriately be termed, " Peter's pence "f 
 namely : M iM i% M^ li-tjiien-tsung-tjUf " Chief Offices of the 
 Cash -Contribution," one for each Province, and Mi%^ M- 
 li-tjiien-fin-tja, " Branch Offices of the Cash-Contribution", 
 with their sub-branches, multiplied throughout the coun- 
 try according to circumstances, both on roads and rivers ; 
 burdening the inland traffic generally, but the foreign inland 
 trade especially, with onerous taxes and exactions. " Should 
 the special tax-barriers," the Tsung-li Ya-men states in a 
 memorandum of August 1st, 1868, addressed to the British 
 Minister, "be hereafter abolished, and the old custom-houses 
 alone be retained in the Interior and along the Yang-tze, 
 we might arrange these matters afi*esli. Meanwhile we 
 have to repeat with regard to these special taxes and con- 
 
 * The diplomatists at Pe-kiug, more particularly since the introduction of the co-operative 
 policy, now defunct, have contracted the habit of designating the Chinese Government 
 as "the Central Government" in contradistinction to "the Provincial Governments," a 
 habit, which leads and can lead to nothing but misconceptions and erroneous impressions. 
 There exist no pro^•incial " governments " in China, but only provincial " Administrations," 
 and at the head of which there are placed no " Vice-Roys," as they are usually styled, but 
 only Tsutif)-tu, i. e. " Head Directors " or " Govemoi-s," and Fit-tai, i. e. " Lieutenant- 
 Governors," subordinate to the former when Governors of two (or three) Provinces united. 
 Strictly speaking, as has been already observed, the Chinese Government is the Emperor, 
 and, in diplomatic language, it would be as correct to speak of " the Central Emperor," as 
 of " the Central Government", of China, 
 
 t The character ^ le, also written simply J|g, designates a small brass or copper-coin 
 of China known to foreigners by the English name of " a cash." The meaning of ^» 
 tjin, or kin, is " metal ".
 
 FOREIGN MERCHANT IN CHINA. 65 
 
 tributions, that they spring from the military necessities of the 
 country. So long as the Custom-houses in the Interior 
 cannot be re-opened on the former basis, the Government 
 must needs place the burden on the trading communities : 
 hence, the more or less numerous inland barriers ; and 
 hence, again, the heavier or lighter contributions de- 
 manded." 
 
 The le-kin tax is not collected at a uniform rate, but at 
 rates differing in different proAdnces and at different times, 
 though hitherto only upon an increasing scale. In China 
 there is no Chancellor of the Exchequer, save the wants of the 
 Government. The annual or periodical sum required is 
 by the Board of Eevenue apportioned among the various 
 Provinces, and an Imperial Edict orders each Province to 
 furnish its quota. To see to this, and to provide for the 
 similar Provincial necessities, is the business of the Gov- 
 ernor and the Treasurer of the Province. The Imperial and 
 Provincial sum-total is by the Treasurer again apportioned 
 among the various circuits, and the Governor orders each 
 Circuit to furnish its quota. To see to this, and, in ad- 
 dition, to provide for the similar local necessities, is the 
 busmess of the Tau-tai or other specially appointed official, 
 under whose immediate supervision the coUectorates of his 
 district are placed. The latter have wants of their own. 
 Every official, high and low, connected with the k-kin tax, 
 looks upon it as an institution for " squeezing " to the ut- 
 most degree of his individual power, a nd the underlings, 
 attached to the coUectorates, have no other means of sub- 
 sistence. The trader, and ultimately the consumer, has to 
 pay for all this in the aggregate. Hence, the taxes, actually 
 levied in each province, depend on the sum apportioned to 
 it by the Chinese Government, the amount added to that
 
 5G THE TREATY RIGHTS OF THE 
 
 sum for Provincial necessities, the further amount added 
 to the latter for local purposes, the rapacity of officials, and 
 the degree of extortion practicable. It is difficult, there- 
 fore, to arrive at the details of the rates imposed on inland 
 trade in the shape of le-kin, and a variety of minor taxes of 
 a similar nature. For this purpose it would be necessary 
 to possess the lists of charges, in use, throughout China, at 
 each collectorate, toll-house, and other fiscal office. 
 
 In certain parts of the province of Kuan-tung, probably 
 in order to obstruct foreign trade with the provinces of 
 Kuang-si, Kwei-chow, Yiin-nan, and Sze-Chuen, and in the 
 provmce of Fu-kien, those charges are raised, always with 
 the cognizance, or at the instance, of the Chinese Govern- 
 ment, to prohibitive rates ; whilst in the northern provinces 
 they used to be so moderate that, m Tientsin, transit-passes 
 were rarely taken out. Yet, in contradiction to this fact, 
 reported as such in 1867 by the then Foreign Commissioner 
 of Customs at the port in question, Mr. Dick, the imposts 
 levied already in 1871, upon a quantity of native sugar, 
 sent by a Chinese merchant from Tientsin to Peking, a 
 distance of about 80 English miles, amounted to nearly 20 
 per cent, on its value. At present they are the same in the 
 northern Provinces, as they are in other parts, of China. 
 On foreign goods, sent, without a certificate, by water fi-om 
 Shanghai to Su-chow, a distance of little more than eighty 
 miles, there are collected, besides minor tolls and *' squeezes," 
 the following taxes, viz., at Shanghai : import duty about 
 5 ]3er cent.;]: choiv-fang about Ih per cent.; h-ldu about 
 2^ per cent; en route at the first collectorate : le-hin about 
 
 J The Tariff import- and export-duties were calculated on the basis of 5 per cent, ad va- 
 lorem in the mean, and articles not enumerated in the Tariff are actually taxed at that rate. 
 In reality, however, the mean amount of import- and export-duties levied is very nearly 6 
 per cent., as will be seen fiuther on.
 
 FOREIGN MERCHANT IN CHINA. 57 
 
 1^ per cent.; at a second collectorate : le-kin about 1^ per 
 cent. ; at Su-chow : le-hin about 2^ per cent. : — in all, fi'om 
 fifteen to sixteen per cent ad valorem. Between Cliin-kiang 
 and Wu-liu, a distance of about 100 miles, at no less than 
 four Custom-houses duties have to be paid independently of 
 war-taxes, the various charges amounting in the aggregate 
 to something Hke twenty-five per cent, ad valorem. Suppos- 
 ing the goods to be accompanied by a transit-pass, they 
 would then up to their place of destination be subject only 
 to import-duty about 5°/^, chotc-fang about 2|^°/q, transit- 
 duty about 2^^/o, in all about ten per cent, ad valorem, 
 besides ** squeezes " ; but, although the Tsung-li Ya-men 
 insists that the foreign merchant has thus a considerable 
 advantage over the native trader, the Chinese officials find 
 means, on the arrival of the goods at the inland market, — 
 which, for this reason, has to be specified in the transit-pass 
 taken out at the port, — to make up for the difference ; and 
 by the time that the foreign merchandise passes into the 
 possession of the native consumer, it may be safely calcu- 
 lated, that it has paid to the Climese Government a tax 
 of twenty -five per cent, ad valorem, as ah-eady stated. In other 
 words, the '^ le-Jcui " per se since its first imposition in 1843 
 or 1844, has been increased to one hundred and fifty times 
 its original rate, and now, including chow-fa}tg, is equal to 
 twice the tariff import- and transit-duties on foreign mer- 
 chandise taken together. It is true, that to some extent 
 its pa}Tnent may be avoided by unscrupulous traders, in 
 unison with more imscrupulous coUectoratc-ofiicials, to the 
 detriment of the honorable merchant ; that excessive imposi- 
 tions, — excessive as compared with a tax of 15'^/^ or IS'^/^^ 
 such as would be payable /. i. between Shanghai and Hankow 
 by water, — were frequently avoided by shipment of the goods
 
 bb THE TREATY RIGHTS OF THE 
 
 to Ningpo and a lonrr round-about land-journey ; and that 
 in some parts of the northern provinces the le-Jcin levied does 
 possibly not as yet reach the full amount per cent. : but, so 
 far as the materials at my disposal permit of a deliberate and 
 well-considered judgment, I am of opinion, that twenty -five 
 per cent, ad valorem, as the mean amount of taxation, to which 
 all foreign goods imported into China and consumed at the 
 ports or conveyed for sale into the Interior, as well as all 
 native articles of produce exported abroad, are at present 
 subject, is a moderate estimate.]] 
 
 The cliow-fang contribution, %^^%, at first named ^Hiii- 
 jang Yuen, '§' |5J li, became known to foreigners under the 
 name of " defence tax," when, after the Tai-pings had taken 
 Sucliow in May, 1860, it was imposed, in the shape of a 
 " voluntary " capitation tax for the recovery of that famous 
 city. " Heaven," a Chinese proverb says, *' has its paradise ; 
 the Earth its Su and 'Hang" (Su-chow and 'Hang-chow). 
 As has been already remarked, the city was re -captured by 
 the Imperialists in December, 1863 ; but the tax for its re- 
 capture was continued under the altered name of ^'cJwic-fang 
 contribution," changed into a tax upon inland trade, and 
 extended to other ports. On the outset the Tau-tai of 
 Shanghai had some little difficulty in introducing this new 
 exaction into tJie Foreign Settlement. Thanks, however, to 
 the complaisance of Sir Frederick Bruce and Lord John 
 Eussell, then English Secretary of State for Foreign Affairs, 
 the astute Chinese official, introducing, moreover, the salt- 
 monopoly into his argimients and killing two birds with one 
 stone, carried his insidious design. The correspondence on 
 the subject, transcribed from the Blue-Book " China, Ko. 3, 
 1864," is deserving of a place here : — 
 
 11 Tins was written before the iuformatiou. fully .ind literally coufirminjr the ahove state- 
 ment, bad reached me.
 
 FOREIGN MERCHANT IN CHINA. 59 
 
 The Taoidae Woo to Consul Medhurst. 
 (Translation). Sliangliae, July 1, 18G1. 
 
 I Avrite in consequence of a letter received from one Wang, expectant 
 Taoutae and Superintendent of the Tai-slian Salt Contributions, that 
 the number of people living in the foreign settlement at Shanghac must 
 needs consume a large quantity of salt ; that the ofticer Yu had accordingly 
 hired a number of men to sell it, but a very small quantity had been 
 disposed of ; that it is evident therefore that it is smuggled ; that having 
 received orders to supervise the salt trade, it behoved him to devise 
 some means of regulating it, that the taxes might be paid and the salt 
 contractors not lose ; that he had assembled the head men to discuss 
 the subject, and proposed to establish the Le-tai-seng salt-shop in the 
 French Concession, and the Chang-cheang-shun salt shop in the English 
 Concession to supply the two settlements, the permits hitherto issued 
 being withdrawn. But as it was to be feared that bad characters would 
 take advantage of the foreign character of the place, and induce the 
 police to throw obstacles in the way, it was necessary that the English 
 and French Consuls should be written to that they might direct the 
 police to arrest any smugglers, by which means the Government sales 
 would increase and the legal trade flourish. That he had du-ected there- 
 fore the two shops to open, and begged me to write to the two Consuls 
 to give the necessary orders. 
 
 I have therefore written to the French Consul, and do also to you to 
 beg you will direct the police to assist in arresting any illicit traders. 
 
 The Taoulae Woo to Consul Medhurst. 
 (Translation.) Shanghac, July 5, 18G2. 
 
 I write to ask your co-operation in a matter by which I may remedy 
 the insufficiency of the taxes to meet the large and most necessary ex- 
 penditures. 
 
 At the cud of the last year I established a committee which when your 
 countrymen and the French assisted us against the rebels were called 
 upon to pay for rent, coolies, roads, batteries, the destruction of houses, 
 boats, rice, firewood, artillery, lascars, &c., &c., to the amount of 50,000
 
 60 THE TREATY RIGHTS OF THE 
 
 or (')(), 000 tacls a month, besides 200,000 odd for the troops brought 
 down from Nyanching, to meet wliich they were only able to collect 
 some 100,000 taels in all, a sum quite insufiicient. 
 
 The above claims, moreover, are for the protection of Shanghae and 
 must be paid. While the Treasury and contribution receipt being in- 
 sufficient for the purpose to which they are devoted, tli6 pay of the troops, 
 it is absolutely necessary to lay on some new taxes to procure the funds 
 so urgently required. 
 
 I therefore on the 15th of the 4th moon wrote you with reference to 
 three taxes I proposed imposing, they being in accordance with Treaty, 
 to wit, a tax on native produce, an increased tax on opium, and a ca- 
 pitation tax, subsequently writing further letters on the subject. 
 
 With reference to the two first taxes, you have already written me 
 that you have referred them to Her Majesty's Minister for consideration, 
 and that it behoveth to await his decision ; but the capitation tax is en- 
 tirely Clihiese and does not affect foreigners at all, and I see no reason 
 therefore why the Chinese residents should not pay it. 
 
 Again, the great majority of Chinese residents on the French and 
 English settlements are Che-chiang and Keang-si refugees who have 
 not paid tlieir proper taxes, and who have fled there since the great 
 collection of the allied troops, and who carry on their business solely 
 by their protection ; and as unless the troops are maintained the people 
 cannot continue to enjoy security, as they are innumerable, I have pro- 
 posed to divide them into three classes, the first x^aying five dollars, the 
 second one dollar, the third half a dollar per head, children and women 
 being exempted, and one collection being final. 
 
 In registering them for the tax, moreover, one will be able to discover 
 any bad characters that may bo here. 
 
 This cannot be considered squeezing, and a double advantage will 
 result from it. It appears, moreover, in accordance with foreign laws, 
 and has already been put in practice as far as the city and suburbs are 
 concerned ; but I have to request you will appoint some one to take 
 cognizance of the natives, whether householders or in foreign employ, 
 in the British settlement, as I am at my wit's end to obtain the enor- 
 mous sums required for the defence of the place, and this is the only 
 way open to me to meet them. 
 
 As the matter concerns us both I trust you will co-operate with me 
 wathout dolav.
 
 FOREIGN MERCHANTS IN CHINA.. 61 
 
 Consul Medhurst to the Taoutae Woo. 
 
 Slianghae, July 16, 18G2. 
 
 Sib, — I have had the honour to receive your two letters dated the 1st 
 and 5th instant, the one asking me to co-operate with you in unposmg 
 a capitation tax on all Chinese residents within the British Hmits, the 
 other announcing the estabhshment of licensed salt-dealers in the 
 British and French Concessions, whose right of monopoly you wish to 
 have protected. 
 
 The local authorities are no doubt entitled to impose on their own 
 subjects any tax or monopoly v.'hich does not interfere witli foreign 
 Treaty rights ; but as regards those natives who reside within these 
 limits, I am not in a position to recognize such a right, as it has been a 
 matter of understanding for years past between the local authorities and 
 this Consulate that the jurisdiction of the former over their own subjects 
 living within these hmits shall only be exercised through and with the 
 consent of the British Consul, and with the large Chinese population 
 now depending on our protection and sharing our interests, it would be 
 inexpedient to allow of any departure from this rule. 
 
 I shall send copies of your letters and this reply to the Hon. 
 
 Mr. Bruce. 
 
 I have, &;c. 
 
 (Signed) AY. H. Medhukst. 
 
 Mr. B'ruee to Consul McdTiurst. 
 
 Peking, November 5, 18G2. 
 
 SrRf — In reply to your despatch of the 14th August last, requesting 
 my advice as to the proposals made by the Taoutae for the taxation of 
 Cliinese subjects within the limits of the so-called Britisli Concession, I 
 have to observe that there is nothing in tlie Treaties which warrants me 
 in interfering in any way in such cpiestions. The Taoutae is entitled to 
 levy taxes as he pleases ; and as long as he merely seeks to impose taxes 
 on persons resident in the Concession, which are paid by those living in 
 the city and suburb, I see no reason for objecting to it at a time when 
 it is our interest as well as that of the Chinese tliat the Government 
 shall not be deprived of its resourges.
 
 G2 THE TREATY RIGHTS OF THE 
 
 A heavy responsibility will rest on the Consul of any port should his 
 action in such matters lead to the disbandiiig or mutiny of the highly- 
 paid force under foreign ofQcers which the Chinese have embodied by our 
 
 advice. 
 
 I am, &c., 
 
 (Signed) Fredekick W. A. Beuce. 
 
 Earl UhsscII to Sir F. Bruce. 
 
 Foreign Office, AprH 8, 18G3. 
 
 Sir, — I have to state to you that Her Majesty's Government entirely 
 concur in your views and approve the instructions which you have ad- 
 dressed to Her Majesty's Consul at Shaughae, as reported in your des- 
 patch of the 5th November last, with regard to the proposals made by 
 the Taoutae for taxing Chinese subjects who reside within the limits of 
 so-called British Concessions. 
 
 The lands situated within the limits of the British Settlement are 
 without doubt Chinese territory, and it cannot reasonably be held that 
 the mere fact of a residence within those limits exempts Chinese subjects 
 from fulfilling their natural obligations. 
 
 I am, &c., 
 
 (Signed) Eussell. 
 
 I shall take some future occasion to revei't to the import- 
 ant principle involved in this question, and content myself, 
 in this place, to point out that Sir Frederick Bruce himself 
 makes his decision to rest solely on the ground of temporary 
 cxpedkncij, -whilst Lord Russell's doctrine, that it is one of the 
 "natural ohligations " of John Chinaman to be " squeezed"! 
 
 § The Tautai Wn, in observinpr relative to the tax pro]X)sed by him, that " this cannot 
 be considered squeezing ", was manifestly not aw;u-e of the Western saying : " Qui s'excune, 
 s\iccii!<e.'' 
 
 To illustrate the manner in which the ihnn'-fa'nfi tax is now levied at Shanghai, in the 
 very Bi-itish Settlement and even on articles of small value intended for local consumption, 
 the following case may sei-ve, whicli some time ago came before the Afixed Court. A highly 
 respectable German firm sent by one of their coolies a sample-piece of habit-cloth to a shop 
 situated, like their own hmc/, in the English Settlement. The coolie was stopped by a 
 Gliinaman, who claimed a tax of Tl. 0.4« (about 2.s-. ^d. British money) on the parcel. In 
 vain he was told that it contained foreign property. He demanded proofs tn that effect, and 
 vieniiirhile seized the cloth, and dcpositeil it in another shop. The firm referred- to very pro- 
 perly had the case at once submitted to the Mixed Coiul. The value of the piece of cloth
 
 FOREIGN MEECHANTS IN CHINA. 63 
 
 and illegally taxed at the will and pleasure of any Tau-tai, 
 presents one of those transparent fallacies, for which his 
 Lordship is so noted ; and further that a tax imposed upon 
 the inland trade of China, injuiiously affecting the interests 
 and .the Treaty -rights, of the foreign merchant, and a capi- 
 tation-tax laid on Chinese subjects, are two utterly different 
 
 things. 
 
 We have seen from statements of the Tsung-li Ya-men, 
 that the le-hui was imposed, — 1, with the view of making up 
 the deficiency in the land-tax, caused by the Tai-ping re- 
 bellion and the Nien-fei troubles; 2, for military purposes 
 alone; and 3, as a mere temporary measure. But the Tai- 
 ping rebellion came to an end a dozen years ago ; the Nien- 
 fei troubles, which a regiment or two of European Light 
 Cavalry would have suppressed within six months, have 
 been forgotten these eight years past; the State is less dis- 
 turbed by rebellion than it chronically is ; the Ai-my perhaps 
 more numerous but no better paid, than habitually ; China 
 has, now for years, been at peace with all the Outer World ; 
 and the laud-tax, it is credibly reported, yields once more 
 fully its medium amount of revenue to the public Exchequer. 
 
 Already at the meetings of the Mixed Commission for the 
 Kevision of the Treaty of Tientsin, the abolition of the le-kin 
 dues was more than once brought up for discussion. From 
 the Minute of Proceedings on March 3rd, 1868, it a23pears 
 that Mr. Tsai stated : — " It had been the intention of the 
 Tsung-li Ya-men " — the war in the south-east of China being 
 then at an end — " to suggest that the tax should be abolished, 
 
 ■was Tls. 21 (iibout £C.6.0) ; the legal Tariff import-duty, which had been paid upon it, 
 Tl. 0.89 (about 5s. 4d.) ; the chow-fang Tl. 0.4.4.5, and the '• squeeze " of the ta.K-gatherer 
 Tl. 0.0.1.5, or rather more than 50 per cent of the former, hvitd within one humh-ed yards of 
 the Foreif/n Custom- House. The Chinese Magistrate Chen decided, that " the man had com- 
 mitted a serious ofiEence in asking for the impost on the public road and on goods not a 
 Chinaman's, but in itself the tax wus perfcdlij riyht ; only its collection should be gone about 
 privately and quietly."
 
 G4 THE TREATY EIGHTS OF THE 
 
 but that the sudden appearance of Nien-fei in Chih-li, en- 
 taihng great expense, had rendered this impossible for the 
 present ; but, as soon as the high officers now commanding 
 armies in Chih-h had quelled the rebellion and returned to 
 their several jurisdictions,^ the Ya-men would take measures 
 to induce them to memorialize the Thrane, and to pray for 
 the abolition of the war -tax. The Ya-men could not do this 
 itself, the question being one not lying in its province." At 
 the meeting of the Commission on June 27th, 1868, the 
 Chinese Members again declared that, " the le4cin tax being 
 the principal source from which were di-awn the means of 
 maintaining troops for the pacification of the provinces, and 
 the ports being the most important preserves of such taxes, 
 it is not ]iossible, so long as the country continues to be dis- 
 turbed by rebels in arms, to order the provincial authorities 
 to desist from levying them ; but that it might be relied on 
 that they would be removed as soon as such pacification 
 should be accomplished." 
 
 In his Memorandum relative to this negative resolution 
 on the part of the Chinese Government, the British Minister, 
 (Sir Eutherford Alcock), says: — 
 
 The non-abolitiou of le-ldmr taxes at tlie poi'ts demands further consi- 
 deration It has been plainly stated before that one of the chief 
 
 objects he had in view in suggesting a Commission,, was, Istly, to correct 
 some great abuses in the collection of duties to the injury of trade (of 
 which the worst is the h-lduij) ; and 2ndl3', to supply compensation for 
 past losses entailed by those abuses, and thus forestal large claims for 
 indemnit3% otherwise like-ly to be preferred. Both these important ends 
 will be missed by the maintenance of the le-kinrf taxation on foreign goods 
 
 % In Clima armies are commanded by civilians,. The militatry profession is altogether 
 held in contempt. 
 
 • Sir Rutherfoi'd Alcock and the British Commissioner spell ; " le-Htiff", us though they 
 had associated the idea of feolinr/ or hechlng with the Chinese term. Mr. Wade, whose 
 e.ar does not catch the difference of sound Between tjin and chin, pronounces ^ ''cliln." 
 The southern pronunciation is kin. I have followed the accustomed mode yf writing 
 le-ktii.
 
 FOREIGN MERCHANTS IN CHINA. 65 
 
 more especially, and the main object of the Commission defeated. The 
 non-cousent to do away with all surcharges and objectionable taxes on 
 foreign trade in the vicinity of the Treaty ports, as soon as the tranquil- 
 hty of the country is assured and demands for special mihtary expendi- 
 ture have ceased, must be considered as a negation of any present relief 
 from taxation which is imposed contrary to Treaty ; and the period fixed 
 for its cessation much too uncertain, if not distant, to be satisfactory. 
 China, like most other countries, by entering into Commercial Treaties 
 with Foreign States,! has, in consideration of a fixed payment of mari- 
 time and transit duties, foregone all further right of taxation on what- 
 ever can be shown to constitute the foreign trade, import, or export. 
 Otherwise, of what use could be the provisions of the Treaties so care- 
 fully fixing and limiting the Tariff rates, import, export, and transit ? 
 If the Territorial Government retained the right to surcharge these at 
 pleasure, the whole trade could at any moment be stopped, or more gra- 
 dually dwarfed and finally ruined by burdens it is unable to bear, or 
 prohibitive duties. To say that the Chinese Government has urgent 
 need of funds is not a reason that can be accepted by a Treaty Power for 
 a plain violation of so essential an Article in all the Treaties, affecting 
 
 the prosperity and very existence of the trade The le-ldiuj taxes are 
 
 eminently variable, uncertain in amount from year to year, arbitrary in 
 their exaction, and otherwise constituting a violation of Treaty-rights. 
 The only portion of the le-kiny taxes, which are not in this sense illegal 
 and contrary to Treaty, are those levied on Opium. On that one article 
 alone the Chinese Government reserved its absolute right of taxation 
 
 without hmitation by Treaty, except as regarded the maritime duty 
 
 The difficulties of the Tsung-li Yameu and the necessities of the country 
 have been fully recognized by the British Minister, and there is every 
 desire on his part to avoid embarrassing discussions, or pressing for im- 
 practicable measures, either beyond or -wdthin the limits of existing 
 Treaties. But tliis one question of an assumed right of the Chinese 
 Government to tax foreign trade ad libitum is one of principle, and of 
 such vital moment to the interests of commerce that a British Minister 
 
 t It should be remembered, that the Chinese do not acknowledge the existence of 
 Foreign States in our sense, i. e. as independent States. They term Great Britain, Russia, 
 France, Germany, the United States, drc, " Outer " States, holding th em to be subject to 
 the One Emperor of the Earth, — whom we " barbarians " are in the habit of calling the Em- 
 peror of China, — and forming integral portions of the Chiug Empire Universal. In the 
 Chinese texts or translations of every ofiScial despatch and diplomatic document, the Wes- 
 tern Powers are represented as vassals of China.
 
 CO THE TREATY RIGHTS OF THE 
 
 can liavo no discretionary power in protesting against it as a violation 
 of Treaty. 
 
 Consequently, the subject was once more discussed at the 
 following meeting of the Revision-Commission on July 14th, 
 18684 The Minute of the Proceedmgs of that meeting 
 says : — 
 
 Of the demands, altogether negatived, it was necessary to press one : 
 tlic abolition of le-kin taxes and local dues upon articles of foreign com- 
 merce. It was represented that the xth Article of the Treaty of 
 Nanking provides that, even in Chinese hands, articles of British com- 
 merce should only pay such rates as are provided by Tariff, and that 
 the Treaty thus protecting the actual staples of British trade, in what- 
 ever hands, it could not be but an infraction to subject them, once out 
 of the foreign merchant's possession, at the ports and in the Interior, to 
 capricious and arbitrary levies. To this representation, however, the 
 Chinese members were prepared with an answer. The Tsung-h Ya-mrn 
 had not been acquainted with the Treaty of Nanking, their copy having 
 been carried away from Yueu-ming-yuen ; they acknowledged fully the 
 obligations it imposed, and recognized their application to the point in 
 question ; but they hoped that the British Minister would not press this 
 point ; urging, in support, the many concessions already made to foreign 
 commerce, the absolute necessity for raising funds to meet the enormous 
 military expenditure called for by the disturbances in the provinces, 
 the impossibility of raising these elsewhere than at the ports and upon 
 articles affecting foreign commerce ; saying that, as these necessities 
 disappeared, measures Avould be taken into consideration for the pro- 
 tection of foreign trade in the future. 
 
 At the last meeting of the Eevision-Commission, on 
 July 16, 1868, " the Chinese were informed that Sir Eu- 
 therford Alcock adhered to his decision, that the thii-ty- 
 
 X The Minute of the meeting states : — " Present : — Hsia. Tsai, Sun 1, Sun II, Kao, Mr. 
 Hart, and the British Mvinbcrs." This is, as regards the latter, only said to make a show. 
 The solitary British Member of the Commission was Mr. Hugh Fraser, Second Secretary 
 of Legation, a diplc\jiatist of the mildest character, who would appear to have 
 occasionally misunderstood the very memoranda of his chief. He was assisted by Mr . 
 Thonaas Adkins as Interpreter. Mr. Hart attended in his capacity of a Chinese mandarin. 
 Of the thirteen meetings of the Commission, a few were 4ield at the Tsuug-li Ya-men, a 
 few at the British Legation, and the majoiity at Mr. Hart's residence.
 
 FOREIGN MERCHANT IN CHINA. 67 
 
 11 radius was the most practical mode of dealing with the 
 le-kiii difficulty. The reply made was, that the Ya-meii 
 cannot see that the collection of the le-ldn, which is a spe- 
 cial tax for local wants and military purposes, constitutes 
 any hreach of Treaty. But they are willing to admit, that 
 foreign goods in transit should be treated alike, whether in 
 the hands of Chinese or foreign merchants, as prescribed 
 by Tariff, Eule 7, irhik under transit certificate ; the attempt 
 to pass goods otherwise than under such certificate ren- 
 dering them liable to be treated as native goods. The 
 thirty-// radius shaU be conceded so soon as the state of the 
 country will permit, a modification in the collection of tlie 
 
 opium tax being accepted as a partial equivalent The 
 
 Ya-men allows the application of the provisions of the 
 Treaty of Nanking only so far as to concede that Chinese 
 merchants, as well as foreign merchants, may convey 
 foreign goods free under transit-certificate." 
 
 The sudden and important change in the views of the 
 Tsung-li Ya-men, here indicated, fully coinciding as it does 
 with the corresponding views of the Inspector-General Mr. 
 Hart : are we not justified in concluding, that the latter were 
 suggested to the Ya-men by its confidential adviser ? Be this 
 as it may : the final reply of the Tsung-li Yamen to the two 
 principal propositions of the British Minister is tlius stated 
 by the Commission: — 
 
 1. Repayment in full of exactions on foreign trade in the Interior. — 
 A)>s\rcr: A proclamation will be issued by the Ya-mOn requiring the 
 Barrier Officials to act in accordance with Treaty, thus avoiding illegal 
 levies in future. Previous claims Avill be treated as they are found to be 
 acts of extortion by Officials, or the result of the separation of the goods 
 from tlic transit-passes. 
 
 2. No levy of Jc-ldii to bo made on produce for export or on foreign 
 imported goods within a radius of thirty //, to be measured from the
 
 08 THE TREATY RIGHTS OF THE 
 
 Custom-liouse at each port. — Jiisnrr: The war expenses of foreign conn - 
 tries arc met by loans nei^otiatod -with the merchants. Having no such 
 resource, China is compelled to resort to the le-Jdn. The impost is on the 
 native and not on the foreigner. Endless confusions and evasions would 
 result from the adoption of this suggestion to do away with the le-kiii 
 Avitliin the thirty. /i. The military supplies, too, would be interfered 
 with. This, after all, is a matter for the consideration of China herself. 
 With the disbanding of her armies and the restoration of tranquilhty, 
 alterations may be made in her fiscal arrangements and, out of consi- 
 deration for the merchants, the le-kin will be abolished. 
 
 Thus " the main object of the Commission," to use 
 Sir Rutherford Alcock's own words, " was defeated." The 
 faihire of the Revision itself, however, had h-orn the com- 
 mencement been insured by the late British Minister, in 
 selecting Mr. Hugh Fraser as the only British Member of 
 the Mixed Commission for discussing the preliminaries, 
 and his consenting to the Foreign Inspector-General of 
 Maritime Customs and Confidential Adviser of the Tsung-U , 
 Ya-men representing, in association with several native 
 members, Chinese interests. || As to his " thirty // radius " 
 scheme, which so gravely compromised, if it did not vir- 
 tually abandon, the very principle at issue : it was simply 
 a crotchet, furnishing but another proof of that want of 
 judgment, inconsistency, and diplomatic incapacity, which 
 have almost invariably paralyzed the natural abilities Sir 
 Rutherford Alcock is endowed with, and altogether frustrated 
 the usefulness of his public career. 
 
 What in this place alone interests us is, that the argu- 
 ments adduced in 1868, by the then British Minister in 
 support of the abolition of the le-kin tax, apply to it at 
 
 II "When, at the time of the attempted revising of the Treaty of Tientsin. Sir Rutherford 
 Alcock was directed by the then Government to place himself in communication with the 
 Tsuug-li Ya-men, we have his own words for the fact, that Mr. Hart, Inspector-General of 
 Foreign M;irine Onstoms having ii/fered his services as an intermediary, those services were 
 arcepti'd."— Tiic Xorlh-C/iiiui Dnilij Xiir.'t. :M:iy .SO, lS7:i.
 
 FOREIGN MERCHANT IN CHINA. G9 
 
 the present time with tenfold force. For, as has been al- 
 ready observed, the public revenue of China from the land- 
 tax and other ordinary sources has, some years since, re- 
 turned to its normal state of productiveness, amply suffi- 
 cient for the common wants of the State ; the country con- 
 tinues unusually quiet ; for the reconquest of Yiin-nan, now 
 accomplished, and the suppression of a chronic outbreak in 
 Kan-su, the Government had, and has, adopted no measures 
 involving an excess of usual expenditure ; no internal im- 
 provements are attempted ; and, certainly, no symptoms of 
 an aggressive or hostile spirit, on the part of any of his 
 "loyal Principalities "§ in the West, can have tended to 
 disturb the slumbers of " the Son of Heaven." Under these 
 circumstances two further preliminary questions present 
 themselves to us, namely : Whether the actual continuance 
 of the le-kiri tax is legal of itself ? and : What are the milit- 
 ary purposes, for which the large surplus of revenue, which 
 that tax is now yielding, and for the last ten years past has 
 yielded, to the Chines^ Exchequer, is applied ? I should 
 have no difficulty in showing that, according to the constitu- 
 tional laws and usages of China, the native trading commun- 
 ity has, and for several years past has had, a just claim to 
 relief from a burden imposed on it under exceptional circum- 
 stances, which have ceased to exist ; but, on the one hand, 
 the will of the Emperor is, in China, after all the source of 
 Chinese law ; and, on the other hand, the question is a pure- 
 ly Chinese one, which directly concerns no foreigner. It 
 would be out of place, therefore, here to discuss it ; although it 
 has no unimportant bearing on the so-called " sale of transit- 
 passes by foreigners," i.e. Chinese merchants availing them- 
 
 § Thus the Tliiitcd States, Great Britain, France, Gennany, Russia,, and otlu'r European 
 Countries were otiiciallj' designated in tlie late Jlr. Burliuyanie's Letters of Credence.
 
 70 THE TREATY RIGHTS OF THE 
 
 selves of foreign aid to avoid, in accordance with tlieir 
 constitutional rights, taxes unJawfully and arbitrarily im- 
 posed upon them.1I 
 
 The second question presents a dificrent aspect. It is ac- 
 knowledged by the Tsung-li Ya-mrn that the le-hin tax con- 
 tinues to be levied almost solely for military purposes ; and 
 it is certain, that the internal condition of China no longer 
 warrants an extraordinary impost for such purposes. Are we 
 tlien to conclude, that the military object, with a view to which 
 the Chinese Government refuses to abolish the war-tax, has 
 reference to the " Outer " relations of China ? It is a no- 
 torious fact, that the foreign policy of the Imperial Govern- 
 ment has resumed a strongly retrogressive tendency; that 
 the Plot of the Summer-Solstice, in 1870, for the expulsion 
 or massacre of Foreigners, and a partial success of which 
 w'as attained in Tientsin, had been designed with the full 
 cognizance and concurrence of the Government ; that the 
 Government had then, and has ever since, been making jjre- 
 parations for a foreign war ; that a large army, covering 
 Tientsin, is kept on a war-footing in the tranquil province 
 of Chih-li ; that another and larger army has been formed, 
 and is kept in reserve, in Kan-su ; that the Taku forts are 
 being continually strengthened, new forts erected and rifle- 
 pits dug for the defence of the Capital, the coast, the Yang-tze 
 and the Wu-smig ; that fresh encampments are being formed 
 ill the vicinity of the ports ; that the arsenals, navy-yards, 
 and powder manufactories are being extended, and kept in 
 full activity ; that immense quantities of foreign arms and 
 munitions of war are unported from every quarter ; and that 
 not only is this vast expenditure defrayed, in part out of the 
 foreign Maritime Customs revenue, in part out of the le-kin 
 
 ^ Compare also the following note *.
 
 FOREIGN MERCHANT IN CHINA. 71 
 
 tax, but that from both sources, more especially from the 
 latter, large sums, if I am well informed, have, during the 
 last five or six years, been sent up to Peking and allowed to 
 accumulate,* with the view of placing tlie Chinese Govern- 
 ment in a financial position to meet the exigencies of an- 
 other contest with Foreign Powers. Combining, then, all 
 the various and striking circumstances, here alluded to, we 
 are simply forced to arrive at the conclusion, that the le-Jcin 
 taxes continue to be levied by the Chinese Government, 
 unconstitutionally, upon the inland trade, and more espe- 
 cially upon the foreign inland trade of China, for the twofold 
 imrpose of obstruct ing that trade to the utmost extent practicahle, 
 and at the same time deriving from it the irai/s and means for car- 
 rying on a new and more formidable ivar, either ofensive or defen- 
 sive as circumstances may determine, against the West, Western 
 Commerce, and Western ideas of Development, Progress, and 
 Civilisation. 
 
 * This is incidentally confirmed by a memorial of Liu Kuo-knang, Superintending 
 Censor of Fu-kien, against a proposed increase of the Emperor's .Civil List, which api)eared 
 in the " Peking Gazette " for Oct. 22, 1871. " A short time ago," the plain spoken memo- 
 rialist states, "the department for controlling the affairs of the Imperial Household applied 
 for an additional annual grant, paijdbk out of the surplus Cuslimis dues, and His Majesty was 
 pleased to refer the application to a Committee of Inquiry. Eut such an aj^plication is, con- 
 sidering the distress of the people around Tientsin, very much out of pkipe at the jiresent 
 time, and diametrically opposed to the economy inculcated in recent edicts. True, it may 
 be said by way of excuse, that the Department only asks for a grant from " the surphis. of the 
 Customs dues, and does not contemplate anj' increase in the dues themselves. But it must 
 be borne in mind that, of lute years, the Customs underliiif/s" — this is [irettily put by the 
 Censor — '^ hnve ju-octiseil so much extortion, that merchtinfs stmid in drend oj' these Customs 
 alto(jether ; and, let the application for an allowance oxU of the surplus funds of the Customs 
 be acceded to, that these underlings will make it a haudle for wholesale squeezing." — For 
 these and other reasons, Mr. Liu prays that the appointment of the Coiumittce referred to 
 may be cancelled, and that the Department in question be directed to practice the economy 
 so much inculcated, to regulate its expenditure according to the iucoiue, and to furnish 
 truthful returns of that expenditure. 
 
 The principal points in this memorial, deserving of attention, are. that the native mer- 
 chants themselves had already then become impatient of the extortionate taxation, with 
 which the inland trade of China continues to be burdened ; and that the surplus revenue, de- 
 rived by the Government from this source, ruust have accumulated in Peking to so large a 
 sum. as to induce and warrant the Court to demand its i«hare of it.
 
 72 THE TREATY RIGHTS OF THE 
 
 IV. 
 
 TREATY RIGHTS OF THE FOREIGN MERCHANT. 
 
 Tlie English Treaties of Nanking and Tientsin — Main object of the ^\'ar 
 of 1842 — Art, x of the Treaty of Nanking — The Hongkong Declar- 
 ation — The Supplementary Treaty of Hoomun-Chae — Commercial 
 advantages secured by the Treaty of Nanking — Akt. ix, xui, xxiv, 
 XXVIII, and liv of the English Treaty of Tientsin — Rulks v, vii, and 
 VIII of the Supplementary Agreement of Shanghai — Art. viii of the 
 English Convention of Peking — Abt. xxiii and xxvii of the French 
 Treaty of Tientsin — Art. hi and iv of the Russian Treaty of Tien- 
 tsin — Akt. IV, V, and vii of the Russian Convention of Peking — 
 Main object of the war of 1859-GO — The principle of free transit 
 through China upheld in the Enghsh Treaty of Tientsin, but swerved 
 from in the subsequent Trade Rules — EiTors committed in framing 
 the Trade Rules — Summary of the Provisions of the Treaty of 
 Tientsin relative to Trade — Real meaning of the terms " transit- 
 certificate " and " transit-dues " — Lord Elgin on the commuted 
 Transit-dues tax — The optional clause of Art. xxviu of the Treaty 
 of Tientsin abrogated by Rule vii of the Shanghai Agreement — 
 Confusion of views on the subject — Commutatiou-tax includes le-kin 
 and all other inland charges whatsoever — No taxes on Foreign Com- 
 merce lawfully leviable in China, save those agreed upon by Treaty 
 — Illegal system of taxation resorted to by the Chinese Government 
 — Liability of the Chinese Government to demands for compensa- 
 tion, and of Chinese Customs-officials to judicial punishment — Pay- 
 ment of Commutation- tax exempts merchandize, on which it is paid, 
 irrespective of ownership — Conclusive evidence adduced to this effect 
 — Testimony of Lord Elgin, the Tsung-li Ya-mt'U, and the highest 
 native Provincial Authorities — Perfidy of the Chinese Government. 
 
 We may now proceed to a consideration of the treaties 
 tliemselves, so far as tbey relate to our subject ; premising 
 that, by the British Treaty of Tientsin : — 1. "Art. i. The 
 Treaty of Peace and Amity between the two nations (England 
 and China), signed at Nanking on the 29th August, 1842, 
 is renewed and conhrmcd (excepting the Supplementary
 
 FOREIGN MERCHANT IN CHINA. 73 
 
 Treaty and General Regulations of Trade, abrogated). 2. 
 Art. liv. The British Government and its subjects are con- 
 firmed in all privileges, immunities, and advantages confer- 
 red on them by previous Treaties ; and it is expressly stipu- 
 lated, that the British Government and its subjects will be 
 allowed free and equal participation in ah privileges, immun- 
 ities, and advantages that may have been, or may be here- 
 after, granted by His Majesty the Emperor of China to the 
 Government or subjects of any other nation. 3. Art. l. 
 All official communications, addressed by the Diplomatic 
 and Consular Agents of Her Majesty the Queen to the Chi- 
 nese Authorities, shall, henceforth, be written in English. 
 They will for the present be accompanied by a Chmese ver- 
 sion, but it is undei-stood that, in the event of there beinjx 
 any difference of meaning between the English and Chinese 
 texts, the English Government will hold the sense as ex- 
 pressed in the English text to be the correct sense. This 
 provision is to apply to the Treaty now negotiated, the 
 Chinese text of which has been carefully corrected by the 
 English original." 
 
 The Treaty of Nanking was concluded by the British Ple- 
 nipotentiary, Sir Henry Pottinger, at the head of a victorious 
 and resistless force, and ended a war, which had been mainly 
 undertaken with the aim of opening up China to foreign 
 commerce in general and to British commerce in particular. 
 Art. X. of this Treaty, relative to " Import- and Export- 
 Duties," reads thus : — 
 
 His Imperial Majesty the Emperor of China agrees to estabHsh at all 
 the ports, which are, by the Second Article of this Treaty, to be thrown 
 open for the resort of British merchants, a fair and regular Tariff of ex- 
 port- and import-customs and other dues, which Tariff shall be publickly 
 notified and promulgated for general information; and the Emperor 
 further engages that, when British merchandise shall have once paid at
 
 7'1 THE TREATY RIGIITS OF THE 
 
 any of the said por^s the regulated customs and dues, agreeable to the 
 Tariff to bo hereafter fixed, such merchandise may be conveyed by Chi- 
 nese merchants to any province or city in the Interior of the Empire of 
 China, on paying a further amount as transit duties, which shall not 
 exceed — per cent, on the tariff value of such goods. 
 
 The amount, here left open, was notified in a "Declara- 
 tion respecting Transit Duties," dated Hongkong, the 26th 
 June, 1843, and affixed to the Treaty on the exchange of 
 Eatifications ; when it had heen agreed and was declared 
 "that the further amount of duty to he levied on British 
 merchandise, as transit duty, shall not exceed the present 
 rates, which are upon a moderate scale ; and the Eatifica- 
 tions of the said Treaty are exchanged suhject to the express 
 declaration and stipulation herein contained." 
 
 However unsatisfactory the wording of this clause, chiefly 
 on account of the inappropriate term " Transit-Duties," used 
 in it, may now appear : there can exist no douht as to its 
 meaning on the part of Sir Henry Pottinger. His one great 
 ohject was to open up the Empire of Chma to British trade. 
 He had accomplished this ohject hy obtaining for the mer- 
 chant full liberty to carry on a free commerce with the Chi- 
 nese people at large, directly at five Chinese sea-ports as a 
 basis of operations, and through native traders with any 
 province or city in the Interior of the Empire, on the pay- 
 ment to the Chinese Government of certain fair and regular 
 export- and import-customs and other dues, as fixed by a 
 Tariff to be publicldy notified and promulgated for general 
 information. Such was the main agreement, concluded by 
 Sir Henry Pottinger between England and China. But, on 
 the circumstance being pressed upon his consideration that 
 certain inlaml taxes were habitually levied by the Chinese 
 Government on native trade : the British Plenipotentiary
 
 f OR^IGN MEE^JHAST IN CHINA. 75 
 
 finally consented to the British merchant also paying the 
 same taxes on British merchandise sent through, or by, 
 Chinese traders for sale to an inland market ; tvith a i^roviso 
 that they should in future not exceed the rates then actually leviable^ 
 — those rates heing upon a moderate scale. It is true, that 
 the actual scale, at that period in use, was not appended to 
 the Declaration ; hutj as will be presently seen, the scale, 
 referred to., was i3ie one fixed by the Chinese Board of Ee- 
 venue and published in its -official manual : iJc !£ ^ US SiJ JO ; 
 ;and, no le-Mn or chov)-fang taxes being imposed upon trade 
 .^t the time, it follows, that no le-hin, ckoiv-fang, or any extra- 
 ordinary taxes, were and are, by the Treaty of Nanking, 
 legally le¥iable on British merchandise within the limits of 
 .the Chinese Empire. 
 
 On reading the *' Supplementary Treaty made at Hoomun- 
 €hae on the 8th October, 1843, it might appeal* even dubious, 
 whether the payment of the ordinary inland taxes on trade^ 
 by Bir Henry Pottinger agreed to, tinder the designation of 
 *' Transit-Duties," in the Treaty of Nanking, had not been 
 again abrogated. Such, however, is not the ease ; as we find 
 from the following, subsequently published documents : — 
 
 Sir He^vrrj Pottinger to the Earl of Aherdeen. 
 
 Oovernmeut Honse, Victoria, Hongkong. 
 February 27, 1844. 
 My Lord, — I have tlie honor to forward to your Lordship a statement 
 of Transit or Inland Duties, levied in the Chinese Empire. I have, &o. 
 
 Govermmnt Notification^ 
 The annexed translated Extract regarding the Transit or Inland Duties 
 of the Chinese Empire is published for general information. 
 
 By order of his Excellency, tliC Superintendent of Trade, &c., in China, 
 
 (Signed) Hichaed Woosnam. 
 Government House, Victoria, Hongkong, February 20, 1844. 
 
 True Extract, (Signed) Ciiaeles Gitzlaff, 
 
 Chinese Secrrtari/. 
 
 u
 
 70 THE TEEATY RIGHTS OF THE 
 
 " 'Transit Duties paid at the Cnstom-honses of Kan, Tucphuj and Pihsin, on 
 
 goods that are fjoinrj down to Canton, or thence transported to the 
 
 Northeri} Provinces. 
 
 (Extracted from the " Hoopootsilile," 30tb and 31st vols., a work on the 
 
 revenues, jDuhliiihed by Imperial authority.) 
 
 EXPORT. 
 
 Kankwan. Taepingkwan. Pihsinkwan. 
 
 T. m. c. c. T. m. c. c. T. m, c. c. 
 
 Alum, p?r 100 catties .. .. 8 3-10 2 7 6-10 8 
 
 Aniseed star, ditto 0042 0042 0040 
 
 Arsenic, ditto 2 6 3-10 2 7 6-10 4 
 
 Banibao screens and bamboo ware of 
 
 all kinds, ditto — 0040 0040 
 
 Camplior, ditto 0105 0364 0140 
 
 Capoor catehery, ditto . . . . — 2 8 1-5 — 
 
 Cassia, ditto 3 5J^ — — 
 
 China root, ditto . . . . . . 3 5 1-5 0057 6-10 0040 
 
 Copper ware, pe^vter ditto, &c. ditto 9 1 9-l0 0150 0600 
 
 Cubebs, ditto 18 7 7-10 — 4 
 
 Galingal ditto 17 6-10 2 7 6-10 4 
 
 Gamboge, ditto 003 5^ 0338 4-10 13 6-10 
 
 Grass cloth, all kinds, per piece .. 5 9 1-10 7 8-10 2^ 
 
 Hartall, per 100 catties .. .. 4 5 9 6-10 025 6 0100 
 
 Lead (white lead), ditto . . . . — — 13 6 
 
 Mats (straw, rattan, bamboo, &c.) 
 
 ditto 2 6 3-10 117 — 
 
 Musk, per catty 9 19 1-10 3 142 1360 
 
 Nankeen and cotton cloth, of all 
 
 kinds, per 100 catties .. .. 005 2^ 0455 0025 6-10 
 
 Rhubarb, ditto 2 3^ 0027 6-10 0040 
 
 Silk, raw, first quality, ditto .. 1000 1432 0857 3-5 
 
 Coarse, or refuse silk, ditto . , . . 4 5 9 6-10 0364 0040 
 Silk, piece goods, ribands, tliread, 
 
 &c 9 19 1-10 3 14 2 1-472 
 
 Middling raw silk, ditto .. .. — 0724 0680 
 
 Silk and cotton mixtures, silk and 
 
 woollen mixtures, and goods of 
 
 siich classes, per piece .. .. — 0724 0012 
 
 Soy, per 100 catties 2 6 2 6-l0 2 7 6-10 4 
 
 Tea, coarse, ditto 7 8 8-10 042 0042 
 
 perlObaskts. per 100 catts. per 100 catts. 
 
 Tea, fine, ditto 3 9 4-10 7 6 — 
 
 Chekeang Teas. 
 
 Vermillion, per 100 catties .. .. 5 2 5 2-10 14 4 6 13 6
 
 T. m. c. c. 
 
 T. m. c. c. 
 
 14 4 6 
 
 4 
 
 4 2 
 
 4 
 
 117 
 
 4 
 
 1116 
 
 13 6 
 
 3 14 2 
 
 13 6 Q 
 
 G 1 7. 
 
 2 
 
 FOREIGN MERCHANT IN CHINA. 77 
 
 IMPORTS. 
 
 ICankwan. Taepingkwan. Pilisinlcwan. 
 T. m . c. c. 
 
 Assafcetida, per 100 catties . . . . 17 5 9^ 
 
 Beeswax, ditto " 3 9 3 9-10 
 
 Betelnut, ditto .. ... .. 17 6-10 
 
 BichodeMar, ditto.. .. .. 3 5 2-10 
 
 Birds' nests, ditto 117 2 7-10 
 
 Camphor (Malay), per catty . . 9 2 
 
 Cloves, per 100 catties . . . . 2 3 4 6-10 
 
 Carnelian beads, ditto . . ..0050 — — 
 
 Cotton, ditto — — 0080 
 
 Cotton manufactures of all kinds, 
 
 whether coarse or fine, per 10 pieces 10 
 
 Cow bezoar, per catty . . . . 117 2 7-10 
 
 Gutch, per 100 catties . . . , 14 4-5 
 
 Elephants' teeth, ditto . . . . 2 3 4 3-5 
 
 Gold and silver thread, per catty . . 2 6 2 3-5 
 
 Gum Benjamin, per 100 catties . . 14 8 
 Olibamim, ditto . . . . . . — 
 
 MjTrh, ditto 2 3 4 3-5 
 
 Horns, unicorns' or rhinoceros, per 
 
 100 catties 17 5 
 
 Quicksilver, ditto 02343-5 
 
 Nutmegs, ditto . . . , . . 10 
 
 Pepper, ditto . . .. .. .. 3 5 19-10 
 
 Putchuck, ditto 2 3 4 3-5 
 
 Rattans, ditto .. .. .. 4 9 9-10 
 
 Rose maloes, ditto 0938 4-10 
 
 Sharks' fins ditto 5 8 7-10 
 
 Smalts, ditto .. 6 5.6^ 
 
 Ebony, ditto .. .. .. .. 9 3 4-5 
 
 Sandalwood, ditto . . . • • • 5 8 6^ 
 
 Sapanwood, ditto . . . . . . 14 2-5 
 
 Woollen nianufactures,, per pleca . . 2 
 
 Narrow woollens, per chang 141 
 
 incjies 0100 
 
 Dutch camlets, ditto .. .. 2 90 
 
 Camlets, ditto 2 
 
 Woollen yarn, por 100 catties . . 3 14 2- 
 
 14 8 
 
 5 5 1-5 
 
 1116 
 
 2 4 
 
 18 3 4-5 
 
 2 
 
 14 4 6 
 
 10 
 
 15 
 
 2 4 4-5 
 
 3 6 7 
 
 2 
 
 3 6 7 
 
 — 
 
 6 8 4 
 
 2 
 
 14 4 6 
 
 13 6 
 
 14 4 4 
 
 13 6 
 
 18 3 3-5 
 
 2 3 4 3-5 
 
 2 5 9 
 
 2 
 
 3 6 6 
 
 2 
 
 4 2 
 
 16 
 
 8 3 4 
 
 — 
 
 117 
 
 4 
 
 14 4 6 
 
 — 
 
 — 
 
 2 
 
 2 5 9 
 
 2 
 
 4 2 
 
 2 
 
 2 
 
 110 2-5 
 
 
 per 1 chang. 
 
 10 
 
 110 6-5 
 
 — 
 
 110 2-5 
 
 — 
 
 110 2-5 
 
 3 14 2 
 
 2 4 4-5
 
 78 THE TREATY RIGHTS OF THE 
 
 What, then, the Treaty of Nanking accomphshed for Com- 
 merce, may be stated in a few concise words, thus : — It threw 
 open the whole of the dominions of the Emperor of China 
 to British and Foreign Trade on the following condition8,viz., 
 Firstly^ that the merchants confine their direct trade to the 
 ports of Canton, Amoy, Fuchow, Ningpo, and Shanghai ; at 
 which ports full liberty was given of residence and transacting 
 business in the way of importing, for sale and consumption 
 throughout China, British and foreign merchandise on pay- 
 ment to the Chinese Government of certain import -duties, 
 fixed by Tariff, and exporting Chinese or native merchandise 
 from all parts of the Empire' on payment to the Imperial 
 Government of certain export-duties, fixed by Tariff, upon 
 such merchandise, and on the further payment of certain 
 tonnage-dues on British and foreign vessels entering the five 
 treaty-ports. Secondly, that the foreign; merchants person- 
 ally abstain from entering the Interior of the country for 
 purposes of trade, but have full and complete liberty to carry 
 on business with the Chinese people at large in, and to con- 
 vey British and foreign merchandise for sale and consump- 
 tion., to, any part, province, or city of China, and freely to 
 circidode such rmrchandise tvithin tJie Chi7i$se dominions, through 
 the agency of native traders, and on payment to the Chinese 
 Government of such moderate inland taxes as trere at that 
 period levied on the home trade, and ivith the proviso that the then 
 customary rates of those taxes were not to he exceeded in future. 
 When, therefore^ the Inspector-General j. Mr. Hart, states that 
 " the Treaty of Nankin stipulated for the conveyance of 
 foreign merchandise into tlie interior by Chinese under a 
 transit system," he is in error and has no authority for his 
 assertion. It would be about as reasonable to say that the 
 road-tolls and similar taxes, which used to be, or still con-
 
 FOREIGN MERCHANT IN CHINA. 79 
 
 tiniie to be, levied in England, were levied under a *' transit- 
 system," as it is to say that the inland barrier-charges, to 
 which the home trade of China was subject in 1842, were 
 levied under such a system. 
 
 Turning now to the British Treaty of Tientsin and other 
 Treaties, — for we have to bear in mind the tenour of Art. liv. 
 of the former contract previously quoted, — we find the 
 principal provisions, bearing on oiur subject, to be the 
 following : — 
 
 Beitish Treaty of Tientsin, signed June 2G, 1858, 
 KATiFiED October 24, 1860. 
 
 Art. IX. — British subjects are hereby authorised to travel, for their 
 pleasiu'e or for purposes of trade, to all parts of the interior, under pass- 
 ports.... No opposition shall be offered to his (the bearer of a passport 
 not irregular) hiring persons or hiring vessels for the carriage of his 
 baggage or merchandise.... 
 
 Art. xui. — The Chinese Government will place no restrictions what- 
 ever upon the employment, by British subjects, of Chinese subjects in 
 any lawful capacity. 
 
 Art. XIV. — British subjects may hire whatever boats they please for 
 the transport of goods or passengers.... The number of these boats shall 
 not be limited, nor shall a monopoly in respect either of the boats, or of 
 the porters or coolies engaged in carrying the goods, be granted to any 
 parties. 
 
 Art. xsiv. — It is agreed that British subjects shall pay, on all mer- 
 chandise imported or exported by them, the duties prescribed by tliG' 
 Tariff ; but in no case shall they be called upon to pay other or higher 
 duties than are requu'ed of the subjects of any other foreign nation. 
 
 Art. xxvni. — Whereas it was agreed in Article x. of the Treaty of 
 Nanldng that British imports, having paid the tariff duties, should be- 
 conveyed into the interior free of all fm-ther charges, except a transit 
 duty, the amount whereof was not to exceed a certain per-centage on 
 tariff value ; and whereas no accurate information having been furnished' 
 of the amount of such duty, British merchants have constantly com- 
 plained that charges are suddenly and and arbitrarily imposed by the 
 provincial authorities as transit duties upon produce on its way to tho
 
 80 THE TREATY RIGHTB OF THE 
 
 foreign market, and on imports on their way into the interior, to the 
 detriment of trade ; it is agreed that within four months from the signing 
 of this Treaty, at all ports now open to British trade, and within a similar 
 period at all ports that may hereafter be opened, the authority appointed 
 to superintend the collection of duties shall be obhged, upon application 
 to the Consul, to declare the amount of duties leviable on produce between 
 the places of production and the port of shipment, and upon imports 
 between the Consular port in the question and the inland market named 
 by the Consul ; and that a notification thereof shall be pubhshed in 
 English and Chinese for general information. 
 
 But it shall be at the option of any British subject desiring to convey 
 produce purchased inland to a port, or to convey imports from a port to 
 an inland market, to clear his goods of all transit duties, by payment of 
 a single charge. The amount of this charge shall be leviable on exports 
 at the first barrier they may have to pass, or, on imports, at the port at 
 which they are lauded ; and on payment thereof, a certificate shall be 
 issued, which shall exempt the goods from all further inland charges 
 whatsoever. 
 
 It is further agreed that the amount of this charge shall be calculated, 
 as nearly as possible, at the rate of two and-a-half per cent, ad valorem, 
 and that it shall be fixed for each article at the conference to be held at 
 Shanghae for the revision of the tariff. 
 
 It is distinctly understood that the payment of transit dues, by com- 
 mutation or otherwise, shall in no way affect the tariff duties on imports, 
 or exports, which will continue to be levied separately and in fuU. 
 
 Agreement in Puesuance of Art. xx^^. and xxviii. of the Treaty of 
 Tientsin signed at Shanghae, No\-ember 8, 18u8. 
 
 EuLE 0. — Bcfjarding certain Commodities hei'etofore Contraband. — The 
 restrictions affecting trade in opium, cash, grain, pulse, sfdphur, brim- 
 stone, saltpetre, and spelter, are relaxed, under the following conditions: 
 
 I. Opium will henceforth pay thirty taels per pieul import duty. The 
 importer will sell it only at the port. It will be carried into the interior 
 by Chinese only, and only as Chinese property : the foreign trader will 
 not be allowed to accompany it. The provisions of Article ix of the 
 Treaty of Tientsin, by which British subjects are authorized to proceed 
 into the interior with passports to ti-ade, will not extend to it, nor will 
 those of Article xxviii of the same treaty, by which the transit-dues are
 
 FOREIGN MERCHANT IN CHINA. 81 
 
 regulated. The trausit-dues on it will be arranged as tlie Chinese Gov- 
 ernment see fit ; nor is in futiu-e revisions of the Tariff the same rule of 
 revision to be applied to opium as to other goods. 
 
 EuLE 7. — Transit Dices. — It is agreed that Article xxvm of the Treaty 
 of Tientsin shaU be interpreted to declare the amounts of transit- dues 
 legally leviable upon merchandise imported or exported by British sub- 
 jects, to be one-half of the tariff duties, except in the case of the duty- 
 free goods hable to a transit-duty of 2^ per cent, ad valorem, as provided 
 in Article ii of these Eules. Merchandise shall be cleared of its transit 
 dues under the following conditions : — 
 
 In the case of Imports. — Notice being given at the port df entry, from 
 which the Imports are to be forwarded inland, of the nature and quant- 
 ity of the goods, the ship from which they have been landed, and the 
 X)lace inland to which they are bound, with all other necessary particu- 
 lars, the Collector of Customs will, on due inspection made, and on re- 
 ceipt of the transit-duty due, issue a transit-duty certificate. This must 
 be produced at every barrier station, and *isefZ. No further duty wiU be 
 leviable upon imports so certificated, no matter how distant the place of 
 their destination. 
 
 In the case of Exports. — Produce purchased by a British subject in the 
 interior will be inspected, and taken account of, at the first barrier it 
 passes on its way to the port of shipment. A memorandum showing 
 the amount of the produce and the port at which it is to be shipped, will 
 be deposited there by the person in charge of the produce ; he wiU then 
 receive a certificate, which must be exhibited and vised at every barrier, 
 on his way to the port of shipment. On the arrival of the produce at 
 the barrier nearest the port, and the transit-dues due thereon being paid, 
 it win be passed. On exportation the produce will pay the tariff-duty. 
 
 Any attempt to pass goods inwards or outwards, otherwise than in 
 compliance with the rule here laid down, will render them hable to con- 
 fiscation. 
 
 Unauthorised sale, in transitu, of goods that have been entered as 
 above for a port, wiU render them hable to confiscation. Any attempt 
 to pass goods in excess of the quantity specified in the certificate will 
 render all the goods of the same denomination, named in the certificate, 
 liable to confiscation. Permission to export produce, which cannot bo 
 proved to have paid its transit-dues, will be refused by the Customs until 
 the transit-dues shall have been paid. The above being the arrange-
 
 82 THE TREATY RIGHTS OF THE 
 
 ment agreed to regarding the transit-dues, which will thus bd levied 
 once and for all, the notification required under Article wvm of tho 
 Treaty of Tientsin, for the information of British and Chinese subjects, 
 is hereby dispensed with. 
 
 Rule 8. — Foreujn Trade under Passport. — It is agreed that Article rx. 
 of the Treaty of Tientsin shall not be interpreted as authorising British 
 subjects to enter the capital city of Peking, for the purposes of trade. 
 
 British Contention of Peace, signed at Peking, October 24, 1860. 
 Art. ^^^. — It is agreed that, as soon as the ratifications of the Treaty 
 of the year one thousand eight hundred and fifty-eight shall have been 
 exchanged, His Imperial Majesty the Emperor of China shall, by decree, 
 command the high authorities in the capital, and in the provinces, to 
 print and publish the aforesaid Treaty and the present Convention, for 
 general information. 
 
 French Treaty op Tientsin, signed June 27, 1858. 
 
 Art xxm. — All French merchandise, after having paid at one of th'O 
 ports of China the Customs duties prescribed by the Tariff, may be con- 
 veyed into the Interior, without being subjected to any other additional 
 charge besides the payment of transit dues according to the moderate 
 rates actually agreed upon, and which transit-dues shall be hable to no 
 further augmentation in future. 
 
 If Cliiuese Customs-officials, contrary to the tenour of the present 
 Treaty, were to exact illegal taxes, or to levy higher rates of duties, they 
 are to be punished in accordance with the laws of the Empire. 
 
 Art. xxvii. — In consideration of the payment of these duties (import 
 and export duties as fixed by Tariff), the amount of which it is expressly 
 prohibited to increase, and which shall be enhanceable by no kind of 
 charge or additional tax whatsoever, French subjects will be at hberty to 
 import into China for any destination) all merchandise which, at the 
 date of the signing of the present Treaty and according to the classifi- 
 cation of the annexed Tarifif, is not the object of a formal prohibition or 
 a special monopoly. 
 
 " E^gleiients Commerciaux," attached to the French Treaty 
 OF Tientsin. 
 
 Rule vii. — It is agreed that the transit dues, referred to in Art. xxn-. 
 of the Treaty, shall be one half of the duties fixed by Tari£f, excepting
 
 FOREIGN MERCHANT IN CHINA. 83 
 
 the duty-free goods, mentioned in Rule ii., whicli shall only pay a transit 
 duty of 2i per cent, ad valorem.^ 
 
 American Supplementary Treaty of Shanghai, 
 SIGNED November 8, 1858. 
 
 EuLE vn. — Transit Dues. — It is agreed that the transit dues upon goods 
 imported or exporte d shall be one half of the tariff duties, except in the 
 case of the duty-free goods liable to a transit duty of 2^ per cent, ad va- 
 lorem .... It being allowed by this rule that the transit dues on mer- 
 chandise shall be levied once for all , no others shall be demanded after 
 they have been paid. 
 
 Eussian Treaty of Tientsin, signed June 1/13, 1858. 
 
 Art. ui. — Henceforth the Commerce between Eussia and China shall 
 not be restricted to the places fixed upon at the frontiers, but shaU be 
 free also by sea .... 
 
 Art. IV. — As regards the Commerce by sea and all details relative to 
 it ... . Eussian subjects shall conform themselves to the general regula- 
 tions of foreign trade, in force at the ports of China .... 
 
 Convention of Peking, signed November 14/26, 1860, and affixed 
 TO THE Eussian Treaty of Tientsin. 
 
 Art. IV. — At all places, along the frontiers agreed upon in the first 
 Article of this Convention, Eussian and Chinese subjects may hold free 
 intercourse. There shall no duties be levied in any case ; and all offi- 
 cials, stationed on the frontiers, shaU afford protection to merchants 
 who quietly carry on trade. 
 
 Art. v. — . . . Eussian merchants, visiting the Chinese marts, shall be 
 under no restrictions either as to the time at which they may visit such 
 places or the duration of their stay ; but the number of merchants at 
 any one place shall not exceed two hundred. 
 
 Att. VII. — The merchants of both countries may trade as they please at 
 the various marts, and shall not be subjected to any obstructions on the 
 part of the officials ; they may as they think proper frequent the shops 
 and markets for trade and barter, and they may there make ready money 
 payments or, if they trust each other, open credit accounts ; and as to 
 the length of time, that the merchants of the one country may sojourn 
 
 t The provisions of the North-German Treaty of Tientsin, signed September 2, 1861, 
 
 and ratified January 14, 1803, at Shanghai, arc identical with thoac of the French Treaty.
 
 84 THE TREATY RIGHTS OF THE 
 
 in the other country, the only hmit shall be the merchants' own pleasure 
 and convenience. i 
 
 I need not remind the reader that, consequent on the 
 British Treaty of Tientsin and the subsequent Convention, 
 in addition to the five Chinese ports aheady open, Swatow, 
 Takow, Taiwan, Tamsui, Kehmg, Chinldang, Kiuldang, 
 Hankow, Chefu, Tientsin, and Nuchuang were rendered 
 effectually accessible to foreign trade ; that the ratification 
 of the Treaty had to be enforced by the war of 1859-1860 ; 
 and that the Convention of Peace, which concluded that 
 war, was signed, after the destruction of the Emperor's 
 Summer-Palace, under the very walls ofthe Capital of China. 
 
 The main object of the second Chinese war was identical 
 with that of the first one, namely, the more efficient opening 
 up of the Interior of the country to foreign commerce in 
 general, and British commerce in particular. Yet, strange 
 to say, from the wording of Art. xxviii. of the Treaty of 
 Tientsin it would appear that Lord Elgin, who conducted 
 the whole of the negotiations, had been acquainted with 
 neither the Hongkong Declaration nor the Supplementary 
 Treaty of " Hoomun-Cliae." It is true, that the Treaty of 
 Tientsin secures great additional advantages to the mer- 
 chant, and, so far as the text itself goes, fully upholds and 
 further carries out the principle of unrestricted free trade in 
 and u-ith the Interior of China on the sole condition of the paij- 
 mcnt of certain fixed duties to the Chinese Government ; but un- 
 liaj)pily, this principle was swerved from or relaxed, when 
 practically applied in the Rules of Trade, appended to the 
 Tariff. 
 
 In framing these Pules, three grave errors were com- 
 mitted. The first is, that, as has been just observed, a 
 
 X There exists a later Convention between Russia and China, the text of -which I have 
 not before me.
 
 FOREIGN MERCHANT IN CHINA. 85 
 
 material restriction was by Eule vii. placed on the free cir- 
 culation, in the Interior, of goods which had paid the pre- 
 scribed duties, by agreeing that, on sending from the open 
 ports foreign merchandise inland, a given place of destination 
 had to be specified and declared, and that the accompanying 
 " transit-duty certificate " had to be produced and vised at 
 every intervening harrier. The second error committed is, 
 that, contrary to the provisions of both the Treaties of Nan- 
 king and Tientsin, the capital city of Peking was, for pm*- 
 poses of trade, by Rule viii. excluded from the operations of 
 the latter Treaty. The third error consists in this, that ihe 
 inland taxes, to the additional payment of which Lord Elgin 
 consented, were designated as " transit dues," and the pro- 
 tective certificate, to be issued in consequence of such pay- 
 ment, as a " transit-diViiy certificate ;" and that it was stated 
 in Rule vii., that " no further duty will be leviable upon im- 
 ports so certificated, no matter hoiv distant the place of their 
 destination." I shall have to revert to these topics. All I desire 
 to point out in this place is, that, — although in the "Agree- 
 ment in pursuance of Articles xxvi. and xxviii. of the Treaty 
 of Tientsin, signed at Shanghai, Nov. 8, 1858," it is stated 
 that "the said (TarijS: and) Rules shall be equally bindmg 
 on the Governments and subjects of both countries with the 
 Treaty itseK," yet, — when there exist difficulties of interpre- 
 tation, whether real or apparent, between the Treaty and 
 the Rules, the Rules are to he construed in conformity with the 
 Treaty, and not the Treaty in conformity with the Rides. 
 
 Now, on an analysis of the Treaty of Tientsin, so far as it 
 relates to British and foreign commerce, it will, taken in 
 connection with the Treaty of Nanking and other Treaties 
 and Conventions (Art. i. and liv.), be found to pro- 
 vide : —
 
 80 THE TREATY RIGnTS OF THE 
 
 1. Generally. — That the whole of the dominions of the 
 Emperor of Cliina, with the sole exception of the capital 
 city of Peking (Rule viii.), are thrown open to British and 
 other foreign trade against the payment to the Chinese Go- 
 vernment of certain /.T<^<:/ duties, import-, export-, " transit "-, 
 and tonnage-dues ; such trade, subject to certain rules rela- 
 tive to inland traffic (Art. ix.. Rule vii.), to be unrestrictedly 
 carried on from certain specified ports with any part of the 
 Empire — the capital alone excepted, — in the way of purchas- 
 ing, selling, or bartering foreign and native merchandise, 
 whether by or through British and foreign merchants and 
 agents (Art. ix.) or through Chinese agents and traders 
 (Art. XIII.), and with the fullest Hberty, on the part of 
 British and other foreign subjects, to transact business and 
 to stay at any mart or place in the Interior of the country, 
 (so long at it may suit their own pleasure or convenience 
 Art. IX.; Russ. Con. Art. v., vii.). 
 
 II. As to Imports. — 1. That British and other foreign sub- 
 jects, residing whether permanently or temporarily, at one 
 of the Chinese ports open to foreign trade, shall be at liberty 
 to import, from foreign parts — including the British possession 
 of Hongkong — into such Chinese ports any kind of British 
 or foreign merchandise ; and after having paid to the Chi- 
 nese Government the stipulated import-duty, if any, on the 
 goods imported, that they shall be fm'ther at liberty to dis- 
 pose of, sell, or barter the same, in loco, to foreigners or 
 natives, either for re-sale and trade in loco or inland, or for 
 individual use and consumption, without such goods ^ be they in 
 tlie possession of natives or foreigners, being liable, on tlie part of 
 the Chinese Government or of Chinese officials, to any additional 
 taxation or charges whatsoever. 
 
 2. That British and other foreign subjects, resident at
 
 FOREIGN MERCHANT IN CHINA. 87 
 
 one of the open ports, shall be at liberty to convey or to 
 have conveyed by foreigners or natives to any given destina- 
 tion, place, or mart within the dominions of the Emperor of 
 China, — Peking alone excepted, — for barter or sale to Chi- 
 nese subjects, and whether for re-sale and trade fm-ther in- 
 land, or individual use and consumption in loco or otherwise, 
 any British or foreign merchandise imported into the said 
 port, after having paid to the Chmese Government upon 
 such merchandise, the stipulated import-duty, if any, and, 
 in lieu of all inland taxes and charges leviable or levied upon 
 native trade, an inland duties commutation-tax of one half 
 the import-duty fixed by Tariff, or of 2^ per cent, ad valorem 
 on goods not subject to import-duty, tvitJioiit such goods, 
 ivhether the property, or in the possession, of Chinese, British or 
 other foreign subjects, being liable, on the part of the Chinese Gov- 
 ernment or of Chinese officials, to any additional taxation or 
 charges ivhatsoever. 
 
 3. That, upon the payment to the Chinese Government 
 of the stipulated import-duty, if any, and the stipulated 
 inland charges commutation or " transit"-tax on any foreign 
 merchandise whether the property intended for sale in the 
 Interior, or in the possession of Foreigners or Chinese, a 
 certificate of payment shall be given to accompany such 
 merchandise, and which certificate shall exempt the same — 
 i. e. the foreign goods on ivhich the stipidated import and inland 
 exemption or commutation-tax has been paid, ivhether such goods 
 be the property, or in the possession, of Chinese or Foreigners, 
 from all further inland charges whatsoever. 
 
 III. As to Exports. — 1. That British and other foreign 
 subjects, resident at one of the open ports, shall be at liberty 
 to purchase or barter in loco any native produce or mer- 
 chandise, and export the same to foreign parts, on paying
 
 88 THE TREATY RIGHTS OF THE 
 
 to the Chinese Government upon such goods the expoi*t- 
 duty, if any, stipulated by Tariff. 
 
 2. That British and other foreign subjects, resident at 
 one of the open ports, shall be at liberty at any mart or 
 place within the dominions of the Emperor of China, 
 Peking alone excepted, to purchase or barter, directly or 
 through agents whether foreigners or natives, and whether 
 for immediate payment and delivery, or for payment and, or 
 on, delivery at the poi-t {Russ. Conv. Art. vii), any Chinese 
 produce or merchandise for exportation to foreign parts ; 
 to convey the same or have the same conveyed, by foreign- 
 ers or natives, to one of the open ports, on paying to the 
 Chinese Government, at the last barrier or Custom-house 
 between the place of barter or purchase and the specified 
 port, an inland charges commutation or " transit "-tax of 
 one-half the export-duty fixed by Tariff, or of 2|- per cent 
 ad valorem on goods not subject to export-duty; and, after the 
 arrival of such goods at the port, to export the same to 
 foreign parts, on further paying upon them to the Chmese 
 Government the export-duty, if any, stipulated by Tariff. 
 
 3. That, upon promise of pajinent to the Chinese Gov- 
 ernment of the stipulated inland charges commutation- or 
 ' *transit"-tax on Chmese produce or merchandise, to be bought 
 inland for exportation by British or other foreign subjects 
 at one of the open ports, a certificate shall be given by 
 the proper Chinese Authorities to accompany such goods, 
 and which certificate shall exempt the same, — i. e. the goods, 
 on which the pcujmcnt of the stipulated inland exemption- or 
 " transit "- duty has heen promised, whether these goods are by 
 the native trader sold for immediate payment and delivery on the 
 spot or for payment and, or on, delivery at the specified port, — 
 from all furtftcr inland charges whatsoever.
 
 FOREIGN MERCHANT IN CHINA. 89 
 
 There are only three or fom* points inckided in this resume, 
 which require explanation or special proof. The first is, 
 that, what has improperly been termed a ^ra7isiY-certificate 
 and transit-di\es, is in reality and should have been termed 
 an inland duty-exemption certificate and an inland charges commu- 
 tation-tax, respectively. I have previously shown that the 
 term, taken in its accustomed English sense, is wholly in- 
 applicable in China, and therefore could not but lead to 
 misconceptions and false impressions, more especially in 
 connection with the mistake, made by Lord Elgin, in con- 
 senting by Tariff-Eule vii. to a given mart or destination 
 having to be specified at the port for all merchandise, in- 
 tended for transmission into, and sale in, the Interior of the 
 country. The broad principle, universally accepted, and 
 clearly laid do^n in Art. xxviii. of the Treaty itself, is that, 
 by the payment to the Chinese Government of a stipulated im- 
 port- and ''transit-," i.e. an inland charges commutation-tax, dXi. 
 merchandise, intended for sale in the Interior, acquires, and 
 in that case should acquire, the right of free and unrestricted 
 circidation ivithin the dominions of the Emperor of China. Indeed, 
 Lord Elgin himself, in his despatch to the Foreign Office of 
 November 8, 1858, speaks of the commutation-tax in ques- 
 tion as " a sum, in name of transit-duty, which will free goods, 
 whether of export or import, to pass between the port of 
 shipment or entry to or h'om any part of China, without 
 further charge of toll, octroi, or tax of any description what- 
 soever." But there is something in a name, after all ; and 
 in the present instance, the ill-chosen names of transit-^ue^ 
 and a /ra^s/f-certificate have alone rendered possible that '' Tran- 
 sit-System," founded on those names, which has enabled the Tsung-li 
 Ya-men and the Foreign Inspector-General of Chinese Maritime 
 Customs to reduce the Treaty of Tientsin, so far as its provisions
 
 00 THE TREATY RIGHTS OF THE 
 
 relate to inland trade by British and other foreign sidfjects, in 
 p'actice to a dead letter. 
 
 The second point, adverted to, is one respecting which 
 there would appear to exist a good deal of misapprehension, 
 inasmuch as it is held by the Tsung-U Ya-men, the In- 
 spectorate-General, and foreign merchants, that the Treaties 
 leave it optional with the latter to commute the inland du- 
 ties and taxes by the payment of the stipulated commuta- 
 tion tax, or to pay, if such be their choice, the various inland 
 charges levied by native authorities. But, although an 
 agreement to this effect had been at first concluded, as Art. 
 XXVIII. of the British Treaty shows : it was finally arranged, 
 by Tariff Rule vii., that the option-clause should be aban- 
 doned, and the one single, legally leviable commutation-tax 
 alone remain in force. Undoubtedly this was the true prin- 
 ciple to adopt ; and Lord Elgin, in his despatch of Novem- 
 ber 8, 1868, already quoted, observes very justly : — ** I have 
 always thought that the remedy (against the grievances 
 complied of by the merchants) was to be sought in the sub- 
 stitution of one fixed 'payment for the present irregular and 
 multiplied levies." This also explains the fact, that the de- 
 claration and public notification of " the amoimt of duties 
 leviable on produce between the place of production and the 
 port of shipment, and upon imports between the Consular 
 port in question and the inland markets named by the Con- 
 sul," of which Art. xxviii. of the Treaty of Tientsin speaks, 
 was no longer insisted on in the Eules of the subsequent 
 Agreement or ever carried into effect, — an omission, which 
 otherwise would have been equally unintelligible and un- 
 pardonable. Sir Frederick Bruce finally took the same view 
 of the case ; for, in his despatch to the Foreign Office of 
 December 2, 1862, he remarks : — "The object of Eule No. 7
 
 FOREIGN MERCHANT IN CHINA. 91 
 
 was to substitute one unvarying charge for the arbitrary 
 exactions of provincial authorities, where Her Majesty's 
 subjects bought or soltl goods, in the interior." It is true 
 that, in palpable contradiction with himself, and after stating, 
 that the merchant " is hound to cover produce by taking out 
 a transit-duty certificate," he adds : " If on the other hand, 
 he thinks it more for his interest to buy produce and bring 
 it down uncertificated, it will not be entitled to any special 
 protection as British property, but will be subject to such 
 charges and regulations as the Chinese Authorities may 
 choose to impose." But in his despatch of September 18, 
 1863, to Prince Kung,he again and more distinctly states: — 
 *'If a British subject takes goods into the Interior without 
 a certificate, or if he attempts to bring produce past the 
 nearest barrier without obtaining a certificate, he exposes 
 his property to confiscation." In the same sense, but with 
 even greater inconsistency, ambiguity of view, and inaccu- 
 racy, Mr. Wade, in his Memorandum respecting the Kevi- 
 sion of the Treaty of Tientsin, expresses himself thus : — 
 " The Customs are empowered by Eule vii. to refuse per- 
 mission to export produce, which cannot be proved to have 
 paid its transit dues, until these dues have been paid. Im- 
 ports, again, being still foreign property, if passing inwards 
 without a certificate, are liable to confiscation." The clause 
 of Eule vii., which, no doubt, both his Excellency and Sir 
 Frederick Bruce bore in mind, reading: "Any attempt to 
 pass goods inwards or outwards, otherwise than in compli- 
 ance with the rule here laid down, wiU render them liable 
 to confiscation," refers and can refer to attempts at smuggling 
 alone. Considering that the option allowed to the merchant 
 by Treaty has not been formally rescinded, and only been 
 done away with by ''interpretation" in an appended Paile
 
 92 THE TREATY RIGHTS OF THE 
 
 of Trade : confiscation, for an unintentional infraction of 
 such a llule from its vague and somewhat obscure wording, 
 very generally misapprehended, is legally out of the ques- 
 tion, and could occur only to the boldest advocates of Chi- 
 nese rapacity. 
 
 Another point, to which allusion has been made, is, that 
 produce or merchandise, purchased inland for exportation to 
 foreign ports, and on which the commutation-tax has been 
 paid, is exempt from all further inland charges, ** whether 
 the goods were by the native trader sold to British or other 
 foreign subjects for immediate payment and delivery on the 
 spot, or for payment and, or on, delivery at the specified 
 port;" in other words, whether the goods are virtually, 
 during the period of transit, foreign or native property, 
 so long as they were bond fide sold, though conditionally, 
 for exportation, or simply bond fide destined for exportation 
 abroad^ by, British or other foreign subjects. This follows 
 necessarily from the nature of mercantile transactions and 
 the customs of trade, in connection more especially with 
 Eule vii. of the Russian Convention and Art. liv. of the 
 British Treaty of Tientsin. 
 
 The last and most important point, concluded by me from 
 the Treaties, and in accordance with the views always held 
 by the merchants, is, that the tax of haK the import- or 
 export-duties, fixed by Tarifi, or of 1\ per cent, ad valorem 
 on merchandise not subject to those duties, respectively, by 
 which the " transit "-duties leviable or levied by the Chinese 
 Authorities on native inland trade were commuted, exempts 
 the goods on which that commutation-tax, independently of 
 import- or export-duty, has been paid, fi-om further exac- 
 tions in the Interior, and exempts such goods from all and 
 cvcrij dcscriplioii of farther imposts, including le-kin and any
 
 'FOREIGN MERCHANT IN CHINA. 93 
 
 other extraordinary tax, to which the home commerce of 
 China was, is, or may become, subject so long as the exist- 
 ing Treaties remain in force. The positive proof to this 
 effect, which I shall be able to adduce, is based on facts and 
 generally recognised principles ; on the literal wording of the 
 Treaties ; and on the united testimony of Sir Henry Pottinger 
 and Lord Elgin, who framed the British Treaties of Nanking 
 and Tientsin, of Sir Frederick Bruce, of some of the highest 
 Chinese Provmcial Authorities, and of the Tsung-li Ya-men 
 itself. 
 
 A public Treaty between two Nations involves the same 
 principles of law and justice, as does a private contract 
 between two individual persons. Suppose, now, two large 
 estabhshments, say a bakery and a brewery^ inclosed within 
 their own waUs and with all the workmen, employed in them, 
 residing on the premises. Suppose further the managers 
 of these concerns to conclude a legal agreement or contract 
 to the effect, that the bakery shall supply, or be free to sup- 
 ply, the brewery with bread and the brewery the bakery with 
 beer, on this condition that, independently of the natural 
 market price of the two articles of consumption, the manager 
 of the bakeiy, on the bread passing through the gate of his 
 establishment, shall levy on it a small impost at a fixed rate, 
 to go towards meeting the expenditure of the management of 
 the concern, and that the manager of the brewery, on the 
 bread entering the gate of his establishment, shall, for a 
 similar purpose, levy on it a similar impost at ti fixed rate, 
 both of which imposts the consumers in the brewery will 
 have to pay in additition to the natural market price of the 
 bread. In the same manner it shall be agreed, that the 
 manager of the brewery, on the beer passing through the 
 gate of his estabhshment, levy on it a small impost at n fixed
 
 94 THE TREATY RIGHTS OF THE 
 
 rate, and the manager of the bakery, on its entering the 
 gate of his premises a similar impost at a fixed rate, both of 
 which imposts the consumers in the bakeiy will have to pay 
 in addition to the natural market price of the beer. Lastly, 
 suppose one of the contracting parties, say the brewery, to 
 faithfully keep to the terms of the agi-eement entered into ; 
 but not so the other party, the manager of the bakei-y put- 
 ting up, mthin his establishment and sun-eptitiously, addi- 
 tional gate-ways, at each of which he levies h-esh imposts, 
 at an increasing rate, upon the beer supplied by the breweiy, 
 so that most of the workmen employed in the bakery are 
 thereby induced to brew then- own beer, to obtain it else- 
 where, or to take to other beverages, to the detriment of the 
 legitimate trade of the brewery. Suppose, I say, all this : 
 would not the manager of the bakeiy have indisputably com- 
 mitted a breach of contract, and laid himself open to bemg, 
 by the manager of the brewery, sued in a Com't of Justice 
 for damage ? 
 
 The breach of public Treaty, committed by the Govern- 
 ment of China in its relations with England and other 
 "Western comitries, constitutes a far gi'osser and more fla- 
 grant case, than the breach of private contract just assumed. 
 It is, or should be, a recognised international principle, that 
 any rate of impoH-dutj, agreed upon between two Govern- 
 ments, exempts the merchandise on which that duty has 
 been paid, from all further inland charges within the limits 
 of the importing countiy, except such customcmj local im- 
 posts of small amount, as may be levied for purposes of 
 local improvement in which trade directly or indirectly par- 
 ticipates, and tvhich ivere publicly hioivn to he levied at the time 
 of the conclusion of the Treaty. Certainly, no additional tax 
 of any khid the Government of the importing country is
 
 FOREIGN MERCHANT IN CHINA. 95 
 
 entitled to impose, for the benefit of the piihlic Exchcqiier, 
 upon merchandise which has paid the covenanted import- 
 duty, without the previous knowledge and express consent 
 of the Government of the exporting country, as the other 
 contracting pai'ty. It may possibly be argued that, in the 
 case of China and England, the contract is a one-sided one, 
 and that China has never been consulted as to the duties 
 upon exports to, and imports from, the Chinese Empire, 
 levied in Western States. True. But it has to be remem- 
 bered that, as regards England, the stipulations of the Treaty 
 at present in force are the price, not of a friendly agreement, 
 but of two costly wars, imposed upon her by China ; that 
 the conquered had, consequently, no right to expect from the 
 conqueror such terms as a state of mutual amity might have 
 commanded ; that England has, nevertheless, treated China 
 with an extreme degree of moderation and forbearance ; that 
 China has never taken exception to the English Tariff; and, 
 above all, that England, so far from increasing her scale of 
 customs-duties in general, and those upon the staple-articles 
 of export to, and import from, China in particular, since the 
 conclusion of the Treaties of Nanking and Tientsin, has 
 voluntarily subjected it to essential reductions. If to other 
 Powers, who next to England carry on the most extensive 
 trade with China and have concluded Treaties with her 
 under conditions of mutual friendship, she has gi-anted the 
 same terms, which were '' exacted " from her by the Pleni- 
 potentiaries of England and France, supported by victorious 
 armies : she has done so of her oum free will, and thereby 
 but furnished a signal proof of that moderation and forbear- 
 ance on the part of England, to which I have just alluded. 
 
 It is clear, then, from what has thus been said, that, 
 after the conclusion of the Treaty of Nanking, the Chmese
 
 90 THE TREATY EIGHTS OF THE 
 
 Government had no right to levy upon foreign merchandise, 
 imported by British and other foreign subjects for sale in 
 China, or upon goods bought in China by British and other 
 foreign subjects for exportation to foreign ports, in addition 
 to the stipulated import- or export-duties, any tax whatso- 
 ever for the benefit of the public Exchequer, nor any other 
 local imposts, besides those local imposts, which it was legal 
 and customary to levy upon inland trade at the time of the 
 conclusion of the Treaty, and to the payment of which the 
 formal consent of England was given. Until the Treaty of 
 Tientsin this agreement remained in force, with the distinct 
 proviso, as has been seen, that the rates of inland taxes 
 le\ded in 1842, being upon a moderate scale, should not there- 
 after he exceeded ; and the import- and export-duties having 
 been fixed by Tariff, whilst no le-hin or any other imposts of 
 the kind had as yet been introduced : there consequently 
 were, at the time of the conclusion of the Treaty of Nanking, 
 absolutely no other imposts either leviable or actually levied 
 on British and Foreign trade within the dominions of the 
 Emperor of China, save those agreed uimn hij Treat ij. 
 
 Scarcely, however, had that Treaty been signed, when 
 the Chinese Government "invented " and imposed on trade, 
 at first upon a very moderate scale, a war-tax under the 
 name of le-hin, unkno^vn to England, and on the principle, 
 — a principle, generally cherished and applied by the Chi- 
 nese Government, — of paying the barbarian, — in this case 
 for war-expenses according to Art. vi. and vii. of the Nan- 
 king Treaty, — with the barbarian's own money ; and with 
 the simultaneous view of keeping the inland trade of for- 
 eigners, then exclusively carried on through native agency, 
 by means of an increasing taxation not only under complete 
 control, but at its absolute mercy. The scheme had thus
 
 FOREIGN MERCHANT IN CHINA. 97 
 
 far succeeded so well and proved so profitable both to the 
 public, and the provmcial, Exchequer, as well as to indivi- 
 dual interests, that, with so rich and pleasant a mine of al- 
 most inexhaustible income opened up on the one hand, and 
 the Tai-ping rebellion pressing upon the resources of the 
 country on the other, the Chinese Government, at the time 
 of the Tientsin Treaty, judged it expedient and, under a 
 system of progressive taxation, considered it safe, to extend 
 for a while the facilities of foreign commerce, and even to 
 allow inland trade, under certain restrictions, to be carried on 
 by foreigners themselves. Hence, the special correspondent 
 of 'Hhe Times" in China during thejears 1857-58, the late 
 Mr. G. Wingrove Cooke, already at that period had to warn 
 the home public to remember, " that, since the outbreak of 
 the rebellion, the Chinese mandarins had levied a tax of full 
 £2,000,000 a year upon the people of England ; that this 
 tax consisted almost entirely of local unauthorised extortion; 
 and that it was capable of indefinite increase." " The 
 English people," he adds, " should teach a starling to cry : 
 Free Transit through China ! and should hang the bird up in 
 Lord Elgin's cabin. Nothing short of this will do, — nothing 
 short of this will prevent future wars. What more is re- 
 quired, I do not now discuss ; but this is the first and most 
 indispensable of all conditions of peace. We do not know 
 enough of the country to take any substitute or to submit to 
 any modification." 
 
 When, therefore, in 1858 the British Treaty of Tientsin 
 was concluded, it not only was well known to the English 
 Government and Lord Elgin, the British Plenipotentiary in 
 China, but it was a matter of public notoriety and of constant 
 complaint on the part of British merchants, "that charges 
 were suddenly and arbitrarily imposed by the provincial au-
 
 98 THE TREATY RIGnTS OF THE 
 
 thorities as * transit-duties ' upon produce on its way to the 
 foreign market, and on imports on their way to the Interior, 
 to the detriment of trade" (Art. xxviii. of Tientsin Treaty) ; 
 whilst all thinking men in China shared the conviction of 
 the Correspondent of ''the Times," that nothing sliort of free 
 transit through China would preverit future wars. Nay, at so 
 early a date as the year 1847, the subject had engaged the 
 special attention of the English House of Commons ; as the 
 following extracts from the evidence, taken before a Select 
 Committee in the months of April and May of that year, 
 will indicate : — 
 
 Viscount Jocelyn : — Do you believe, that there are any very heavy 
 transit-duties levied upon our manufactures which go from this country? 
 • — J. Matheson, Esq. ; — I have no correct information upon that point. 
 
 Da. BowRiNG : — Can you form an estimate of the cost of duties which 
 attach to the conveyance of woollens from the port to the northern dis- 
 trict of consumption ? — John Gott, Esq. : — What the internal duties are, 
 I do not know. 
 
 Viscount Jocelyn : — Do you know anything as regards the internal 
 duties levied by the Chinese upon the transit of imported goods ? — J. 
 SiLVERLOcK, Esq : — I do not. We are sometimes told, that they levy cer- 
 tain duties ; but by the treaty, I think, there are to be no transit duties. 
 
 Are you aware, whether there are duties levied upon the imports as 
 they pass up the country ? — I beheve there are certain fees given to the 
 mandarins at diflferent passes. 
 
 The Chairman : — Would it not be possible by the establishment of heavy 
 transit duties in tfie country to defeat the tihole object of the treaty (of Nan- 
 lung), with reference to the duties fixed upon the first entry of the 
 goods ? — T. A. GiBB, Esq. : — No doubt ; it is a very material considera- 
 tion. 
 
 What alone, even in 1858 and still later, the English Go- 
 vernment and the foreign public remained in ignorance of, 
 as they virtually do to this day, was, and is, the exact ex- 
 tent, the systematic character, and the precise nature of the
 
 FOEEIGN MERCHAJ^T IN CHINA. 99 
 
 " transit-duties " levied upon the inland trade in China, as 
 also of the fact that those inland taxes ivere and are levied hij 
 order of the Chinese Government itself, as a source of public re- 
 venue,\\ and, of late years at least, mainly for purposes hostile 
 to the West. To assume, then, that, with the knowledge 
 and information actually possessed by the British Plenipo- 
 tentiary, Lord Elgin, in framing the Treaty of Tientsin, 
 should not have meant to effectually protect, and by Treaty 
 effectually have protected, British trade in China from inland 
 duties, charges, and exactions, on the part of the Chinese 
 Authorities, of every kmd, by consenting to the payment of 
 one fixed commutation-tsijX, and that he should have equally 
 failed therein when, master of the Capital of China, he sub- 
 sequently concluded the Convention of Peking, appears to 
 me, — notwithstanding that the arguments of the illustrious 
 defenders of le-kin, chow-fang, and other imposts of the kind, 
 imply nothing less, — simply irrational. Nor shall we find 
 the wording of the Treaty of Tientsin to belie our confidence 
 in Lord Elgin. 
 
 By Art. liv. of this Treaty, all privileges, immunities, 
 and advantages of previous Treaties generally are insured, 
 and by Art. i., the Treaty of Nanking in particular is re- 
 newed and confirmed. But by Art. x. of the latter Treaty 
 and the Hongkong Declaration, the only inland imposts to be 
 levied upon foreign m.erchandise sent for sale into the In- 
 terior, and by Art. xxviii. of the Treaty of Tientsin, upon 
 native merchandise intended for exportation to foreign parts, 
 
 II It might posssibly be argued that, after all, the Chinese Government receives but a 
 small portion of this revenue. But such is by no means the case. With the exception of 
 the " squeezes " of the officials, the whole amount goes to the public Exchequer ; only that 
 in China, the Government, instead of collecting the entire income of the State into the 
 national Treasury and directly .-idministrating the whole expenditure again from Peking, 
 allows the Local and Provincial Authorities to retain, out of the taxes collected, certain 
 portions, fixed by the Board of Revenue and instructs them to remit only the remainder for 
 Imperial or general purposes to the Capital.
 
 100 THE TIIEATY RIGHTS OF THE 
 
 were the then customary, moderate imposts hij Treaty arjrecd 
 In, ami n-Jiich were in no wcuj to he inereased or added to in future. 
 Now, tliosc imposts, certainly not amomiting to 2i- per cent. 
 ad ridorein in the aggregate, included neither le-kin nor choiv- 
 J'aiKj, and the like subsequently invented taxes. Conse- 
 quently, by the provisions of the British Treaties of Nanking 
 and Tientsin taken in combination, the Chinese Goverimient 
 has no right to levy upon foreign merchandise sent by British 
 and other foreign subjects for sale into the Interior, and 
 natiA'e merchandise sold to British and other foreign subjects 
 •for exportation to foreign parts, any duties or imposts ichat- 
 ever, save and except such import-, export-, and inland- 
 duties, res][}eetively, as have been agreed upon % Treatji. 
 
 Again, by Art. xxviii. of the Treaty of Tientsin and Rule 
 vii. of the Agreement appended to it, the rates of inland 
 imposts, as stipulated by the Treaty of Nanking, having 
 been exceeded on the part, it was believed, of the Pro\'incial 
 Authorities alone; and le-kin being already then leaded, and 
 surreptitiously so, it was provided, in order to do away with 
 ALL irregular and arbitrai-y inland charges or exactions, to 
 commute the same by, and sid)stiiute for them, the payment of 
 one single fixed impost of one half the Tariff import- and ex- 
 port-duty respectively, or of 2|^ per cent ad valorem on 
 merchandise by Treaty not subject to those duties, — which 
 impost, it is stated in the most explicit terms, '^ shall — by 
 certificate — exempt the goods — on which the one tax, thus 
 lixed, shall have been paid — from all further inlaud charges 
 whatsoever." Consequently, also by the British Treaty of 
 Tientsin taken by itself, the Chinese Government has no 
 right to lev}', under wdiatever name or pretence it be, upon 
 foreign merchandise sent by Foreign subjects for sale and con^ 
 sumi>tion to any part of the Interior of China, and uatice
 
 FOREIGN MERCHANT IN CHINA. 101 
 
 mercliandise sold in any part of the Interior of China to 
 Foreign subjects for exportation to foreign parts, le-Lin, dioir- 
 fanfj, or any duties or imposts n-hatsoever, save and except 
 only such import-, export- and inland- (also improperly 
 called transit-) duties, respectively, as have been agreed vpoii 
 hij Trmttf. And hence, not only are the inland-imposts, 
 actually levied by the Chinese Government through its 
 officials, whether under the name of le-ldu, chow- fang, or any 
 other name, in amount over and above tfie rates fixed bg Treat g 
 and Tariff, illegal, and entitle the British and- other Foreign 
 Governments to demand from the Chinese Government due 
 repayment of, or full compensation for, the same to the ag- 
 gregate extent, to which they have accumulated : but ])y 
 Art. xxrii. of the French, and Art. liv.. of the British, 
 Treaty of Tientsin, the Chinese Customs- and other officials, 
 moreover, who, contrary to the provisions of that Treaty, 
 have been engaged in exacting the illegal taxes in question, 
 and- levied higher rates of inland- (or as they are styled 
 transit-) duties than have been agreed upon and fixed by 
 Treaty, have rendered themselves liable to be punished in 
 accordance with the l^ws of China. 
 
 No language could be clearer than the words of the 
 Treaty, stipulating that the inland duty-exemption (or, as 
 for brevity's sake it is inappropriately called, the transit) cer- 
 tificate, to be issued'by the proper Chinese Authorities upon 
 payment of tiie stipulated commutation -tax, and to accom- 
 pany the goods, upon which such a tax has been paid, 
 " shall exempt siicit goods from all further inland charges 
 icliat soever." The Chinese version of the whole passage is, 
 perhaps, not quite so satisfactory ; without, however, 
 leaving any doubt as to the fact, that by the one single sti- 
 pulated tax, once paid, all inland duties, however numerous.
 
 102 THE TREATY RIGHTS OF THE 
 
 were to be commuted, and the goods — whether in tlie pos- 
 session of fbrcignciB or natives, — upon which such a tax 
 has been paid, to be exempted from any further inland 
 charges ivhalsoever. Independently of which, it was dis- 
 tinctly agreed by Art. l. of the Tientsin Treaty, as we have 
 seen, that not the Chinese, but the English, text is to be 
 considered the standard text for determining the true sense 
 of the Treaty. 
 
 The same view had already, I find, been taken by F. B. 
 Johnson, Esq., in his able memorandum on " Transit-Dues," 
 submitted by him on September 18, 1869, to the General 
 Chamber of Commerce of Shanghai, and subsequently 
 printed by the Chamber. In reference to Art. xxviii. of the 
 Treaty of Tientsin and Art. x. of the Treaty of Nanking, 
 Mr. Johnson insists: — " If language can be said to be ca- 
 pable of any definite meaning, the terms of this clause apply 
 to British merchcuidizef as such, without reference to its im- 
 mediate ownership ; and no other supposition than that it 
 was foreign trade generally, and not the individual foreign 
 merchant particularly, which was intended to be protected, 
 is rcconcileable with the remonstrances which, from time to 
 time, were directed by H. M. Consuls to the Chinese au- 
 thorities on the subject of transit-dues, and the negotiations 
 regarding them, which took place between the signatm-e of 
 the Treaty of Nanking and the proposed settlement of the 
 question by Art. xxviii. of the Treaty of Tientsin.^' 
 
 As a further proof, if such a proof be still needed, for the 
 correctness of this interpretation, there is the despatch of 
 the framer of the Treaty of Tientsin himself, addi-essed by 
 him to the Home Government on November 8, 1858, and 
 in which, on transmittmg the Agreement of the same date, 
 together with the accompanying Tariff and Eules, Lord
 
 FOREIGN MERCHANT IN CHINA. 103 
 
 Elgin explains the sense, which he attaches to the 
 latter. 
 
 EuLE VII. applies, his Lorclsliip writes to the Foreign Office, and ex- 
 tends the 2}>'inci2^le respecting transit-duties, which is laid down by Art. 
 XXVIII of the Treaty. Henceforward, on payment of a sum in name of 
 transit duty, which for simplicity's sake has been fixed at one-half of the 
 tariff-rate of duty, goods, whether of export or import, will be free to 
 pass between the port of shipment or entry to or from any part of China, 
 without further charge of toll, octroi, or tax of any description what- 
 soever. I confess that I consider this to be a most important point 
 gained in the future interest of foreign trade with China. In every re- 
 presentation on the general subject of trade, which I have received fi-om 
 mercantile bodies or individuals since I came to China, the system, or 
 no system, under which transit-duties are now levied, has been pressed 
 upon me as a grievance, and I have always thought that the remedy teas 
 to be soiight in the substitution of one fixed pay7nent for the jn'esent irregular 
 and multiplied levies. At the same time, in a country where the duties of 
 octroi are habitually resorted to as an expedient for supplying the wants 
 both of the local and ImiDerial treasuries, it was obviously difficult to 
 devise a scheme for the commutation of transit \i. e. inland] duties, ichich, 
 without creating great financial disturbance, should prove an effectual 
 protection to the importimj and exporting merchants. The rule now under 
 consideration has been carefully framed, and will, I trust, in practice, 
 afford a reasonable security against both of the two classes of evils 
 which I have indicated. 
 
 The considerations, which induced Lord Elgin to consent 
 to the payment of so high an inland impost as from 2^ to 
 3 "/o cid valorem, in addition to the stipulated import- and 
 export-duties, we learn from the Plenipotentiary's despatch 
 of July 12, 1858, to Lord Malmesbury, then Enghsh Secre- 
 tary of State for Foreign Affairs. In reference to "the 
 settlement of the vexed question of the transit-duties," Lord 
 Elgin observes : — " This subject presented considerable diffi- 
 culty. As duties of octroi are levied universally in China, on 
 native as well as foreign products, and as canals and roads
 
 101 THE TREATY RIGHTS OF THE 
 
 are kept np at the expense of the Government, it seemed to 
 be mircasonable to require that articles, whether of foreign 
 or native production, by the simple process of passing into 
 the hands of foreigners, should become entitled to the use 
 of roads and canals toll-free ; and should, moreover, be re- 
 lieved altogether from charges to ^Yhich they would be liable 
 if the property of natives." 
 
 In reading these extracts, it has to be borne in mind, 
 that, even at the conclusion of the Treaty of Tientsin, no 
 other charges were as yet levied upon trade, whether native 
 or foreign, in the Interior of China, except charges levied on 
 the road, and hence, when Lord Elgin, speaks of transit- 
 charges, octroi, etc., that he speaks of, and intends to be 
 understood, the Inland duties, levied or leviable by the Chi- 
 nese Government, (jcneralhj and collectively. 
 
 If the reader could retam. any doubt in regard to this 
 point, he is. referred to the Government Notification of Sir 
 Henry Pottinger of February %), 1844, and his despatch to 
 the English Foreign Office of the 27th of the same month, 
 previously quoted, in which already by the framer of 
 the Treaty of Nanking the taxes in question are distmctly 
 desio-nated as "Transit or Inland Duties of the Chinese Em- 
 l>ire," and "^ the- Transit ov Inland Duties, levied in the Chinese 
 Empire;' and that also Sir Frederick Bruce, who was pre- 
 sent at the framing of the Treaty of Tientsin, understood 
 them in the same sense, is proved by his despatch of De- 
 cember 2, 1862, wherein he states, that "the object of the 
 [Trade-] Rule No. 7, [appended to the Treaty of Tientsin] , 
 was to substitute one unvartjing charge for [the whole of J the 
 arbitrary exactions of provincial authorities, . . . in the Interior." 
 
 To complete the evidence in support of this view, I shall 
 now htive only further to show that, innuediately after the
 
 FOREIGN MERCHANT IN CHINA. 105 
 
 ratification of the Treaty of Tientsin, the same view was 
 taken of Art. xxviii. and Kule vii. by at least some of the 
 highest Chinese Officials and, what is still more to the point, 
 by the Tsung-li Ya-nieii itself. The following papers, pre- 
 sented, in 1804, to both Houses of Parliament by command 
 of Her Majesty, will suffice for this purpose : — 
 
 The Prince vf Kvjuj to Mr. Bruce. 
 
 (Trauslatiou) Peking, October 18, 18G2. 
 
 The Priucc oi Kung makes a communication. 
 
 In the regulations forwarded by His Excellency Kwanwen, Governor- 
 General of Hu Kwang, for the general regulation of trade on the Yang- 
 tze-kiang, there were three, namely, the 11th, 12th, and 13th, affecting 
 the levy of transit duties, and which, as they shghtly modify the present 
 regulations of the Customs (or in force at the different Custom-houses) , 
 he has requested His Highness to submit to his Excellency the British 
 Minister. 
 
 It becomes the Prince's duty to forward a copy of these three regula- 
 tions as a supplement to the list already communicated, and His High- 
 ness will be obliged to the British Minister to inform him whether there 
 be in them anything objectionable. 
 
 A necessary communication. 
 
 Fri'cis of Three Articles to Reffulate the GolkctioK nf Trtinait 
 
 Duties up the Yan//-t~e Kiatij. 
 (Translation.) 
 
 Art. XI. — Proposed that certificates of transit duties on goods passing 
 through Hu-peh and Hu-nan should be issued only at the Kiang-han kwau 
 (Hankow Customs), on goods in Kiang-sl and An-hwui, only at Kiu- 
 kiang ; on goods in Kiang-su only at the Kiaug-hai kwan (Slianghae 
 Customs). These two additional articles to a certahi extent, would mo- 
 dify (the Treaty condition) so as to facilitate its operation. 
 
 AuT. xu. — Merchants desiring to carry imports cither in their own 
 custody or that of a foreign agent from the port of entry, have issued to 
 them by the Customs of that port a certificate that the Customs have 
 inspected the goods, as particularised in the application, and that they 
 are bound for such a point. This certificate the merchant produces at 
 the Customs Receiving Office, and having paid into it the half Tariff
 
 100 THE TREATY RIOnTS OF THE 
 
 (lut.y duo on the goods, presents its receipt for the money to the Customs, 
 who thereon issue to the apphcant a note (or pass) which enables the 
 mcrcliant to carry his goods free of uar tax charges [le-ldn) to the point 
 specified in his appHcation, no matter how distant this may be from the 
 port. But the merchant is not obhged to take out this certificate at all, 
 and goods going into the country, if not covered by such a certificate, 
 become liable, whether in charge of foreigner or native, to the operation 
 of the (local) laws already in force under which the uar taxes are imposed. 
 
 If, therefore, a foreign merchant, having already disposed of his goods 
 to a native merchant, shall obtain a certificate by fraudulently represent- 
 ing the goods to be his own, the goods shall, on discovery of the fraud, 
 be confiscated ; and whereas, at the present moment, military requke- 
 ments produce a pressing demand for funds, the Customs above enume- 
 rated have moved (his Excellency Kwanwen or His Highness the Prince) 
 to notify that the following distinctions will be made between foreign and 
 native goods : — broad cloth, camlets, clocks and watches, shirtings 
 foreign wood, such article being bond fide foreign, can be covered by 
 transit certificate ; but sea-weed and other articles which are produced 
 in China, as well as abroad, shall, for the present, not be so covered. 
 
 Art. xiii. — Any foreign merchant desiring to bring down produce to 
 an open port either in his own charge or in that of a foreign Agent, can 
 apply through his Consul to the Customs for a certificate. The merchant 
 states in his note where he is going and what produce he wants to buy, 
 and the Customs, on receipt of the Consul's application, forward to him 
 for the merchant a triplicate certificate and a blank pass. The mer- 
 chant takes these to the interior, and ha\ing piu'chased his produce sub- 
 mits it to the inspection of the first barrier it has to pass, and deposits 
 there one of the triplicate certificates, on the face of which is entered 
 the quantity of produce purchased. The barrier enters on his pass the 
 amount of his produce, seals it, and returns it to the merchant, who is 
 then authorized to proceed. When he arrives at the barrier nearest his 
 port he produces his pass, and the amount of his produce being found to 
 correspond with the entry, he clears it of the transit duty at the Custom- 
 house of his port, and then takes it past the barrier. 
 
 Should the produce be unaccompanied by a transit certificate, it must 
 patj the tear tax charges (le-kin) imposed by the rules already in force at 
 every barrier it has to pass.
 
 FOREIGN MERCHANT IN CHINA. 107 
 
 Bat whereas oil, grain, and timber are articles consumed by the poorer 
 classes, and there would be consequently much embarrassment attending 
 the transit of these, it is proposed to issue no passes for them, and to 
 punish any Chinese and any linguist who may combine with him in de- 
 manding a pass for the same, besides confiscating the goods. 
 
 I need hardly remark that these propositions, the insi- 
 dious design and tendency of which are too patent, were 
 dechned by Sir Frederick Bruce as '* inconsistent with 
 Treaty rights and leading to endless embarrassment." 
 What here alone interests us, is the distmct admission, by 
 both the Governor-General of ' Hu-kuang and the Tsung-li 
 Ya-men, that foreign merchandise for inland consumption 
 and native merchandise for export to foreign ports, conveyed 
 without a certificate, are, whether in the hands of foreigner 
 or native, liable to pay all inland war-tax charges (i.e. le-kin, 
 choio-fang, dc); but, that, accompanied by a certificate, they 
 are, — whether in the hands of native or foreigner, — exempt 
 from such charges ; and, consequently, that le-kin, chotv-faufj, 
 dc.j are included in the inland charges commutation-tax — being 
 half the Tariff import- and export-duties, respectively, or of 
 2} per cent, ad valorem on merchandise not subject to those 
 charges, as stipulated hij Treaty. And hence, and because at 
 that time no machinery — in the shape of ' ' Stationary trade 
 taxes," " Grower's tax," etc., of which I shall have to speak 
 hereafter, — had been invented to levy, at the mart of destina- 
 tion or the locality of production, the complementary amount 
 of iUegal imposts, desired by the Chinese Government, and 
 which the "transit-pass," would prevent the native officials 
 from levying on the road, it was, that his Excellency Kuan 
 Wen felt so anxious to establish the doctrine, that "the 
 merchant is not obliged to take out a certificate at all," and 
 the Tsung-li Ya-men so readily supported the proposition of 
 the Governor-General of 'Hu-Kuang.
 
 108 THE TllKATY EIGHTS OF THE 
 
 Again, Tseng Kuo Fan, the late Governor-General of tlic 
 Two Kcang, and Superintendent of Trade for the Southern 
 Ports, in a despatch dated Nanldng, Nov. 5, 1868, — at the 
 instance, Mr. Hart states, of the Tsung-li Ya-men, — in- 
 structed the Tau-tai of Shanghai as Intendant of Customs, 
 to the effect that "foreign merchandise, entering the In- 
 terior, shall pay duty at the Custom-houses and le-kin at the 
 Customs-barriers only when the merchant is unable to pro- 
 duce a certificate;" that "if he hold a certificate showmg 
 that the transit-duty has been paid, then no further duty or 
 le-kin shall be demanded;" and that, if the foreign mer- 
 chant be not inclined to pay, on imports, the half-duty at 
 the sea-port, he must pay the transit-dues and le-kin at the 
 inland stations, and, if he be not inclined to pay, on exports, 
 the transit-dues and le-kin at the inland stations, he must 
 pay the half-duty in advance, in which matter he may have, 
 his choice." Nay, he writes : — " It is imperative that the 
 Treaty-stipulations be observed, and under no circumstances 
 should the le-kin be made to violate existing Treaties, and pro- 
 voke constant disputes with the Consuls." § 
 
 . And lastly, even after the Tsimg-li Ya-mtin's sudden 
 change of view on the subject, it had, through its Commis- 
 sioners, by promising that a proclamation should be issued, 
 requiring the barrier-officials to act in accordance with exist- 
 ing Treaties, in order to " avoid illegal levies in future," once 
 more to admit that the imposts^ actually levied at the bar- 
 riers, i. c. the le-kin taxes, are being levied illcgalbj. 
 
 But, what renders these levies illegal, and alone renders 
 them so, is not that they are collected in particular localities 
 or at particular collectorates, but that they are collected in 
 
 § The despatch of Tseng-Kuo-Fan, here quoted from, was piinted by Yinp-. — a Inte 
 Taii-tai of Shanghai, to whom it waf addressed, — in a volume, known rs : ^ ^ ^Q ^,f[, 
 ''^Treaty-Obligations of Individual (Trlbutal•y^ Siatc?." for private distributiou ouly.
 
 FOREIGN MERCHANT IN CHINA. 100 
 
 defiance of positive Treaty-stipulations. It matters nothing 
 to the foreign merchant, manufacturer, or consumer, whether, 
 in the Interior of China, he has to pay duties, enhancing the 
 cost of merchandise, at If or -fe, at Chinese ports or " in 
 transitu;" but it does matter to him, whether or not he has 
 to pay such duties at all. It concerns no Foreign Power, 
 with what imposts the Chinese Government burdens its own 
 subjects, and lays them on nartive merchandise for 7iative con- 
 sumption ; but it does concern every Foreign Power in 
 treaty-relations with China, with what imposts the Govern- 
 ment of China, in violation of positive international engage- 
 ments, burdens its subjects by iUegaUy burdening the pro- 
 perty of those subjects, — their manufactures and other mer- 
 chandise destined for sale in the Interior of China, and Chi- 
 nese produce, destined for consumption at home. The dis- 
 tinction, involving a simple problem of "mine" and "thine," 
 could, in despite of the labours of the Foreign Inspector- 
 General of Chinese Maritime Customs and the Chief Su- 
 perintendent of British Trade in China to confuse the views 
 of Her Britannic Majesty's Board of Trade on the subject, 
 hardly escape the penetration of the Tsung-li Ya-men. 
 
 Nor could, otherwise, the Chinese Authorities be rea- 
 sonably expected to hold a different opinion in regard to 
 our question, for this additional reason that, by Rule v. of 
 the Agreement appended to the Treaty of Tientsin, it was 
 expressly stipulated that to opium alone Art. xxviii. of the 
 Treaty should not extend, and that in regard to opium alone 
 the Chinese Government should be at liberty to arrange the 
 (transit- i.e. the) inland duties as it might see fit. Conse- 
 quently, on the principle that the exception constitutes the 
 rule, the exception here once more and forcibly supports 
 the sense which, I venture to think, the Treaty has now
 
 110 THE TREATY RIGHTS OF THE 
 
 been fully proved to bear, namely, that on no article of 
 British and Foreign Commerce, opium only excepted, has the 
 Chinese Government the right to levy any taxes whatever 
 over and above those agreed upon by Treaty. 
 
 The entire question, in fact, lies in a nutshell; It pre- 
 sents to Common Sense but two points for consideration. 
 The minor one of these points is : the special object of the 
 commutation of a multiplicity of payments for inland duties 
 by one single payment of an aggregate sum in lieu thereof. 
 No rational person can misintei'pret or misapprehend that 
 object. The second and principal point is : the general object 
 of any international Commercial Treaty. Foreign commerce 
 consists essentially in a mutual exchange of commodities, 
 natural — industrial, between different countries, each coun- 
 
 or ' ' 
 
 try endeavouring to insure what is termed the balance of 
 trade in its own favor. When, therefore, the Governments 
 of two countries to this combined end conclude a Commer- 
 cial Treaty, the sole object of such a Treaty, of its very na- 
 ture, is : firstly, to/:c the pecuniary terms or ** duties" to be 
 paid by the trading subjects of either country to the Go- 
 vernment of the other, in consideration of which the natural 
 and industrial productions of either country shall have free 
 and direct access for purchase, barter, use, or consumption 
 to the subjects of the other country ; and secondly, to deter- 
 mine the regulations, under which trade is to be carried on 
 with this view. Hence it follows that the Government of no 
 country, having concluded a Treaty of Commerce with the 
 Government of another country, can, so long as that Treaty 
 remains in force, legally levy upon the commerce between 
 the two countries any higher or further imposts, save and 
 except such imposts or duties as have been agreed upon and fixed 
 by Treaty. If it were otherwise ; if either country be at
 
 FOREIGN MERCHANT IN CHINA. Ill 
 
 liberty, after having entered into a contract, at any moment 
 to change the terms of that contract to its o^\ii advantage ; 
 if it could lawfully, after accepting to-day a fixed Tariff of 
 duties, to-morrow raise that Tariff or at pleasure add further 
 imposts to those agi'eed upon : it is manifest that the sign- 
 ing of international Treaties would become simply a farce, 
 the exchange of their ratifications a mockery instead of a 
 solemnity, and the Treaties themselves just so much waste 
 paper, and worth less than waste paper. 
 
 China has systematically and perfidiously broken her 
 international contracts with England and the West generally, 
 relative to inland trade, — the only subject here under con- 
 sideration. By the Treaty of Nanking the Imperial Govern- 
 ment engaged to levy, upon British merchandise, no inland 
 taxes whatever over and above the customary and legalized 
 taxes then generally leviable upon inland trade ; and unme- 
 diately afterwards, the Chinese Government not only " in- 
 vented " and surreptitiously imposed upon British trade an 
 additional inland tax, under the name of le-kin, being a kind 
 of "war-tax," but rapidly increased the rate of that new and 
 illegal tax from a small impost to the scale of a grievous 
 burden. By the Treaty of Tientsin, England protesting 
 against the system of unlawful inland taxation thus initiated, 
 once more the Chinese Government, having arranged to 
 commute the whole of the inland charges then levied and 
 thereafter to be levied upon British trade, for the payment 
 of one fixed tax, namely, of one half the stipulated iinport- 
 and export-duties, respectively, or of 2^^ per cent, ad valorem 
 upon duty-free goods, solemnly engaged to levy in future 
 upon Foreign trade no inland imposts of any kind what- 
 soever in addition to, or in excess of, the one single commu- 
 tation-tax thus by Treaty agreed upon. But no sooner had
 
 il2 THE TREATY RlfillTS OF THE 
 
 this figrccmcnt been concluded, than the Chinese Govern- 
 ment, in violation and defiance of its public engagements 
 and of national good faitli, resorted to the surreptitious im- 
 position of still further inland-trade taxes and a still further 
 extension of those already introduced to such a degree, that 
 the mean aggregate of inland imposts over and above those 
 fixed by Treaty, and which are at the present time being 
 ilJi'fjdUi/ levied, and for several years past have been so levied, 
 upon Foreign commerce with the Interior of China, amount, 
 at a moderate computation, to moi'c than seven times the 
 rate hij Treaty stipulated, that is to say, to an annual sum, as 
 will be presently seen, of upwards of ^5,000,000 sterling, 
 independently of Coast-trade duties. Nor does this large 
 sum of money represent any thing like the injury, which 
 the Chinese Government is thus suffered to inflict upon the 
 Foreign merchant and Foreign Commerce and Industry, by 
 deliberately and systematically violating the^ provisions of a 
 Treaty, secm^ed to the people of England by the national 
 sacrifices involved in two distant wars.
 
 FOEEIGN MERCHANT IN CHINA. 113 
 
 V. 
 
 EXAMINATION OF AUTHORITATIVE VIEWS. 
 
 Position of the Foreign Inspector-General in the Chinese Customs' Ser- 
 vice — Vahie to be attached to his opinions — Obstructive tendency 
 of his views illustrated — The Transit- System brought home — The 
 Inspector-General's misapprehensions and duphcity of sight — 
 Prince Kung's " sincerity " — The Tsung h Yamen's newly proposed 
 Regulations discussed — Sii* E. Alcock's opinions in 18G8 and 1870 
 contrasted — A novel doctrine — What gives validity to Chinese State- 
 papers — The Great Imperial Seal and the Seal, by the Tsung-li Ya- 
 mfin attached to International Treaties — Unsatisfactory diplomatic 
 state of Western Treaty-relations with China — Sir E. Alcock's im- 
 perfect knowledge of Chinese State affairs — Mr. Wade's Memoran- 
 dum of 1868 characterised — His inaccuracies and self-contradictions 
 ' — Mr. Wade, the le-kin tax, and the Foreign Customs — His warm 
 apology for the Ic-kin and two-sided exaggerations — Amount of 
 Chinese' Eeveuue — " The Central Government " wanting not in the 
 power, but in the will to abrogate the le-kin — Prince Kung's " timid- 
 ity " — His Imperial Highness in disgrace — Mr, Wade's strange 
 fiscal notions — Untenable character of the " in transitu " theory de- 
 monstrated — Its first originator — Pernicious doctrines involved in 
 Mr. Wade's views — Mr. Wade's impressions and Lord Elgin's 
 written statements — Alleged right of the Chinese Government to 
 tax ad libitum foreign merchandize which has paid the Commutation- 
 dues, after passing into Chinese possession — Confusion of ideas on 
 the subject — Sir Frederick Bruce's views — Mr. Wade's key-note to 
 the whole question — Its false and discordant sound — The real na- 
 ture of the problem stated — Justice versus Expediency — Two unholy 
 wars against China — Sinful policy of Lord Palmerstou and atoning 
 policy of the Eight Hon. W. E, Gladstone. 
 
 Having shown what are the real Treaty-stipulations, agreed 
 upon between China and England as well as other foreign 
 States relative to inland- (usually but improperly termed 
 transit-) dues, leviable upon British and other foreign trade 
 by the Chinese Government ; to what an extent the Chinese
 
 114 THE TKEATY RKJIITS OF THE 
 
 Government, in addition to the imposts fixed by Treaty, has 
 burdened foreign trade with illegal taxation ; and to what 
 ])urposes the large surplus of revenue, which the Imperial 
 Exchequer is deriving from this source, is applied : there 
 now presents itself for our consideration the basis of those 
 views, which both Chinese and British officials of high po- 
 sition, including the Lords of the Committee of Her Ma- 
 jesty's Privy Council for Trade, hold at variance wdth the 
 positive results of our inquiry; together with the arguments, 
 by which some of the Authorities alluded to have endea- 
 voured to justify or to palliate the conduct of the Chinese 
 Government. For the sake of greater lucidity, it will be 
 desirable to reserve the general and more important points, 
 until we shall have passed in review and estimated at their 
 l)roper value such mdividual opinions, as partake of a se- 
 condary character, yet enter as essential elements into the 
 question. 
 
 Considerable allowance has to be made for, and therefore 
 a proportionately less value attached to, the views expressed 
 upon Chinese matters by the foreign Insj)ector-General of 
 ]\Iaritime Customs, Mr. Hart, on account of his peculiar 
 position in the Celestial service, — highly lucrative on the 
 one hand, anomalous and somewhat precarious, on the other. 
 The Chinese Goverrmaent, i. c. the Emperor, and his Privy 
 Council and State Secretariate, P^ 1^ lS P^, have never offi- 
 cially recognised so much as the existence of the foreign 
 element of the Customs -Service, although this branch of 
 public administration, so far as it relates to foreign trade, is 
 chieliy directed and partly performed by foreign employes, of 
 whom none, however, are in direct communication with the 
 Imperial Government. The latter, having committed the 
 ** General control of Individual (Tributary) States' Affairs "
 
 FOREIGN MERCHANT IN CHINA. 115 
 
 to a mere temporary Commission, presided over by Prince 
 Kung, and by foreigucrs usually, but erroneously, styled 
 "the (Chinese) Foreign Office" or "Board of Foreign 
 Affairs," has consigned also the foreign department of Mari- 
 time Customs to the general charge of that Commission, and 
 the special charge of native " Superintendents of Trade " and 
 " Intendants of Customs," their subordinates. The native 
 Intendants of Customs correspond with the native Superin- 
 tends of Trade, and have under their orders the foreign 
 " Commissioners of Customs," — whose real title is U. i'@ 11 
 ^ f^ ^, "River- and Sea-Customs Inspector," — and who, 
 on their part, correspond with their immediate superiors, 
 the native Intendants of Customs and the foreign li U. ^ 
 ^3 ^ f^ ^, "Chief River- and Sea-Customs Inspector," — 
 commonly, but erroneously, styled "Inspector-General of 
 (Chmese Imperial) Customs," — in rank inferior even to the 
 native Intendant of Customs. The foreign Chief- or Head- 
 Inspector of Maritime Customs, at present Mr. Hart, is the 
 immediate subordinate of the native Superintendents of 
 Trade and corresponds with the latter and, — in as much as 
 he has of late years been permitted to reside in Peking in- 
 stead of Shanghai, his proper station, — with the Tsung-li 
 Ya-men. The native Superintendents of Trade and the na- 
 tive Tsung-li Ya-men alone correspond with the Imperial 
 Board of Revenue and the Imperial Government, i. e. the 
 Emperor's Privy Council and State Secretariate.* 
 
 The circumstances, under which the present In.spector- 
 General succeeded to his post, I shall have occasion to speak 
 of in another place. Mr. Hart's appointment by the Tsung- 
 
 * In the official State-Directory of China, which is published quarterly under the title 
 >^ in ts P^ ^ ^' *'^^° names of the native Superintendents of Trade and Intendants 
 of Cnstouis will l)c found duly registered, but neither the Foreign " Inspector-General of 
 (Chinese Imperial Maritime) Customs " or any other foreign Customs employe, /io7- the 
 Tsunrj-U Ya-min itad-'' The latter authorities arc completely ignored.
 
 110 THE TREATY RIGHTS OF THE 
 
 li Ya-nicn is dated November, 18G3. The translation, pub- 
 lished in the Lliie-book "China, No. 2, 18G4", contains the 
 following i^aragraphs : — " The Prince of Kung [the Tsung-li 
 Ya-m6n] issues these important instructions to Mr. Hart, 
 for his information and guidance. Mr. Lay has been dis- . 
 missed from the post of Inspector-General of Customs, and 
 has been instructed to proceed to Shanghai to wind up every- 
 thing still unsettled by him, and We (knowing that) you, 
 from the date of your entering the Customs to the present 
 time, have at all times acted harmoniously and with suc- 
 cess, hereby appoint you to the post of Inspector-General of 
 Customs Affairs. You wiU reside and transact all business 
 at Shanghai : and if any important question arise, you are 
 authorised, as heretofore, to come to the capital as occasion 
 requires, to report and deliberate thereupon. You will 
 report, as it may be necessary, all matters of daily occm*- 
 ronce at the several ports both on the northern and southern 
 sea-board, and on the Yang-tze, to their Excellencies Li or 
 Chung, as the case may be, Ministers Superintendents of 
 Trade, and will abide by their instructions. Your tact, and 
 experience are known to all, both Chinese and foreign, and 
 it wdU behove you to be still more careful and diligent, so 
 as to justify your present appointment". 
 
 .To Sir Frederick Bruce the Tsung-li Ya-mcn, on No- 
 vember, 15, 1863, wrote : — " The Prince [the Tsung-li Ya- 
 mcn, i. c. the temporary ' Commission for the General 
 Control of Individual (Tributary-) States' Affairs ', of which 
 Prince Kung is the Chairman] has now appointed Mr. Hart 
 to the post of Inspector-General of all the Customs Affairs. 
 Inclosed are copies of the letters (of dismissal) to Mr. Lay, 
 and of the letter appointing Mr. Hart Inspector-General of 
 Customs, the purport of which the Prince would request the
 
 FOREIGN MERCHANT IN CHINA. 117 
 
 British Minister to communicate to the Consuls at the se- 
 veral ports." In his despatch of November 27, 1863, to 
 Earl KnsseU, then Secretary of State for Foreign Affairs, 
 the British Minister in Peking, Sir Frederick Bruce, ob- 
 served; — " Mr. Hart is appointed in his (Mr. Lay's) place, 
 and I trust that the change will make the Custom-house 
 work more smoothly. He will reside on the coast, coming 
 here when sent for on business. It is very desirable, with 
 a view to the maintenance of the Custom-house adminis- 
 tration, that the head of it should not be permanently at 
 Peking, for if he is," Sir Frederick naively adds, "he is 
 supposed to act as the adviser of the Chinese in matters not 
 appertaining to his office, and thereby incurs the odium of 
 the errors they commit." In the same sense the late Mr. 
 Burlingame, then United States Minister in Peking, wrote 
 to his Government in a despatch, dated July 5, 1864 : — 
 "After what had happened [the dismissal of Mr. Lay] we 
 felt it to be our duty to urge upon the Tsung-li Ya-mOn the 
 expediency of not permitting the Inspector of Customs, or 
 any other foreign employe to reside at Peking in a quasi- 
 diplomatic capacity. In this view they most heartily con- 
 curred, and immediately appointed Robert Hart, Esq., in 
 the place of Mr. Lay, with instructions to reside at Shang- 
 hai." 
 
 In reference to this appointment, I should still observe that 
 the despatches of the Tsung-li Ya-m6n are never written in 
 the name of Prince Kung but invariably in that of " the 
 Commission" in question, and in the third person ; and that 
 the above translation, presumedly Mr. Wade's, if correctly 
 reproduced in the Blue-book, is undoubtedly an incorrect 
 one. Had Prince Kung assumed the Imperial^, "We," 
 — by which the translator evidently means to convey the
 
 118 THE TREATY KTOnTS OF THE 
 
 impression tliat Mr. Hart is Imperially appointed, — ITis 
 Imperial Highness would simi)ly have had to pay for that 
 ijrrcatcst of Chinese crimes with his head. For '• and We 
 (knowing that) you. ...have at all times acted hamioniously 
 and with success, hereby appoint you to the post of Inspector- 
 General of Customs Affairs," the translation should read : 
 "and your conduct having at all times been in har- 
 mony (with our — the Tsung-li Ya-men's — wishes) and at- 
 tended with success, you are hereby appointed....," etc. ; 
 whilst in the despatch to Sir Frederick Bruce the rendering 
 should be : "of Customs Affairs," for : " of all the Customs 
 Affairs." And in fm'ther illustration of the subject, I may 
 quote a despatch of the Tsung-li Ya-men to Sir Frederick 
 Bruce of October 24, 18C2, in which we read : — " By Tariff- 
 Eule X., the high (native) Official, charged with the super- 
 intendence of foreign trade is at liberty to engage British 
 subjects to aid in the prevention of smuggling. Accord- 
 ingly in January 1861 the Prince [i. e. the Tsung-li Ya- 
 men] addi-essed a despatch to Mr. Horatio N. Lay, ex- 
 pressly appointing him Inspector-General of Customs, and 
 directing him to engage a number of Englishmen of good 
 character to assist in various subordinate offices at the dif- 
 ferent ports. In the spring of 1861 Mr. Lay applied for 
 leave to return to England for the benefit of his health, and 
 the Prmce in a second despatch instructed Mr. Fitzroy and 
 Mr. Hart to administer the fmictions of Inspector-General 
 together jointly, Mr. Fitzroy continuing to discharge the 
 duties of Commissioner at Shanghai, his proper station. 
 The high officer appointed by the Chinese Government to 
 superintend foreign trade, will, accordmgly, from time to 
 time, either himself visit, or will send a deputy to visit the 
 different ports. The said high officer will be at liberty, of
 
 FOREIGN MERCHANT IN CHINA. 119 
 
 Lis own choice, and independently of the suggestion or no- 
 mination 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 smugglmg ; in 
 the definition of port-boundaries; or in discharging the 
 duties of harbom'-master ; also in the distribution of lights, 
 buoys, beacons, and the like, the maintenance of which 
 shall be provided for out of the tonnage-dues." 
 
 The Tsung-li Ya-men has no power or authority to ad- 
 mit any person whomsoever, least of all an ''outer barba- 
 rian," into the service of the Imperial Government ; and no 
 one can enter that service, unless he be appointed, or unless 
 his appointment be sanctioned, by Imperial Rescript. Mr. 
 Hart, therefore, no Imperial Edict having ever been issued 
 to sanction his appointment, is not in the service of the 
 Chinese Government ; nor is he " Inspector-General of 
 (Chinese) Customs". He is simply a subordinate dJH^^/oyc', 
 viz., the foreign Head-Inspector of that Branch of the 
 Chinese Maritime Customs Establishment, which re- 
 lates to trade carried on in foreign-built vessels, nominated 
 to his post by the Tsung-li Ya-men, and positively subordi- 
 nated to the native Superintendents of Trade, who alone are 
 authorised to appoint other foreign subordinate employes, a 
 right, never formally transferred by them to the Foreign 
 " Head-Inspector," Hence, it would appear, to say the 
 least, that aU the appointments of foreigners, employed in 
 the Chinese Customs service, are irregular ; that, strictly 
 speaking, Mr. Hart is not even in the service of the Tsung- 
 li Ya-men, but, as a foreign subordinate, in no manner or 
 way connected with the Chinese Government, and simply 
 appointed by the Tsimg-li Ya-men, in the personal service 
 of the native Superintendents of Trade ; and that the foreign
 
 120 THE TREATY mGIITS OF THE 
 
 subordinates of the Hcad-Insjiector of Customs, in their turn, 
 are in the personal service of Mr. Hart. 
 
 I have considered it necessary here to point out the true 
 position of Mr. Hart in the Chinese Customs-Service, be- 
 cause, the Inspector-General, for certain reasons of expedi- 
 ency, having been allowed by the Foreign Ministers — con- 
 trcmj, as tlmj themselves state, to their duty,— to take up his 
 permanent residence at Peking in the additional capacity of 
 confidential political adviser of the Tsung-li Ya-men, the 
 importance of his public position and the extent and ten- 
 dency of his influence and authority f have been as greatly 
 misrepresented abroad, as his ability has been exaggerated, 
 by interested persons. 
 
 The communicated article, previously reproduced and now 
 claiming our attention, like all prior and subsequent papers, 
 which have thus far emanated fi'om the pen of the Inspector- 
 General and found their way into the press, is a feeble pro- 
 duction, — superficial, illogical, unreliable, and betraymg the 
 writer to lend himself simply as an instrument to the Chinese 
 policy. I "When the ratifications of the Tientsin Treaty," 
 Mr. Hart, or rather om- anonymous memorandist, states, 
 
 t The Inspector-General's " authority " has penetrated even into the Govemment-ofaces. 
 Referring to certain views of.Sir Rutherford Alcock, the Secretarj' to H.B.M. Board of Trade, 
 in a letter dated May 19,1869, writes to the Under-Secretary for Foreign Affairs, the Rt. 
 Hon. J. Hammond : — " This ^-iew is expressed even more emphatically by Mr. Hart who, in 
 his very able letter to Sir Rutherford Alcock of December 4, 18G8, says : ' Of couree, force 
 will wrest anything from China ; but wherever there is action there is a reaction ; and as sure 
 as natural laws continue to act, so sure it is that ajipeals to force in one age will give to the 
 men of a later day a heintaje ofvenf/ennce — the Europeans of some future day may wish 
 tliat their forefathers had not sown the seeds of hatred in the bayonet-ploughed soil of 
 Cathay ' ". Now, for what I know, this may be truly Irish, and emphatically poetical : but) 
 soberly and historically speaking, it is the reverse of sense and truth. 
 
 X In the hitter sense, Mr. Hart's first memorandum, addressed in 18G5 to the Tsung-li 
 Ya-men, and at the close of 1871 , in a highly colored translation by the late Commissioner of 
 Customs, Mr. Bowra, published without date, may seem to form an exception. But, if the 
 very object of that paper had been, to counteract the simultaneous mcmorandiun of Mr. 
 Wade, which it accompanied, and to set the Chinese Authorities against all Western ideas 
 of progress and refonn, it could hardly have accompli.*hed its object m a more effective 
 manner, than it did. I shall examine it elsewhere.
 
 FOREIGN MERCHANT IN CHINA. 121 
 
 *'were exchanged in 1860, the transit system stood thus : 
 (outward) Foreign merchants were authorised to go inland, 
 purchase and convey to a treaty port native produce intended 
 for shipment foreign, and (inward) Foreign and Chinese mer- 
 chants were authorised to convey foreign merchandise fi'om 
 a treaty port to a specified mart in the interior ; and, in each 
 case, exemption from taxation en route was to be procured 
 by the payment of a single tax — the treaty or tariff Transit 
 Due. The first question that came up under the Transit 
 system as estabhshed in 1860, was the follovdng : — Must 
 the Foreigner in per son be with his merchandise en route y 
 entering or leaving the interior ? The Authorities at Peking 
 took a common sense view of the matter ; and at once de- 
 cided, in 1861, that the Foreigner need not accompany his 
 goods: he may employ any agents 1| for their conveyance, 
 but Agent, Goods and Certificate must travel in company, 
 to secure exemption." 
 
 Those, who are familiar with the reasoning tactics of the 
 Jesuit fathers, are aware that the point, on which the entire 
 argument hinges, is almost invariably introduced by them 
 into their premises as an indifferent and universally accepted 
 fact. Just so the memorandist proceeds here in regard to the 
 in transitu theory. That theory — the petitio principii — he 
 presents to his readers as an unimportant, well-kno'svn 
 Treaty-stipulation, a recognised law of China, omnibus notis- 
 sima ; in order to go on to the discussion of what, according 
 to him, is the first important point, viz. : " Must the Foreigner 
 in person be with his merchandise en route, entermg or leav- 
 ing the Interior?" The mere fact, that such a question 
 
 II The text, certainly, reads : " any agents "; but from the subsequent passage : — " Native 
 Produce purchased by Foreigners or by Natives the agents of Foreigners, if intended for 
 exportation, that is for shipment to a foreign country, may be brought from the Interior 
 to a Treaty-Port in transit by Foreigners or their agents," it is clear, that the agents, who 
 had been employed for the purchase, are meant.
 
 122 THE TllEATY RIGHTS OF THE 
 
 conkl have come np at all and been referred to Peking, shows 
 more forci])]y, perhaps, than any language of mine could, 
 the ohstruciive spirit in which the Treaty -provisions had 
 been committed to the Chinese Provincial Authorities. Art. 
 xiii. of the British Treaty of Tientsin is plain. There was 
 absolutely no room for any view of its own or any decision 
 to be taken by the Tsung-li Yamen on the point mooted : 
 they had but to look at the Treaty to convince themselves 
 of the preposterous nature of the case submitted to them. 
 Yet, what, after all, was the hardly less preposterous deci- 
 sion, so highly lauded and approved of by the anonymous 
 memorandist, the Ya-men came to ? 
 
 Let us imagine, under Chinese-British stipulations simi- 
 lar to those of the British-Chinese Treaty, Mr. Yik A-Kwok, 
 a general merchant and cheese-monger, set up in business 
 in London, requesting his native agents, say Messrs. Smith, 
 Brown & Co. of Exeter, to forward to him by an ordinary 
 train a hundred tins of Devonshire cream for exportation 
 abroad ; imagine further every tenth station between Exe- 
 ter and London to be a Custom-house, and every remaining 
 station a war -tax barrier ; and Messrs. Smith, Brown & Co., 
 after having purchased the English produce, paid thereon 
 to the British Authorities in Exeter the inland duties com- 
 mutation-tax stipulated by Treaty, and been furnished ac- 
 cordingly with an inland-duty-paid certificate, to have to 
 accompany, personally, Mr. Yik A-Kwok's hundred tins of 
 Devonshire cream, in order to obtain to the certificate in 
 question the visa of the native Customs and War-tax offi- 
 cials at every station between Exeter and London, and at 
 every station to afford to the the native agents, Messrs. 
 Smith, Brown & Co. the opportunity of ''tipping" the 
 native tax-collectors and their underlings. For, if, instead
 
 FOREIGN MERCiHANT IN CHINA. 123 
 
 of conforming to the time -honored custom, Messrs. Smith, 
 Brown & Co. were, perchance, to insist on the " onter- 
 barharian's,"i.e. the Chinese merchant's Treaty-rights : why, 
 the native Custom-house and War-tax harrier officials, high 
 and low, would — we are still. to imagine that all this could 
 take place in England — consider it their natural duty to 
 impede and delay the progress of Mr. Yik A-Kwok's Devon- 
 shire cream from the inland mart to the port of exporta- 
 tion and the inland-duty-paid certificate notwithstanding, 
 by every dodge at their command. The tins, of course, will 
 have to be weighed, and inspected, and the contents duly 
 examined to make sure that they really are what the cer- 
 tificate describes them to be ; and whilst one official is certain 
 to declare the cream to be cheese, another will as certainly 
 declare it to be butter, both agreeing as to the case being 
 a dubious confiscation-case, demanding reference to the 
 Authorities in London ; and if " the Agents, Goods and 
 Certificate, who and which must travel in company to secure 
 exemption," reach their destination at the end of a month, 
 both Messrs. Smith, Brown & Co., and their principal, the 
 Chinese general merchant, — who had his Devonshire cream 
 purchased for exportation to Paris, probably for a special 
 occasion, — may thank their stars that they succeeded in 
 *' securing exemption " at all. But what, if the goods had 
 not been accompanied by the agents ? In that case, we 
 are told, they would, in despite of payment of " transit-- 
 duty and " transit " -certificate, have enjoyed no "exemp- 
 tion from taxation en route," that is to say, they would, be- 
 sides the "squeezes" of native officials, have had to pay 
 all the exorbitant Custom-house and war-tax barrier imposts, 
 here assumed to be illegally levied by the British Government. 
 My object in adducing this imaginary case, has been to
 
 124 THE TREATY RIGHTS OF THE 
 
 bring home to the Enghsh reader the irrationally obstruc- 
 tive tendency of the " Transit- System ", as it is actually 
 practised in China, at the same time that it affords a fair 
 illustration of the "common sense" of both the Tsung-li 
 Ya-men in deciding, that the agent as well as the duty-paid 
 Certificate has to accompany goods, purchased inland, in 
 order to secure them from illegal taxation, and of the 
 Foreign Inspector-General in endorsing that decision. The 
 only thing militating against the latter is that it has, by 
 Treaty, absolutely no foundation to rest either itself or its 
 " common sense " upon. Art. xxviii. broadly provides, that 
 any British subject desiring to have produce, purchased 
 inland, conveyed to a port, may clear his goods of all inland 
 charges by one single payment, that of the stipulated com- 
 mutation-tax ; and that thereupon, " a certificate shall be 
 issued, which shall exempt the goods from all further inland 
 charges whatsoever." Nothing can be more clear. It is 
 the certificate, which is to clear the goods, and, once granted, 
 unconditionally so. Since in China, however, no more 
 than elsewhere, a bale of silk, or a chest of tea, can be or- 
 dered and made to proceed to such or such a port by its 
 own locomotion and geographical knowledge, but, as the 
 Treaty intimates, has to be conveyed to its destination, and 
 consequently, to be placed in charge of some person, viz., 
 the carrier or barge -master engaged for the purpose ; and 
 since Rule vii of the Rules of Trade subjects the certificate 
 in question to a visa at every barrier : the same Rule states 
 that " the person in charge of the produce will receive a cer- 
 tificate, which must be exliibited and vised at every barrier, on 
 its way to the port of shipment. " It is not even said that the 
 certificate is to be exhibited by the person in charge of the 
 produce. As in the case of foreign goods, conveyed for sale
 
 FOREIGN MERCHANT IN CHINA.. 125 
 
 into the Interior, it has simply " to be produced." If it be 
 the British merchant's pleasm-e or interest to send a coolie, 
 or to instruct his agent or any other person, to accompany 
 to the port any native merchandise he may have purchased 
 inland : he, certainly, is at liberty to do so ; but there ex- 
 ists no Treaty-stipulation, which so much as implies that, 
 the inland commutation-tax having been paid and a " tran- 
 sit "-certificate obtained, his ^^ Agent, goods and certificate 
 must travel in company to secure exemption " from further 
 illegal taxation. 
 
 The Inspector-General -svrote manifestly in total ignorance, 
 or else in wilful disregard, of the real state of the case. For, 
 in his despatch of October 26, 1861, to Earl KusseU, Sir 
 Frederick Bruce, in explaining certain Notifications then 
 issued, and of w^hich I shall have to speak hereafter, states : 
 — " The Chinese were anxious that the exemption should 
 not be claimed except in cases where the goods were ac- 
 companied by the foreign agent. They stated that, already, 
 Chinese representing themselves to be agents for foreigners 
 claimed certificates for inland produce at the first barrier, 
 but instead of bringing it to the port, sold it in transitu, thus 
 defrauding the revenue of all duties. I ohjected to the pro- 
 posed limitation as inconvenient, not in accordance icith Treaty^ 
 and giving no real security to the Chinese revenue. But as 
 it was fair that the Chinese should be protected against 
 such frauds, I agreed that, where a Chinese agent is em- 
 ployed, he is to produce proof of his being employed by a 
 foreigner, and that the foreigner, in whose name he acts, 
 is to declare himself responsible for the duties on the pro- 
 duce certificated, whether brought to the port or not." 
 
 Our memorandist relates another case, which, so late as 
 1868, had "come up for discussion" at Peking, the Tau-
 
 120 THE TREATY EIGHTS OF THE 
 
 tai of Niugpo having seized some foreign goods, under a 
 " transit-" pass for the Interior purchased by a Chinese 
 trader : had, under these circumstances, the native merchant 
 a right to the *' transit " privilege ? That he did possess that 
 right by Treaty, has been ah-eady shown ; and accordingly 
 the Tsung-li Ya-men, our memorandist assures us,. " at once 
 wrote back to say, that the Tautai's desire to guard against 
 evasion of inland taxes had blinded him to his duties under 
 foreign treaties." Now, remembering what at the same time, 
 Sir Eutherford Alcock saw occasion to impress upon the 
 Tsuncr-li Ya-men, and Mr. Wade confessed to Her Britannic 
 Majesty's Board of Trade, — not to speak of the earlier des- 
 patches, addressed to the Ya-men by Sir Frederick Bruce— 
 on the subject of the Y^a-men's utter disregard of the duties 
 imposed by Treaty on Provincial Authorities, as recorded at 
 the commencement of this essay : a genuine despatch 
 from the Tsung-li Ya-men to Tseng Kuo Fan, written in 
 such a tone as the anonymous memorandist depicts, 
 would be a unique document, indeed, and I only abstain 
 from calling upon the Inspector-General to produce it as a 
 historical ohjet de vertu, lest I should appear to take his 
 pleasantry au serieux. It is, I fear, wdth the asserted 
 tone of the Tsung-li Ya-men on this occasion, as it is with 
 its asserted alacrity. If the reader will refer to the *' com- 
 municated " memorandum itself, he will find that it was not 
 till the Ya-men had exhausted every unfair argument and 
 subterfuge, that it could be brought to admit the plain im- 
 port of the Treaty of Tientsin upon the point in question, 
 "without," as the Inspector-General naively adds "any 
 foreign pressure or suggestion." 
 
 The principal trait, however, in connection with this sub- 
 ject, to which I would call attention in the memorandist's
 
 FOREIGN MERCHANT IN CHINA. 127 
 
 statement, consists in a palpable self-contradiction on his 
 part, couched in these words : — 
 
 The Imperial Commissioner was As the Tsung-li Ya-men's ac- 
 instructed by the Ya-m(}n§ to ac- tion was the issuing, for Chinese 
 quaint the various Custom-houses guidance, of what was merely a 
 with the reply sent to the question clearer statement of a rule already 
 that had arisen at Ningpo, for their made public 'by the notification of 
 guidance. The despatch is in the Treaties, it was not thought in any 
 archives of each Custom-house, and way necessary to communicate the 
 a former Tau-tai at Shanghai print- despatch to Foreign officials. 
 ed and published it. 
 
 But for Mr. Ying's publication, Tseng Kuo Fan's despatch 
 would probably never have quitted the mysterious recesses 
 of " the various Custom-houses." There are in China Chi- 
 nese and Foreign Custom-houses. The latter alone can be 
 meant by the Inspector-General ; who knew perfectly well, 
 that his Excellency Tseng had the right to address, and ad- 
 dressed, only those within his own jurisdiction. He also 
 knew, that "Custom-houses" as such are not instructed, 
 and that each foreign Custom-house has its native Inten- 
 dant of Customs, — recognised by the Chinese Government — 
 and, the former's subordinate, a foreign Inspector, usuahy 
 styled Commissioner, of Customs — not recognised by the 
 Chinese Government, — to whom instructions are, and have 
 to be, addressed. Moreover, he knew that it would have 
 been altogether against Chinese official etiquette for Tseng- 
 Kuo Fan to have directly addressed the foreign Commis- 
 sioner of Customs ; his own immediate foreign subordinate 
 and the foreign Commissioner's superior being the Head- 
 
 § No "Imperial Commissioner" receives, or would accept, instructions from the Tsung-li 
 Ya-men. It was in his capacity of Superintendent of Trade ("for the Southern Ports, Canton 
 excepted, or " Acting Superintendent of Customs," as he is styled in the translation, which 
 appeared in the North-China Herald iov A\igt. 18, 1871), that Tseng Kuo Fan issued his No- 
 tification of November 10, 1868. And even in that capacity it does not appear that he re- 
 ceived either "instructions," or .simply a "communication " from the Ya-mea to the effect 
 referred to. They corresponded, moreover, on terms of perfect equality.
 
 128 THE TREATY KIGIITS OF THE 
 
 Inspector or '* Inspector-General of Customs." To whom, 
 then in reaUty, were TsAng Kuo Fan's instructions con- 
 veyed ? "The despatch," our memorandist asserts, "is 
 in the archives of each Custom-house." But, what the ar- 
 chives of the native Intendants of Customs contain, is al- 
 together unknown to him. He only knows, what docu- 
 ments are preserved in the archives of the Foreign Head- 
 Inspectorate at Peking, and of the foreign Custom-houses at 
 the ports. Again, however, he states, that " it was not 
 thought in any way necessary to communicate the despatch 
 to foreign olBficials." Here, then, there is seen to exist a pal- 
 pahle self-contradiction in the memorandist' s statement ; and 
 once more we have to inquu-e : to whom was the despatch 
 of the Superintendent of Trade addressed ? I shaU have 
 some observations to offer upon this subject under the fol- 
 lowing Section. 
 
 Meanwliile, recm-ring a second time to the case just com- 
 mented on, the anonymous memorandist, holding up to the 
 public his own candour and the Tsung-li Ya-men's honesty 
 of purpose, remarks : — " In issuing its instructions in 1868, 
 and in repeating them to the Shanghai Customs in 1871, 
 the Ya-men has made no new concession in respect of In- 
 loard Transit, but has merely honestly ordered subordinate 
 offices to give fuU and proper effect to a previously existing 
 rio-ht." Now, considering that the Treaty of Tientsin was 
 concluded in 1858, and ratified m 1861 ; and that, after 
 havmg, for the space of ten long years, supported its Cus- 
 toms-subordinates in resisting an indubitable right to which 
 the provisions of that Treaty entitle the merchant, as weU 
 as in levying upon foreign inland trade illegal taxes, in de- 
 fiance of the concluded Treaty and in the very year of its 
 ratification enforced by special Regulations, it was not till
 
 FOEEIGN MERCHANT IN CHINA. 129 
 
 1868 that, under the pressure of British and foreign diplo- 
 macy, the Tsung-h Ya-men took a first totally ineffective, 
 and, three years later, a second only partially effective, step 
 to carry a clear, existing Treaty-right into practice : it seems 
 to me that, under such circumstances, even to allude to the 
 Ya-men's ** honesty of purpose," required a man with a 
 bold front. 
 
 " In 1870, however," the memorandist continues, " and 
 in respect of Outiimrd Transit, the Ya-mcn did make a, con- 
 cession : in the Revised Treaty, rejected " — he sarcastically 
 adds — **at the prayer of the Mercantile Communities, the 
 Ya-men had agreed to regard destination and not ownership as 
 the condition of the title of Native Produce to the Transit 
 privilege." It has already been shown that, both according 
 to the spirit and the letter of the Treaty of Tientsin, des- 
 tination, i. e. bond fide intended exportation to foreign parts 
 by British and other foreign subjects, of native merchandise 
 to be conveyed for that purpose from the Interior to a port, 
 does constitute the essential and only condition entitling it 
 to a commutation of inland charges, and that ownervship 
 most assuredly does not. But what in this place alone 
 claims our attention, is the startling disclosure of Tsung-li 
 Ya-men generosity, in the shape of " a concession " hitherto 
 unsuspected, in the rejected Supplementary Convention of 
 Peking of October 23, 1869. I can but state, that Sir 
 Rutherford Alcock himself, — although in his notes on the 
 Convention he attributes to every single Article whatever 
 possible advantages, real and imagmary, he could think of, 
 — remained in complete ignorance of the fact, " communi- 
 cated" by the Inspector-General. The British Board of 
 Trade also, in reference to the preliminary understanding 
 arrived at as to the bases of revision by the Mixed Commis-
 
 130 THE TREATY RIGHTS OF THE 
 
 sioii, is of opinion, that : — " The proposal (regarding Transit 
 Dues) is nothing more than a literal fulfilment of existing 
 stipulations in the Treaty of Tientsin, and involves no new 
 concessions whatever;" and if the reader will refer to the 
 text of the Convention, he will convince himself, on a closer 
 inspection, that the very reverse of the Inspector-General's 
 assertion is the case. What the Tsung-li Yamen, in a me- 
 morandum, dated August 1st, 1868, and addi-essed to the 
 ]\Iixed Committee of Revision, proposed was, " that native 
 produce, brought from the interior under a transit pass by 
 foreign merchants, on arrival at the barrier nearest the port, 
 should then pay there both Treaty transit due and tariff ex- 
 port duty, and should, in addition, lodge a separate amount 
 equal to the transit dues, as a temporary deposit." This 
 additional tax of about 3 "/o ad valorem was to be returned, 
 if the produce was exported to a foreign port within three 
 months ; it was to be forfeited, if the produce was shipped, 
 within three months, to another Chinese port ; and it was 
 equally to be forfeited, if the produce, at the expiration of 
 three months, had not been shipped at all, because, accord- 
 ing to the Ya-men's view, it might then '' be safely inferred 
 that it had been sold to Chinese at the port." So much for 
 the memorandist's " concession " and the Tsung-li Ya-men's 
 generosity, "which consisted in this, that, instead of illegally 
 confiscating goods, brought fi-om the Interior, not shipped 
 within three months after arrival at the port and assumed to 
 luxve been sold to Chinese, the Ya-men was content to in- 
 flict only an illegal fine of 3°/o for " the (assumed) improper 
 use made of the transit pass." And was all this unlmown 
 to our memorandist, when he communicated his state- 
 ment to the Press ? The Inspector- General was himself a 
 mombor of the Mixed Connnission referred to, and took a
 
 FOREIGN MERCHANT IN CHINA. 131 
 
 leading part in the Revision of the Treaty of Tientsin, 
 throughout. 
 
 Next, our memorandist, with that duphcity of view and its 
 accompanying logical inconsistency, which a prolonged so- 
 journ in China and a more constant intercourse with the 
 Tsung-li Ya-men would seem to impart to not a few Euro- 
 peans, undertakes the task of showing, firstly, that Sir 
 Rutherford Alcock, in rightly considering that the inland 
 charges commutation-tax, stipulated by Treaty, frees mer- 
 chandise from all other taxation, went further than the 
 British Government could authorise and, therefore, was 
 wrong in that view; and secondly, that Sir Rutherford 
 Alcock, having come round to the wrong side of the ques- 
 tion, was right in his first opinion, because, if it be remarked 
 that there is a difference between Inward and Outward 
 Transit, and if, in respect of Inward Transit, foreign mer- 
 chandise be divided into three different stages as to time, 
 what His Excellency meant to say was what he did not say. 
 The Inspector-General, it would seem, has to labour hard 
 for his support. 
 
 On summing up his views as to " the position, in which 
 transit business now stands," the memorandist adds : "as 
 understood by the Ya-men and Foreign Representatives at 
 Peking." What authority he had for this statement, I ig- 
 nore ; but, considering that, on the one hand, the memo- 
 randist's views are utterly at variance with, and detrimental 
 to, the rights secured to foreign merchants by the Treaty 
 of Tientsin, and that, on the other hand, the memorandist 
 is publicly known to be the present Inspector-General of 
 Chinese Maritime Customs, Mr. Hart : it appears to me, 
 that it concerns the Consular Body and the General Cham- 
 ber of Commerce of Shanghai, to ascertain officially from
 
 132 THE TREATY RIGHTS OF THE 
 
 the Foreign Ministers in Peking, whether the Inspector- 
 General's assertion be, or be not, founded in truth. 
 
 Lastly, our anonymous memorandist, whilst dwelling 
 with emphasis on asserted malpractices of Foreign mer- 
 chants, remains positively mute in regard to the proven 
 violation, ceaseless, flagrant, and systematic, of the Treaty- 
 rights of the Foreign merchant on the part of the Chinese 
 Government, the Chinese Tsung-li Ya-men, and the Chinese 
 Provincial Authorities, their tax- and " squeeze "- gathering 
 employes and underlings, — as rapacious, exacting, and un- 
 scrupulous as their masters, but in the memorandist's esti- 
 mation, simple innocents, who, if they now and then hap- 
 pen to unwarrantably confiscate foreign goods, do so from 
 mere want of sufficient official experience, — and concludes 
 thus:— ''From 18G1 to 18G8 the Provincial Officials were 
 constantly complaining at the Ya-men of the abuse of the 
 Transit system ; and the abuse of the system as intended for 
 Produce Outward, added to the neglect to distinguish clearly 
 between Transit Inward and Transit Outward, threatened to 
 make the whole system inoperative." In other words, the 
 Inspector-General, putting the saddle on the wrong horse, 
 lays the fact, that tlie Treaty of Tientsin, so far as its pro- 
 visions respecting foreign trade with the Interior of China 
 arc concerned, has virtually remained and remains "a dead 
 letter," to the charge of Foreign merchants in general and, 
 considering the relative extent of that trade, of the British 
 merchant in particular. I might in silence pass over a state- 
 ment of this nature as one of those peculiar attempts at 
 pleasantry, in which the Inspector-General occasionally 
 indulges for the benefit of his native employers, were 
 it not that also the Lords of the Committee of Her Bri- 
 tannic Majesty's Privy Council for Trade — I cannot help
 
 FOREIGN MERCHANT IN CHINA. 133 
 
 thinking, with undue severity — remark upon " the fraudu- 
 lent evasion by British merchants of the obhgations and con- 
 ditions imposed by the Treaty of Tientsin." I shall, there- 
 fore, revert to this subject when, in the next section, the 
 practical working of the Treaty will be discussed. 
 
 The line of conduct and argument, adopted by the Tsung- 
 li Ya-men, in reference to our subject, explain themselves 
 from the circumstances under which the ratification of the 
 Treaty of Tientsin was enforced, the reactionary policy of 
 the Chinese Government, and the character of Chinese 
 statesmen. There was a time, when His Imperial High- 
 ness Prince Kungtook everyopportunity of impressing upon 
 Foreign Plenipotentiaries and Representatives, that "the 
 Prince in his dealings with men is most sincere; whatever 
 he says is the truth." Foreigners have gradually come to 
 know so well how to estimate the value of such assevera- 
 tions, that even the Tsung-li Ya-men thinks it useless to 
 repeat them any more. What, in reference to its newly 
 proposed regulations touching Transit-Passes, &c., in the 
 first place deserves notice is, that, as has been previously 
 pointed out, the Ya-men is not the Chinese "Foreign 
 Office." It forms no part of the Government-machinery of 
 China. It has no place in the official State-directory of the 
 Empire. It possesses no constitutional authority of its 
 own.ir Its assumed power we find, on the plain grounds 
 just adduced, openly repudiated by the very City-officials of 
 the Capital.* The Ya-men, as its title expresses, is simply 
 a temporary " Commission, by Imperial command appointed 
 for the general control of the (commercial) affairs of (those) 
 
 % Dr. Williams also, in an official despatch of January 25, 1868, to the American Gov« 
 
 ernment, remarks that the Ya-men, " notwithstanding its great influence (?) and the high 
 rank of its members, has hitherto no legal existence of itself." 
 
 • See the Shanghai Badytt and Wtekly GvurUr for April 4, 1872, p. 210.
 
 134 THE TREATY RIGHTS OF THE 
 
 individaal States, (which compose the Ching Empire Uni- 
 versal)."! In matters relative to Treaties concluded, it has 
 no warrant to initiate propositions for any new rules or 
 regulations, unless especially authorised to that effect by 
 Imperial Kescript. In the present case it had been invested 
 with no such authority. But the commercial relations be- 
 tween China and Western Powers rest on the basis of exist- 
 ing Treaties and certain Trade Rules, framed by duly au- 
 thorised Plenipotentiaries m the name of, and subsequently 
 ratified by, the Governments concerned, and hence, in prin- 
 ciple, framed by those Governments themselves. Such Trea- 
 ties, therefore, even in China admitted to possess the temporary 
 force of Statute Laws,]: having been publicly promulgated 
 for general observance and guidance, admit of no modifica- 
 tion so long as they obtain ; nor can the Trade Rules, pos- 
 teriorly incorporated with them, be lawfully altered or mul- 
 tiplied, save by the Governments concerned, in strict con- 
 formity with Treaty provisions, with the concurrence of the 
 Mercantile Communities interested, and on due premonitory 
 notice being given to the latter of the terminus a quo for any 
 new regulations thus agreed upon. 
 
 The proposed Kegulations (a), moreover, — I quote here the view, taken 
 by me of these regulations at the time of their appearance, from the 
 ShcDujJiai Eveninii Courier, — are, professedly, on the one hand incomplete, 
 on the other conditional. They are incomplete, inasmuch as they do not 
 extend to Chinese produce destined for exportation, i.e., to the better 
 part of the whole foreign trade carried on with China, respecting which 
 " the Ya-men has not yet satisfied itself." They are conditional, inas- 
 much as the Ya-men's "decision " is rendered subject to the approval 
 
 t The full official designation of the so-called Tsung-li Ya-men is : — 
 
 followed by the names of the members of the Commission. 
 
 X See the Tsuug-li Ya-meu's Despatch of June 19, 1863, and Sir Frederick Bruce's reply 
 above, p. 5-(j.
 
 FOREIGN MERCHANT IN CHINA. . 135 
 
 of tlie native Superintendents of Trade for the Northern and Southern 
 Ports. For the Tsung-H Ya-men to have submitted to the consideration 
 of the Representatives of Foreign Powers propositions thus formulated, 
 constitutes of itself an offence. 
 
 But the Ya-men does not stop here. When those native Superin- 
 tendents of Trade, it writes, shall have replied, the Ya-men " will, after 
 due deliberation, address an ojjiclal communication || to the American 
 Minister and to the Ministers of other (tributary) States, § in order that 
 they may instruct their subordinates accordingly,'' In this passage, the 
 Yamen, assuming — as it does in its correspondence with the Foreign 
 Ministers throughout, — the Autocracy Universal of the Emperor of 
 China, by implication maintains that, as the Foreign Consuls are the 
 subordinates of the Foreign Ministers, so the Foreign Ministers are 
 the subordinates of the Tsung-li Ya-men (and of the native Superin- 
 tendents of Trade), whose "official communications" they have but to 
 read and obey. Is it irrational to conjecture that the British Minister 
 at least, — His Excellency being one of the most distinguished of living 
 sinologues, — may have returned the Ya-men's note, and demanded an 
 apology for its insulting terms ? H 
 
 The note further reads : — " (The Wmen) will be obhged to the American 
 Minister to issue instructions to the foreign merchants at the ports" in the 
 sense of its ** communication " regarding the payment of li-Jdn, or war- 
 taxes. The United States Minister, (as each other Minister individual- 
 ly), is here requested to issue instructions (being the Ya-men's instruc- 
 tions to himself,) to the body of foreign Merchants in China at large, — 
 a request, which draws no distinction between foreigners (according to 
 the Ya-men, without distinction subjects of the Emperor of China), and 
 conveys a second insult to the Pnepresentatives of Foreign Powers gene- 
 rally. I need hardly observe, that no Minister can, without a flagrant 
 breach of diplomatic decorum and neglect of his public duty, accept from 
 the Government to which he is accredited — and the same remark applies 
 here to the Tsung-li Ya-men,-^even a s6)»i-official communication, attri- 
 buting or imputing to him authority over the subjects of other Powers. 
 
 II The Chinese term is : BS W , and cenveys the commanding sense of an instructioti. 
 
 § The American version renders erroneously: "the Ministers of other Powers;" the 
 text reading ^ P ;;^ & 
 
 5 This was written before Mr. Johnson's letter to His Excellency, of June 21, 1872, had 
 appeared, mdicaimg that the Ya-men's note was not returned by Mr. Wade.
 
 130 THE TREATY IlIGIITS OF THE 
 
 Lastly, the Ya-mun bases its proposed new Rules solely on Art. xlvi. of 
 the British Treaty of Tientsin, stating that — "The Chinese authorities 
 at each port shall adopt the means they may judge most proper to pre- 
 vent the revenue suffering from fraud and smuggling." But the Ya-m«!n 
 overlooks or disregards, that the Article in question applies exclusively 
 to the prevention of smuggling at (he porta; that it has, and can have, 
 no bearing whatever on the rights of the foreign merchant to trade and 
 barter in the Interior; that it is but one out of sixty-six Articles, which 
 compose the Treaty ; and that the means which, on the ground of it, the 
 local authorities at each port may judge most proper to adopt, have to be 
 in accordance with the Treaty's sixty-five remaining Articles.* 
 
 As regards the proposed Rules themselves, which are distinctly stated 
 to have been framed by the Inspector-General Mr. Hart, in concert 
 with the native Intendant of Customs at Shanghai : those touching 
 "Drawbacks and Exemption-Certificates," (notably Rule ii.) are worded 
 with a degree of inconsistency, looseness, confusion, and disregard of 
 Treaty-obligations, which speaks ill for the present Administration of the 
 Chinese Maritime Customs-Service. Drawbacks and Exemption -Certifi- 
 cates, moreover, which have nothing in common with each other, are 
 mixed up together ; and the latter again, not even mentioned in the 
 Tientsin Treaty, are subjected to anonymous Treaty-provisions. 
 
 The recovery, by Drawback, of duties, paid upon the importation of 
 foreign goods, on their re-exportation to forciijn parts or Honghouf/, was, 
 without any limitation as to time,t secured to the British merchant by 
 
 • It is true, that the conchiding sentence of Rule 10 of the Trade Rules, attached to the 
 Treat}' of Tientsin, reads somewhat vaguely : — " The Chinese Government will adopt what 
 measures it shall find requisite to prevent smuggling upon the Yang-tse-kiang, when that 
 river shall be opened to trade." But, as I have already had occasion to remark in a more 
 general sense, the Rule here h;is to be construed in conformity with the Treaty, not vice 
 versa. Besides which, the opening sentence of this very Rule 10 states : — " It being, bt/ 
 Trenti), at the option of the Chinese Government to adopt what means appear to it be^^t 
 suited to protect its revenue accruing on British trade, it is agreed that one imiform system 
 shall be enforced at every port," 
 
 t From Mr, Consul-General Seward's letter to the Chamber of Commerce of Feb. 24, 
 1871, it would appear, that there obtains some misapprehension on this point. The term 
 for the re-exportation of Chinese produce was originally fixed at 3 months in Sir Frederick 
 Brucc's Notification of October I'i, 1861, and subsequently, by the Tsung-li Ya-men's des- 
 patch of June 25, 18fi3, extended to 12 months, as was also the term for the recoverj' by 
 drawback of the coast-trade duty. It was on the occasion of applj'ing for this extension, 
 that Sir Frederick Bnice remarks : — " I am informed that, to meet the exigencies of trade, 
 a period of twelve months should be allowed, witliin which the benefit of the regulation 
 should be extended to the re-exporting merchant." It was no doubt this arrangement, 
 which Prince Kung bore in mind, when " stating to the United States Minister .'it Peking.
 
 FOREIGN MERCHANT IN CHINA. 137 
 
 Art. xlv of the Treaty of Tientsin. Art. v. of Sir Frederick Bruce's 
 Notification of October 12, 1861, published in Shangliai on October 30, 
 1861, entitles him to Exemption-Certificates, "protecting duty-paid 
 foreign imports, on being re-exported to any jyort in China, against all 
 further exaction of duty by the Maritime Customs." 
 
 Ptule I. proposes to violate Art. xlv. of the British Treaty of Tientsin 
 in regard to two essential points, viz ; the unlimited time open to appli- 
 cations for Drawbacks, which it is now unreasonably desired to Limit to 
 a period of thirty months from the date of importation ; and the condi- 
 tions, under which the Drawback-Certificate is to be granted, or the 
 goods are to be seized. The Treaty-conditions, and the conditions of the 
 proposed Eule, respectively, are : — 
 
 T r cat ij-Cundit ions. Riilc-CmidUioHS. 
 
 In order to prevent frand on the re- The officer, deputed by tlie Intendant of 
 
 venue, the (native) Intendant of CustonisJ Customs, shall ascertain hj inspection 
 shall cause examination to be made by that the goods are the original goods ivi- 
 suitahle officers, to see that the duties paid ported, and in the original package, and 
 on such goods, as entered in the Custom- that no^ie have been icifJidrai/ni or ea;- 
 house books, correspmid with the rcpre- cJmnged, . . . but, if the goods be found 
 sentation made, and that the goods remain to be other tlum the goods they are staled 
 with their original nmrks unchanged ;\\ to be, that then they icill he confiscated 
 but, if, on such coutmination, the In- [there and then], according to the Treaty, 
 tendant of Customs shall detect any fravA (The offensive, arbitrary, and vexations 
 
 on the rcvcmve in the case, then the goods character of this Rule, objectionable in 
 shall be subject to confiscation by the every sense, needs no further explana- 
 Chinesc Government. tiou). 
 
 Eule II. proposes, in violation of Art. x. and xi. of the Tientsin Treaty, 
 to do away with the merchants' right to carry on a direct trade, from 
 Hongkong or abroad, with the ports of the Yaug-tse river ; and, at va- 
 riance with Art. xlv, to restrict the re-exportation to foreign ports of 
 foreign duty-paid imports from a second Chinese port, so far as Draw- 
 backs are concerned, to a period of thirty months, to be reckoned from 
 the time of the arrival of the goods at the first port. 
 
 Rule iii. is a tardy and unsatisfactory relaxation of a rule, hitherto 
 enforced by the Foreign Customs-Authorities, and resting on no other 
 foundation save their personal unacquaintance with the grammatical 
 
 that the period of one year for the granting of drawback on goods re-exported, was de- 
 termined at the request of the mercantile body." Possibly, the Hon. Mr. Low misunder- 
 stood by " goods " (Chinese produce) " foreign goods." 
 
 J The American version renders : " the Superintendent of Customs," — a term very 
 usually employed, but which is apt to be confounded with '• the Superintendent of Trade." 
 •^a far higher charge. 
 
 II That is to say : the package of the goods remaining essentially intact.
 
 13B THE TREATY RIGHTS OF THE 
 
 nsagosoftho English language. § The Inspoctor-Gcncral now proposes 
 to depart from tlie purely vexatious practice, unwarranted by any Treaty- 
 provision, so far as to dispense with the signature of the dead. 
 
 Rule iv. contains a repetition of a portion of the objectionable para- 
 graph of Rule i. respecting the conditions in violation of Art. xlv. of the 
 Treaty of Tientsin, under which alone it is proposed that Drawback- 
 Certificates shall be granted. The Rule, moreover, apphes those condi- 
 tions, without warranty, to Exemption- Certificates. 
 
 Passing on to a review of the proposed Rules touching " Transit- 
 Passes " : they are marked by the same contempt for Treaty engage- 
 ments, intensified by duphcity, which we have found to characterise the 
 preceding Rules relative to Drawbacks and Exemption-Certificates, and 
 would appear to have been designed with the sole view of obstructing 
 inland trade, and of curtaiHng the rights of the foreign merchant, to the 
 utmost. 
 
 Rule i. demands, contrary to Treaty provisions, that all applications for 
 Transit Passes shall be made by the original importer of the goods, and 
 that the name of the person who is to carry them, must be given. It 
 tacitly assumes the applicant to be a foreigner. 
 
 Rule ii., at variance with Rule i., admits applicants, not being the ori- 
 ginal importers ; but, except when they are defunct, requires,* without 
 warranty, the signature of the latter. Compared with Rule i. and iv., it 
 tacitly, like the preceding Rule, assumes the applicant to be aforeujner. 
 
 Rule iii. allows foreign goods to be conveyed for sale into the Interior, 
 whether the trader, commjimj them, be foreigner or native. 
 
 Rule iv., in flagrant violation of Treaty provisions, firstly, demands 
 that all goods, intended for sale at a specified inland mart, shall be con- 
 veyed thither by a specified route ; secondly, decrees that such goods, 
 upon a departure from the proper route, shall be confiscated (there and 
 then) ;1I thirdly, decides that the Transit-Pass shall protect the goods from 
 
 § The passage, from which the rule in question has been deduced, occui-s at ' the com- 
 menccraeut of AuT. xlv of the Tientsin Treaty, and reads : — " British merchants, who may 
 have imported merchandise into any of tlie open ports, and paid the duty thereon, if they 
 desire to re-export the same, shall be entitled, ifec." The Inspector-General has, strangely 
 enough, taken the construction in a personal, instead of a generic sense, and has been fol- 
 lowed in this ungrammatical and irrational view by the Chairman of the Committee of the 
 Shanghai General Chamber of Commerce in his letter of March 12, 1872, to the Senior 
 Consul, Mr. G. F. Seward. , 
 
 ^ China is a country, containing, according to McCulloch and Dr, Williams, an area of 
 upwards of tivc million square miles, itud its topography is not particiUarly familiar to
 
 FOREIGN MERCHANT IN CHINA. 139 
 
 (illegal) taxation, in the shape of li-Jcin, between the port and the inland 
 mart in transitu only; fourthly, orders the Transit-Pass, upon, arrival, to 
 be presented to the nearest authority, on pain of a fine to the amount of 
 an additional half-Tariff duty ; &ndi fifthly, subjects the goods, on their 
 sale to the native trader or retail-dealer, to the Li-kin i. e. a war-tax of 
 undefined amount. 
 
 Rule V. leaves it to the native Intendant of Customs at Shanghai and 
 the Inspector-General, Mr. Hart, to fix the number of days, within which 
 foreign goods are to be conveyed to any given inland mart, — on what 
 penalty, in case of default, the Ya-mGu does not say ; — and prescribes that, 
 on the sale of such goods, the Transit-Pass shall be called in and can- 
 celled. 
 
 Eule vi., abrogating the principal provision of Rule 7 of the Trade 
 Rules incorporated with the Treaty of Tientsin, permits foreign goods to 
 be sent for sale inland uncertificated, on the condition of their paying both 
 Custom-House dues and li-kin. 
 
 These Rules simply propose to reduce existing Treaties with China, so 
 far as their provisions bear on the inland trade in foreign goods, to a dead 
 letter. They not only do not recognise the title of the native merchant 
 to a Certificate, and maintain the untenable in transitu theory; but 
 they attempt to legalise, moreover, in addition to the stipulated inland 
 charges commutation-tax of half the Tariff import duty, the imposi- 
 tion upon foreign goods of those illegal and " over-burdensomo " im- 
 posts, which, under the name of li-kin, the Chinese Government, in all 
 cases in which, consequent on the Transit-Pass system, it fails to levy 
 them en route, levy upon such goods on their passing into the hands of 
 the native retail-dealer. For the foreign merchants to accede to these 
 Rules concerning Transit Dues, framed by the Foreign Inspector-General, 
 Mr, Hart, in concert with the Tau-tai of Shanghai, and by the Tsung-li 
 Ya-men proposed to the Representatives of Foreign Powers, would bo to 
 accede, on their part, to the ruin of Foreign Trade with the Interior of 
 China, and deliberately to rehnquish Treaty-rights, secured for them at 
 the cost of two wars. 
 
 foreign merchants. Even the Inspector-General himself might be puzzled to decide upon 
 the route, which it would be " proper" for him to take, or which he "ought to take" from 
 Shantrhai to Suchow,— a short distance of about 80 miles. Forsooth, if " propriety of route,'' 
 T^ jffl, were in this country made the standard for confiscating foreign goods sent for saly 
 inland, as Rule iv proposes to make it, the chances are that not a yard of shirtings aud not 
 a catty of iron, despatched from a port, woidd ever reach its destiuatiou.
 
 140 THE TREATY RIGHTS OF THE 
 
 In the course of time a copy of the proposed Regulations 
 would seem to have reached also the British Consulate. We 
 have to infer this at least from the following letter, dated 
 Shanghai, June 21st, 1872, which in reference to the suh- 
 ject was, after considerable delay, addressed to his Excellency 
 Mr. Wade, by Mr. F. B. Johnson, as Chairman of the Com- 
 mittee of the Shanghai General Chamber of Commerce : — 
 
 Sir.,— 1 have the honour to acknowledge the receipt, through Mr. Consul 
 Alabaster, of a Draft of certain Eulcs proposed by the Chinese Govern- 
 ment to govern and regulate the issue of Drawback Certificates and 
 Transit Passes, and I am to convey to you the thanks of the Committee 
 for the opportunity thus given to them of expressing the opinion of the 
 Chamber upon this important document. The views of this Chamber 
 with regard to the rules attaching to the issue of Drawbacks were ex- 
 pressed in my despatch to the address of the Senior Consul under date 
 12th March, and the Committee see no reason to change these. Prac- 
 tically, an extension to thirty months of the period during which foreign 
 duty paid goods shall be entitled, on re-exportation to a foreign counti-y, 
 to a return of the Import duty, will satisfy the present requirements of 
 trade, and therefore I have only to urge that as the Treaty prescribes no 
 limitation by lapse of time of a right which it acknowledges, and which 
 is universally recognized by civilized countries, the proposed rule should 
 be accepted by the foreign ministers only on the understanding that the 
 regulation in question shall be subject to relaxation, whenever the general 
 course of trade shall call for it. 
 
 It is satisfactory to know that the claims of re-exporters who have been 
 hitherto surcharged with duty contrary to Treaty stipulations will be 
 examined and adjusted, but it is incumbent upon me to point out that 
 the return of duty cannot with fairness be confined to those cases alone 
 in which it is ascertained that drawbacks have been supphed for and 
 refused. For, in consequence of the persistent determination of the Cus- 
 toms' Authorities not to grant the drawbacks in question during a period 
 of nearly twelve years, it has latterly been considered useless to apply for 
 them, and it will be obviously unjust if reparation be refused in any case 
 in which it can be conclusively shown that the duty has been wrongfully 
 detained. I reserve, for a separate communication at a future date, a
 
 FOREIGN MERCHANT IN CHINA. 141 
 
 consideration of the Pailes applying to Drawbacks on duty-paid goods re- 
 exported to Treaty Ports, as this subject has abeady been brought under 
 discussion by my letter to the Senior Consul, dated the 12th March.* 
 
 With regard to the regulations for the issue of Transit Passes on foreign 
 goods destined for the interior, I have to express the unqualified satisfac- 
 tion felt by the Committee at the recognition now publicly made by the 
 Chinese Government of the principle for which this Chamber has so long 
 contended; viz., that the commutation of inland duties may be claimed 
 on Imports of foreign origin without reference to ownership. 
 
 Eule 3 provides that traders, whether Chinese or Foreign, may convey 
 goods inland under cover of a Transit Certificate, which will be issued on 
 payment of the half duty, as provided by Treaty, and the recognition of 
 this principle removes the main difficulty which has hitherto interfered 
 with the successful working of the Transit system. I need hardly say 
 that the Members of this Chamber are desirous to co-operate with the 
 Native authorities in the adoption of all reasonable means to secure the 
 revenue against fraud and smuggling. 
 
 Many of the Rules, however, which the Chinese Government have 
 framed in order to subserve this purpose appear to the Committee to be 
 not only unnecessary and vexatious, but calculated to defeat the object 
 which Transit Certificates are taken out specially to promote. As long 
 
 * Sir, — The Secretaiy briefly acknowledged ou the 27th ultimo your Letter of the 21tli, 
 and since then the Members of the Committee have considered the proposal of the Imperial 
 Maritime Customs, with regard to Drawbacks on re-exported goods, which you have sub- 
 mitted to them for the consideration of the Chamber. 
 
 I have now the honour to state to you the unanimous opinion of the Committee, which is 
 that as the terms of the British and German Treaties very clearly provide for the issue of 
 Drawbacks of duty on re-exported goods, and as very great inconvenience and loss have 
 been sustained by Importers in consequence of the refusal of the Customs to issue tlic ne- 
 cessary certificates after the lapse of twelve months from the date of importation, the ful- 
 filment in their integrity of the Treaty stipulations should now be claimed. 
 
 The engagement appended to Mr. Hart's proposition for an extension of the time to two 
 years, viz. that after that period each case shall be considered, " as it arises under a sj'steiu 
 which shall be just to the Merchant, and at the same time shall not interfere with the 
 working of accounts" has not been overlooked, but the Committee conceive that this sti- 
 pulation implies an inversion of the proper rule applicable to special cases, which may 
 threaten an interference either with the safety of the Revenue or the working of the Customs' 
 accounts. 
 
 It seems obvious that the burthen of proving the existence of an exceptional necessity to 
 suspend privileges confen-ed by Treaty should be thrown upon the Customs, and incon- 
 sistent with justice that the Importer should in each application for Drawbacks, as pro- 
 posed by Mr. Hart, be called upon to show that the exercise of his legal right will not ha 
 inconvenient to the arrangement of the Custom-house Accounts. 
 
 The Committee, moreover, are quite unable to understand why adequate protection to the 
 Revenue, and a proper arrangement of accounts, should be dependent upon an arbitrary
 
 142 THE TREATY RIGHTS OF THE 
 
 as it was held that the right to commute inland taxation was a privilege 
 to be enjoyed by foreigners alone, so long it might not be unnecessary to 
 adopt rules in order to prevent a fraudulent ascription of foreign owner- 
 ship by native traders ; and the nature of the fraud to be guarded against 
 may possibly have called for a practice of inquisitorial declarations which 
 rendered the entire transit system one of very questionable advantage. 
 l>ut the privilege of commutation being now admitted to be one which 
 may be claimed by natives and foreigners aUke, the field for the commis- 
 sion of possible fraud is confined within very narrow boundaries, and the 
 regulations may be simplified accordingly. 
 
 Before entering into a detailed examination of the Rules which the Ya- 
 mOn propose to adopt it will not be out of place to quote the article of the 
 Treaty on which the transit system is based, and to state the opinion of 
 the Chamber as to the rights which have been created by it. 
 
 The 28th Article of the Treaty of Tientsin provides that — 
 
 " It shall be at the option of any British subject desiring to convoy imports from a 
 port to an inland market to clear his goods of all transit duties by payment of a single 
 charge. The amount of this charge shall be leviable on imports at the port at which 
 they are lauded: and on payment thereof, a Certificate shall be issued, which shall 
 exempt the goods from all further inland charges whatsoever." 
 
 And the interpretation placed by Lord Elgin upon this provision is 
 
 limitation of the period during which Drawbacks can be freely claimed, and suggest that 
 very simple regulations regarding the forms of application, and the conservancy of marks 
 and numbei'3 on the original packages will suflSce to do all which Mr. Hart proposes to 
 effect by an abrogation of Treaty rights. 
 
 With regard to the allegation of the Prince of Kung, that the existing arrangement was 
 made by the authorities of this port, at the request of the Mercantile body, I obser\'e that 
 you consider the statement to be deprived of force by the fact that the aiTangement was 
 made prior to the ratification of the British and French Treaties of 1858. I append, how- 
 ever, copies of the correspondence which passed between this Chamber and H.B.M. Consul 
 on the question in 1859, 1860, and you will not fail to perceive that the efforts of the 
 Chamber were alone directed to procure an extension to " one year at least," of the period 
 during which Drawbacks should be granted instead of the onerous limitation of it to three 
 months, which was then imposed upon the Mercantile Commimity. 
 
 I further append a copy of a despatch from Lord Elgin, which shows that the clause in 
 the English Treaty was framed to secure the recovery of the full amount of duties paid on 
 Foreign Imports, and drawback in any case, when the goods are re-exported to a foreign 
 country. 
 
 I trust that the Consular body will not only press the qtiestion to a speedy solution, but 
 will also urge upon the Chinese Government the justice of returnmg the duties which they 
 illegally detain. The whole amount of them forms no heavy claim upon the Revenue, but 
 probably presses with considerable hardship upon individuals, and I need hardly add that 
 the interests of the Chinese Government, and of foreign ti-ade alike, demand that in an 
 important centre of distribution such as the port of Shanghai, no vexatious hindrances 
 should be imposed upon the ingress and egress of merchandize.
 
 FOREIGN MERCHANT IN CHINA. 143 
 
 shown by bis clispatcb to tbe Foreign Office, dated Sbangbai, November 
 
 8tb, 1858. It writes— 
 
 " Henceforward, on payment of a sum in name of transit duty, which for simpli- 
 city's sake has been fixed at one half of the tariff rate of duty, goods, whether of ex- 
 port or import, will be free to pass between the port of shipment or entry to or from 
 any part of China without further charge of toll octroi or tax of any description what- 
 soever." 
 
 And Kule 7 of the Rules and Eegulations attached to the Treaty provides 
 
 that — 
 
 "Merchandize shall be cleared of its transit dues under the following conditions. 
 In the case of imports. Notice being given at the port of entry from which the im- 
 ports are to be forwarded inland of the nature and quantity of the goods ; the ship 
 from which they have been landed ; and the place inland to which they are bound, 
 with all other necessary particulars, the collector of customs will on due inspection 
 made, and on receipt of the transit duty due, issue a transit duty certificate. This 
 must be produced at every barrier station and vised. No further duty will be levied 
 upon imports so certificated, no matter how distant the place of their destination." 
 
 The Committee do not disguise their conviction that it was as much 
 the purpose of the treaty of Tientsin by this article to protect foreign 
 imports from taxation throughout the country other than the customs 
 duty to be levied on entry, and the half duty to be levied on transit, as it 
 was one of the objects of the Commercial Treaty between Great Britain 
 and France to limit the duty on French wines imported into Great Britain 
 to a certain fixed sum per gallon. They therefore consider that on suffi- 
 cient proof of foreign origin, and of the payment of Import and Transit 
 duty being tendered, a simple stamp should be placed on the packages, 
 in accordance with the general practice of the native excisemen, to de- 
 note that the commuted transit duty has been paid, and that the goods 
 should then be freed from further impositions throughout the empire. 
 
 The terms of the Treaty are, however, unfortunately so loosely ex- 
 pressed as to admit of an interpretation, which, though opposed fo the 
 general bearing of the entire article, is claimed as justifyiiig the Chinese 
 in limiting the operation of the Transit Certificates to the protection of 
 the goods from taxation en route to, and while they remain intact in, a 
 place of destination to be named prior to their departure from the port 
 of entry. In view of this ambiguity therefore the Committee, represent- 
 ing what they believe to be the sense of the foreign mercantile commu- 
 nity on this question, and without abandoning the principle for which 
 they have hitherto contended, are not unwilMng to accept the instahnent 
 of reform offered by the Chinese, provided satisfactory guarantees shall
 
 1-11 THE TREATY RIGHTS OF THE 
 
 be given that the system of commuted taxation, even in this hmited de- 
 gree, will be fiiitlifiilly carried out by the Native Government — that is to 
 Kay — provided the taxes for which commutation is made shall be guaran- 
 teed not to be subsequently levied in an indirect or a surreptitious form. 
 
 It is practically admitted by the Ya-m6n, in the dispatch under con- 
 sideration, that the only two conditions imposed by the Treaty upon the 
 owners or carriers of goods transmitted to the interior under the protec- 
 tion of Transit Certificates are, that the goods themselves shall be of 
 foreign origin, and shall be bound for a fixed destination, and it is there- 
 fore obvious that rules which are unnecessary to the fulfilment of these 
 two conditions must be deemed superfluous and vexatious or be framed 
 for ulterior purposes. 
 
 By this test I propose to consider the regulations suggested by the 
 Ya-mOn. 
 
 Eule 1. — Requires that the applications for Transit Passes must be 
 made by the merchants who originally imported the goods. This re- 
 quirement involves great waste of time and trouble ; comphancc with it 
 may frequently be impossible, and it is wholly unnecessary for the pur- 
 pose of identifying the goods. The Inspector-General has declared his 
 readiness to recommend to the Yamun the abrogation of a similar condi- 
 tion in the case of applications for drawbacks on foreign imports, and the 
 stipulation may be omitted from the regulations regarding Transit Passes 
 without inconvenience. The Rule further requires a declaration as to 
 the place to which the goods are to be carried and the name of the car- 
 rier. The first of these stipulations can only be defended on the ground 
 of its necessity as a means of affording the Chinese Government a reason- 
 able facility for protecting its revenue, but the second is quite unneces- 
 sary, and cannot be claimed in support of either of the conditions to which 
 I have referred. 
 
 Rule 2. — The objections above named as to declarations from the ori- 
 ginal importer apply equally to the terms of this Eule. 
 
 Rule 3. — To this there is no objection to be made. 
 
 Rule 4. — Provides for the exhibition of the Transit Certificate at each 
 barrier and duty station along the line of route, to be vised and stamped, 
 but it goes on to say that if the goods are not on the line where they 
 ought to be, or prove to be other than the goods named in the Certificate, 
 they shall be confiscated and the right of confiscation is claimed by virtue 
 of Rule 7 attached to the tarifl' of the Treaty of Tientsin. The alleged
 
 FOREIGN MERCHANT IN CHINA. 145 
 
 offences wliich are to be subjected to so severe a penalty are essentially 
 distinct in character, and must be considered separately. Should the 
 goods covered by the Transit Pass prove to be of a description other than 
 those which are entitled to the benefit of the transit system, that is to 
 say to be of native origin, or if the quantity be found in excess of 
 that named in the Certificate, or if fraud be attempted, or evasion of duty 
 be in any way discovered, then confiscation might be a legitimate penalty. 
 If, however, the discrepancy between the description of the packages in 
 the Certificate, and the goods themselves be merely one of marks or 
 numbers, be otherwise accidental, or involve no evasion of duty, in such 
 cases the penalty of confiscation would be altogether an unjustifiable one, 
 and the Committee suggest that a small fine be substituted for it. 
 
 As regards the proposed penalty of confiscation for deviation from line 
 of route, I have to protest against it as being unreasonable and excessive, 
 and not justified by Treaty, there being no fraud involved in sucli an 
 irregularity. The certificate covers the goods, in the language of the 
 Tariff Rules, " no matter how distant the place of their destination." 
 If, as the Chinese claim, the destination must be fixed, and the goods be 
 freed only along direct lines of route, then the only proper and a sufli- 
 cient penalty for deviation will be the subjection of the goods to the 
 ordinary levies at the various barriers, which are not cleared by the 
 certificate, and through which they may pass. Let the case be supposed 
 in which 10 bales of Cottons certificated for Soochow are found etc nmie 
 to Kashing. There would be and could be no fraud intended or practised 
 by such a deviation. The goods would be simply in the position of being 
 uncertificated, and would consequently be liable not to confiscation, but 
 to the payment of the ordinary barrier dues. 
 
 In all cases moreover in which it can be shown that deviation has been 
 occasioned by floods, obstructions of an extraordinary character, or other 
 reasonable cause, the goods should be exempted from all }X)nalty or extra 
 charges whatever. 
 
 The second clause of Kule 4 provides that on the arrival of the goods 
 at the place of destination the certificate shall be handed to the nearest 
 authority, who will fix his seal to it and return it to the consignee as his 
 protection against taxation on the goods so long as they remain unsold. 
 If the certificate be not so presented an additional half tariff duty is to 
 be levied as a fine. The Rule concludes with the strange announcement, 
 that notwithstanding the commutation of the lekin duties, which has al-
 
 140 THE TREATY RIGHTS OF THE 
 
 ready been made, these duties will stiU be levied by the local government 
 upon the buyer. 
 
 It appears scarcely possible that the Chinese Government gravely pro- 
 poses to accept from the importer a commutation of specific duties, and 
 afterwards to levy these duties upon the buyer of the goods ; yet no other 
 meaning can be attached to the last clause, while the unnecessary mul- 
 tiplication of Rules seems as if there were an intention to create offences, 
 and goes far to excite a belief that the Yamt-n intends to raise from the 
 natives, as soon as the goods shall have fairly passed out of foreign 
 hands, the dues which have been professedly commuted. The intricate 
 nature of the Rules gives rise in fact to a natural suspicion, more or less 
 justified by the action of the authorities in more than one Province, that 
 they have been framed in order that the goods may be carefully traced 
 from the Port of entry to the place of destination, and be subjected 
 through the medium of the ultimate recipient to the payment of all the 
 barrier dues which are supposed to have been commuted.! 
 
 The Committee see no reason for the stipulation that the certificate 
 shall be surrendered at the place of destination unless it be intended to 
 indicate to the local authorities the name of the consignee of the goods 
 for the purpose of subjecting him to special taxation. The certificate 
 having been stamped at the various barriers will be virtuaUy cancelled, 
 and the provisions for the surrender of them contained in this Rule 
 and in Rule 5 are therefore wholly unnecessary for the protection of the 
 legitimate revenue. 
 
 Rule 6. — Appears to refer mainly to uncertificated goods, and in this 
 respect the purpose of it does not seem very clear. The provision that 
 in the event of irregularity appearing in the passes tlie goods they re- 
 present shall be detained at the barrier until communication be had with 
 the Custom-House seems to be a reasonable one. 
 
 The Committee conceive that if the Chinese authorities intend to carry 
 the transit system faithfully into effect, the Rules relating to it may be 
 di'awn up in a very simple form. The certificate to be issued in payment 
 
 t I have candidly to confess that, with the experience of many years of Chinese sj'stem- 
 atic obstructiveness and " over-burdening " illegal taxation before him, Mr. Johnson, — to 
 judge from the above paragraph, in which the policy of the Tatar Government, whereof 
 that long experience is but the faithful and practic;\l exponent, still appears to him 
 " scarcely possible," and has given rise, on his part, only to a " natural suspicion " as to its 
 teudcnc}', — seems to me to lia\'e been somewhat slow in opening his ej-es to the stubborn 
 evidence of facts and the actual state of things.
 
 FOREIGN MERCHANT IN CHINA. 147 
 
 of the commuted duty should protect the parcel of goods it represents 
 from the port of entry to any indicated place in the interior along a 
 direct route, and at the place of destination so long as the parcel remains 
 intact. Along any other route, when a reasonable cause of deviation can- 
 not be shown, or at any other place than those named In the pass, and 
 after distribution, the protection ceases, and the goods become liable to 
 ordinary, hnt not special local taxation. The names of the owner, of the 
 carrier, or of the recipient of the goods, should not be given. The certi- 
 ficates being vised, and stamped at the various barriers, and thus rendered 
 ineffective for use a second time, there is no valid reason to be given for 
 requiring them to be surrendered. 
 
 It becomes my duty to urge your Excellency to withhold your assent to 
 the proposed regulations unless the restrictions and penalties sought to 
 be imposed by them be modified in respect to the various clauses to which 
 I have taken exception, and unless satisfactory and explicit declarations 
 be made by the Chinese Government, in order that no ground for dispute 
 may exist hereafter as to the precise nature of the engagements which 
 have been entered into. 
 
 The Transit system, even in its present partially regulated and ill- 
 defined condition, is shown by recent Custom-House returns to be 
 working in a progressive manner and with beneficial effect in those 
 Provinces where it finds encouragement from enhghtened native ad- 
 ministrators. It is worthy of consideration therefore whether it bo not 
 better to allow the process akeady existing to gain gradual recognition 
 throughout the Empire by the force of its inherent excellence, than in 
 reahty to run the risk of hindering its growth by the promulgation of 
 regulations which in their proposed form I can only describe as crude, 
 ill adapted to the requirements of the system, and vexatious to trade. 
 
 I observe that the regulations regarding Transit Passes on Exports 
 have not yet 'been framed by the Yameu.]: The Committee are aware 
 that fraudulent irrregularities are not uncommon in respect to applica- 
 tions for commutation certificates on native produce which is not a bona 
 jide constituent of foreign trade, and they will readily bui)port any rea- 
 sonable rules which the Chinese Government may find it necessary to 
 adopt for the protection of the national revenue. On the other hand, 
 the illegal exactions of the Provincial Officers are not less notorious. 
 
 X The reader will remember that, at the date of Mr. Johnson's letter, even the amended 
 
 Regulations (B) had not as yet been framed.
 
 148 THE TREATY RIGHTS OF THE 
 
 Tlio Commiifoc arc of opinion tluit if the principle of commutation, as 
 aj>j)lie(l to inland dues, botli on Imports and Exports, is to be settled ou 
 a diiniblo and oqnitable basis, a comprehensive enquiry through the 
 respective agencies of the Consular Authorities and the Customs' Offi- 
 cials, into the working of the present system of Transit Passes, and the 
 l)racticc of barrier taxation, should precede the adoption of any new 
 code of regulations ou the subject, and I am to bring this proposal to 
 the attention of your Excellency. 
 
 The Committee earnestly desire that the Tsung-li YamGn may be led 
 to see the advantages which will be reaped alike by the Chinese Gov- 
 ernment and people, and l)y foreign trade, from a scheme of equal and 
 settled taxation. They believe that if, when the revision of the foreign 
 Treaties shall again come under consideration, the Imperial Government 
 would accept a first and final payment at the port of entry, which would 
 free foreign merchandize from further taxation throughout the empire, 
 an increased tarift' would not be objected to by those interested in foreign 
 trade. The plan of the recent abortive convention between Great 
 Britain and China was unacceptable to the Chamber because commu- 
 tation of transit duties was made compulsory without adequate gua- 
 rantees, and its operation was incomplete. The plan which the Com- 
 mittee are prepared to propose, of an optional payment to be attested by 
 a simple stamp or certificate which should be in force everywhere 
 throughout the Empire, would in the opinion of the Chamber encourage 
 trade, benefit the people, and largely augment the revenue of the 
 country. 
 
 Leaving it to the reader to compare these comments of the 
 Shanghai Chamber of Commerce upon the Regulations (a), 
 here mider discussion, ^Yith those Regulations themselves 
 and my own analysis of the flatter, which at the time was 
 under the notice of the Chamber, — I desire to call his atten- 
 tion to what I cannot but consider the grave errors embodied 
 hi the Chamber's letter. To the most promment of these 
 errors, the writer himself assigns the most prominent place. 
 Before even entering into an examination of the proposed 
 Rules, he expresses "the unqualified satisfaction felt by the 
 Committee (of the Chamber of Commerce) ai the recogni-
 
 FOREIGN MERCHANT IN CHINA. 149 
 
 tion now publicly made by the Chinese Government of the 
 principle for which this Chamber has so long contended, 
 viz., that the commutation of inland duties may be claimed 
 on Imports of foreign origin without reference to ownership." 
 He thereupon, without any grammatical or logical connec- 
 tion, begins a new paragraph, stating : — " Rule 3 provides 
 that traders, whether Chinese or Foreign, may convey goods 
 inland under cover of a Transit Certificate, which will be 
 issued on payment of the half duty, as provided by Treaty, 
 and the recognition of this principle removes the main 
 difficulty which has hitherto interfered with the successful 
 working of the Transit system. I need hardly say," he 
 adds in a train of thought, which, notwithstanding the se- 
 quel, is not inteUigible to me, "that the Members of this 
 Chamber are desirous to co-operate with the Native authori- 
 ties in the adoption of all reasonable means to secure the 
 [Chinese] revenue against fraud and smugglmg." 
 
 We are thus led to infer, that Mr. Johnson sees in the 
 third of the proposed Eules the public recognition, on the 
 part of the Chinese Government, of the long contended-for 
 principle, to which he alludes, and the sole ground for the 
 Committee's "unqualified satisfaction." I fear, however, 
 that there exists no adequate reason for such a satisfaction, 
 and that Mr. Johnson's construction of the Rule must rest 
 on a misapprehension or some ground to me unknown and 
 unintelligible. That Rule contains not even an expression, 
 from which the principle under consideration could be ra- 
 tionally deduced. On the contrary. I have the original 
 Chinese text before me, and the translation of this portion, 
 as previously given, though it might have been worded more 
 literally, is essentially correct. On referring to it, the reader 
 will find that the only right it confers on the foreign and 
 
 ■*H
 
 150 THE TREATY RIGHTS OF THE 
 
 native trader in common, is the right to convey, in tlic capa- 
 city of carriers, foreign goods into the Interior ; but the im- 
 porter of such goods, the apphcant for a duty-paid Certifi- 
 cate, and hence the owner of the goods, are tacitly supposed 
 to be foreigners. And this is in accordance with the whole 
 spirit of the Tsung-li Ya-mun's views and policy. Only in 
 the case of foreign goods, destined for an inland market, 
 having been imported from abroad by a Chinese merchant, 
 — a case which was neither contemplated by the Ya-men, 
 nor had ever occurred, — a construction coidd, in my judg- 
 ment, be placed upon the Rules proposed by the Ya-nit n, 
 which, though at variance with their spirit, might justify 
 Mr. Johnson's interpretation of them. But in no other case. 
 The second error, prominent in Mr. Johnson's letter, is 
 that, in the name of the Committee of the Shanghai Chamber 
 of Commerce, he concedes, — contrary to the facts of the case, 
 — that " the terms of the Treaty (of Tientsin) are unfortu- 
 nately so loosely expressed as to admit of an interpretation, 
 which, though opposed to the general bearing of the entire 
 article, is claimed as justifying the Chinese in limiting the 
 operation of the Transit Certificates to the protection of the 
 goods from taxation en route to, and while they remain intact 
 in, a place of destination to be named prior to theLr departure 
 from the port of entry;" and that, "in view of this ambi- 
 guity," he expresses the not-unwillingness of the Chamber 
 conditionally to waive, partially and temporarily at least, 
 what I judge to be a clear and indubitable Treaty-right of 
 the British and Foreign merchant. The question here at 
 issue is not, whether a particular sentence of a particular 
 Article of the Tientsin Treaty can be construed, but whether 
 the Treaty of Tientsin can be rationally and consistently con- 
 strued, in the sense forced upon it by ihe Tsung-liYa-men
 
 FOREIGN MERCHANT IN CHINA. 151 
 
 and the Inspector-General, Mr. Hart. I have proved, and 
 shall further prove, to demonstration, that this is not the 
 case, and that the Chinese Authorities themselves were from 
 the first fully aware of the fact. Nay, when the very 28th 
 Article of the Tientsin Treaty, quoted by Mr. Johnson, 
 clearly provides that the agreed commutation -payment for 
 all " transit "- (i. e. inland) duties " shall exempt the goods 
 from all further inland charges whatsoever," there is vktu- 
 ally no room left for legitimate doubt ; and I cannot but hold 
 it to be a gi'ave mistake, on the pai-t of the mercantile com- 
 munity, more especially in the actual state of affairs, to 
 yield so much as one single iota of the provisions of existing 
 Treaties. 
 
 The third and by far most important error, however, 
 committed by the Chamber, is embodied in the following 
 passage : — " The Committee conceive that if the Chinese 
 authorities intend to caiTy the transit system faithfully into 
 effect, the Rules relating to it may be drawn up in a very 
 simple form. The certificate to be issued in payment of 
 the commuted duty should protect the parcel of goods it 
 represents, from the port of entry to any indicated place in 
 the interior along a direct route, and at the place of de- 
 stination so long as the parcel remains intact. Along any 
 other route, when a reasonable cause of deviation camiot be 
 shown, or at any other place than those named in the pass, 
 and after distribution, the protection ceases, and the goods 
 become liable to onlinanj, but not special local taxation." 
 It can admit of no doubt, that a Rule, which binds the 
 Foreign merchant, resident at one of the ports, to declare 
 beforehand, or to declare at all, a specific place of destina- 
 tion for goods he intends to send to some inland market, 
 interferes essentially with a free transit-system, and is po-
 
 1;j2 the treaty rights of the 
 
 sitivcly opposed to the whole spirit and the main object of 
 existing Treaties. The Chamber of Commerce, therefore, 
 instead of submitting to a restriction of this nature, shouhl 
 have used its efforts to have it removed. But I wish to 
 speak more especially of Mr. Johnson's fatal suggestion, 
 that the protection of British duty-paid goods, sent for sale 
 to an inland market, against the imposition of further duties, 
 shall cease after their distribution at the place of destina- 
 tion ; nay, that such goods shall then become liable to 
 ordinary, but not special, local taxation. 
 
 Mr. Johnson, himself, falls here into that looseness and 
 ambiguity of expression, which he deplores in the wording 
 of the Treaty of Tientsin ; and we are left to conjecture 
 what he may understand by " local " taxation, and what by 
 ''ordinary," as distinguished from "special," local tax- 
 ation. But it is certain that, as referred to any given 
 locality, the Chinese Authorities now regard le-hn in the 
 light of an item of " ordinary " local taxation ; and hence, 
 the real, practical purport of Mr. Johnson's suggestion ap- 
 pears to me to be this, that he would have the amount of 
 illegal taxation, by which the Chinese Government is now 
 over-burdening foreign trade in the Interior, paid, not by 
 the Foreign or Chinese wholesale-, but by the Chinese 
 retail-dealer. In other words, he would not only, like his 
 Excellency Mr. Wade, maintain, but also legalize, the im- 
 position of k-hin and other illegal taxes, and, abandoning 
 the principle that the foreign goods, on which the inland 
 commutation-tax has been paid, are thereby " exempted 
 from all further inland charges ivhatsoevcr," only render it 
 somewhat more troublesome for the Chinese Authorities to 
 collect upon those goods illegal taxes which, heavy as they 
 already are, would surely be increased in proportion to the
 
 FOREIGN MERCHANT IN CHINA. 153 
 
 increased trouble and expense involved in their collection. 
 Mr. Johnson, whose theory is to all inte.its and purposes 
 the in-trcmsitu theory pur et simple of the British Minister, 
 Mr. Wade, and the Inspector-General, Mr. Hart, had mani- 
 festly over-looked what should ever be borne in mind, viz. : 
 that it is in truth a matter of indifference for the Foreign 
 merchant to know how, and from v»^hat class of native traders 
 or consumers, illegal taxes are levied upon his goods, the 
 sale of which is thereby unlawfully restricted, if not altoge- 
 ther h'ustrated ; but that the one thing, which really con- 
 cerns him, is to see that such taxes are not levied at all ; 
 that they are exacted in no shape and from no one ; and 
 that his Goods, having once paid to the Chinese Govern- 
 ment all taxes by Treaty payable upon them, shall there- 
 after be allowed to circulate freely, and without any further 
 enhancement, by taxation, of their cost to the consumer, 
 throughout the Interior of China. 
 
 There occur several passages of minor importance in the 
 Chamber's letter, open to animadversion. Thus the indu- 
 bitable Treaty-right of commuting inland charges by one 
 single payment is represented as a privilege ; the Chamber 
 of Commerce is made to offer its assistance in the fi'aming 
 of Bules for the better protection of the Chinese Customs- 
 revenue in reference to fraudulent export commutation - 
 certificates, whereas no Eule can prevent the use of such 
 certificates, their fraudulent character appearing only from 
 the non-shipment to foreign ports of the produce to which 
 they refer, and the remedy lying already in the hands of 
 the Foreign Customs' Department, as will hereafter appear ; 
 and it is stated that "the plan of the recent abortive Con- 
 vention between Great Britain and China was unacceptable 
 to the Chamber because commutation of transit duties was
 
 151 THE TREATY RIGHTS OF THE 
 
 made comimlsory without adequate guarantees, and its 
 operation was incomplete," wliereas by Treaty the commu- 
 tation in question was covtipulsory from the first, and con- 
 stitutes one of the most important benefits conferred by the 
 Treaty of Tientsin. 
 
 The severest comment, however, which that letter has 
 manifestly provoked, are the modified Regulations (b), and 
 the Regulations (c),by theTsimg-li Yamen submitted to the 
 Foreign Representatives ; and that such Regulations should 
 have been mainly framed by a British subject, as " Inspector- 
 General of Chinese Maritime Customs," is, considering 
 their tendency and spirit so hostile to, and obstmctive of, 
 British legitimate trade with China, and so utterly regard- 
 less of existing Treaties, perhaps, not one of their least 
 objectionable features. It is true, the indubitable Treaty- 
 right of Chinamen to ''apply for (lit. solicit) duty-certifi- 
 cates (usually styled transit-passes) for the purpose of .conveying 
 imports from foreign lands to the Interior of China," has at 
 last been recognized in explicit terms ; but this ''privilege," 
 which the sanguine and divinatory eye of the Chairman of 
 the Shanghai General Chamber of Commerce had read, as we 
 have seen, already in the text of the original Regulations (a), 
 and hailed with so much unqualified satisfaction as " the 
 recognition now pul)licly made by the Chinese Government 
 of the principle for which the Chamber has so long con- 
 tended, viz., that the commutation of inland duties may be 
 claimed on Imports of foreign origin without reference to 
 ownership:" what does it in reality amount to? Princi- 
 ples, more especially after having been for years contested, 
 should be enounced in clear, precise, and unmistakeable 
 Lnigiiage. The very contrary is here the case. That lan- 
 guage, therefore, is not merely, it is of necessity also pur-
 
 FOREIGN MERCHANT IN CHINA. 155 
 
 posely, vague. By implication it might possibly be construed 
 in Mr. Johnson's anticipated sense ; according to grammar 
 it admits of no such interpretation ; in spirit it is diametri- 
 cally opposed to it ; de facto it is altogether silent as to 
 "ownership," but speaks of "conveying," and only speaks 
 of " conveying " foreign goods — (by historical miplication 
 foreign-owned foreign-goods) — inland, as the object, for which 
 Chinamen also (in the quality of carriers, comp. also Regul. 
 (a), Eule iii.) shall in future be permitted to apply for duty- 
 certificates protecting such goods against illegal taxation on 
 the ivcuj to their immediate destination, and no further. 
 
 Had it been the bond fide intention of the Tsung-li Ya-men 
 and the Inspector-General, Mr. Hart, who framed the Eules 
 in question, to concede the principle, to which the Chamber 
 justly attaches so much weight, and which would imply a 
 desire on their part to facilitate instead of trammeling and 
 obstructing Foreign trade with the Interior of China, we are 
 justified in assuming that, for the sake of obtainmg due 
 credit for, and insuring to the Chinese Government the full 
 benefit of, such an intention, they would have announced it 
 in corresponding terms, and that the tenour of the Rules 
 generally, proposed by them, would in some degree at least 
 have been in harmony with it. Nor is it irrational to con- 
 clude that they would, moreover^ have applied the same 
 principle to the Regulations (c). The facts of the case are 
 diametrically opposed to this legitimate reasoning, and lead 
 to the almost unavoidable inference, that tlie authors of 
 Rule i. § 1. of the Regulations (b), pouncing upon the fatal 
 admission made to them on the part of the Chamber of Com- 
 merce ; embodying, in language the most plain and concise, 
 the principle of that admission in § 4 of the same Rule ; 
 relying on the facile belief and sanguine interpretation of
 
 156 THE TREATY RIGHTS OF THE 
 
 the Chamber ; and desirous to offer, in return for the sub- 
 stantial principle surrendered to them, the semblance at 
 least of a similar principle — framed the paragi-aph in ques- 
 tion accordingly. 
 
 The general tendency, and it must consequently be in- 
 ferred, the contemplated aim, of the Regulations newly pro- 
 posed, is not only the obstmction of the indirect, but also 
 the final and total destruction of all direct, Chinese inland 
 trade on the part of British and Foreign subjects at large. 
 In other words : these Regulations, as framed by the In- 
 spector-General, Mr. Hart, in communion with the native 
 Intendant of Customs at Shanghai, and by the Tsung-li 
 Yamen transmitted to the Representatives of Western Powers 
 in Peking, follow out, to the fiill extent that in them lies, 
 the policy of the Chinese Government to exclude aU foreign- 
 ers alike from the Interior of China ; to confine aU foreign 
 intercourse to the Treaty -ports, and, so far as for the present 
 may be found practicable, to the sea-borders ; to obstruct 
 foreign trade to the utmost ; and, whilst thus obstructing, 
 to the utmost to tax it, for the combined purpose of com- 
 mercial restriction on the one hand, of military armament 
 on the other, and with an ultimate view to the consumma- 
 tion of that fondly-cherished dream — the expulsion of the 
 outer barbarian from "the bayonet-ploughed soil of Cathay." 
 In order to conceal these aims and to give a certain colouring 
 to the forcible measures designed for their attainment, the 
 foreign merchant and, as in collusion with, and misguided 
 by him the native merchant, are, in accordance with the 
 Tsung-li Yamen's despatch of March 23, 1872, assumed to 
 be intent only on defrauding the Chinese Customs, and to 
 render it imperative, for the protection of the Imperial 
 revenue, that such evil intent should be met bv the inflic-
 
 FOREIGN MERCHANT IN CHINA. 157 
 
 tion, regardless of existing Treaties, of disabilities (Eegula- 
 tions (b). Rule iv. § 2, § 3 ; Reg. (c). Rule iv. § 2.), heavy- 
 duties (Reg. (b). Rule i. § 3, § 5, Rule ii. § 1, § 2, Rule iii, 
 § 3; Reg. (c). Ruleii. §8), exorbitant fines (Reg. (c), Rule 
 iii. § 1, § 2), and wholesale confiscation (Reg. (b), Rule ii. § 3, 
 Rule iii. § 3, § 4, Rule iv. § 2 ; Reg. (c), Ruleii. § 5, § 7, 
 § 8, Rule iii. § 3, Rule iv. § 3), on the principle : confisca- 
 tion first ; inquiry into the merits of the case afterwards 
 (Reg. (b), Rule iii. § 4). 
 
 The extreme boldness — provoked, it would seem, by cer- 
 tain portions of the letter of June 21, 1872, addi-essed by 
 the Shanghai General Chamber of Commerce to the Chief 
 Superintendent of British Trade in China, — with which 
 these iron Custom-house and Barrier fetters are proposed 
 to be placed upon that trade by the Inspector-General and 
 the Tsung-li Yamen, and which, if anything can, should 
 open the eyes of the mercantile community and of Western 
 Cabinets to the true commercial policy of the latter and the 
 real tendency of the influence exercised in Peking by the 
 former, render a detailed consideration of the Regulations 
 in question, on my part, unnecessary. Some of the principal 
 objections to the Regulations (b), moreover, have alread}" 
 been laid before the reader. They leave me only a few 
 observations to add. 
 
 As to the proposed Regulations (c), relative to the purchase 
 of Chinese produce in the Interior by foreign merchants 
 and its conveyance, subject only to the half-duty stipulated 
 by Treaty, to one of the open ports for shipment abroad, 
 they render such a business-transaction practically impossi- 
 ble, and so reduce, in this respect, the provisions oi exist- 
 ing Treaties absolutely to a dead letter. 
 
 No Chinese household includes foreigners. The meaning
 
 15S TITE TREATY HICTTTS OF THE 
 
 of the ^ A of Rule i, § 2, therefore, i.e. persons of the for- 
 eign merchant's household, to whom and himself alone 
 ])ermission is granted to proceed inland for the purpose of 
 buying produce of the soil, must be taken as restricted to 
 foreign employes of his finn. But whether this be so or 
 not : what foreign merchant, who, totally unacquainted with 
 the exact geography and the productions of each single 
 locality in the Interior of China, is on the one hand expect- 
 ed in his ignorance to state beforehand, not only the name 
 of the. very village or mart, at which, and no other, he 
 intends and shall be allowed to purchase certain specified 
 articles that may or may not be produced or offered for sale 
 at that particular village or mart, but to declare also, as it 
 were on oath, in what district the mart or village, in wliat 
 prefecture the district, and in what province the prefecture, 
 according to the ^^M '^Wt i^, is situated, while on the 
 other hand he is threatened with civil disabilities, ruinous 
 fines, and total confiscation of his property, if he fail in the 
 observance of but one item of the Inspector-General's ''direc- 
 tions," pass but one of the unrecognised Barriers on his 
 road without displaying both his "tripartite" and his goods, 
 and deviate on his return but one inch from the right way, 
 — what foreign merchant, I ask, would under such condi- 
 tions ever think of going himself, or sending any member 
 of his household, whether foreigner or native, on such an 
 errand ? If the proposed Eegulations (c). should be accepted, 
 their framers will have succeeded not only in effectually se- 
 curing to the Chinese Government the full and undisputed 
 amount of illegal taxes, imposed by it on native produce 
 destined for exportation abroad, i^ the local Authorities 
 their share ol local charges, and to the Customs' underlings 
 a proportionate revenue in the shape of "squeezes;" but,
 
 FOREIGN MERCHANT IN CHINA. 159 
 
 what is of even greater moment, in legalising the aggregate 
 of those imposts, which may to a certainty be expected to 
 go on rapidly increasing ; and in bm-dening with tlie yearly 
 increasing sum total the British and foreign consmner. 
 
 One ofthe peculiar features of the Regulations (c), and the 
 modified and improved Regulations (a) is, that they convert 
 the foreign merchant, intending to purchase native produce 
 or to dispose of foreign goods inland, to the use of a 
 Chinese Customs' emploge and check upon, respectively 
 accuser against, himself (Regul. (b), Rule iv., § 1, § 3, § 4; 
 Regulation (c). Rule iv., § 1, § 2, § 4, § 5) ; and he is expected 
 to perform this somewhat novel duty, within stated limits 
 of time, too, on pain of excommunication (Regul. (b). Rule iv., 
 § 3; Regul. (c). Rule iv., § 2), and at the risk of causing his 
 own property to be confiscated (Regul. (c), Rule iv., § 4). 
 This is expecting not a little from traders, assumed to be 
 intent only on defrauding the Chinese Customs ; but the 
 device, original, ingenuous, and inexpensive, reflects credit 
 on the organizing and expectative faculties of the framers" of 
 the Regulations, and will no doubt be duly appreciated as 
 well as faithfully followed out, in the event of those Regula- 
 tions becoming law, by the body of British and foreign 
 merchants. 
 
 In § 2 of Rule ii. ofthe Regulations (b), it is hot positively 
 stated that, as insisted on by the Inspector-General in his 
 anon^-mous memorandum of November 1, 1871, the ^^ Agent " 
 as well as "Goods and Cei-tificate must travel in company to 
 secure exemption " from illegal taxation. This follows, 
 however, from the words ofthe preceding § 1 : " When they 
 — persons conveying foreign goods inland — have taken out 
 a certificate for a place previously designated, they must 
 follow the direct road to it; " — whereupon we read § 2: —
 
 1(')0 THE TREATY RIGHTS OF THE 
 
 " The duty-certificate and the goods conveyed under its pro- 
 tection must ahvays travel and remain together," &c. It 
 seems to me, therefore, plain that the Agent of the foreign 
 merchant is, in § 2, tacitly assumed to accompany the goods, 
 and that the omission can only serve, if it was not actually 
 meant, to mislead. 
 
 A highly ohjectionahle article is Rule ii. § 3, inasmuch as 
 any foreign mark or writing on the packages of the foreign 
 goods conveyed hy Chinese merchants inland, might ac- 
 cording to it, be constnied into a sufficient ground or ex- 
 cuse for their confiscation; and such goods, whether the 
 property of foreigners or Chinese, would at all times he 
 at the mercy of the native Custom-house and Barrier offi- 
 cials. The looseness and vagueness of diction and the cor- 
 responding selection of Chinese characters in all cases, in 
 which a latitudinarian sense is demanded by the Chinese 
 trade and Custom-house policy, foi-ms, throughout the Re- 
 gulations, so striking a contrast with the concise andto-the- 
 poiYit language employed whenever Chinese interests require 
 the latter, that it is in reason barely possible not to ascribe 
 to this difference in style and expression a designed char- 
 acter. 
 
 I need do no more than call attention to § § 4 & 5 of Rule i. 
 Upon these two paragraphs hangs, as will be presently 
 seen, a claim of indemnity for some ^25,000,000, and 
 more, which the British Government would be fully justified 
 to enforce, in the event of a fresh war, agamst the Govern- 
 ment of China ; the Treaty-right of Western Powers to in- 
 sist on the punishment of those Chinese officials, who, in 
 violation of existing Treaty-engagements, have caused 
 Foreign trade to be over-burdened with illegal taxes ; the 
 future prosperity and development of the entire foreign
 
 FOREIGN MERCHANT IN CHINA. 161 
 
 commerce with the Chinese people ; and the maintenance 
 or abandonment of the important principle involved in the 
 question : Whether International Treaties, so long as they 
 remain in force, have to be observed ; or whether, on the 
 part of both or either of the High Contracting Parties, they 
 may be broken, at any time and in any manner, at their in- 
 dividual will and pleasure ? 
 
 Touching Sir Rutherford Alcock's views in regard to this 
 question, and on the ground of which he adopted, in May 
 1870, an opinion diametrically opposed to the opinion with 
 more than usual warmth urged by him in July and Novem- 
 ber, 1868, and demanding consideration here, they are so 
 intimately connected with the two antagonistic opinions 
 themselves, that I am unable to separate the subject. It is 
 not, I think, unfair to assume, considering the tenour of his 
 own statements, that, in thus veering completely round, the 
 late Eepresentative of England at Peking has been to some 
 extent influenced, on the one hand, by a petty spite against 
 the merchants, who had caused his Pievision Convention to 
 faU to the ground, and who had thereby induced his shelva- 
 tion, on the other hand, by a strong desire to ingratiate him- 
 self again with the Ministry of the day. Be this as it may, 
 Sir Rutherford Alcock wrote, as we have aheady seen, as 
 follows : — 
 
 In Juhj 1868. In Man 1870. 
 
 CLiiia, like most other countries, The merchauts have iicrsistcntly 
 
 by entering into commercial Trea- maintained an interpretation dis- 
 ties with Foreign States, has, in tinctly and authoritatively reini- 
 consideration of a fixed payment diated by the only competent au- 
 ol" maritime and transit duties, fore- thorities in such a matter — the 
 r/oiie alljnrthcr rujht aj taxation on two High Contracting Parties, the 
 whatever can he sJioivn to constitute British and Chinese Governments. 
 the forciQn (rade, import or •■'j.m-i, Neitlier tiie opinion of the Law
 
 lf)2 
 
 THE TREATY RIGHTS OF THE 
 
 Otherwise, of wliat use cotild be tlie 
 provisions of tlie Treaties so care- 
 fully fixing and limiting the Tariff 
 rates, imi)ort, export, and transit ? 
 If the Territorial Government re- 
 tained the right to surcharge these 
 at pleasure, the •whole trade coiild 
 at any moment be stopped, or more 
 gradually dwarfed and finally ruin- 
 ed by burdens it is unable to bear, 
 or prohibitive duties. The le-kin. con- 
 st ilute a violation of Treatij rifjhis... 
 On tliat one article, opium, alone 
 the Chinese Government reserved 
 its absolute right of (inland) taxa- 
 tion without limitation by Treaty... 
 There is every desire on the British 
 Minister's part to avoid... pressing 
 fur impracticable measures either 
 beyond or within the limits of exist- 
 ing Treaties, But this one ques- 
 tion of an assumed right of the Chi- 
 nese Government to tax foreign 
 trade ad libitum is one of principle, 
 and of such vital moment to the in- 
 terests of commerce, that a British 
 j\rinister can hare no (li.scrrtionari/ 
 power in protcstiiuj o^/ainat it as a 
 ■violation of Treati/. 
 
 In Xoveinher 1S68. 
 I still hope Your Imperial High- 
 ness (Prince Kimg) and the Minis- 
 ters of the Ya-men, collectively, will 
 see that the time has arrived for re- 
 moving all just cause of complaint 
 and placing the trading-relations of 
 British subjects in the Interior on 
 the footing of securitv and immu- 
 
 Officers of the Crown, as to tlie le- 
 gal and proper interpretation of 
 these Articles ; nor the equally clear 
 testimony of the late Sir F. Bruce 
 and Mr. Wade, both engaged as the 
 Secretaries of Lord Elgin in draw- 
 ing up the several clauses of the 
 Treaty, as to the true meaning and 
 intent of those articles in his Lord- 
 ship's conception, have availed to 
 deter the merchants from reiterat- 
 ing afallaeij, and insisting upon an 
 interpretation, which rests upon no 
 better foundation than their own 
 opinion against all evidence and 
 authority. 
 
 But Treaties are not of privata 
 interpretation, according to the in- 
 terest or cdjiriee of individuals trad- 
 ini/ n)uler their stipulations. Wliat 
 the Treaty of Tientsin does grant 
 in this matter of transit both Go- 
 vernments are agreed, and their 
 joint decision is without appeal. 
 By that Treaty, the importer of 
 foreign goods has the right to sell 
 them at the port without liability, 
 while they remain his propertij, to 
 any other duty than the import 
 duty, or to send them to any inland 
 market which he may select, free 
 from any other charge than the 
 Customs dues on importation and 
 the stipulated transit diaty of 2^} 
 per cent. But both at the port and 
 at the internal market, n-hcn once 
 the floods hare parsed out of hi^ han/h, 
 thrii are liable to bear uhattter ta.ies
 
 FOREIGN MERCHANT IN CHINA. 163 
 
 nity from illegal taxation and ob- or duties the Chinese administration 
 
 struction, without which the Treatij mat/ see fit to lecif on them (in com- 
 
 itself becomes a dead letter. This day mou with similar goods of Chinese 
 
 eight years ago Lord Elgin and the origin). This is the authoritative 
 
 army that accompanied him, left reading of the Articles in question, 
 
 the gates of Peking, after haciny se- accepted by Her Majesty's Govern- 
 
 ciired the ratification of the Treat 1/ of meut... These are the conditions of 
 
 Tientsin, and, in negotiation with Trade, as determined by the only 
 
 Your Imperial Highness a further authoritative reading of existing 
 
 Convention that, in the terms of Treaties, 
 
 your proclamation then issued, ' Hereafter the weapons of rear vunj 
 for ever he laid aside,' 
 
 Whatever allowance we may be inclined to make for a 
 dij^lomatist who, after having borne the greatness of England 
 on his shoulders, liad, after a long exposure to the debilitat- 
 ing effects of the climate of China, failed in the crownino- 
 effort of his public life, and returned home only to disaj)- 
 pointment, neglect, and privacy : it is painful to see a man 
 even in Sir Rutherford Alcock's present position, on grounds 
 which are but too transparent, not only abandon without 
 reason, but entirely ignore, a former view which he had de- 
 liberately formed, supported by valid, logical, and irrefuta- 
 ble arguments, and in the strongest conceivable languao-e 
 impressed, in the name of England, on (what he believed 
 to be) the Government of China ; nay, reduce that view, as 
 adhered to by others, to a fallacy resting, against all e\'i- 
 dence and authority, on the mere interested or capricious 
 interpretation of "trading individuals." I doubt whetlier 
 inconsistency, ill-judgment, and bad taste could be carried 
 much further. There exists, to my knowledge, no authority 
 whatever for attributing to Sir Frederick Bruce the opinion, 
 imputed to him by his successor at Peking. The former 
 Minister, certainlv, never acted as Secretarv to Lord Elo-in's
 
 104 THE TllEATY RIGHTS OF THE 
 
 Embassy. With the opinion of tlio Law Officers of tlie 
 Crown "as to the legal and proper interpretation " of Art. 
 xxviii. of the Treaty of Tientsin and Rule vii. of the Trade 
 Kules, I have not the advantage of being acquainted ; but, 
 with every deference to their Lordships, I venture to think 
 that no interpretation can be well considered, or rest on a 
 sound basis, which is at variance with the clear testimony 
 previously adduced by me. 
 
 The point which here concerns us is the strange and 
 novel doctrine, advanced by Sir E^utherford Alcock, to the 
 effect that " the two Hig-h Contractino- Parties, the British 
 
 CD O ' 
 
 and Chinese Governments, are the only competent authori- 
 ties to agree and decide upon the meaning and purport of 
 a Commercial Treaty, concluded through their Plenipoten- 
 tiaries between the two nations, and that their joint deci- 
 sion is without appeal." Sir Ptutherford would seem to have 
 imbibed in "the Capital of the Son of Heaven" quite ultra- 
 absolutistic ideas regarding the Powers that be. Mafjna 
 Charta, Parliament^ and the People of England, manifestly, 
 had shpped from liis memory. Imagine British merchants, 
 who, on then- faith in certain clearly expressed provisions of 
 the international Treaty of Tientsin, have invested some ten 
 million £ sterling worth of British property in Shanghai alone, 
 to be told by Her Majesty's ex-Chief Superintendent of Trade 
 in China, that. His Imperial Highness Commissioner-Presi- 
 dent Prince Kung, and Her Majesty's Secretary of State for 
 Foreign Affairs the Earl of Granville, having agreed to re- 
 duce the said provisions to " a dead letter," there is " no ap- 
 peal from their joint decision" ! But, let the pleasantry 
 pass. 
 
 Great Britain has thus far been content to allow her Pve- 
 presentative in Peking to occupy the position of a most
 
 FOREIGN MERCHANT IN CHINA. 165 
 
 humble, yet unsuccessful petitioner for admittance to but 
 the threshold of the Imperial Palace, for access to but the 
 foot of the Dragon-throne of "the One Lord of the World." 
 With the gates of the Empeior's Palace shut in his very 
 face, almost ignored by the overweening Tatar Monarch, 
 and unnoticed by his supercilious semi-barbarous Govern- 
 ment, that Representative has been told by a Deputy : — You 
 will. for the present be suffered to stay in the Capital ; but as 
 to any business between your Outer Principality and the 
 Government Universal, it can be transacted only with this 
 temporary " Commission, Imperially appointed for the Ge- 
 neral Control of the Various Tributary States' Affairs," and 
 a barbarian servant engaged for the purpose. Aye, and men 
 having been found to accept, and feel proud of, such a posi- 
 tion : Su" Pvutherford Alcock set to revising the Treaty of 
 Tientsin with the " barbarian servant" of a Commission ap- 
 pointed for the General Control of the Affairs of the British 
 Dominions and other Dependencies of the Ta Ching Empire ; 
 and concluded the Supplementary Convention of Peking 
 with the Tsung-U Ya-men. With the Tsung-li Ya-men also 
 were the Treaties of Tientsin and other Treaties concliided. 
 Is the Chinese Government, i. e. the Emperor of China, bound 
 by those Treaties ? Morally speaking : no doubt ; legally 
 speaking : hardly. There exists, according to Chinese no- 
 tions, at any given period of time but one Iluler, Heaven's 
 Ptepresentative on Earth, the reigning Sovereign, to whom 
 the whole human race is subject, and whom we " outer bar- 
 bariails " are wont to style " the Emperor of China." He is, 
 so long as he occupies the throne, nameless. His reign 
 pJone is distinguished by a motto of good augury, or yeai's' 
 epithet, ^ II, nicn 'hdo. That of the present reign is : %W', 
 which may be rendered " Glory's Consummation," and Is in
 
 lOf) . THE TREATY RIGHTS OF THE 
 
 the West generally mistaken for the Emperor's name. Ilis 
 historical or Temple-name, he will receive only after his 
 deatli. Imperial Rescripts or Edicts, and similar State- 
 papers, wliich are issued in the Emperor's name, neutrally, 
 i. e. without the use of either the first or third personal pro- 
 noun, || have the concluding fonnula : iJC jlfc, " This from the 
 Emperor," generally but erroneously rendered : " Respect 
 this I " Even personal letters, in which the Emperor writes 
 as J^, " I, THE Emperor," which character no other Chinese 
 is allowed to use on pain of death, bear no signature. 
 
 The validiUj and authenticity of all Chinese State documents is 
 determined by the proper State seal being attaclied to them, in con- 
 clusion of the document and with the date, £ i. " Glory's 
 Consummation, year the 10th, moon the 6th, day the 18th," 
 written perpendicularly, downwards, through the midst of 
 the seal. An international Treaty requires, on the part of 
 China, the Great Imperial Seal, to render it valid and bind- 
 ing on the Emperor and liis Government. To the Treaty of 
 Tientsin and other Treaties this seal is not attaclied ; but 
 one of a very different character. 
 
 The inscription, in ancient writing, on the former seal, 
 reads in modern Chinese characters and English : — 
 gjj. ^ " The dominion of the World (I, the Emperor, have) 
 ^ ^ received from Heaven ; The splendour of past ages 
 :^C ^ (of Dominion has) descended (on Me)," The seal, 
 5c with a slightly varying inscription, was first intro- 
 
 II To gh-e an illustration of this peculiar stj-le, I will subjoin a literal translation 
 of the Imperial Rescript, which ordered the appointment of the late Mr. Burlingame 
 as (Chinese) State or Public Messenger (tantamount to " Queen's Messenger") : — 
 
 " It having been 
 
 Revtrentiall}- submitted by the Commission for the General Control of Individual 
 (Tributary) States' affairs, that the Public Messenger P"u Ngan-chen ("the Chinese trans- 
 literation of " Burlingame," usually named simply P'u) transacts business-mattei-s in a 
 conciliatory spirit, and is thoroughh- conversant with the fundamental relations of the 
 (Governing) Central (State) and the (Governed) Outer (States) : it is hereby ordered, that
 
 FOREIGN MERCHANT IN CHINA. 167 
 
 diiced by the great founder of the Chin Dynasty, Shih 
 'Huang Ti. The one at present in use, is the third stone. 
 The inscription on the second seal is in (Manchu and) Chi- 
 nese : M ^ ^ ^, which may be rendered : " The Emperor's 
 gem." The character ^, ]?du, "precious, resplendent," is 
 an epithet, applied to the Imperial seal ; as it is, /. i., by 
 one person to the family of another, of whom a Chinaman 
 will speak as " Your precious family," or to the shop of an- 
 other man, of which he will speak as " Your resplendent 
 shop," in both cases using the same predicate ^. The term 
 for seal is yin, fP. The use of the latter seal has been as- 
 signed to the Tsung-li Ya-men, in its intercourse with the 
 Representatives of Outer (Tributary) States, — an act of great 
 international impropriety. 
 
 Already on the signing of the Treaty of Tientsin, Mr. 
 Wade, at that time Lord Elgin's Interpreter, had his mis- 
 givings on this subject, as will appear from the following 
 documents : — 
 
 ■ The Earl of Ehjin to Lord J. EusselL 
 
 Peking, October 26, 1860. 
 My Lord, — I have tlie liouoxir to inclose a translation of the Imperial 
 Decree conferring full powers on Prince Kuug, and of the certificate 
 alfixed to the ratified Treaty, and signed and sealed by him, declaring 
 the apposition of the Emperor's Seal to the Treaty to be a full and valid 
 act of Imperial ratification. Before consenting to be satisfied with the 
 ratification in this form, I inquired what Baron Gros' views on the sub- 
 ject were, and I ascertained that he would be glad to have the certificate 
 which I proposed to demand, but that he was quite willing to accept the 
 Seal as a valid act of ratification, even without any such certificate. 
 
 (signed) Elgin and Kincardine. 
 
 he be appointed to proceed to the ludividual (Tributaiy) States, bouud by Treaty, in the 
 capacity of an Official of rank, to manage such matters as have arisen, in reference to 
 each Individual (Tributary) State, out of the (commercial) intercourse between the Central 
 (.State=China) and the Outer (barbarian States). The rest according to predion. This 
 from the Emperor. T'ung-chih, year 6, moon 10, day 26, (" Union and Order," November 
 21, 18G7).
 
 168 THE TUEATY RIGHTS OF THE 
 
 lirncf. fiioiliici'd hij the Prince of Kimfj at the Cunrl of the Board <ij 
 
 Ccrnnonicis Iw/orc .sujuiiiy the Conveiitioa of the 
 
 2ith October, 18G0. 
 (TnuiHlatioii) 
 
 On tlic 7tli day of the 8tli moon of the 10th year of the reign of Ilien- 
 fiuig, (21st September, 18G0) the Chief Secretariate had tlie honour to 
 receive the following Imperial Decree : — 
 
 "We command Yih-su, Imperial Prince of Kung, to be Imperial 
 Commissioner Plenipotentiary, with power to do whatever may be ne- 
 cessary to the exchanging of Treaties and the making of peace between 
 the two nations. Eespect this ! " 
 
 Note. — The term " tsiueu-kiuen," traaslated " Plenipotentiary," is of foreign ma- 
 nufacture, aucl employed here, as on former occasions, out of deference to our pre- 
 judices. The plenipotentiary power, according to Chinese notions and usages, is 
 really conferred by the words " pien-i-hing-sz," — " to do the things which the occa- 
 sion may demand as essential." — T. F. W. 
 
 Certificate appended to the Treatij of Tientsin hij the Prince 
 
 of Kmvj, October 24, 1860. 
 (Translation.) 
 
 The Prince of Kung, Commissioner and Plenipotentiary of his Ma- 
 jesty the Emperor of the Ta Tsing Dynasty, hereby executes a certi- 
 ficate : — 
 
 Be it known, that the impression of the ' Hwang Ti-chi P'au ' (the 
 fifth of the twenty-five seals of the Empire), which has been reveren- 
 tially affixed to the foregoing Treaty, the same being the Treaty of Peace 
 concluded at Tientsin in the year wni-wu (1858), is an attestation of the 
 full assent of his Majesty the Emperor of China to, and his promise to 
 abide by, all the Articles therein, and renders unnecessary any separate 
 authorisation by the Imperial signature. This Certificate is accordingly 
 appended to this Treaty, to serve as a record for evermore. Executed 
 at Peking, on the lltli day, of the 9th moon, in the 10th year of the 
 reign Hien-fung (20th October, 1860.) 
 
 How Prince Kung, the Mandarins, and the Tatar Court 
 must have smiled, on this occasion, at the facile belief, and 
 easily -led punctiliousness of "those outer barbarians!" 
 How admirable the sarcasm, which lies in the analogy be- 
 tween the ^ ^ ;^ ^, and " the Emperor's full assent to, and 
 promise to abide by, hU the Articles of th« Treaty of Tien-
 
 FOREIGN MERCHANT IN CHINA. 169 
 
 tsin! " Does not, moreover, the very Certificate state, that 
 His Majesty is " the Emperor of the Ta Ching Empire," (by 
 Mr. Wade erroneously rendered — a palpable absurdity — the 
 Ta Ching '' Dynasty "), /. e. of the entire habitable Earth ? § 
 And is ''the Lord of the World " IT bound by a promise, 
 forced from him by some of his own rebellious subjects ? 
 Then, the laughable idea of Prince Kung, any more than a 
 common coohe,* vouching for the Emperor's assent; and 
 the foreign-invented, senseless term " tsium-lciuen, translated 
 Plenipotentianj ," which reduces the whole certificate -a jffan to 
 a mere farce. 
 
 But, even assuming the Decree, produced by Prince Kung, 
 to have had the proper seal attached to it, Mr. Wade trans- 
 lates :—" We (/.<'. J^, I, the Emperor) command.... P^espect 
 this ! " The concluding formula itself, however, — correctly 
 rendered : " This from the Emperor," — proves that the sup- 
 posed Edict was worded in the usual style, and that the true 
 version would have been : " It is (hereby) ordered, that...." 
 On account of the absent Imperial pronoun ^, Mr. Wade 
 cannot possibly have misapprehended the syntax ; l)ut, as 
 he would seem to have done on another occasion, — with the 
 view of making it appear that the present Inspector-General 
 
 § To a large Atlas, f. i., published in 1863 bv Proviucial Authority, and entitled : 
 '' Atlas of the Whole of the One Great Ching Empire," and al.so : '■' Atlas of the 
 Whole Central and Outer Dominions of the (present) Exalted Dynasty,"' there is prefixed 
 in the Introduction, a '' General Map'' of those Dominions in three divisions ; the first 
 comprehending " the Central State," viz., China inclusive of a portion of Russia, of Corea, 
 Japan, etc. ; the two others comi)rehending both " the Central and the Outer States of 
 the Ching Empire," viz., the two hemispheres of the Earth. 
 
 ^ In his famous Edicts to the Eiirht Banner-Corps, the Emperor Shih T.sung Hsien 
 (Yung Cheng. 1723—1736) says :— ^ J^ ^ 5C T ^^ i- " I, the Emi'EKOR, in- 
 dividually, am the Lord of the World ;" and by His Imperial Highness Prince Kung, in a 
 recently printed volume of Essays, the samo doctrine is, over and over again, impressed 
 upon his readers in the verj' strongest language. 
 
 * In the same volume, just refeiTed to, Prince Kung repeatedly adduces the old maxim : 
 " The Emperor is the Emperor, and the suliject subject," in other words : There are but the 
 one Absolute Ruler of mankind, and, — reduced to the same level before him, all men, 
 however high their r.i-ik. relatively to each other — his slaves.
 
 170 THE TREATY RIGHTS OF THE 
 
 of Cliinese Maritime Customs had been Imperially appointed, 
 — he must be inferred to have introduced here the same 
 Imperial We, mtentionally. Again, he explains '* the words 
 pien-i-hing-sz to signify : — '' to do the things which the occa- 
 sion may demand as essential," whilst he translates them : 
 " with power to do whatever may be necessary to...." I am 
 not in possession of the Chinese text of the Decree ; but the 
 reading can only be : ill !a fr ^, and Mr. Wade must 
 have known, that its meaning is simply : "for the purpose 
 of transacting business,"! although he appears not to have 
 known, that, " according to Chinese notions and usages," 
 Heaven's "plenipotentiary power," solely possessed by the 
 Emperor, is never by him entrusted to a deputy for any pur- 
 pose whatever. Lastly, Mr. Wade, though fully aware of the 
 true nature of the difficulty, manifestly had allowed Lord 
 Elgin to remain under the erroneous impression, that it was 
 not the improper stamp attached to the Treaty for the Great 
 Imperial Seal, but the absence of the Emperor's signature, 
 which constituted that difficulty. The Emperor has no 
 signature. Its place is taken by his seal. 
 
 According to the authoritative " Collective Code of the 
 Ta Ching Dynasty,]: the fifth of the twenty-five State 
 seals, — the one assigned to the Tsung-li Ya-men, is used 
 ^M^iiM' " foi* awe-inspiiing (documents), restraining 
 (regulations), and 3-oke -imposing (bonds)." It is quite in 
 harmony, therefore, with the title of the Tsung-li Ya-men 
 itself. It measures 4-8 Chinese inches square, and is ex- 
 ceptionally made of wood, — a particular kind of sandal- 
 
 t The sentence may, when the context justifies it. but not otherwise, be rendered : 
 '' with authority to transact business." 
 
 X ^^^ ^^ '^ ^ > ^^ ^'^^^- ^° ■ "^'"^- ^- ^'^- ''■ ^°^- ''• ^ ^^"^ ""'•''' ^^^ ^^^ ^'^'- 
 tioTi before me ; the text in regard to our subject, however, has undergone no later altera- 
 tions.
 
 FOREIGN MERCHANT IN CHINA. 171 
 
 wood — ; all the other seals, with the exception of the third, 
 a small seal made of gold, being cut of precious stone, viz. 
 jade, varying in color and quality. 1| The first or great 
 seal, made of white jade, and measuring 4-4 Chinese inches 
 square, impressed in vermilion and used iliM M.^> "for 
 statutes, etc., emanating from the Imperial Cabinet 
 itself, " as I understand the phrase. Its inscription, 
 claiming the autocracy of the Earth for the Tatar Sovereign, 
 is, no doubt, highly objectionable ; the use, for which the 
 fifth seal, which is impressed in black, is destined, renders 
 its application to international treaties simply insulting. 
 Altogether, nothing could be in a more unsatisfactory state 
 than are, diplomatically, the treaty-relations of Western 
 Powers with China, § and, independently of other, as Avill 
 be presently seen, even more fatal, objections. Sir Ruther- 
 ford Alcock can but have advanced his theory, that " the 
 two High Contracting Parties, the British and Chinese 
 Governments, are the only competent authorities to agree 
 and decide upon the interpretation to be placed on the 
 various provisions of the Treaty of Tientsin," in perfect 
 ignorance of the facts and bearings of the case.^ 
 
 A similar, and truly surprising degree of unacquaint- 
 ance with the real merits of " the transit-system," 
 upon which he advises the British Government, Mr. Wade 
 exliibits in his often cited Memorandum, — a composition, 
 
 II It canuot be the size of the fifth seal, which has determined the choice of its excep- 
 tional material, as the ninth, eleventh, and twenty-fii-i^t seals are of the same size, while 
 the twenty-second one, made of black jade, measures as much as 53 Chinese inches 
 square. 
 
 § Comp. my stssay. On the Universal Supremacy of the Emperorc of China, as dijilo- 
 maticaliy enforced in their relations with Western Powers, and considered in its practical 
 bearings and tendencies. — Shanghai, 1875, 8 ° • 
 
 ^ Sir Rutherford Alcock has shown, by some papers contributed to Fraser's Magazine. 
 for March and April, 1871, that it is possible for a man of education to reside tor ye^rs 
 as British Minister in the Capital of China, and to take home from it, even relative to its 
 Government, nothing but erroneous notions.
 
 \7'1 lUK TREATY IlIGIITS OF THE 
 
 as he liiinsclf observes, " of immense length," but of neither 
 breadth nor depth ; in which the distinguished author in- 
 clines to all sides ; affirms and negatives, emphasizes and 
 "but"s, proposes and opposes, approves and disapproves, 
 everything ; extends his full hand, under the appearance of 
 his little finger, to the Chinese official, and his little finger, 
 under the appearance of his full hand, to the British mer- 
 chant ; would fain please God, and decidedly not displease 
 the Devil. If Mr. Wade had been a ]\Iember of the Tsung- 
 li Ya-men, or been looking forward to the chances of another 
 Burlingame Mission, he could hardly have argued more 
 ingeniously than he does, in support of the continuance 
 of a system of illegal inland taxation in China, which, so far 
 as trade with the Interior is concerned, virtually reduces 
 the Treaty of Tientsin to a dead letter. But his pro-Chinese 
 bias and feelings, rising up to " mountains full two hundred 
 Z/ in height,"* are so well known as to require no further 
 elucidation on my part. 
 
 To what extent, however, Mr. Wade was unfit, not 
 only fi-om his strong prejudices, but fi'om defective in- 
 formation, to advise the British Board of Trade on the subject 
 under consideration,, will appear from the following state- 
 ments, made by him, namely: — "A fair Tariff of import 
 and export customs was (in virtue of the Treaty of Nan- 
 king) published in 1843, but the promised declaration by 
 which the inland transit duty was to have been regulated 
 never appeared." His Excellency, therefore, was mani- 
 festly ignorant of the official publication of the declaration 
 in question, dated Hongkong June 26, 1843, as well as 
 of the existence of the " Supplementary Treaty ofHooman- 
 
 * See Mr. Wade's T:u Erh Chi. London, 1847, 4o p. 32 ; and Key, Exercise I, 13 p.p, 
 4-5. Aboni three Chinese li are equal to an English mile.
 
 FOREIGN MERCHANT IN CHIN\. 178 
 
 Chai of October 8, 1843," and the Government Noti- 
 fication of February 20, 1844 ; although, strangely enough, 
 he adds : "it was doubtless, of the rates to be charged at 
 these — certain fixed points, or — barriers, a list of which is 
 published in the Code of the Board of Revenue, that the 
 declaration required by Sir Henry Pottinger, in 1842, was 
 demanded."! There is nothing here but confusion. In 
 the Treaty of Nanking of August 29, 1842, in which it is 
 expressly stated that the amount to be levied as transit 
 duties, " shall not exceed — per cent on the tariff value" of 
 British imports, there is no allusion made to inland '* Bar- 
 riers," at which he rates of duties were then to have been pay- 
 able according to measures of length, weight, and capacity. 
 The Chinese tariff of inland taxes, at the period in question 
 levied at the various inland Custom-houses — there existed 
 then as yet no Barriers, — and published in the Code of 
 the Board of Revenue, I was duly promulgated by the British 
 Plenipotentiary. 
 
 Again, in reference to the optional clause in Art. xxviii. 
 of the Treaty of Tientsin, Mr. Wade writes : — "This stipu- 
 lation, like that in the Treaty of Nanking, had reference to 
 the Barriers that had been sanctioned by the Board of Re- 
 venue." In the first place, this sentence includes a contra- 
 diction in terms, inasmuch as, at the conclusion of the 
 Treaty of Nanking, no "Barriers" had been " invented, " 
 Mr. Wade apparently confounding them with the old Cus- 
 
 t The declaration or promulgation of the tariff of inland duties, of which Mr. Wade 
 here speaks, can possibly refer only to Sir Henry Pottinger's " Declaration of June 2(1 
 1843," which he has just asserted to have never appeared, — because in that document alone 
 the tariff in question is alluded to. I find to my surprise alf-n, that Mr. Wade, towards the 
 couclu.sion of his memorandum, actually quotes tbe " Supplementary Treaty signed at 
 Hoo Mun Chai, 1843." All I can say is, that his Excellency must, with that Treaty before 
 him, be inferred to have read it very paitially, and for a special purpo.se only. 
 
 X A translation of the Tariff is given also by the late Mr. Wingrove Cooke, in his cor- 
 rpspondenoe from China in th»^ years 1857-58, London 1859, 8° p.p. 191-5.
 
 174 THE TREATY RIGHTS OF THE 
 
 toiii-houses.|| And, in the second place, the optional clause 
 in Art. xxviii. of the Treaty of Tientsin had by no means 
 reference to the Barriers only which, since the Treaty of 
 Nanking, might, or might not, have been sanctioned by the 
 Board of Revenue, but to the whole of the inland charges, 
 including le-km, which were being levied at the time, and 
 were not to be increased thereafter. Had Mr. Wade read 
 the Treaty-Article referred to with the least degree of at- 
 tention, he would have avoided falling into an error, solely 
 on the ground of which he was afterwards enabled to draw 
 so fine a distinction between " transit "-taxes and le-kin, in 
 favor of the legality of the latter impost. 
 
 " But it was found," Mr. Wade goes on to say, *' that in 
 the then conditions of the Interior and especially of the 
 valley of the Great River, the required notification, if pro- 
 ducible at all, could not be looked for without very consider- 
 able delay; " and that ^'therefore, by the 7th of the Rules ap- 
 pended to the Tariff, the inland duty on all imports and ex- 
 ports therein enumerated was limited to a sum equal to half 
 the duty leviable upon them under Tariff, and that on duty- 
 free goods, to a sum equal to 2|- per cent, upon value ; 
 exemption from any additional impost in transitu being se- 
 cured by certificate." I hardly comprehend his Excellency. 
 The notification in question might have been " produced " 
 at any moment. Does Mr. Wade, then, mean to say, that 
 a fixed inland commutation-tax was finally agreed upon, be- 
 cause the valley of the Yang-tze was at the time in the 
 
 y The Tsung-li Ya-men and the Superintendent of Trade for the Middle Ports, the late 
 T.seng Kuo Fan, do not participate in Mr. Wade's strange error. In the notification of the 
 
 Governor-General of the Two Kiang, he states: — " I, Tseng Kuo Fan in reference 
 
 to a communication from the Teung-li Ya-meu, respecting the first article of the regula- 
 tions, which were established in the Hth year of Hsien Feng, and requiring that foreign 
 merchandise, entering the Interior, shall p.iy dnti/ at the Ciistom-house:> ^^ and le-l-iri at the 
 Customs barriers -j^ &c."
 
 FOEEIGN MERCHANT IN CHINA. 175 
 
 possession of the Tai-pings ? Legitimate trade in that quarter 
 existed not : all intercourse with the rebels having been 
 strictly forbidden. What advantage, therefore, could "a 
 fixed tax" have presented to the Chinese Government over 
 its accustomed " iiTegular and multiphed levies," in districts 
 temporarily beyond the reach of its authority ? Did Lord 
 Elgin, perchance, conclude his Treaty with China solely with 
 a view to her disturbed provinces ? It would seem that 
 Mr, Wade could have perused neither the Treaty itself with 
 due attention, nor Lord Elgin's despatch to the Foreign 
 Office, of November 8, 1858, at all. For Art. xxviii. of the 
 former, compared with Rule vii. of the appended Rules, 
 distinctly says that one fixed inland duties commutation-tax: 
 it was adopted on account of " charges suddenly and arbitra- 
 rily imposed by the provincial authorities as transit duties 
 upon produce on its way to the foreign market, and on im- 
 ports on their way to the Interior, to the detriment of 
 trade ; " and the latter document as distinctly states, that it 
 was in " the substitution of one fixed payment for the pre- 
 sent irregular and multiplied levies, the remedy was to be 
 sought against this grievance," — :a grievance, which had from 
 all sides been pressed upon Lord Elgin by the mercantile 
 bodies. Finally, Mr. Wade here admits, that the one fixed 
 commutation tax was to absolutely commute " the inland ditty 
 on all imports and exports," and in the same breath main- 
 tains that the certificate, certifying the due payment of that 
 inland duty, was not to exempt all imports and exports from 
 "the inland duty," but from "any additional imposts in 
 transitu only," — a palpable contradiction in terms. 
 
 "I am not in a position," Mr. Wade remarks, "to state 
 whether Sir Henry Pottinger supposed that the single pay- 
 ment, by which he stipulated that the Chinese merchant
 
 170 THE TREATY KIGHTS OF THE 
 
 was to compound for his barrier dues, would exempt the 
 goods he carried inland from all farther taxation. I suspect 
 that he did ; and the mercantile community, though, with 
 reason, not sanguine that the promised scale of inland du- 
 ties would ever be published at all, were, I think, under the 
 same impression as to the sense of the Treaty stipulation." 
 If his Excellency, when he wrote this, as Secretary of the 
 British Legation in China on leave of absence in London, 
 and with the very Archives of the Foreign Office at his dis- 
 posal, was not in a position to ascertain the fact, which he 
 " suspects " : who could have been ? His suspicion, how- 
 ever, is ill-founded. Sir Henry Pottinger, in his Declara- 
 tion of June 26, 1843, did not compound the then leviable 
 inland taxes — by Mr. Wade erroneously styled "harrier 
 dues " — by one single fixed tax — but agreed that the British 
 (the same as the Chinese) merchant should pay the whole 
 of the actual inland taxes at that period levied upon native 
 trade, to an extent tiot exceeding the then rates, such rates 
 being upon a moderate scale. And how, with the said De- 
 claration before it, could the mercantile community have 
 participated in Mr. Wade's groundless impression ? What 
 reason, moreover, had merchants to apprehend that Sir 
 Henry Pottinger- would fail in causing the promised scale of 
 inland duties — involuntarily Mr. Wade recurs again and 
 again to the use of the true designation for taxes, to which 
 he otherwise applies the misleading term of " banier "- or 
 " transit "-dues — to be published ? 
 
 Mr. Wade further observes : — " Through the native trade, 
 undoubtedly, the le-liin hits our o^\^n trade hard, and for 
 more reasons than one we are justified in crying out ; but 
 again we must be careful to remember what the tax really is." 
 Its nature appears to me to be singuki'ly misunderstood.
 
 FOREIGN MERCHANT IN CHINA. 
 
 177 
 
 "•Since the last payment, "lie 
 writes," of our indemnity in 1865, 
 only, has the Central Government 
 caused two-fifths of the Customs re- 
 ceipts (the amount that the French 
 and ourselves drew annually from 
 1860 to 1865) to be remitted to Pe- 
 king. The remaining three- fifths are 
 apjjlied to the expenditure of the 
 'provinces.' So they were through- 
 out the whole five years of indem- 
 nity payments ; and except the Can- 
 ton quota, which, up to a certain 
 date, had always gone to the purse 
 
 " As I have before mentioned, the 
 Central Government, it might be 
 more proper, perhaps, here, to say 
 the Court, now draws and applies 
 nearly half the total of the Tariff 
 duties. It has no other fund so 
 large, and none so regularly paid. 
 Be its alarm " (at the aboUtion of 
 the import Tariff, proposed by his 
 Excellency) " ever so great, the ac- 
 tion taken by it will be slow. The 
 Decree calling for the provincial re- 
 turn will be for a time disregarded, 
 or at the best tardily obeyed." 
 
 of the Imperial household, so, for the last fifteen years of trouble, have the 
 whole of the maritime duties, collected on foreign trade, been applied." 
 
 "The ^'squeezes'' of the local au- 
 thorities, that is, / presume, the le- 
 kin or war-tax, of the abuses con- 
 nected with which I shall have 
 enough to say, owe their existence 
 and evil growth to the same de- 
 mand for supplies, not to any ac- 
 tion taken by or through the Cus- 
 toms Inspectorate. In some form 
 or degree the impost is of far older 
 birth than the Inspectorate, and 
 must be at this moment a chief re- 
 source of Government in regions far 
 
 "The le-kin taxes are, and for 
 years to come will be, indispensa- 
 ble to the Chinese Government... To 
 find bread for its standing civil and 
 military establishments, to say no- 
 thing of the large bodies of mihtia 
 or volunteers, which are demanded 
 of it to make head against the re- 
 bellion or brigandage incessantly 
 troubling it in one quarter or an- 
 other, the State has been driven to 
 various abnormal ways of recruit- 
 ing its means." 
 
 beyond the influence of that Institution." 
 
 It is almost painful to follow Mr. Wade through the laby- 
 rinth of his illogic, inconsistency, self-contradiction, and 
 verbose inaccuracy. After having incidentally stated that 
 the le-Jcin, " though ostensibly a voluntary contribution, is 
 in reality a tax of great elasticity upon all trade, and one 
 which, in course of time, becomes as grievous in the arbitra-
 
 178 THE TREATY KLGIITH OF THE 
 
 riness of its imposition as the 'benevolence' of om- Kings of 
 old," his Excellency tells us, that it is only through the na- 
 tive trade it touches our own ; asks us, in justification of 
 tlie grievously-arbitrary impost, to carefully remember what 
 the singularly misunderstood tax really is ; thereupon pre- 
 sumes it to be the squeezes of local authorities ; in the same 
 breath positively affirms that it constitutes one of the chief 
 fiscal resources of the Chinese Government, being the bread 
 of the Chinese Army ; and finally explains its true nature 
 by warning the English Board of Trade, that it (the le-kin) 
 is no imposition of the Foreign Inspectorate-General, but — con- 
 sidering .that three-fifths of the Customs revenue, derived 
 from British and foreign trade, have been regularly absorbed 
 by the Provinces, whilst, during the period 1860 to 1865, 
 the remaining two-fifths were appropriated by England and 
 France for war expenses, and go now towards the support 
 of the Peking Court, — simply a necessity, imposed upon the 
 poor Chinese Government partly by Great Britain herself. 
 Such, — however little of logic there may be in Mr. Wade's 
 argument, if there be any at all, — appears to me to be the 
 drift of his remarks ; and this inference is confirmed by the 
 whole tendency of his subsequent, less occult reasoning. 
 
 The statements here animadverted upon have, at aU events, 
 scarcely any foundation in truth. The le-kin, clwio-fang, and 
 similar imposts, are taxes, directly and in open violation of 
 Treaty-engagements, levied upon British and foreign im- 
 ports, and native exports destined for British and foreign 
 ports. They are not the ''squeezes" of local authorities, 
 but illegal taxes imposed by the Chinese Government. And 
 these taxes are not being levied to supply bread to the Chi- 
 nese troops engaged in the suppression of rebellion and the 
 restoration of order, but, partly for the obstruction of foreign
 
 FOREIGN MERCHANT IN CHINA. 179 
 
 inland trade, partly, — and for a number of years past, at 
 least, this has been the case, — for the purpose of military 
 armaments against Western Powers generally, and against 
 England in particular, — a purpose, to which a large part of 
 the three-fifths of the regular Customs revenue, alluded to 
 by Mr. Wade, is equally applied in the Provinces. It is well 
 for the Court of Peking, that Mr. Wade is so little acquainted 
 with its resources ; or else the Imperial Household must 
 have had a hard time of it during the Franco -British -in- 
 demnity-paying period of 1860-1865. But what logical 
 connection there exists between the Emperor's relief from 
 penury in 1866, and his alarm at Mr. Wade's intended pro- 
 position to abolish the import Tariff in favor of a " car(e 
 blanche inland taxation," on the one hand, and His Majesty's 
 slow action and " a Decree calling for the provincial return, 
 which will for a time be disregarded or at the best tardily 
 obeyed," on the other, is to me a mystery. Or had his Ex- 
 cellency here once more and suddenly been seized with the 
 idea, that the le-kin taxes are nothing more nor less, than 
 "the squeezes of local authorities"? Does he consider 
 " the Court," i. e. the Emperor and his household, and " the 
 Chinese Government," i. e. the Emperor and his State-Se- 
 cretariate and Pri^^- Council, to constitute in the divine-ab- 
 solutistic Empire of the Ching, two distinct elements of 
 power, independent of each other ? And what relations 
 existed there between Mr. Wade and the Foreign Inspector- 
 ate-General of Chinese Maritime Customs, that he should 
 see occasion to disconnect fi-om the Ic-kin " a department 
 which, if not on other grounds as much above suspicion as 
 his Excellency 'is happy to believe,' is entirely distinct 
 from the receiving offices " ? That there exists some con- 
 nection between the levying of the le-hi'n taxes and Foreign
 
 180 THE TREATY RIGHTS OF THE 
 
 Custom -liouses, " the foreign Commissioner of Customs at 
 each port, being, it is true," as Mr. Wade himself remarks, 
 *' tlie subordinate of the Chinese Superintendent of Customs," 
 I can positively affirm ; to what an extent that connection 
 goes,§ is a question I am not prepared to answer. 
 
 Mr. Wade states : — " By Article ix. of the Treaty of Tien- 
 tsin, Lord Elgin obtained for the British merchant the right 
 to travel with a pass-port, on business or for pleasure, to 
 any part of the Empire. This gave him personal access to 
 the markets whether as buyer or seller, and secm-ed him, at 
 all events, against false information.... So far as Article ix. 
 of the Treaty of Tientsin is concerned, it is my impression 
 that the privilege it guarantees has been fairly enjoyed.... 
 The personal access which it does authorise to whatever 
 places the foreigner desires to visit, has been, with rare ex- 
 ceptions at all events, conceded him.... At Shanghai, notwith- 
 standing our power of visiting the producing districts, tea 
 and silk are procurable on as good terms at the port as up 
 the country, if not on better ; but this because the native 
 community have the wit to combine. The foreign community 
 invariably compete. The combination of the tea -growers 
 proves, I fancy, too much even for the native brokers." It 
 is characteristic of the present Eepresentative of England in 
 China, that he represents the right of the British merchant 
 
 § That the Foreign Commissioner of Customs at Shanghai, Mr. Dick, knows to a cash 
 what is the exact annual product f. i. of the chmv-faiiff, which he still calls the " Defence 
 Tax " (" Suggestions for the Revision of the Chinese Customs Tariff and Trade Regula- 
 tions," appended to the " Reports on Trade at the Treaty Ports in China " for the year 1869), 
 Shanghai, 1870, 4°, p. 20, note), is, of course, no proof of such a connection. The office of 
 the chow-fang being under the same roof with the Foreign Custom-house, the returns in 
 question might easily be obtained. If we were to judge, however, from the confiscation- 
 case of Messrs. Bower and Hambury, to which I shall have to revert in the sequel, foreign 
 tide-waiters and tide-sun-eyors, being in the imited service of the Foreign Maritime Cus- 
 toms and the Tau-tai, even act, occasionally at least, as k-kin officials ; and the le-hin and 
 " transit-" dues in that ra.se appear to be inextricably mixed up together.
 
 FOEEIGN MERCHANT IN CHINA. 181 
 
 to travel, mider a restrictive pass-port system, in the In- 
 terior, as a privilege, and the curtailment of his Treaty -right 
 as a Chinnese concession. Not only were, up to within the 
 lasts even or eight years, travellers' passports, with the tei-mg 
 " for purposes of trade " inserted in them, constantly refused 
 or disregarded by the Provincial Authorities, but in certain 
 provinces they were so by direct instructions from the Tsung- 
 li Ya-men. If, more recently, the "privilege " has been " fair- 
 ly enjoyed," it is simply because foreign merchants have had 
 to "concede " the point, and almost ceased to avail them- 
 selves of the pri^dlege in question, for the reason indicated 
 by Mr. Wade himself, namely, the chief staple articles of 
 exportation from China, "tea and silk, bemg procurable on 
 as good terms at the ports, as up the country, if not on 
 better." 
 
 How is this fact to be explained ? Manifestly, the 
 foreign merchant finds it useless to incur,— pleasure in tra- 
 velling, or travelling for pleasure, in China is out of the 
 question — , the trouble, privation, and expense, of pro- 
 ceeding himself, or sending agents of his own, to the inland 
 marts ; useless, either because he finds it impossible to 
 escape iUegal taxation after all, or because the journey 
 costs more than the amount which he is able to save in 
 purchase-money and transit-charges, or because the native 
 traders use bribery in order to evade a portion of those 
 taxes ; in short, because the desire of the Chinese to sell 
 brings the produce to the British merchant's door at a 
 cheaper rate than he could, by pm"chasiug as a mere tra- 
 veller, in the Interior, lay it do^\'n himself. Not so Mr. 
 Wade. The present Chief Superintendent of British Trade 
 in China contends that the foreign merchant can buy 
 more advantageously at his own poi-t than at the inland
 
 182 THE TREATY RIHIITS OF THE 
 
 market, because there — " the native comnninity have the 
 wit to combine " against him i.e., impHedly, against his 
 chillncss, manifested by "invariable competition." But there 
 are two points, which reduce his Excellency's argument 
 to its proper value. Of his extraordinary advocacy in favor 
 of " combination," which is in principle identical with, and 
 necessarily involves, monopoly, against " competition," the 
 very soul of free trade — one of the principal conditions of 
 England's commercial and industrial prosperity — , I will 
 not even speak. The first of the points referred to, is 
 that Mr. Wade overlooks how, in the same paragraph in 
 which he lands the Chinese wit of combination, he explains 
 that : — " Article ix. of the Treaty of Tientsin does not 
 accord us, nor, as I (Mr. Wade) have urged elsewhere, 
 does any other Article accord, the right of residing other- 
 wise than a tourist or mercantile traveller may reside, in 
 any part of China, but the Consular ports." How, then, 
 such being the case, can the British and foreign commercial 
 tourist be rationally expected to, and how could be possibly, 
 " combine," successfully combine, against the resident 
 native tea-growers and silk-farmers ? The preliminary and 
 indispensable condition of such a combination, on the part of 
 foreigners, is the right of residence in the Interior. They pos- 
 sess as yet no such right. Mr. Wade, personally, opposes it. 
 Is it not amply sufficient that, in China, British merchants 
 should be allowed " to visit any producing ground or im- 
 port market they please ; to contract, if it suit them, with 
 the producer for exports, and to certificate them to the 
 port of shipment ; or to contract with the native dealer in 
 imports, and to send their goods certificated from the port 
 to his house ?" Why, as his Excellency adds with pater- 
 nal and quite touching solicitude, should they, moreover,
 
 FOREIGN MERCHANT IN CHINA. 183 
 
 " subject themselves to the iiLconvenlence of that multiplica- 
 tion of establishments, which has already cost our China 
 merchant so dear " ? I am of opinion that, in regard to 
 this matter, the individual merchant himself ought to he 
 considered the only proper judge ; but, at all events, let no 
 sensible man talk of Foreigners combining, at an inland 
 mart, against the native tea growers and silk farmers, so 
 long as they continue deprived of the right of residence 
 in the Interior. 
 
 The second point, to which I have alluded, lies in Mr. 
 Wade's own remark, in " fancying, that the combination 
 of (native) tea-growers proves too much even for (the com- 
 bination of) the native brokers ; " for surely, he would not 
 have us understand that, in China, the native " wit " is 
 peculiar to the tea-growing part of the population ? Brokers, 
 generally, have the reputation of not being wanting in 
 that quality. But, if native brokers, inland, combine, 
 or are made to combine, against native producers : is not 
 this a case of " diamond cutting diamond," of " Greek 
 meeting Greek," by which the British merchant may be 
 fairly concluded to come out the chief gainer ? For if, at 
 the port, he do compete for the purchase of Chinese produce, 
 the Chinese, eager to convert their accumulating stock into 
 money, do combine in an equally fervent desire to dispose 
 of it ; and, were it not that the people of England, the 
 United States, and other countries were so determined to 
 drink new tea, and to wear fresh silks, at any price, it 
 might be difficult to say on whose side the advantage would 
 remain. As it is, there can be no doubt as to one thing, 
 viz., that the Chinese Government, in addition to the 
 export and inland-duty on tea and silk fixed by Tariff, 
 make the Western consumer of these commodities, in open
 
 181 THE TKEATY UIGIITS OF THE 
 
 viohition of Treaty-provisions, pay about twentif per cent ad 
 valorem over and above their lair market cost. 
 
 The view next expressed by Mr. Wade, and requirinf^ 
 notice, relates to the ownership of certificated British mer- 
 chandise, intended for sale inland. *' Article xxviii. of the 
 . Treaty of Tientsin," he writes, " /))w??ises exemption from 
 all charges in transitu.... ; provided always, as Sir Frederick 
 Bruce read the Treaty, that such imports or produce, being 
 bond fide British o^vned, were accompanied by a certificate.... 
 
 "It is hard enough on the provin- It must be remembered that, with 
 
 cial Governments, that they must these local Governors (whose cupi- 
 
 give up their tolls on goods that dity is not easily restrained) pleas 
 
 are foreign-owned, but it will be for extraordinary expenditure a- 
 
 harder stiD if Chinese, armed with bound,... and that for years they 
 
 foreigners' certificates, are to carry have been used to the appropria- 
 
 Chinese-owned goods toll-free from tion, almost unquestioned, of the 
 
 one end oftheEmpireto the other... le-kin taxes, ...so grievous to bear. 
 
 **I hold that the transit-duty, as defined by Treaty, once paid, 
 the certificate thereon gi'anted..,.will not exempt the goods, 
 cleared under it, from the le-kin or from any other tax, once 
 they have become Chinese property." Those poor provin- 
 cial mandarins, whose cupidity even Mr. Wade is miable to 
 restrain ! Well may they congi-atulate themselves at pos- 
 sessing so warm and influential a friend in the present Chief 
 Superintendent of British Trade in China. I fear, however, 
 that his pro-Chinese enthusiasm carries him occasionally, 
 as here, beyond the boundaries of prudence, if not of reason. 
 When, in one page, he admits that " there has not been, to 
 his knowledge, any instance but the one exposed at Ningpo, 
 of such an abuse of the certificate," as I shall have to speak 
 of in the sequel and is alluded to by Mr. Wade above, and 
 in another page talks of the Chinese revenue, derived from
 
 FOREIGN MERCHANT IN CHINA. 185 
 
 the native inland taxation, being defrauded, throughout the 
 Empire, by means of false certificates taken out by British 
 and other foreign merchants, in order, it would seem, to 
 create the greater sympathy, on the part of the British Go- 
 vernment, for Chinese officials, who are systematically en- 
 deavouring to destroy the legitimate trade of England by 
 illegal exactions, and whose rapacity he himself denoimces : 
 I am at a loss to account for so unaccountable a proceeding. 
 On the other hand, his Excellency, missing no opportunity 
 of gratifying "the Central Government"' as well, greatly 
 exaggerates the share of the le-kin, which "the Provincial 
 Governments are allowed to appropriate," and forgets how 
 he has just insisted, that " k-lcin taxes are, and for years to 
 come will be, indispensable to the Chinese (i. e. " the Cen- 
 tral") Government.... to find bread for its standing civil and 
 military establishments." And the whole of Mr. Wade's 
 preceding declamation is based on the erroneous view of his, 
 that only British- and foreign-owned goods are entitled to a 
 commutation of inland taxes and a corresponding certificate. 
 He had read the provisions of the Treaty of Tientsin ^^Tongly ; 
 and, if there was one man above all others in China, who 
 ought to have read them aright, surely it was Mr. Wade. 
 As to imports, even before he pressed his mistaken opinion, 
 — so far as I know, never shared in, as he states, by Sir 
 Frederick Bruce, — on the British Government, the very 
 Tsung-li Ya-men had formally proclaimed that opinion to be 
 opposed to Treaty-stipulations; and in domg so, as the 
 Inspector-General explains it, "merely honestly ordered 
 subordinate offices to give full and proper effect to a pre- 
 viously existing right.'- Respecting exports, I have shown 
 that the spirit of the Treaty of Tientsin, containing no con- 
 dition of oinicrsliip, is erpially plain ; and it will, presently,
 
 18G THE TllEATY KlUHTS UF THE 
 
 be shown, that in practice it al)solutely excludes the con- 
 struction i)laced upon it by his Excellency. 
 
 *' The immediate abolition of the le-kin contribution 
 (the remedy urged by some of the physicians of this ailing 
 Power)," Mr. Wade states, " is simply impracticable. I 
 will state the ground of this conclusion. The provinces 
 have revenues specially affected to their expenses, but the 
 income with which the Empire assumes to support its 
 establishments should, in normal times, amount to some 
 45,000,000 taels, say ^£15,000,000 sterling. It derives 
 this from three sources, the land tax, the sundry taxes, and 
 the Salt Gabelle. The Salt Gabelle, even in the most 
 flourishing periods, appears ahvays to have been in confu- 
 sion ; and in evil days, such as those we live in, it can even 
 less be reckoned on : the collectors In the towns and cities, whether 
 and mouopoHsts" [the State is the on the seaboard or inland, the 
 only monopolist in salt] " make ledger of the native dealer, mer- 
 large fortunes, the smugglers also; chant, broker, and tradesman aUke, 
 the account with the State is al- is subjected to an unsparing inqui- 
 ways grievously in debt. But a sition, and on all discoverable 
 large portion of the land-tax, which transactions the le-Jdn falls heavily 
 should yield nearly two-thirds of the and without relaxation, 
 total income of the State as above estimated, it must have 
 been, for years past, impossible to collect at all, in any place 
 w^liere a population still existed to pay it ; w^liile, in many 
 places, the country has been so thoroughly laid waste, that 
 there is no longer a population to be taxed. The sundry 
 taxes" [including foreign Maritime Although, thanks to the increase 
 Customs], " of course, have fared of trade since I860,... the foreign 
 no better. Of the pro^^ncial as customs have nearly doubled,... 
 distinguished from the Imperial even now they amount to something 
 revenues, we have no exact ac- less than 8,000,000 taels. 
 count. They are roundly put at some 6,000,000 M sterling.... 
 The foreign import and export duties (not the transit dues)
 
 FOREIGN MERCHANT IN CHINA. 187 
 
 are, perhaps, the only income on which, for some time past, 
 the Central Government has been able to comit with perfect 
 certainty.... It is this poverty of the exchequer, and this fee- 
 bleness of the Government, which also explain, though they 
 do not excuse, the disregard of the transit duty clause." 
 
 Mr. "Wade's plea ad miserlconliam, in favour of his p-otege 
 the le-hin tax, is made to rest, on the one hand, upon a great 
 exaggeration of the temporary filiancial difiiculties of China, 
 and almost as great an exaggeration of the insignificance 
 of her normal revenue ; on the other hand, upon his silence 
 as to certain publicly-known or barely concealed purposes, 
 to which a large portion of that revenue is applied. True, 
 he remarks that " the most eager apologist of the Govern- 
 ment will no more contend that the sources selected have 
 been the best, than that the means drawn from these 
 sources have been honestly or judiciously applied; very little 
 indeed, considering the emergency, having been done to 
 improve the effectiveness of the forces employed ostensibly 
 to restore order in the provinces :" but he alludes with no 
 syllable to, as though he were in utter ignorance of, the 
 vast sums expended upon the arsenals at Tientsin, Shang- 
 hai, Nanking and Foochow, the purchase of gun-boats and 
 foreign munitions of war against Western Poivers, and the 
 object of which, now patent to the world, was no longer 
 a secret to the attentive observer, even at the time when 
 Mr. Wade presented his memorandum to the British Go- 
 vernment. 
 
 To judge from that memorandum, it might seem doubt- 
 ful whether there did, or did not, then survive in China, 
 out of a population estimated at 400 million people, as 
 many tens of thousand tax-paying subjects of " the One 
 Lord of the World," and whether the revenue of the Ching
 
 IRR THE TIIEATV RKJIITS OF THE 
 
 Empire Universal had, or liad not, dwindled down to the 
 pittance, collected, " thanks to the Foreign Customs Ins- 
 pectorate," from " the forei^^n import and export duties 
 (?iot the transit dues)." 
 
 I'his is not the place to enter into a discussion regarding 
 the normal amount of imposts, levied yearly in money and 
 kind, by the Chinese Government ; but, to put it down, as 
 Mr. Wade does, at £6,000,000 for Provincial, and 
 £15,000,000 for Imperial use, or £21,000,000 in all, be- 
 tmys an apparent unacquaintance wath the subject, which 
 it is difficult to account for on his Excellency's part. Let 
 it be remembered that the area of the Tatar Dominions, as 
 estimated by McCulloch, exceeds 5,000,000 English square 
 miles, and that, according to Dr. Williams, the area of 
 the Eighteen Provinces, i.e. of China Proper, alone, can- 
 not be much less than 2,000,000 square miles, — say 
 1200,000,000 English acres. If, then, we assume only one 
 half of these lands to be under cultivation, the land-tax, 
 which at the present time may be estimated at a mean 
 rate of two shillings per acre, would yield a gross amount 
 of £60,000,000 ; and this rough approximation agrees 
 remai'kably well with the statement of Dr. Medhurst, who, 
 drawing liis infonnation from Chinese sources, valued 
 the land-tax in money and grain, several yeai's ago, at 
 $198,984,032 Mexican, or about £45,000,000 sterhng, 
 c/ear revenue, of which less than £15,000,000 were trans- 
 mitted to Peking. Sir George Staunton was infonned that 
 the entire income of the State amounted, at the time of 
 his visit, to £66,000,000, being about three shillings 
 and sixpence English, per head. 
 
 As regards the management of the Salt Gabelle, it is, 
 no doubt, coiTupt enough ; but the revenue derived by
 
 FOREIGN MERCHANT IN CHINA. 180 
 
 the Government from this monopoly is, witlial, not quite 
 so poor as Mr. Wade represents, nor the administration so 
 bad as the salt, which it supplies. Besides the support of 
 a very large number of officials, employed in connection 
 with the trade, it yields to the Chinese exchequer an annual 
 income not much short of a couple of million pounds ster- 
 ling. If it were productive of nothing but debts, would 
 the " needy" Tatar Government be likely to cling to it 
 with so much fondness and pertinacity as it does ? On the 
 large revenue, collected from le-ldn, Mr. "Wade observes a 
 profound silence. Nor does he allude to the very handsome 
 item which the Maritime Customs on commerce, carried 
 on in natk e-hm\.t bottoms, contribute to the Treasury. It 
 is quite instructive to see how hard his Excellency labours 
 to make it appear as though the Foreign Inspector-Gene- 
 ral of Chinese Maritime Customs were the only financial 
 pillar of " the Central Government, it might be more pro- 
 per, perhaps, here, to say the Court." 
 
 The nominal expenditure of the Provinces is strictly 
 regulated by the Board of Revenue ; and so are the taxes 
 to be levied. The corruption of the higher officials con- 
 sists, with few exceptions, in this, that they " squeeze" 
 the revenue cluhj collected and by Government or their supe- 
 riors placed at their disposal for specified purposes, by not 
 appropriating the whole of such sums to those purposes, 
 or by applying them altogether for tlieir own benefit ; that 
 of the inferior officials in this, that they " squeeze" tlie tax- 
 cmd-rate-paijers by levying unauthorised charges in addition 
 to the prescribed taxes or rates. The latter are, on j^cipcr, 
 never exceeded, and the Provincial appropriations most 
 minutely accounted for. When Mr. Wade proposes that 
 periodical " returns " of the le-hin taxes, collected in tlie
 
 190 THE TREATY RIGHTS OF THE 
 
 various provinces, and of their application, should be made 
 to " the Central Government," and communicated to the 
 British Minister in Peking ; when he imagines that there- 
 by a check will be imposed on the Provincial Authorities ; 
 and when " his hope is, that the Central Government, once 
 compelled to avow its cognizance of these burdens, will 
 bestiritself to moderate the pressure which it now inclines to 
 ignore, and this will be a first step towards the suppression 
 of the war-tax, where there is no occasion for levying it : " — 
 his Excellency shows but, that he is in perfect ignorance of 
 the true state of the case. The returns in question most 
 carefully prepared, are regularly sent up to Peking, and 
 if the Board of Revenue were incHned to communicate them 
 to Foreign Representatives, the latter need only apply 
 for them. Mr. Wade is altogether under an erroneous 
 impression, in stating to his Government that, " (wher- 
 ever there is a centre of trade, trade becomes liable to 
 taxation apparently without an appeal against the au- 
 thority of the Provincial Government and without any 
 other limit than the Provincial Government may see fit 
 to prescribe ; branch transit duty coUectorates multiply- 
 ing, and the tariff of each rising, of course, at the 
 pleasure of the subordinate in charge." As I have already 
 stated, imposition of taxes and their re-appropriation 
 throughout the Empire is essentially regulated by the 
 Board of Revenue. It is true that but a comparatively 
 small proportion of the sum total, actually levied by the 
 Government, is remitted to Peking for Imperial purposes : 
 but this is simply a feature of the Chinese system of fiscal 
 and financial administration, necessitated partly by the 
 nature of the taxes, as paid in kind, partly by the vast 
 extent of the Empire and its undeveloped means of com-
 
 FOREIGN MERCHANT IN CHINA. 191 
 
 munication. At the present time, the Imperial revenue, 
 as distinguished from the revenue appropriated to Pro- 
 vincial wants, amounts, if I am well informed, to about 
 £17,000,000 ; the Imperial expenditure to less than 
 £15,000,000 ; and the accumulating annual surplus to 
 something like £2,000,000 sterhng. 
 
 I have already spoken of the second plea, advanced by 
 Mr. Wade in support of the continuance, for at least years 
 to come, of the le-kin tax, — the plea of " the weakness of 
 the Central Government" of China. He states : — 
 
 The Central Government has not The Central Government, though 
 felt itseK in a position to say to not jHjwerless, icould it but assert it- 
 these (Provincial) Authorities : . . . self, has been scared by the bug- 
 You will not be allowed to resort bear of war expenditure from inter- 
 to this measure or that... It is (this ference in provincial finance...! do 
 poverty of the exchequer, and) this not forget or unsay what I have 
 feebleness of the Central Govern- earlier stated regarding the weak- 
 ment, which also explain, though ness and timidity of the Central 
 they do not excuse, the disi*egard Government; but I am not with- 
 of the transit duty clauses... Until out hope that it may be brought to 
 the central power is better able than put forth the jwwer it certainhj pos- 
 it believes itself to take the Provin- sesses, in the manner I desire, 
 cial Governments in hand, we must not expect to see the amount of these 
 (le-kin) taxes, now admittedly excessive, materially reduced. 
 
 Considering, then, that Mr. Wade, though in contradic- 
 tion with himself, here distinctly admits, that it is, not in 
 the power but in the will to reduce or abrogate the le-kin 
 taxes, that the Chinese Government is w^anting, and that, 
 in truth and reaUty, his Excellency quite agrees with me 
 upon this point, I may leave it where it is. As to the alleg- 
 ed timidity of the Government to put forth its power, Mr. 
 Wade, confounding the Chinese Government with Prince 
 Kung, and investing him with the charge of a " Kegency " 
 which had no existence, remarks correctly, that this imagined
 
 11)2 THE TREATY RIGHTS OF THE 
 
 Jtt'<^(incy, "except in the single act to which it owes its 
 birlli, lias not been remarkable for vigour or boldness in the 
 work of administration." The act alluded to is Prince 
 Kung's coup d'etat of 18G1, by which he upset the Special 
 Council of State, appointed by the late Emperor to assist 
 his successor in the Government, and to some extent usurped 
 that power himself But his own turn came soon. In 1865, 
 he was suddenly ''removed from all his functions and no 
 longer permitted to have a voice in public matters," ostensi- 
 bly on account of his " having exhibited in the administra- 
 tion of affairs such favoritism and greediness for presents, 
 such arrogance and grasping after power, that people are 
 everywhere discussing his conduct," as we learn from 
 the "Peking Gazette" for Aprils, 1865. He was, how- 
 ever, soon restored to his title, and the presidency of " the 
 Board for the General Control of Individual (Tributary) 
 States' Affiiirs " — the Tsung-li Yamen, — and by Imperial 
 Bescript of May 9, 1865, also to a place in the Privy Coun- 
 cil and State Secretariate. In this Bescript it is said : — 
 " At the audience held this day. Prince Kung, having 
 been allowed to appear to return thanks for favours granted 
 to him, prostrated himself to the ground, weeping bitterly, 
 as if he had no way to conceal his mortification. We then 
 personally admonished and warned him, and the Prince 
 expressed himself to be deeply sensible of the grievous 
 faults into which he had been led, and sincerely repentant 
 and ashamed of his past conduct. It excited the utmost 
 commiseration in Our heart." According to Mr. Wade, 
 we ^should have to infer that it was "the Begency," i.e. 
 Prince Kung himself, aaIio thus reduced His Imperial 
 Highness to the piteous state, into Avhich he had fallen, 
 and from which he' has never nQ-ain risen to his former
 
 FOREIGN MERCHANT IN CHINA. 193 
 
 position. Did " the Central Government" on that occasion 
 evince any signs of timidity ? Did it so, when, to say the 
 least, it connived at the Plot of the Summer-Solstice of 
 1870, and took upon itself the responsibility of the Tientsin 
 Massacre ? Has it done so in firmly resisting European 
 demands for further improvement and progress ; in dicta- 
 ting the Tsung-li Yamen's " Missionary Despatch ;" in 
 setting international Treaties at defiance ; and in openly 
 preparing for war, ofiensive not defensive, against the West ? 
 Or, did Prince Kung, individually, betray any timidity in 
 consigning the members of " the E/Cgency," appointed by 
 the late Emperor himself, and including two Princes of the 
 blood Imperial, — his own — to the scaffold ? Did he do so 
 when, with a victorious British Army at the very gates of 
 the Capital, he, in an official despatch, reproved the Repre- 
 sentative of England, Lord Elgin, for using language unfit 
 for a subject of "the One Autocrator of the World "to 
 use ? IT Overweening arrogance his Imperial Higliness has 
 shown but on too many occasions : timidity never ; unless, 
 perchance, on that memorable day when, soon after the 
 Tientsin Massacre, Mr. Wade, then Her Britannic Majesty's 
 Charge d'Affaires, is reported, on the authority of Mi'. 
 Hart, to have " succeeded in frightening the Peking Go- 
 vernment out of their wits."* It appears to me, that his 
 Excellency would have rendered better service both to 
 China and to England, had he succeeded in frightening 
 the Tsung-K Ya-men into its wits. 
 
 *|[ The words of Prince Kung's despatch to Lord Elgin, dated the 27th September, 1860, 
 are : — '" The words in the despatch under acknowledgement regarding the attack on and 
 destruction of the Capital, and the do\v'nfall of the Dynasty, are words which it is not fitting 
 that a subject should use. Can it be right for the British Minister " [ — I quote from Mr. 
 "Wade's translation, the original has imdoubtcdiy " Messenger — "], " when declaring that 
 he still entertains a desire for peace " [ — i. e. peaceful submission — ] " to employ them ? " 
 
 * The Hongkong Dail;/ Pre^s as quoted in the Xorth-CJiina Herald for October 25, 1870,
 
 194 THE TREATY RIGHTS OF THE 
 
 Mr. Wade's third plea in favour of the le-kin tax is 
 this : — " On the suggestions that it should be wholly, or 
 even partially, suppressed, I shall offer but this additional 
 remark, that, if we could drive the Chinese to admit that 
 the present mode of levying the war tax is in breach of 
 the Treaty, there is, in my belief, nothing to prevent them 
 turning our flank by a change in its denomination. A 
 house tax, shop tax, or corporation tax, would effect the 
 same object, and press almost, if not quite, as grievously 
 as the le-kin on our trade." Mr. Wade would seem to 
 find some difficulty in dis-identifying himself from Chinese 
 interests and tactics, and to entertain strange fiscal notions. 
 Does his Excellency really fancy, that the burden of a tax 
 lies in its denomination, and that there is no difierence 
 between a tax imposed upon Chinese houses, Chinese shops, 
 or Chinese corporations, and a tax imposed upon British 
 and Foreign manufacture ? It seems hardly credible. Y^t, 
 when in another place he compares the le-hin with our 
 income-tax at home, there can remain no doubt on the 
 subject. Supposing, however, that the latter tax were 
 levied under the name of "the national-wan ts-relieving 
 tax :" would such a " change of denomination" afford any 
 relief to the tax-payer ? Or, suppose that, instead of an 
 income-tax, a newly invented " war-tax " of from twenty to 
 fifty per cent ad valorem, were, in violation of existing 
 Treaty-stipulations, imposed on all French wines imported 
 into England : would these two " modes" of raising the same 
 amount of revenue to the English exchequer be identical 
 in their " effects upon trade ? " Would the English con- 
 sumer of, and the English trader in, French wines think so ? 
 Would the French wine-grower and wine merchant be 
 of the same opinion ? Would the French Minister at the
 
 FOREIGN MERCHANT IN CHINA. 195 
 
 Court of St. James' plead with his own Government in fa- 
 vour of the legaUty and the continuance of such a tax, — on 
 the ground of old, poor, distracted Mother Britannia being 
 hard up for funds, and that her home-made cider and holy- 
 water were, together with French wines, taxed at similar 
 rates, — as we have seen the now British Minister in " the 
 Capital of the Ching Empire Universal " plead to that end 
 with his Government ? And would the French Ministry have 
 listened to fallacies so glaring and unprincipled, and said 
 with the Gladstone administration : — Oh, its all right ; and, 
 were it not so, it would be manifestly both unjust and inex- 
 pedient to keep England to her Treaty-engagements, . and 
 interfere with her endeavours to destroy our trade, and 
 simultaneously find therein the sinews for a new war 
 with us? 
 
 Mr. Wade has not realised the fact, that the income-tax 
 is, in principle at least, a general tax i. e. in its effects essen- 
 tially a capitation-tax; that a house-tax is not necessarily 
 so, but, as commonly understood, would fall on proprietors of 
 houses only, as a class of the community ; and that a shop- 
 or corporation-tax would decidedly be a cZass-tax. Neither 
 has he realised this second fact, that, the heavier the general 
 Chinese taxation, the greater the chances for British and 
 Foreign staple manufactures, on account of their compara- 
 tive cheapness, to find a market in China. Suppose a 
 Chinese family, resident at Sin-gan, the provincial capital 
 of Shen-si, with a fixed income of Taels 1,000 or £300 
 sterling per annum, to expend for house-rent, say <£40; 
 taxes £20; indispensable articles for clothing (£60); other 
 indispensables £150; luxuries and sundry expenses £30; 
 suppose further a piece of English Grey Shirtings to cost at 
 Sin-gan (inclusive of le-kin) eighteen shillings, a piece of
 
 190 THE TREATY lUGHTS OF THE 
 
 liome-made Shirtings of similar quality (on which no le-hin 
 is paid) seventeen shilHngs, a piece of English woollen cloth 
 (inclusive of le-hin) £9, and a piece of Russian cloth of 
 similar quahty <£8. 10/-; f and lastly suppose, for the sake 
 of simphcity of illustration, the wants of our Chinese family 
 to necessitate the annual purchase of four pieces of cloth, 
 and thirty pieces of cottons, the aggregate cost of which 
 would, at the lowest market prices, just reach the sum of 
 c€GO, allotted to the purpose. Why, is it not certain, that, 
 under such circumstances, the cheaper home-made cottons 
 and the Russian cloth will be bought, and that the English 
 cloth and shirting will be excluded from the market by the 
 le-Un tax ? On the other hand, let us assume the le-hin tax 
 to be removed from British manufactures in accordance with 
 Treaty-stipulations, and, as Mr. Wade suggests, a corre- 
 sponding additional tax to be imposed upon houses or in the 
 general form of a capitation tax, whereby the house-rent of 
 the Chinese family of our illustration will be raised fi'om ^40, 
 say, to ^52, or its quota of general contributions to the State 
 from i,10 to .£32 ; whilst the price of English Grey Shirtings 
 at Sin-gan will be reduced to about fom-teen shillings a piece, 
 and that of woollen cloth to about j£7, not to speak of the 
 probable increase in the cost of the home-made fabric, say 
 only to seventeen shillings and six pence a piece. It is true, 
 the Chinese consumer might still, retrenching his fund for 
 luxmies and sundi-y expenses accordingly, choose to buy 
 the dcarei' articles for clothing ; but is there so much as the 
 shadow of a probability that he will do so, and, with his 
 house-rent or taxes increased by J612 annually, pay upwards 
 of J£60 for the very same Chinese- and Russian-manufactured 
 goods, which, of British manufacture, he could pm'chase for 
 
 t Compare Ajix. iii. of the Russiaa Treaty of Peking, of November 14, 1860.
 
 FOREIGN MERCHANT IN CHINA. 197 
 
 less than £50 ? I Let the experhnent only be made. Let 
 Mr. Wade but persuade the Tsung-H Ya-men of the truth of 
 his fiscal theory, and induce "the Central Government " to 
 " turn oui- flank," by relieving Foreign manufactures of le- 
 Mn and other illegal taxes, and imposing, in their stead, any 
 Chinese house-, shop-, or corporation-taxes, it may think 
 proper. I venture to anticipate that, so long as such manu- 
 factures are allowed, throughout China, to reach the hands 
 of the native consumer, unenhanced in their fair market- 
 price by other imposts than the stipulated import- and 
 " transit "-duties, by Treaty payable to the Chinese Govern- 
 ment : that both the native consumer and the foreign ma- 
 nufacturer will be equally grateful to his Excellency for his 
 extraordinary wisdom and more extraordinary powers of 
 persuasion. 
 
 Meantime, Mr. Wade's fancy, so fertile in resources and so 
 inexhaustible in duplex views, proposes, on the one hand, 
 facing Her Britannic Majesty's Board of Trade, " a strict 
 enforcement of the transit-duty clauses of Article xxviii. (of 
 the Treaty of Tientsin) as it now stands," — indeed, his 
 Excellency would stand by that Article even " whether our 
 transport of goods to or from the Treaty ports be placed 
 under the foreign Inspectorate or no ;" — on the other hand, 
 tm-ning to the Chinese Provincial Governors, that, consider- 
 ing how little the Tariff protects our imports, it be abo* 
 lished altogether, and " carte blanche in inland taxation be 
 left to the Provinces," — a measure which, he adds with a 
 knowing glance towards his high mandarin friends, could 
 
 J The figivres, here used for illustrative purposes, may appear to involve a considerable 
 exaggeration ; but it must be remembered, that no direct trade has as yet been established 
 with the capital of Shen-si, and that British manufactures, which may reach it through 
 native channels, have to pay an accumulation of inland chargee, probably far in exceee of 
 what I have assumed.
 
 108 THE TREATY RIGHTS OF THE 
 
 scarcely, — though he feels by no means sure it would not 
 alarm the Central Government or rather the Court though 
 the Tsung-li Yamen, — be t7/-received by them. In other 
 words, with the view of saving to British imports into China, 
 on account of the bad faith of the Chinese Government, the 
 stipulated Tariff-duty, the present Chief Superintendent of 
 British Trade in China would see that trade itself consigned 
 to certain and speedy ridn for the special advantage of the 
 Provincial Governors. Suddenly facing round, therefore, to 
 the British merchant, the "able," the "very able Minister" 
 of Her Britannic Majesty's actual Government pours forth 
 into his ear an abmidance of sympathy with his " hard 
 case." True, from a natural mandarin fellow-feeling, he 
 looks upon the sale of official dignities in China, to which, 
 — " the worst sign of the times," — this dynasty, too, have 
 recklessly recurred, as by far the most objectionable expe- 
 dient for raismg ill-applied funds, and " the other expe- 
 dient " — I am quoting throughout Mr. Wade's own words 
 almost literally, — extraordinary though it be, as of com- 
 parative little moment, nor so objectionable in its natm-e. 
 Still, it is withal " over-burdensome in the degree, and 
 vexatious in the method, of its employment," and what is 
 so grievous to bear is this, that the war-tax never ceases ; 
 indeed, that, so far fi*om abating, it seems always on the 
 rise. Now, could there be a harder case than this ? Native 
 and foreigner are alike injured by the course pursued. 
 Hence Mr. Wade's sympathy with the British merchant. 
 He has not, however, as yet completed the circle. Turning, 
 then, his coimtenance finally to " the Central Government " 
 of China, whilst addi-essing his own, he observes: — "It 
 may appear singular that, admitting as I do, the oppress- 
 iveness of the le-lin tax, the corruption and torpor which
 
 FOREIGN MERCHANT IN CHINA. 199 
 
 are responsible for its undue extension and ill-directed 
 application, I should occupy myself at such length about 
 the protection of revenue so collected and so applied. I 
 have endeavoured to show that, however ill-gotten and 
 ill-spent, these war -taxes are, and long will be, the main 
 resom-ce with which the Provincial Governments have to 
 face, almost every one of them, an unusually heavy expend- 
 iture ; and that, until the central power is better able than 
 it believes itself, to take the Provincial Governments in 
 hand, we must not expect to see the amount of these taxes, 
 now admittedly excessive, materially reduced. We must 
 put up ivith them as an evil, not incurable, but not soon or 
 suddenly to be cured, and— rturning towards Her Majesty's 
 Government — " we must do our best to combat their in- 
 fluence upon our interests : first, by a strict exaction of 
 our rights under the transit-duty clause, of which I would 
 give up no part ; and then" — resuming his previous j)osi- 
 tion, and once more facing, with a significant smile, " the 
 Central Power," — " by certain supplementary concessions, 
 which, I think, the Chinese Government will not find it hard to 
 yield." 
 
 There now remain for us, in this place, only the more 
 important objections to consider, which have been urged 
 against the unquestionable meaning of the so-called " tran- 
 sit-clauses " of the Treaty of Tientsin, as estabhshed by me 
 in the previous section. The first point is, that the inland 
 charges commutation-tax, stipulated by Art. xxviii. and 
 EuLE vii., is asserted to exempt h'om inland charges foreign 
 merchandise from a port to a given mart, and native pro- 
 duce, destined for exportation abroad, from a mai-t to an 
 open port, in transitu only. ' ' The Certificate, ' ' the Inspector- 
 General of Chinese Maritime Customs states, " is simply a
 
 200 THE TREATY RIGHTS OF THE 
 
 Traimt certificate ; it protects from a Treaty port to a sprci- 
 fiM place " (and vice versa) ; " lapses on arrival at the place 
 specified, and thereafter the goods, having once entered the 
 stream of general Chinese trade, are liable to the incidence 
 of local taxation."—" I hold," Mr. Wade writes, " that the 
 transit duty, as defined by Treaty, once paid, the certificate, 
 thereon granted, shonld clear the foreign payer's imports of 
 transit dues to any inland market he may choose, or his ex- 
 ports purchased inland to any open port. But the certificate 
 will not exempt the goods cleared under it from the le-hin or 
 from any other tax, once they have become Chinese proper- 
 ty." The British Board of Trade, also, submits, in very terse 
 language, to the Foreign Office : — " My Lords (of the Com- 
 mittee of Privy Council for Trade) entertain no doubt that 
 the view expressed in some of the Memorials, and even at 
 one time by Sir K. Alcock himself, viz., that the pa}Tnent 
 of the transit dues ought to be held to exempt the goods, 
 upon which it has been paid, from all subsequent internal 
 taxation, and to insure the sale of the goods to their ultimate 
 consumer with no enhancement of cost derived from taxa- 
 tion, save that represented by the import and transit duties, 
 is a view which cannot be entertained by Her Majesty's Go- 
 vernment. There is nothing in the terms of the treaty which 
 appears to my Lords to justify such a sweeping demand, and 
 in view of the internal taxation to which native goods are 
 subject in China, it would be in their opinion both unjust 
 and inexpedient to enforce such a demand, even if it were 
 warranted by the terms of Treaty stipulations. All that Her 
 Majesty's Government can claim in this respect, appears to 
 ray Lords to be, that in the Treaty ports, the importer shall 
 have the right to sell his goods in the market, after paj^ment 
 of the Customs duties stipulated, and that he shall have
 
 FOREIGN MERCHANT IN CHINA. 201 
 
 the right to send goods to any internal market which he 
 may select, free from any other charge than the Customs 
 duty on importation, and the stipulated transit duty ; but 
 that both at the port, and at the internal market, when once 
 the goods have passed out of his hands, they must take their 
 chance in common with native goods, and bear whatever 
 impositions the rapacity or necessities of Chinese adminis- 
 tration may inflict." — What additional strength these views 
 may, or may not, derive from the latest opinion of Sir 
 Kutherford Alcock, I leave, after having expounded that 
 opinion in a preceding page, for the reader to say. 
 
 Let us now, in the first place, consider what the views 
 referred to, in practice, really imply, and, in order to bring 
 the matter more closely home, assume that the commer- 
 cial part of the Treaty of Tientsin has been negotiated 
 between England and France, instead of between China 
 and England. England has agreed to open the whole 
 extent of the United Kingdom to French trade ; allowing 
 French merchants to import into certain sea-port towns 
 French and other foreign merchandise on the payment, to 
 the English Government, of certain fixed import-duties, 
 and to have such goods conveyed, for sale, to any part of 
 the Interior ; also to export British produce and merchan- 
 dise, bought inland, from the same sea-port towns, on the 
 payment of certain fixed export-duties. And there being 
 customarily levied in England upon inland trade, certain 
 tolls and octrois, besides some newly imposed war- and 
 other taxes, respecting the irregular and somewhat heavy 
 rates of wliich there had arisen some difficulties previously, 
 England has further agreed to commute the whole of these 
 inland charges, in consideration of the payment, by France 
 to the British Government, of a fixed tax iu addition to
 
 202 THE TREATY RIGHTS OF THE 
 
 both the stipulated import- and export-duties. Lastly, it 
 has, on the part of the French plenipotentiary who framed 
 the Treaty, been conceded in one of certain Eules of Trade 
 subsequently appended to that Treaty, that the French 
 merchant, desirous of sending foreign goods for sale or con- 
 sumption inland, should specify the place or mart, to which 
 he intended to have them conveyed ; and that, after pay- 
 ment of the inland charges commutation-tax, a certificate, 
 certifying this payment to have been duly made, and exempt- 
 ing the foreign goods " from all further inland charges what- 
 soever," shall be given by the proper English authorities, 
 to accompany such goods in the form of a "transit-pass." 
 And similarly so in regard to English produce or merchan- 
 dise, to be conveyed from an inland mart to one of the 
 Treaty ports for exportation abroad. 
 
 Assuming, I say, all these stipulations to have been 
 solemnly agreed upon and embodied in an international 
 Treaty, — and they are but a faithful transcript of the cor- 
 responding stipulations of the Treaty of Tientsin : — is there 
 one member of the British Government, who could or would 
 contest its obligations as regard the complete exemption of 
 French imports, having duly paid the import-duties and 
 commutation -tax, from all further inland taxation ? Is there 
 one English Customs official, who could or would miscon- 
 strue the sense and effect of a certificate, in his otvti language 
 designated as a receipt in full for all inland-taxes atul imposts, 
 because, forsooth, the French, for want of a more convenient 
 term, happened to style it a " transit "-certificate ? And is 
 there one rational EngHshman, who could or would main- 
 tain that a pass, exempting French merchandise from all in- 
 land charges whatsoever, exempts them only "m transitu," 
 say, from the London Custom-house to Cornhill e. c, or to
 
 FOREIGN MERCHANT IN CHINA, 203 
 
 Regent street, or to Hampstead, or to Oxford, as the case 
 may be, and that, once arrived at the specified terminus and 
 passed out of French possession into English hands, it must 
 take its chance in common with native goods, and bear 
 whatever impositions the rapacity or the necessities of the 
 EngHsh administration may, in the sliape of inland "war"- 
 and other taxes, inflict upon it ? To make French merchan- 
 dise, upon which the import duty and inland charges com- 
 mutation-tax, stipulated by Treaty, had been duly paid, pay, 
 so long as that Treaty remains in force, any tax whatever in 
 addition to the Treaty-imposts, would not only constitute a 
 flagrant breach of international faith: but involve, more- 
 over, on the one hand, the truly pernicious doctrine, that 
 such a breach of international faith is justifiable by any and 
 every pretence of financial necessity, nay, by bare oflicial 
 rapacity; and, on the other hand, the more than absurd 
 theory, that France, in concluding a commercial Treaty with 
 England and agreeing to pay to the English Government 
 certain duties and imposts upon her trade with the United 
 Kingdom, had done so, not with a view to the sale of French 
 merchandise, at a computable price promising to insure such 
 a sale, to the British consumer, but with a view to the privi- 
 lege of conveying it to an English inland place, to become 
 the prey of English oflicial and fiscal rapacity, or else to rot ; 
 not for the purpose of protecting from fm-ther imposts French 
 merchandise intended for sale to the English consumer, but for the 
 purpose of protecting from further imposts the French posses- 
 sion of such merchandise, i. e. to obstruct or rather prevent 
 its sale to the British consumer, and to restrict its consump- 
 tion to French subjects resident in the Interior of tJie United 
 Kingdom. In short, if the doctrines and theories here under 
 consideration were to prevail, international Treaties would
 
 204 THE TREATY RIGHTS OF THE 
 
 become simply "a delusion and a snare"; and the sooner 
 they be done away with altogether, the better. 
 
 But suppose the English Government, moreover, to be an 
 overbearing, supercilious, and perfidious Government, hos- 
 tile to France and bent on commercial isolation ; suppose 
 it to hold no direct intercourse with the French Ambassador 
 in London, excluded from admittance to the Court of St. 
 James, and to communicate with him only through a tem- 
 porary " Commission for the General Control of the Affairs 
 of France," which he imagines to be our " Foreign office ;" 
 suppose France to have concluded her commercial Treaty 
 with this Commission, under the false impression of its 
 identity with the British Government, and the Commission 
 to have appended to the Treaty an improperseal, mva- 
 lidating it as an international legal contract ; and sup- 
 pose the English Government, immediately after the sign- 
 ing of the Treaty, to have imposed upon trade heavy addi- 
 tional inland charges by raising the existing, and adding 
 fresh, inland imposts under the designation of "war"- and 
 other taxes, and relying on the unacquaintance of the 
 French merchants with the English language and other 
 circumstances, to have surreptitiously ordered these *' over- 
 burdensome" taxes to be levied ostensibly upon inland 
 trade in general, but virtually and more especially upon 
 French inland trade, ^cith the twofold vieiv of gradually ruining 
 that trade, and meanwhile deriving from it the icays and means 
 to arm, and defray the expenditure of an early-to-he-renewed war 
 with France. Lastly, suppose the community of French 
 merchants in, and trading with England, to have called 
 the attention of the French Government to this state of 
 matters ; suppose the French Government to have con- 
 sulted its Representative in London, and the first Secretary
 
 FOREIGN MERCHANT IN CHINA. 205 
 
 of the Embassy, — famed for his English scholarship, hia 
 intimate acquaintance with the members of the English 
 *' Commission for the General Control of the Affairs of 
 France," and his knowledge of England generally, — hap- 
 pening at the time to be on leave of absence in Paris ; 
 suppose the French Secretary to have submitted to his Go- 
 vernment views analogous to those which were by Mr. 
 Wade submitted to the British Government upon an ana- 
 logous question ; suppose him, on the strength of those 
 views, to have been appointed to the post of French Am- 
 bassador in London ; suppose the French Government to 
 have, tlii-ough the Foreign Office, told the community of 
 French merchants in, and trading with, England, — who, 
 on their faith in the Treaty concluded between England and 
 France, have invested millions of money in French Wines 
 which, solely owing to the heavy and illegal inland taxes, levied 
 upon them by the English Government in violation of Treaty- 
 stipulations, they cannot seU in England except at a loss, 
 and millions of money in British coal and iron which, for 
 the same reason, they cannot dispose of in France save at a 
 ruinous price, — that " the French Government entertains 
 no doubt that the view expressed by the merchants and at 
 one time by the former Ambassador of France in London 
 himself, viz., that the payment of the inland charges com- 
 mutation-tax ought to be held to exempt the goods, upon 
 which it has been paid, from all further inland taxation, is 
 a view which cannot be entertained by the French Govern- 
 ment, there being nothing m the terms of the Treaty, 
 which appears to the Government of France to justify such 
 a sweeping demand, and that all the French Government 
 can claim from the Government of England is, that the 
 English administration continue to inflict on French inland
 
 206 THE TREATY RIGHTS OF THE 
 
 trade whatever impositions its rapacity or its necessities 
 may judge a j)ropos ;" and suppose the fonner Ambassador 
 of France in London, distinguished for his versatihty and 
 dupHcity of view, to have decided that " the High Con- 
 tracting Parties, the British and French Governments, are 
 the only competent authorities to agree upon the meaning 
 and purport of a Treaty, and that their joint decision is 
 without appeal." 
 
 Supposing, again, all this, I ask: What an opinion would 
 all honorable Englishmen have to form of the assumed ac- 
 tion of the British Government ? Wliat a view w^ould all 
 fair and rationally-thinking Englishmen have to take of the 
 supposed conduct of the French Government, and its sup- 
 posed former and actual Representatives in London ? And 
 must not the members of the English Government, such as 
 I have assumed to be its character, needs be concluded. to 
 have chuckled to their heart's content over the credulity, 
 blindness, and infatuation of the supposed French Ministry 
 and its Representatives ? Now, this is precisely what 
 the members of the Chinese Government and the Tsung-li 
 Ya-men are doing : in secret they chuckle over the creduhty, 
 blindness, and infatuation of the British Board of Trade 
 and the distinguished sinologue in w'hom it places so un- 
 bounded a political reliance ; they marvel at, and deride,, 
 the inconsistency of Sir Eutherford Alcock; they rejoice 
 equally in their own superiority and cunning, and the spoil, 
 which they and their provincial fellow-mandarins are accu- 
 mulating from the inland trade of the British and foreign 
 merchant ; and whilst they thus triumph, in secret for the 
 present, they grudge not to devote a large portion of their 
 plunder to the support of the Government for the purpose of 
 warlike preparations, and look forward, with impatience, to
 
 FOREIGN MERCHANT IN CHINA. 207 
 
 the time when, having cleared the polluted, "bayonet- 
 ploughed soil of Cathay" from the hated presence of "the 
 outer barbai'ian," they may triumph in the full light of day. 
 Speaking with the utmost deference of the Lords of the 
 Committee of Her Britannic Majesty's Privy Council for 
 Trade, I cannot help thinking that their Lordships, instead 
 of investigating the question under consideration for them- 
 semselves and using their own judgment, have aUowed them- 
 selves to be led, without due consideration, to adopt the 
 peculiar, ill-matured, and strongly biassed views of Mr. 
 Wade, '' with whom, in accordance with Lord Clarendon's 
 suggestion, they conferred on this subject." Indeed, the 
 opinions expressed by them are but a literal re-echo of the 
 opinions of the present British Eepreseutative at Peking and 
 Chief Superintendent of British Trade in China. And if I 
 be not mistaken in this, the "m ^ra?isi^w "-interpretation, 
 forced upon Art. xxviii. of the Treaty of Tientsin and Rule 
 vii. of the appended Trade Rules, is in reahty the exclusive 
 interpretation of Mr. Wade and the Foreign Inspector-Ge- 
 neral of Chinese Maritime Customs, Mr. Hart. His Excel- 
 lency, it is true, contends that Lord Elgin himself placed 
 the same construction upon the Tientsin Treaty ; but such 
 a statement is hardly reconcileable with Lord Elgm's own 
 clear words : — 
 
 Mr. Wade, in his Memorandum to Lord Elgin in his despatch to the 
 
 H. M. Government of Dec. 1 868. Foreign Office of Nov. 8, 1858. 
 
 " Lord Elgin, Z«mcer«rti«, did not "Henceforward, on payment of 
 
 look for more than the protection, a sum in name of transit-duty,... 
 
 in transitu, of certificated goods... goods, whether of export or import, 
 
 Lord Elgin did hope that imports will be free to pass between the port 
 
 so certificated, might not only be of shipment or entry to or from any 
 
 carried by travellers (!) from one ^>arfo/CAina, without farther charge 
 
 centre of traffic to another, but dis- of toll, octroi, or tax of any descnp-
 
 208 
 
 THE TKEATY RIGHTS OF THE 
 
 pOBod of in parcels along the lint; " 
 — [this would have been in diame- 
 trical cpposition to the provisions 
 of Rule vii.] — "an order of pro- 
 ceeding not impossible in quieter 
 times; but I remember his Lord- 
 ship expressly stating, that he did 
 not sec his way to the farther pro- 
 tection of imports against taxation 
 once they had passed into the hands 
 of a Chi)iese purchaser. They must 
 then, said he, take their chance." 
 Mr. Wade, at a Meeting in Shanghai 
 on Nov. 16, 1869. 
 "Mr. Wade rose and said, that 
 he could not be mistaken as4;o Lord 
 Elgin's intention, which was to a- 
 void taking under British jurisdic- 
 
 lioti vhatsucier. I confess that I 
 consider this a 7nost important point 
 gained in the future interest of 
 foreign trade with China... I have 
 always thought that the remedy 
 (against the grievance pressed upon 
 me by mercantile bodies or indivi- 
 duals since I came to China), was 
 to be sought in the substitution of 
 one fixed payment for the present 
 irregular and muUijdied levies ;...{ai[- 
 though) it was obviously difficult to 
 devise a scheme for tJie commutation 
 of transit [i. e. inland] duties which 
 without creating great financial dis- 
 turbance, should prove an effectual 
 protection to the importing and ex- 
 ])orting merchants." 
 
 tion, or interfering with, Chinese subjects or Chinese property." || 
 
 On comparing these i^assages, it appears to me manifest, 
 tliat IVIi". AVade's memory as to Lord Elgin's intentions must 
 be at fault, and that his reminiscences and impressions, 
 after a lapse of ten years and more, cannot be placed in the 
 balance against his Lordship's clear, positive, and contempo- 
 raneous written testimony. The British Plenipotentiary's 
 conviction was, that he had protected, and effectually pro- 
 tected British and foreign merchandise, intended for sale or 
 consumption in China, and Chinese merchandise intended for 
 exportation abroad by British (and foreign) subjects, in con- 
 sideration of the payment of fixed and specified duties, fi-om 
 all further charge of " toll, octroi, or tax of any description 
 whatsoever." An imbecile alone can be supposed to have 
 meant such an effectual protection to constitute and afford 
 no protection at all ; i. e. to protect simply " in transitu from 
 
 II The .\orth'Cliina Iltrald for Isov. 8, 1S7L.
 
 FOREIGN MERCHANT IN CHINA. 209 
 
 a Treaty-port to a specified inland place," (and vice versa), in 
 order that the goods, once conveyed into the Interior, might 
 the more certainly become a prey to Chinese rapacity. Lord 
 Elgin was inferior to few men in power of intellect, perspi- 
 cuity, and practical common-sense. He may have had his 
 misgivings as to the action of the cunning and deceitful Chi- 
 nese Government ; but that he vuant to, and by Treaty did, 
 " insure the sale of British and foreign goods to their ulti- 
 mate consumer in China, with no enhancement of cost de- 
 rived from direct taxation, save that represented by the 
 import-duties and inland charges commutation -tax," is a 
 fact, which admits not even of the shadow of a doubt. 
 
 The best additional comment, perhaps, I can offer on Mr. 
 Wade's differing view, are his own words. *' The foreigner," 
 he states in his frequently cited Memorandum, " pays on his 
 imports about 5 per cent, in the shape of Tariff duties, not 
 for the mere privilege of housing them on his premises, but, 
 as it was believed, to enable him to sell them free of farther 
 charges on all ground between his port and the inland Cus- 
 tom-houses nearest the port ; and for passing them inland 
 of these barriers he should pay 1^ per cent, upon value in 
 addition to the Tariff duty. Yet he finds at Amoy, for 
 example, that charges of one kind or another range from 5 
 to 90 per cent, upon value, and his imports are consequently 
 unsaleable. If the Tariff protects imports so little, why not 
 abolish the import Tariff? " 
 
 There remains, thus, as the only authority for, and appa- 
 rently the first originator of, our *' in transitu " construction, 
 the Foreign Inspector-General of Chinese Maritime Customs, 
 Mr. Hart. Unfortunately, however, for him and his fol- 
 lowers, their interpretation, though still upheld by Mr. Hart 
 in his anonymous memorandum of November 1, 1871, had
 
 210 THE TREATY RIGHTS OF THE 
 
 long previously been disavowed by his own immediate native 
 superiors. For, I have already shown that, in October 1862, 
 the Tsiing-li Ya-m6n, as well as the then Governor-General 
 of *IIu-kuang, Kuan-Wen, and again, in November 18G8, 
 Tseng Kuo-Fan, in his capacity of Superintendent of Trade, 
 freely admitted that, by the Treaty of Tientsin, the war- 
 taxes {k-kin, ehow-faufj, etc.), — the only taxes upon foreign 
 inland trade levied by the Chinese Government and com- 
 plained of by the British and Foreign merchant, — are, and 
 were meant to be, included in the inland charges commuta- 
 tion-tax or the so-called " transit "-dues, agreed upon and 
 fixed by Art. xxviii. of the Treaty and Kule vii. of the ap- 
 pended Trade Eules, and that consequently, those "war"- 
 and all other inland taxes, in so far as in the aggregate they 
 exceed the said commutation-tax, have been, and are being, 
 levied upon foreign inland trade in China, illegallif mid in 
 Violation of Treaty -stipulations. To leave, how^ever, no man- 
 ner of doubt on this point, I will quote from Tseng Kuo- 
 Fan's despatch of Nov. 5, 1868, the following passages : — 
 *' Thus it is evident that foreign goods entering the Interior, 
 wdiether in the hands of Chinese or foreign merchants, when 
 accompanied by a certificate that the half-duty has been paid, 
 then no further tax or le-Jciu shall be levied on them. If it be 
 argued that, w^ere Chinese merchants, having purchased 
 foreign merchandise accompanied by a certificate that the 
 half duty has been paid, not to pay the Ic-hii also, they would 
 defraud the revenue : — this (latter tax) is a regulation of the 
 le-kin barriers ; but is by no means a Treaty stipulation.... It is 
 imperative to act in accordance with Treaty-stipulations, and 
 on no account must the le-kin be made to violate existing 
 Treaties, and provoke constant disputes with the Consuls. To 
 this end I have writton to the Customs, (instructing them)
 
 FOREIGN MERCHANT IN CHINA. 211 
 
 to act accorclingl3\"§ This passage alone, it appears to me, 
 should have sufficed to settle, as it does settle, the entire 
 question. 
 
 The second point, however, to which I have alluded, 
 consists in the argument, that the Chinese Government 
 possess the legal right to impose upon foreign merchandise, 
 the moment it has become Chinese property, whatever 
 imposts it may judge fit ; and that the English Govern- 
 ment is not entitled to interfere in the internal administra- 
 tion of the Chinese Empire. Now, I as loyally accept the 
 latter, as I emphatically reject the former, proposition. 
 Theie absolutely exists no connection between the two. 
 Mr. Wade and others, in muddling them up together and 
 impressing the British Board of Trade with their own con- 
 fused ideas, have created a difficulty of a purely imaginary 
 character. Sir Frederick Bruce would seem to have given 
 the occasion for the misconception. In speaking of " Bule 
 7, which was substituted for Art. xxviii. of the Treaty of 
 Tientsin," he remarks in a despatch, dated December 2, 
 1862, to the Foreign Office : — " I conceive that most em- 
 barrassing questions will be avoided by adhering strictly 
 
 § The corresponding original text reads : — 
 
 i!J mnt 1 i^i^.m-^'^^^^^ m ^^ pji m - m 
 is m mmmx> n m mw ^^ ^ Wi m ^ ^ m m ^ Km 
 
 ^ ^ JS ^1- — ■'■ ^^^^ ^^^^ remark, that the translator of the despatch, as printed in 
 " the North- Cliina Herald " for August 18, 1871, has altogether mistaken the sense of one 
 ©f the paragraphs, and rendered it unintelligible. What he translates : '• with reference to 
 foreign merchants, purchasing foreign goods for an interior market, the gist of it con- 
 sists in two pouits," should read : •' as to foreign merchants, who enter tiie Interior to sell, 
 themselves, foreign merchandise, and [for the supposed purpose of evading oil "transit" 
 duties] lay stress on there being two alternatives, it is thus :" — "if the foreign merchant 
 should prefer not to pay the half-duty at the sea-port, tlieu he must pay it as well as the 
 h-{kin) tax,at the inland barriers ; if he be unwilling to pay the charges inland, then he 
 niust pay the half-duty in advance. Herein he hais tiis choice."
 
 212 THE TREATY RIGHTS OF THE 
 
 to it. Tlie object of the Rule was to substitute one un- 
 vaiying charge for the arbitrary exactions of provincial 
 authorities, -where Her Majesty's subjects bought or sold 
 goods in the interior. But it was not intended to interfere 
 between the Chinese Goveiniment and its own subjects." Again, 
 in a later despatch of April 30, 1863, he observes in re- 
 ference to the publication of a certain letter : — " It has 
 done good by clearing up the misapprehension that pre- 
 vailed as to the real position of foreigners at the Chinese 
 ports open to trade, and as evidence that Her Majesty's 
 Government will not agree to any system, which does not 
 respect the tenitorial rights of the Chinese Government, 
 and its exclusive jurisdiction over its otvn S2ihjects. This 
 exclusive jurisdiction of China over Chinese, and of each 
 foreign nation over its subjects, is the foundation on which 
 the international relations of China with the outer world 
 is based." Sir Frederick Bruce's view, however, is explain- 
 ed by his despatch to Mr. Medhurst, H.M.'s Consul at 
 Shanghai, of November 5, 1862, which I have had pre- 
 viously occasion to transcribe, and from which it will be 
 seen, that the essential condition of the decision, then 
 given by the British Representative in Peking, was, that 
 the taxes, which in his opinion the Tau-tai, as an official of 
 the Chinese Government, was entitled to levy on Chinese 
 subjects even " within the limits of the so-called British 
 Concession," be " taxes imposed on persons resident in the 
 Concession, and paid by those living in the (Chinese) city 
 and suburb." Now, this is the point which has escaped 
 the attention of Sir Rutherford Alcock, Mr. Wade, and 
 others, who refer to the opinion of Sir Frederick Bruce in 
 support of their own untenable views. There is just the 
 same diJQference between the right of the Chinese Govern-
 
 FOREIGN MERCHANT IN CHINA. 213 
 
 ment to tax the persons of Chinese subjects, to tax •whom 
 it possesses, or assumes to possess the Hmitless right, and 
 its right to tax British Merchandise imported into China 
 for sale or consumption under Treaty-stipulations, and to 
 tax which beyond fixed Hmit it has by mternational Trea- 
 ties, recognised to be as binding as the Laws of the Em- 
 pire themselves, positively waived the right, — as there is 
 between a Chinaman and a bale of EngHsh shiii:ing ; and to 
 protect the latter from unlawful spoliation by the Chinese 
 Government and its officials, is no more to interfere be- 
 tween the Chinese Government and the former, his property, 
 and his duties as a subject, than to lawfully defend one's 
 own is to commit a crime. Yet, Mr. Wade, in his Memo- 
 randum of December 1868, states in regard to le-kin : — ■ 
 " this impost, although in its excessive degree objectionable, 
 is not in is nature more open to objection than our own 
 income-tax, nor, indeed, than any exti^ordinary tax, by 
 which a State short of money may recruit its finances... 
 The merchants conceive that transit dues and le-kin are 
 identical... I have laboured at great length to show, that 
 the le-kin and the transit dues are, so far as we are con- 
 cerned, imposts of a totally difierent character ; that we 
 may fight any augmentation of the latter by Treaty, but 
 that the Treaty will not help us against the le-kin." And 
 at the Meeting in Shanghai, on November 16, 1869, en 
 route from England to Peking as Charge d'Afiaires, he is 
 reported to have said : — *' Lord Elgin's intention was to 
 avoid taking under British jurisdiction, or interfering with, 
 Chinese subjects or Chinese property. This is the key- 
 note to the whole question. There was at the time a 
 political objection to unnecessary interference, and although 
 the fears that then existed may be shown to be groundless.
 
 214 THE TREATY RIGHTS OF THE 
 
 it Is ])y no means certain that the British Government are 
 even now prepared to accejDt a concession that may leave 
 them, if it is tcf be effective, no alternative but to force the 
 local authorities to forego the taxation of their own sub- 
 jects. Whilst the imports continue British property, the 
 a.o'orrieved have a locus standi with the British Consul and 
 the British Minister, but when the goods pass into Chi- 
 nese hands, we must trust in great measure to the strict- 
 ness, with which the Peking Government hold in check 
 the taxing propensities of their subordinates." 
 
 On analysing these passages, we find : 1, — tliat his Ex- 
 cellency appears unable to, and does not, distinguish be- 
 tween a capitation-ta.x, lawfully levied by the British Go- 
 vernment upon British suhjecis, and a tax upon foreign goods, 
 unlawfully levied, — supposedly here by the British Govern- 
 ment also, — in violation of the Treaty-rights of the foreign 
 Power, by whose subjects those goods had been, under the 
 guarantee of international Treaty-stipulations, imported into 
 England ; 3, — that his Excellency, by implication, advances 
 and maintains the doctrine, that financial difficulties at any 
 time justify and warrant a State to violate, and repudiate, 
 in any maimer it may think proper, the international obliga- 
 tions which, by solemn Treaty, it has engaged to observe 
 and keep towards other States; 3, — that his Excellency 
 holds the British merchant to be so dull and inconsistent, 
 as to cry against " Illegal Exactions in the Interior " and 
 "Local Taxes in excess o/ Tariff Duties," t on the ground of 
 their identity with the legal " transit-dues," as commuted by 
 
 ^ The very contrary, I need hardly say, is the case. See/./, the Shanghai, Hongkong,. 
 and other " Memorials, addressed to H.E. the British Minister at Peking, on the approach- 
 ing Revision of the Treatv of Tientsin, and Sir Rutherford Alcocks Renlv," Shanghai, 
 1868. 8"-
 
 FOREIGN MERCHANT IN CHINA. 215 
 
 Treaty ; '"' 4, — that his Excellency is seemingly unable . to, 
 and does not, see that, in arguing the "totally different 
 character " of the le-hin imposts from the unquestionably 
 legal character of the " transit "- or inland charges commu- 
 tation-tax, he argues the illegal character of the former ; 
 5, — that his Excellency, from a manifest confusion of his 
 own ideas, conceives that, when a fixed inland tax upon 
 merchandise is doubled and trebled by further inland taxes, 
 differently denominated, upon the same merchandise, this con- 
 stitutes no augmentation of the said inland tax, — by Treaty, 
 moreover, stipulated and fixed to include all inland taxes 
 whatsoever ; 6, — that his Excellency is of opinion, that an 
 international Treaty is of no use or avail against infractions 
 and violations of the provisions of such a Treaty ; 7, — that 
 his Excellency, — if his words have been correctly reported t — 
 looks upon the due fulfilment of Treaty-stipulations on the 
 part of the Chinese Government, and its desisting from the 
 illeofal taxation of British merchandise, as a concession made 
 or offered by the Chinese to the British Government, and 
 which Her Britannic Majesty's present Advisers may by no 
 means be prepared to accept ; <5, — that his Excellency ap- 
 pears to entertain so exalted an opinion of " the local (Chi- 
 nese) authorities " — the Provincial Governors, I presume,— 
 as to look upon the Emperor's subjects as their own ; and 
 9, — that his Excellency is unaware of the'fact, that the in- 
 creased rates of le-kin and other unlawful taxes upon British 
 and foreign merclianclise were imposed, immediately after 
 
 * Mr. Wade, elsewhere, too, sneers at " those, who should know their own business," 
 viz., the body of foreign mcrchiints iu China ; and assumes an air of superiority in know- 
 ledge over them, to which his Memorandum presents so striking and remarkable a cou- 
 tnist. 
 
 t They are quoted by me on the authority of Mr. J. Barr Eobert.=>on,— who was present 
 at the meeting iu fjucstion,— from his letter to " Tht yarth China lltraM," dated November 
 6, IbTl, and publi-.licd iu No. 'JoG of that juuniaL
 
 216 THE TREATY RIGHTS OF THE 
 
 the ratification of the Tientsin Treaty, not by " the subordi- 
 nates of the Peking Government," but by the Chinese Go- 
 vernment itself. 
 
 Mr. Wade's "Key-note to the whole question" clearly 
 emits a false and very discordant sound. The question is 
 simply one o^ mutual Treaty obligations, binding tlie two Govern- 
 ments of England and China. Both Governments should sole- 
 ly keep these obligations in view ; observe and respect them ; 
 and cause them to be observed and respected by their sub- 
 jects, mutually. In a general sense no other duties devolve 
 on either Government from existing Treaty-obligations, That 
 the English Government has no more the right to *' take 
 under British jurisdiction, or interfere with Chinese subjects 
 or Chinese property " in China, than the Chinese Government 
 has the right to " take under Chinese jurisdiction, or inter- 
 fere with, British subjects or British property " in England, 
 is no Article of Treaty-agreement, but a maxim of Inter- 
 national Law. In England, Chinese subjects and Chinese 
 property are as much under British jurisdiction, as are 
 British property and British subjects themselves. And 
 properly so : because English Law and Justice protect both 
 equally. In China, British subjects and British property 
 have, by Treaty, been withdrawn from Chinese jurisdiction. 
 And properly so : because the Chinese Government is a 
 semi-barbarous Government, and Chinese Law and Justice 
 afford neither protection to foreign property, nor security 
 to the foreigner's life. Is there any one personally ac- 
 quainted with the condition of China and her most recent 
 histoiy, who will contest the absolute necessity continuing 
 to exist for this state of " exterritoriality," as it is usually 
 designated ? That veiy necessity, universally recognised, 
 imposes on the English Government even a more rigid
 
 FOREIGN MERCHANT IN CHINA. 217 
 
 observance of its special duties, involved in the Treaty of 
 Tientsin, than might otherwise be the case. Hence, cer- 
 tainly, on the one hand it should not only carefully abstain, 
 itself, from any interference, practically, between the Chi- 
 nese Government and its subjects, their duties, and their 
 property, but should interdict also the maudlin bias of its 
 pro-Chinese functionaries from indulging in such an inter- 
 ference in theory, — assuming the form of IVIemoranda and 
 Despatches of " immense length," and tending to blind the 
 British Government as to the true state of matters, to mis- 
 lead public opinion, and to throw confusion and perplexity 
 into a subject of itself perfectly simple and clear. But, on 
 the other hand, too, the British Government should, so long 
 as the Treaty of Tientsin remains in force, fh-mly and con- 
 sistently uphold its provisions, I see them upheld, and, in 
 accordance with them, insure effective protection to Bri- 
 tish subjects and their property, invested in China, it can- 
 not be too often repeated, on the faith of those provisions, 
 from the lawless rapacity of the Chinese Government and 
 of Chinese officials. A clearer, and under existing circum- 
 stances more imperative, duty no Government could have 
 to perform ; and in perforaiing it by insisting upon the 
 due observance, by the Chinese Government, of Treaty- 
 obligations solemnly entered into, and, to use the words 
 
 I Lord Clarendon, the British Secretary of State for Foreign affairs, in his despatch 
 of December 28, 1868 to the late Mr. Burlingame, as '• envoy of Chinese empire," while 
 assuring him of "' the friendly feelings entertained towards the Government of Peking by 
 the British Government," insists : — " But Her Majesty's Government, I said, expects from 
 China faithful observance of the stipulations of existing treaties ;" and in the Queen's 
 speech from the throne, on the prorogation of Parliament on August 7, 1874, Her Britannic 
 Majesty states :^" My relations with all foreign Powers continue to be friendly, and the 
 influence of those cordial relations will be emploj-ed, as heretofore, in maintaining the 
 obligations imposed by Treaties." 
 
 Upon the Government of China, the influence of friendly feeling and '' cordial relations," 
 an already too long experience has shown to produce only the opposite results expected 
 from them ; and it is to be hoped, therefore, that the present British Administration may 
 be disposed to recoubider, without much farther delay, a policy that has tended towards
 
 218 THE TKEATY HIGHTS OF THE 
 
 of Mr. Wade, Its " holding in check the taxing propensi- 
 ties of its subordinates," tlie EngUsh Government would 
 no more interfere between the Chinese Government and 
 its subjects, than, by doing so, it would exceed its pubhc 
 duty to itself and the community of British merchants in, 
 and trading with, China on their faith in existing Treaties. 
 
 Mr. Wade, however, still contends that the course just 
 indicated, " if it is to be effective, might leave Her Majes- 
 ty's Government no alternative but to force the Chinese 
 local authorities to forego the taxation of their own sub- 
 jects ;" in other words, to interfere, if necessary by force of 
 arms, between " the Central Government" and its subjects, 
 the Provincial Governors. And this leads me to a con- 
 sideration of the third and last point, to which I have 
 previously alluded, namely, the question of expedienmj. "It 
 would be in the opinion of my Lords," the Secretary of 
 the British Board of Trade writes to the Foreign Gffice, 
 " both unjust and inexpedient to enforce such a demand" 
 (the abrogation of the le-hin impost on British merchandise, 
 upon which the stipulated commutation -tax has been paid), 
 " even if it were warranted by the terms of Treaty stipu- 
 lations." Mr. Wade's argument hardly calls for any fai*- 
 ther notice. A bale of English shirting, as I have once 
 before had occasion to observe, is not a " Chinese subject." 
 AVith Chinese subjects and their taxation or that of their 
 property by the Chinese Government, Her Britannic Ma- 
 jesty's Government has no concern whatever. It is nei- 
 
 the ruin of British trade with China, and has brought England to the verge of another war 
 with the Government of Peking. — a war, which, should it unliappily become inevitable, 
 will involve, on the part of England, the greater sacrifices in human life and treasure, 
 the longer it is delayed. In my humble opinion, it may yet be averted by a policy of 
 firmness, decision, and action. A most important and efl^ective measure in this sense, 
 would undoubtedly I'rove the annexation of Burmah to the Indian Empire of Great 
 Brituic.
 
 FOEEIGN MERCHANT IN CHINA. 219 
 
 ther one of the Chinese Government Boards, nor in charge 
 of the Chinese PoHce Administration. Its sole concern is 
 with the Imperial Grovernment of China, the provisions of 
 existing Treaties between the two countries, and their due 
 fulfilment, here in regard to British merchandise, over-taxed in 
 violation of those Treaty -provisions. This, and this alone, is 
 the question. It requires no key-note. That the Chinese 
 Government possesses, if it had but the will to exert, the 
 power to " check the taxing propensities of its subordinates," 
 Mr. Wade, as we have previously seen, himself admits. 
 Nor will " the Central Government, of course, avow," he tells 
 us, " that feebleness," to which his Excellency, one of the 
 most eminent of the "foreign physicians of this ailing 
 Power," is determined " nolens volens " to reduce its strength. 
 And in the Minute of a Meeting of the Mixed Conuni&sion on 
 the Revision of the Treaty of Tientsin, on June 5, 1868, we 
 read : — " On the first point, the abolition of all taxes upon 
 foreign export and import trade within thirty // of the 
 Custom-house, the Chinese Commissioners refused to sup- 
 plement the system of transit-passes already in force, 
 declaring that nothing better could he invented. It was replied 
 that the scheme had in effect seemed weU adapted, but had 
 fallen through by the unwillmgness of the local Mandarins 
 to understand and carry it out, and they were asked wJic- 
 ther they IV ere prepared to foree their officials to do so. They 
 answered : Yes ; the passes had failed by the fault of the 
 merchants, and the separation of the goods from the 
 passes ; but they were prepared to have issued and publish- 
 ed an Imperial Proclamation, setting forth proper penalties 
 for any infraction of the existing Treaty Piules for the 
 taxation of goods forming part of foreign trade. They 
 were asked, whether this had not already been done ? and
 
 2'jO the treaty riotits of THfi 
 
 said : No. I| It is, therefore, simply a fact, that the levying in 
 China of inland duties upon British and Foreign Merchan- 
 dise whetlier sucli merchandise be in the hands of British 
 
 and Foreign or Chinese subjects, — in excess of the inland 
 charges commutation-tax, is a positive violation of the 
 Treaty of Tientsin, and by the Tsung-li Ya-men and high 
 Chinese Officials acknoivleclged to, he so; that such illegal 
 duties, to an " over-burdensome" extent, are levied upon 
 British and Foreign merchandise, having paid the stipu- 
 lated inland commutation-tax, systematically, and by order 
 of the Chinese Government ; and that the Chinese Govern- 
 ment, (supported by Her Britannic Majesty's present re- 
 presentative in Peking, and Chief Superintendent of Bri- 
 tish Trade in China), persist in continuing to levy them, 
 not because it wants the power, but because it wants the will, 
 to fulfil its Treaty-obligations. 
 
 After Sir Rutherford Alcock had a priori insured the failure 
 of the Revision of the Treaty of Tientsin, by entrusting the 
 preliminary negociations on the part of England solely to 
 the incompetency of Mr. Hugh Fraser, Second Secretary of 
 Legation, and allowing, on the part of China, the Foreign 
 Inspector-General of Chinese Maritime Customs, Mr. Hart, 
 to sit on the Committee together with five experienced na- 
 tive Officials, and that failure, to all intents and purposes, 
 had once become a fait accompli: it was, possibly, a matter 
 of sound expediency for the Lords of the Committee of Her 
 Britannic Majesty's Privy Council for Trade, "under exist- 
 ing circumstances to recommend for the consideration of 
 
 II The sequel reads : — " They (the Chinese Commissioners) were then told, that it had 
 been the duty of the Chinese Government to publish such obligations effectively, and that 
 the ;)ro/70jed Proclamation, if effective now, would have been equally so then." It was 
 Mr. Hugh Fraser, Secretarj' of Legation and only Eaglidh member of the Revision-Com- 
 mittee, who spoke thus, and wrote as he had spoken.
 
 FOREIGN MERCHANT IN CHINA. 221 
 
 Her Majesty's Government, to endeavour to arrive at an 
 understanding with tlie Government of China, by which the 
 formal revision of the Treaty miglit be deferred until the 
 majority of the Emperor, which Sir R. Alcock stated would 
 take place in 1872 or 1873." § But, that their Lordships, 
 although under the influence of Mr. Wade's representations 
 and strongly-pronounced pro-Chinese bias, yet manifestly 
 doubtful n.s to the true position of the "transit-question," 
 should have unconditionally submitted to the British Go- 
 vernment in reference to the demand of British merchants 
 for relief from illegal taxation in China, that " it would be 
 in their opinion both unjust and inexpedient to enforce such 
 a demand, even if it were warranted by the terms of Treaty- 
 stipulations," appears to me almost in the light of an infa- 
 tuation. I will say nothing of the utter inexpediency, in 
 Western relations with such a Government as the Chinese, H 
 to recede a single step from a position once deliberately taken 
 up, or to waive a single point of rights once legally acquired 
 by Treaty ; nor of the striking fact that, whilst full of solici- 
 
 § It is characteristic of Sir Rutherford Alcock and the manner in which British Diplo. 
 macy is being conducted in China, that an English Minister, who had for j-ears resided ia 
 Peking, should have been as vaguely informed, as was the general foreign public of 
 the important date of the epoch of the late Emperor's majorit}-, — a date and an event to 
 which " one third of the human race" looked forward with anxious expectation, and 
 upon which, for England, might have turned the question of continued peace, or a new war, 
 with a great and distant Empire. 
 
 ^ Even Mr. Hart, in his " Note on Chinese Matters" states : — " However advanced tho 
 Chinese may be in civilization, it is not to be forgotten that their civilization is not a 
 Christian civilization ; they are Asiatics, too, and there is a pride of race about them 
 that leads them to tread upon the neck that bends, rather than to lift the head that touches 
 the dust, when its owner is an alien. 
 
 " It is the keen-sighted policy that will not permit shuffling — the just policy that will 
 not claim what it has not a right to — the firm policy that will not retract from a demand 
 once made — and the personal policy which biiaes its just requirements on its own, and 
 does not argue for their satisfaction from the point of view of Chinese interests, that will 
 be most likely to command success ; any winking at obligations neglected — any claiming 
 of what cannot fairly be laid claim to — any retreating from a position taken up — and any 
 advocacy of measures aa favoring Chinese rather than foreign interests, onl}- tend to 
 cause misunderstanding, breed wrangling, invite insult, arouse suspicion, and evoke au 
 unespressed, but action-inspiring scorn."
 
 222 THE TREATY RIGHTS OF THE 
 
 » 
 
 tude for justice to the Chinese, the idea of justice to tlie 
 British mcrcliaiit would seem not to have occurred to their 
 Lordships' mind. But had their Lordships, indeed, "care- 
 fully considered " the true import and wider significance of 
 their words ? They could only mean this : that Her Britan- 
 nic Majesty's Government should be prepared to inform the 
 country, that the national pohcy in China, pursued by Lord 
 Pahnerston, — a policy which extended the commerce, the 
 industry, the prosperity, and the power of England, and 
 caused the British name to be respected from one extremity 
 of the Ta Ching Empire to the other, — was a false policy, 
 which the Rt. Hon. W. E. Gladstone considered it " expe- 
 dient " to reverse ; and that the two Chinese wars, under- 
 taken by England with the view of breaking through that 
 system of isolation by which, in opposition to the ^vishes of 
 the Chinese people, its overweening and semi-barbarous 
 Tatar Government was, and to this day is, striving to ex- 
 clude " one third of the human race " from intercourse with 
 the rest of God's world, and of effectually opening up 
 the vast Empire of the Manchu usurper to the legitimate 
 commerce of the West, were unjust wars, in which English 
 blood and treasure have been expended to an imholy end, 
 and which Her Britannic Majesty's late Administration 
 felt it to be their Christian duty to expiate by again re- 
 signing the commercial Treaty-rights, secured by those 
 wars, into the hands of the " Imperially appointed Com- 
 mission for the General Control of Individual (Tribu- 
 tary) States' Affairs," through which " the One Auto- 
 crator of the World" condescends to communicate with 
 " His Loyal Eng Principality,"* and by surrendering 
 
 * Thus, as has been already observed, England was designated in the body of the 
 Letter of Credence, presented from " the Great Exalted Monarch and Highpriest of the 
 Great Ching Empire of the World" to " the Great Lady" (the Queen of Great Britain and
 
 FOREIGN MERCHANT IN CHINA. 223 
 
 British and foreign trade with the Interior of China to 
 " whatever unpositions the rapacity or necessities of Chi- 
 nese administration may inflict upon it." Were Her Bri- 
 tannic Majesty's late Advisers, in accordance with the 
 opinion expressed by the Lords of the Committee of Privy 
 Coimcil for Trade, to avow less than what I have just 
 stated, they would but disavow the true import and bearing 
 of their China policy of ''Justice and Expediency." Can 
 their Lordships be doubtful as to the view, which Parlia- 
 ment and the People of England, — for, despite of Sir 
 Rutherford Alcock's latest theory, there exist as yet such 
 Powers, — will take of that policy ? f 
 
 Ireland) " of the Great Eng State" (England as one of the '' Ten-thousand" Tributary 
 States of the Ching Empire Universal). 
 
 t This was written before the fall of the Gladstone Ministry and the accession of the 
 conservative party to power.
 
 221 TIIK TREATY RIGHTS UF THE 
 
 VI. 
 
 PRACTICAL WORKING OF THE TRANSIT-SYSTEM. 
 
 Alleged abuse of Treaty-provisions on the part of Foreign merchants — 
 Sale of Transit-certificates, in 1866, at Ningpo — The Commissioner 
 of Customs' unfair statement of the case — The Foreign Custom-house 
 responsible for the practice of Discrepancies in the open infringement 
 of Customs' rules — Customs' Revenue — Fines and Confiscations — 
 The Chinese Customs, Mr. Wade, and the British Merchant — Ten- 
 dency of British Representatives in Peking to favor the Chinese — 
 History of a confiscation-case — How the British Merchant in China 
 is protected by the British Minister — Disadvantages, under which 
 foreign merchants are placed touching the payment of le-kin — The 
 Tsuug-li Ya-men's "own Hart" — First-fruits of Mr. Hart's appoint- 
 jiient — The Ya-men proposes new regulations respecting trade on 
 tlie river Yang-tze, the Transit- System, and the Coast-Trade — Sir 
 Frederick Bruce's Notification of his "Revised Provisional Regula- 
 tions for British Trade on the Yangtze River," and "Regulations 
 (sanctioned by Mr. Bruce) regarding Transit-Dues, Exemption Certi- 
 ficates, and Coast Trade Duties" — Promulgation of corresponding 
 documents by the Tsung-li Ya-men — Sir Frederick Bruce repre- 
 sented as in the Service of China — The Ya-men's proposed "Five 
 Regulations respecting War-Taxes payable at inland stations, 
 Coast-Trade Duties, and Exemption Certificates" apparently with- 
 held from the knowledge of the British Government — Essential dis- 
 crepancies between the English text of Sir Frederick Bruce's " Re- 
 gulations regarding Transit-Dues," etc., and Mr. Wade's Chinese 
 version, as ofticially pubhshed by the Tsung-li Ya-men — The latter 
 grants to China the unrestricted imposition of le-kin — Both the En- 
 ghsh text and the Chinese version violate Treaty-provisions and mis- 
 lead the mercantile community — Imperative necessity for an expla- 
 nation on Mr. Wade's part — " T'u's five Rules" — Attempt, made 
 by the Native Intendant, and Foreign Commissioner, of Customs at 
 Shanghai, to place the Transit-System on a new basis — Tseng Kuo- 
 Fan's despatch of Nov. 5, 1868, to the Shanghai Customs Authori- 
 ties — Responsibilities incurred by the Inspector-General and tlie 
 Shanghai Commissioner of Customs — "A new and valuable Chinese 
 Concession" — The Transit-dues question, and the local Press. 
 
 The next element of the subject under discussion, which 
 now remains for me to consider, is the practical manner,
 
 FOREIGN MERCHANT IN CHINA. 225 
 
 in which the provisions of the Treaty of Tientsin relative 
 to British and Foreign trade with tlie Interior of China 
 have been carried out, both on the one side and the other. 
 The Tsung-li Ya-men's earher despatches abound in com- 
 plaints or rather recriminations as to infringements or 
 abuses of Treaty-provisions on the merchants' part. Those 
 complaints have now, so far as my knowledge goes, alto- 
 gether ceased.]: But Mr. Wade, on unaginary grounds, 
 continues to look with a kind of shudder at the " unclean 
 hands" of his countrymen, possibly intent on defrauding, 
 at some future time, the Ta Ching revenue by false certi- 
 ficates, throughout the Empire ; and, these alarming anti- 
 cipations of his morbid philosinensic fancy having com- 
 municated themselves to the British Board of Trade, 
 their Lordships state in all seriousness : — " It has also 
 to be remembered, that the imperfect execution of the 
 Treaty of Tientsin m this particular (the imposition of 
 Ic-Jcin) is due not alone to the weakness or inaction of the 
 Chinese Government, but also to the h'audulent evasion by 
 British merchants of the obligations and conditions which 
 it imposed. My Lords refer to the sale of transit certifi- 
 
 J An exceptional charge, however, has recently again been preferred by the Acting 
 Commissioner of Customs at Chinkiang, Mr. G. Detring, whose ultra zeal I have had 
 occasion to notice elsewhere. Attempting to be sarcastic, if not witty, he writes in the 
 "Customs G-azette" for October — December, 1871, p. 45, as follows: — "The Transit 
 Pass Trade, or rather the trade under Transit Pass, has flourished more than ever. During 
 the year 17,750 Passes were issued (against 10,059 in 1870) for the conveyance of foreign 
 produce to the interior, and 880 Paiises for the conveyance of native produce to this port. 
 It will be remarked that hardly one third of the produce thus brought to Chinkiang 
 under Transit Pass appears in the Export Tables. It being mostly intended for local 
 consumption, the produce is bought, owned and sold by natives, to icltom foreigners con- 
 tinue selling outward Passes to the detriment of the inland Revenue. There is, however, no 
 case on record, where the validity of these outward Passes has been contested." The 
 articles, to which Mr. Detring refers, are Raw Cotton, Dates, Dried Lily Flowers, Melon 
 Seeds, Oil, and Animal Tallow. As to Raw Cotton, the arrivals from the Interior under 
 Transit-Passes amounted, according to his own returns, to Piculs l,(J0t; the sliipnienta 
 to Piculs 3,483. Of dried Lily Howers, it is true the exports are put down at only Picula 
 3,010, while the arrivals under Certificate were Piculs 8,247 ; but there is no evidence to 
 show, that a large quantity wao not, in ii<rtne Junli, shipped to Shanghai, whence, during
 
 226 THK THKATY KIGIITS OF THE 
 
 cates to tlie Chinese, by which malpractice the difficulties 
 in the way of a just administration were greatly increased. 
 A stricter execution of the stipulation on the English side 
 should be, if possible, enforced, as well as on the part of 
 China." 
 
 Let us examine the sole foundation, upon which this 
 broad charge of " fraudulent evasion" of Treaty-obligations 
 on the part of " T3ritish merchants " is avowedly made to 
 rest. It consists in certain paragraphs touching Cotton in 
 the Eeport on the Trade at Ningpo for the year 1866, 
 addressed by Mr. Jas. K. Leonard, the then Commissioner 
 of Customs at that port, to the Inspector-General. || I will, 
 italicising the more notable passages, quote those para- 
 graphs at length : — 
 
 The Cotton crop has been a large one, but the quantity is not so good 
 as last year. Prices, vfliicli have ruled high throughout the season so 
 far, are maintained by the growers being, after last year's profitable 
 business, so independent as to feel no necessity of forcing sales. The 
 large exportation of this article is in Native craft Coastwise, Chinchew 
 and Wanchew being both large consumers. A considerable quantity 
 has gone to Hankow to replace what has been destroyed there by the 
 
 the last quarter of 1871 alone, PIcuIb 5,164 were exported to Foreign Countries. The same 
 remark applies to Oil, and may also apply to the remaining articles. The " Returns" are 
 80 unsystematic and imperfect, as to defy control. Mr. Detring has failed to explain 
 ■why it is that the validity of these, as he alleges, fraudulent outward passes i.s never con- 
 tested by the Chinese authorities ; namely, because, in the shape of a Produce-tax or the 
 like, the latter had already at the inland mart, and beforehand, taxed the produce to an extent 
 lunch txcevdinr/ the rate they were lawfuUij entitled to levy upon it, and probably little if at all 
 below the amount of charges, to which the goods as Chinese property would h.ave been 
 subject. The Chinese trader, even without any other pecuniarj- advantage, prefers to 
 avail himself of transit-passes, on account of the '' squeezes" and the trouble they save 
 him. Moreover, Mr. Detring overlooks, Jirstly, that the Foreign Customs is but a branch 
 of the Chinese Cu.>;toms-Service ; and secondly, that for any open infringement of Treaty- 
 regulations relative to the Transit-System on the part of Foreign merchants, the Foreign 
 Commissioner of Customs is, and is alone, re^<!ponsible. In accusing the Foreign merchant 
 of selling fraudulent Transit-Passes to the detriment of the Chinese Revenue, freely and 
 withoiU impunity : Mr. Detring accuses himself oi pa^ssively conniving at the alleged fraud. 
 
 II Reports on Trade at the Ports in China open by Treaty to Foreign Trade, for the 
 year IWifi. Published by order of the Insprotor-Gcneral of Customs. Shanghai: Printed 
 at the Imperial Maritime Customs' Presb, 1867. I"*.— p.p. 18-19.
 
 FOREIGN MERCHANT IN CHINA. 
 
 227 
 
 floods, and a short crop in Japan has afforded another new outlet. In 
 ordinary times Foreign traftic i.s principal!}' confined to supplying the 
 Cotton market in Hongkong. 
 
 Export of Cotton. 
 
 1861. 1862. 1863. 1864. 1865. 1866. . 
 
 Peculs 5,849 19,648 125,155 103,201 33,568 33,727 
 
 It is in connection with this staple more especially, that the utter futil- 
 ity of the Transit Pass system becomes apparent. The export of Cotton 
 from this port by Foreign raei'chants is tririintf in- the e.vtreme: yet, not- 
 withstanding, almost the entire produce of this article comes down from 
 the Interior declared Foreiyn property. The sale of Transit Passes is as- 
 suming almost sufficient importance to be a business of itself; merchants 
 obtain them for thousands of bales per month, and at the rate of 5 cents 
 a bale they are eagerly sought for by Native merchants, who thus are 
 enabled to evade payment of many local imposts, to which as Chinese 
 subjects they are lawfully liable. This misinterpretation of the Treaty 
 might be met by placing the Native on the same footing as the Foreigner 
 so far as regards Inland Dues, and till some such measure is adopted 
 there is little chance of alteration ; but how difficult it is to introduce 
 reforms of that nature requires no comment. 
 
 The following table illustrative of the above remarks, shows the 
 amount of " declared Foreign owned " Cotton passed from the interior, 
 as compared with the quantity shipped by each Foreign mei'chant: — 
 
 
 Bales 
 2,885 
 3,388 
 4,670 
 5,085 
 
 Bales 
 1,640 
 3,374 
 1,410 
 1,765 
 
 Bales 
 4,965 
 7,238 
 3,775 
 4..S95 
 
 Bales 
 
 1,470 
 
 2,680 
 
 280 
 
 9.55 
 
 Bales 
 215 
 405 
 255 
 635 
 
 Bales 
 380 
 1,555 
 2,420 
 1,920 
 
 Bilks 
 
 270 
 
 1,565 
 
 1,110 
 
 735 
 
 Bales 
 25 
 1,350 
 1,820 
 1,570 
 
 Bilks 
 
 685 
 
 445 
 
 Total. 
 11.850 
 21,555 
 16,325 
 17..505 
 
 
 
 
 Bales... 
 
 At 120 catties per 
 bale equal to ... 
 
 Ship'd from N'po 
 during 4 months 
 
 ' • 1 
 
 
 16,02» 
 
 8,189 
 
 20,373 5.385 1,510 
 
 6,275, 3,680 
 
 4,765 
 
 1.1. SO 67.335 1 
 
 Pecuh 
 19,233 
 
 Pecuh 
 9,826 
 
 Peculs \ Peculs Peculs 
 24,447 6,462 1,812 
 
 Peculs Peculs Peculs \Peculs 
 7,530 4,416 5,718 1,356 
 
 
 6,169 
 
 2,147 1 604 4W| ... j 666 4,415 j ... j 139 
 
 § 
 
 Logic is manifestly not Mr. Leonard's /or^6'. Since, 
 however, his exposui-e of the fraudulent abuse, connected 
 
 § Mr. Leonard adds : — " The importatiou of Opium has reached peculs 4,489, being fully 
 peculs 1,000 over that of last year. Of this quantity only about 2,550 peculs have paid 
 War Tax. sliowiag clearly that the system of evasion, which it was endeavoured to suppress 
 
 last vpar. *till obtains.
 
 228 THE TREATY RIOHIH OF THE 
 
 with tlie certificated importation of Cotton into Ningpo, 
 would seem to have remedied a " misinterpretation of the 
 Treaty," which produced symptoms so alarming in high 
 places, I have no desire to be severe upon that gentleman ; 
 yet, inasmuch as His Excellency Mr. Wade maintains that 
 there exists no connection whatever between the Foreign 
 Customs Inspectorate and le-kin, we may well be permitted 
 to ask what business, in that case, had the Foreign Com- 
 missioner of Customs at Ningpo, in a public official report 
 on the Foreign trade at that port, to meddle with the 
 Chinese " War Tax " ? But, tm-n we to the particulars of 
 the case. In the first place, Mr. Leonard does not put 
 that case honestly. He selects for illustration those very 
 four months of the year, diu-ing which the far greater part 
 of the annual cotton imports arrive from the Interior and 
 accumulate at the port, and foreign shipments keep no 
 proportionate pace with the arrivals. In faii*ness, his 
 Table should have extended over a whole year at least. In 
 
 " The continuance of the exaction of this tax, so long ajler the necessity for its imposition 
 has ceased to exist'' — this was written in 1866 — " excites no little discontent among Native 
 dealers, and inclines them naturally to seek the aid of Foreigners in evading payment. This 
 is to be regretted, as these persons run constant risk of collision with the authorities, whicli 
 might at any time give rise to grave complications nnth the Foreign Consuls. The abuse, there- 
 fore, is suffei'ed to exist unchecked, the Tax Officers being unable to devise or carry out any 
 plan for its suppression.'' 
 
 Did Mr. Leonard, really, means to say, that foreign Opium-smugglers, brought before 
 their Consuls, would or might have been granted official Consular protection from the con- 
 sequences of assumed guilt, and that it was only from a fear that such a protection was al- 
 most certain to be extended to the guilty, that the Chinese Intendant of Customs, with the 
 knowledge of his immediate subordinate the Foreign Commissioner of Customs, at Ningpo, 
 suffered the Imperial revenue to be defrauded ? I am unable to put any other construction 
 upon his statement; and since the Inspector-General ordered it to be printed, he, of course, 
 must have approved of it. Taken at the Shanghai rates of le-kin and chow-fang, the assumed 
 fraud here in question, — a somewhat more profitable "business" than the sale of Cotton- 
 certificates at 5 cents a bale, and which has j'et escaped the sensitive apprehensiveneas of 
 His Excellency Mr. Wade and the British Board of Trade, — would have amounted to up- 
 wards of £35,000 sterling. For Chinese Custom-house Officials to have "suffered" such a 
 sum to escape, unharmed, to the pockets of "barbarian" smugglers, from a fear of "grave 
 eomplications with the Foreign Consuls" : — why, Mr. Leonard must have meant his remarks 
 for sarcasm ; and, no doubt, the Inspector-General ordered them to be printed in a similar 
 f^ittirical mood.
 
 FOREIGN MERCHANT IN CHINA. 229 
 
 the second place, he exaggerates flagrantly and in two 
 opposite directions. In comparison with the total imports 
 of Cotton into Ningpo, in 1866, which may be estimated 
 at about 150,000 bales, he designates the aggregate of foreign 
 exports, exceeding 40,000 bales, as a proportion "trifling in 
 the extreme." Even dming the fom- months, to which he 
 specially refers, we find the proportion to be as Piculs 
 14,534 to Piculs 80,740. The difference between these two 
 quantities, equal to about 80,000 bales, represents the 
 aggregate of Transit-Passes, the sale of which, at 5 cents 
 a bale, producing a sum total of $4,000 or less than ^6900 
 for division among nine foreign merchants^ Mr. Leonard pro- 
 nounces to be of " almost sufficient importance to be a 
 business of itself." A small enough business it must have 
 been, at all events, to that highly dishonest merchant, 
 " illustrative of the Commissioner's remarks," who, accord- 
 ing to the computation of the latter, exported to foreign 
 parts just one bale less than he certificated to have im- 
 ported, and thereby made an illegal income of 5 cents 
 American, or 2|^d. English money, being at the rate of 
 seven pence half-penny 'per annum, at the best. Again, 
 Mr. Leonard concludes " the utter futihty of the Transit 
 Pass system," not from the overburdensome taxation re- 
 sorted to by the Chinese Government, and the discon- 
 tent of the native traders who " naturally" seek to evade 
 an imposition " for which the necessity has long ceased to 
 exist " or from other causes to which I shall presently refer ; 
 but from the fact that certain foreign merchants at Ningpo, 
 "misinterpreting the Treaty," allowed themselves to be 
 induced by those native traders to assist them in defrauding 
 the Chinese Government of taxes, to which they, as Chi- 
 nese subjects, were lawfully liable."
 
 2'V) THR TREATY RI0HT3 OF THE 
 
 Apart, however, from Mr. Leonard's exaggeration, illogic, 
 and bias, tliere are one or two features, peculiar to this 
 case, which demand notice. That British merchants 
 should have offered for sale to native traders, as the report 
 of the Ningpo Commissioner of Customs implies, fraud- 
 ulent certificates at 5 cents per bale of Cotton, is simply a 
 libel on the name of a British merchant. Nor will I ask, 
 how, — having regard to the Inspector-General's view, that 
 " the Foreigner, who has purchased Chinese produce in the 
 Interior, need not accompany his goods, being at liberty 
 to employ any agents for their conveyance ; but that Agent, 
 Goods, and Certificate must travel in company, to secure 
 exemption " from li-ki?i and other inland dues, — it became 
 possible for any English mercantile firm at Ningpo, simply 
 by the loan of its name, to assist native merchants in 
 passing their Cotton as " Foreign-owned property " from 
 the inland mart to the port of shipment. I need only 
 recall here to the reader's memory the clause, relative to 
 Exports, of Rule vii. of the Trade Rules appended to the 
 Treaty of Tientsin. It reads thus : — " Produce purchased 
 by a British subject in the Interior will be inspected, and 
 taken account of, at the first barrier it passes on its way to 
 the port of shipment. A memorandum, showing the amount 
 of the produce, and the port at which it is to be shipped, 
 will be deposited there by the person in charge of the produce ; 
 he will then receive a certificate, which must be exhibited and 
 vised at every barrier, on his way to the port of shipment. 
 On the arrival of the produce at the harrier nearest the port, 
 and the transit dues diie thereon being paid, it tvill be passed. 
 On exportation the produce will pay the tariff duty. Any 
 attempt to pass goods inwards or outwards, otherwise than 
 in compliance with the rule here laid down. wiU render them
 
 FOIiEIGN MERCHANT IN CHINA. 231 
 
 liable to confiscation." Assuming, then, that Enghsh firms 
 in Ningpo had furnished Chinese traders with letters, false- 
 ly representing them to be their Agents, authorized to pur- 
 chase and convey for them to the port of Ningpo Cotton 
 intended for exportation to foreign parts, and that the 
 goods had arrived under certificate, duly vised at every 
 barrier passed, at the last barrier on its way to Ningpo : 
 it is clear that by Rule vii. of the Trade Eules, notice had 
 thereupon to be given to the Foreign Commissioner of 
 Customs at Ningpo ; and that the Cotton could not be 
 *' passed " until the " transit-duty," leviable upon it by 
 Treaty, viz. one half the Tariff export duty of Tls. 0.3.5.0 
 being Tls. 0.1.7.5 per picul, had been paid to the Foreign 
 Customs by the importing English firm, in accordance 
 with the distinct provisions of the Piule referred to. 
 
 Now, there are two questions which here present them- 
 selves. The first is : Was the commutation -tax of Tls. 
 0.1.7.5 per picul, upon " the amount of ' declared Foreign- 
 owned ' Cotton, passed from the Interior" in 1866, paid 
 to the Foreign Customs ? Mr. Leonard's elaborate state- 
 ment for the months of September, October, November and 
 December, and the fact that the quantities therein named 
 did " pass," leave us no room for doubt on the subject. 
 Supposing the entire quantity of Cotton, thus imported 
 into Ningpo during the year 1866, to have amounted to 
 only 100,000 piculs : the transit-duty thereon would have 
 been Tls. 17,500 or X'5,250. But, on turning to page 138 of 
 the Inspector-General's " Report on Trade " for 1866, which 
 is occupied by a Table of " Duties collected at the Ports open 
 to Foreign Flags in 1866 and 1865," there is no corre- 
 sponding entry. We find the " Import " and " Export " 
 Dutiies, the " Tonnage Ducb," and the "Coast Trade
 
 2.'}2 Tin-; tkeaty rights of the 
 
 l>iity " returned for each Port, and after the sums total 
 liavc been given to a cash, we read : — 
 
 1866. 1865. 
 
 Haikwan Tls. 8,658,381.8.3.3.-8,208,582.5.4.2. 
 
 Atld Transit Dues, at Shanghai 21,966.0.0.3.— 82,966.7.5.5. 
 
 Do. Do. Foochow 4,911.1.1.0.— 4,167.5.3.9. 
 
 Do. Do. Chinkiang 370.8.5.6.— 558.5.4.2. 
 
 Total Tls. 8,685,629.8.0.2.— 8,297,275.3.7.8. 
 
 Of the Tls. 17,500.0.0.0 or more, which must have been 
 levied as Transit Dues on Cotton at Ningpo, there is no 
 trace to be found in the Reports ; and what does not 
 diminish our perplexity, is that, whilst in a Table at page 
 126 the Ningpo Exports of Cotton are stated, within a 
 picul, in accordance with Mr. Leonard's Table, to have been 
 *' Peculs 33,726," they are, at page 131, in a " Summary 
 of the Principal Articles of Export, exported at all the 
 Treaty Ports, in 1866," returned to the limited extent of 
 ** Peculs 1,039." Altogether the logic and arithmetic of 
 the official " Returns of Trade," published by order of the 
 Inspector-General, are of the most unreliable kind.lT 
 
 To revert, however, to our immediate subject. The 
 officially published statement of duties collected by the 
 Foreign Customs in 1866, — I wish to confine myself here 
 to the case under discussion — does not include the amount 
 of transit dues, amounting to upwards of ^5,000 sterling, 
 payable on Cotton by the Commissioner of Customs at 
 Ningpo officially stated to have been imported into that 
 port from the Interior as " declared Foreign-owned " pro- 
 perty. It cannot be argued, that the dues in question, 
 being dues upon native merchandise, which had been con- 
 
 H See : "The Return!> of Trade at the Treaty-ports in China, a^ published by order of the 
 Inspector-General of Customs, critically examined. tShanghai, 1875, 8"., p. 81.
 
 FOREIGN MERCHANT IN CHINA. 233 
 
 veyed to Ningpo from inland marts, was not pa3^able to the 
 Foreign Custom-house, because it is so payable by Treaty- 
 stipulation ; the same as similar inland-charges-commuta- 
 tion-dues upon foreign merchandise, conveyed from a port 
 to an inland mart, are so payable. Moreover, I find f.L 
 in the final " General Table " of the Returns for 1870, 
 geographically arranged " Statistics of the Transit Trade 
 as carried on under Treaty," of which the sums total, which 
 alone it will suffice to adduce, are as follows : — " Inwards : 
 Passes 24,124 (including 17,796 *' British"); value of 
 Trade Tls. 6,370,004 ; Transit Dues Tls. 121,107.9.4.4 ; 
 Outwards: Passes 306 (including 99 "British"; value 
 of Trade Tls. 1,097,175 ; Transit Dues Tls. 37,522.9.8.2. 
 This alone would settle the point just raised. Are we, 
 then, to conclude that the commutation-tax of upwards of 
 Tls. 17,000 under discussion was not paid to the Foreign 
 Customs, Le. that " the sale of Transit passes by British 
 merchants at Ningpo, in 1866, for thousands of bales 
 of Cotton per mouth at the rate of 5 cents a bale," was 
 virtually nothing but a hollow outcry ? Or, are we to 
 conclude, that those duties were paid to the Foreign Cus- 
 toms, and ask : What, then, became of the money ? * 
 
 The second question, which suggests itself in connec- 
 tion with Mr. Leonard's strictures is : Not only suspecting, 
 but, to give full credence to his own words, Imowing what 
 he did, viz., that Cotton was imported into Ningpo in 
 large quantities under fraudulent certificates, and that, 
 instead of being intended for exportation, and exported, 
 abroad by British merchants, it was exported, in native 
 craft by native traders to Chinchew, and other Chinese 
 
 * It will have been observed, that the Inspector-General returns rt Transit-Dues, in 1866, 
 include even the small sum of Tl.s. 370— little more than a hundred pounds— for Chiukiang.
 
 234 THE TREATY KUiHTS OF THE 
 
 marls, — was it not the duty of the Foreign Commissioner 
 of Customs, and tlid he not possess the required authority 
 and means, at onee to clieck malpractices of the kind, and 
 to put a stop to an unlawful evasion of the payment of 
 Foreign export duties, leviable upon goods expressly im- 
 ported, under certificate, for exportation by Foreign mer- 
 chants to foreign parts, by the consfiscation of such goods, 
 on their being attempted to be shipped in contravention of 
 Rule vii. of the Trade Kules appended to the Treaty of 
 Tientsin ? As indubitably the Commissioner of Customs 
 possessed the authority and the means to that end, as it 
 was his duty, to employ them ; and one single seizure 
 would have remedied the evil complained of. Perhaps, a 
 mere warning might have effected the purpose. 
 
 Under any circumstances, I am justified in affirming, — 
 and I do so without fear of contradiction,^that a state of 
 matters at Ningpo such as Mr. Leonard describes, in 1866^ 
 touching the sale of Transit-Passes, could have arisen and 
 endured only tvith the indirect concurrence^ or by the direct 
 sufferance of the Foreign Customs Authorities. If we are to 
 believe the Report of the Ningpo Commissioner, it amount- 
 ed to nothing less than a system, or rather a "business" 
 o^ fraud and smuggling, carried on by British merchants, in 
 broad day -light, under a "misinterpretation" of Treaty- 
 provisions, which the Inspectorate General not only took 
 no means to rectify, but, in connection with which it failed 
 either to collect, or to account for, Transit-dues to the 
 extent of J65,000 sterling or thereabout, which were, in 
 1866 alone, unquestionably payable to the Foreign Customs 
 by the conductors of that " business," accordmg to Mr. 
 Leonard's statement. Whatever amount of blame, then, 
 there really may have been incurred, the larger share fell,
 
 FOREir.N MERCHANT IN CHINA. 235 
 
 obviously, upon the Customs Authorities, who so grossly 
 neglected their duty, rather than upon the merchants, 
 who only "misinterpreted the Treaty." The case, Hke 
 any ordinary case of smuggling, was one of Customs ad- 
 ministration, discipline, and responsibility. And what 
 renders these apparent defalcations of the Revenue to the 
 extent of something like ^5,000, at one of the minor ports 
 and in one single year, the more remarkable, is the ex- 
 treme vigilance and strictness, manifested by the " Seizing 
 Officers" of the Inspectorate-General as to trifles, at all 
 the ports. If the natives be but half as alive and pouncing 
 in this respect, as are the foreign employes : one would 
 conclude, from a glance at Part iii. of the " Customs Ga- 
 zette,"! headed: "Precis of Fines and Confiscations," 
 that not so much as the value of a pin's head could, without 
 therr good-will or consent, escape " Imperial " or any other 
 " lawful " taxation in China. 
 
 Thus, we find, in looking over the lists for the three 
 first quarters of 1871, that at Ningpo, " a Passenger " by 
 the good "vessel Ta-Lee," carrying some " Cuttle Fish 
 Bones," these "Goods" w^ere "sentenced" to be "con- 
 fiscated " by the " Seizmg Officer A. Sharpe," for the 
 "Offense" of "False declaration of weight to Ship;" 
 and that the " Sum^ realised " amounted to H. Tls. 0. lin. 
 Ic. Oc. being in English money about one shilling two 
 pence farthing. This was a case of labour of pure love or 
 duty ; for the " Sum paid to Seizing Officer" — being 10 per 
 cent on ^^ Sum realised," — is here left a blank. The same 
 officer, however, on the same ground, having obtained a 
 " sentence " of " Fined 10 times Duty" upon some " Joss 
 
 t Customs Gazette. Published (quartnrlj-) by order of the Inspector-General of Custom3, 
 Shanghai, printed at the Customs Press. 4".
 
 230 THE TREATY RIGHTS OF THE 
 
 Stick Powdor," received his dnc share of the fine, amonnt- 
 ing to H. Tls. 0.4.2.0, or about half-a-crowii. But, with 
 all their severity upon " Bamboo shoots," the Ningpo Tax 
 Officers appear to be as " unable to devise or cany out any 
 plan for the sujypression " of attempts at modifiedly smuggling 
 this very obnoxious article, as they are in regard to Opium ; 
 for, Bamboo shoots are repeatedly sentenced to be " con- 
 fiscated," — for " False declaration of weight to Ship," — 
 whether of the value of H. Tls. 0.3.4.0 or H. Tls. O.C.8.0, 
 unless they are, exceptionally, let off with a " Fine of 
 treble Duty" to the extent of H. Tls. 0.4.1.0. On a 
 " Passenger," however, hapj)ening to " Present false ap- 
 plication," they are again, without mercy, and though but 
 H. Tls. 0.5.1.0 m amount, doomed to confiscation. Fish 
 Nets, Bird's Nests, Leather Boots, Silk Shoes, Fungus, 
 Umbrellas, Hams, Cakes, Medicines — nothing has a chance 
 of escaping the due payment of imposts at Ningpo. On the 
 slightest "breach of regulations," every trifle is seized and 
 sold, or fined "double," "treble," " 5 times," " 10 times 
 Duty," as the case may be, for the benefit of the Chinese 
 Maritime Customs, its seizing Officers, and mercantile mo- 
 rality. 
 
 Nor is all this laudable zeal confined to the open port of 
 Ningpo and Tax Officers, whether foreign or native. At 
 Chinkiang, the master of the '^Lor. Annie" is mulcted in a 
 fine of H. Tls. 10.0.0.0 or £3. for "shipping without special 
 permission," by way of Goods, "Two old guns"; and the 
 "Seizing Officer" in this case is the "Office," which gener- 
 ously presents its share of the fine inflicted, to the "needy" 
 Imperial Pievenue. The same exemplary "Office" — under 
 the Inspection of Acting Commissioner of Customs, Mr. G. 
 Detring — manifests, free of percentage, ifs unselfieh duti-
 
 FOREIGN MERCHANT IN CHINA. 287 
 
 fulness by a fine of H. Tls. 10.0.0.0 on some "Bamboo 
 shoots " for ''false valuation," and another fine of H. Tls. 
 30.0.0.0 on a parcel of " Mushrooms," the " Offence " being 
 ''Goods in excess of Cargo Certificate." For " Landing 
 without Permit," the Assistant in Charge at Takow (For- 
 mosa) confiscates a lot of " Old Hemp Bags." Examiner 
 Brackenridge at Tientsin effects the seizure, for the offense 
 of "Goods in excess of Import application," of "Dye, 35 
 cups," which realize H. Tls. 2.0.0.0; whilst a nameless 
 " Customs Watcher " confiscates Pace to the value of H. Tls. 
 3.0.0.0. At Hankow, " Linguist Got " makes an extra H. 
 Tl. 1.0.0.0 by discovering a "False Declaration of Value " 
 of Medicine, for which a fine of H. Tls. 10.0.0.0 is imposed; 
 and "Customs native night watchmen" realise H. Tls. 
 0.5.0.0 out of a fine of H. Tls. 5.0.0.0 on Sundries, includ- 
 ing " 1 doz. Nail Brushes, 6 doz. Spoons, 10 prs. Spectacles, 
 8 tassels for do.," for the offense of " landing without per- 
 mission"; whilst " Customs Boatmen " make H. Tls. 1.0.0.0, 
 H. Tls. 1.8.0.0, and H. Tls. 2.0.0.0, at different times by 
 " Sentences " on the same ground. At Fuchow, a " Cus- 
 toms Spy" obtains a sentence of confiscation for some Pre- 
 served Ginger, by which he realises a percentage of H. Tls. 
 » 0.6.5.0; and at Shanghai, " Ah -yew, Chinese detective" is 
 so lucky as to add to his mcome Haikuan Tls. 2.4.5.0 
 through an " Offender imkown " for " Importing a contra- 
 band article," viz., " 6 bags Salpetre," which are, of course, 
 "sentenced" to confiscation, and disposed of at H. Tls. 
 24.5.0.0. Of the seizures effected by Tide -Waiters and Tax 
 Officers I need say nothing, I but will only transcribe, in ad- 
 
 X Their strictness appears sometimes to border on injustice. I will only take Swatow. — 
 ■where M. A. Huber, formerly Interpreter at the French Legation in Peking, was Acting 
 CoBuaiBsioner of Custome, — during the last quarter, for which I happen to have the "Precis 
 «f FincB and Confiscation!'" before mp. by vi ay of illustration. Th<- Table reads as follow : —
 
 2;JH 
 
 THE TI{E.\TY RIGHTS OF THE 
 
 Prkois of FINE.S & Confiscations at the Port of Swatnw, for the Qr. ending Sept. 30, 1871. 
 
 Date, 
 
 1H71. 
 July -1 
 
 Of- 
 fend. 
 
 EK. 
 
 Ho-E 
 Loong 
 
 S,am- 
 
 pan 
 
 Man 
 
 Chi- 
 nese 
 Paa- 
 
 Isonger 
 M E-kee 
 
 18 
 
 26 
 
 Aug. 5 
 ., 9 
 
 Vkhsel. 
 
 Ycsso 
 
 Yeaver- 
 iiiff Bell 
 
 Derwenl 
 
 Offence. 
 
 Ye- 
 
 wah 
 
 Sing, 
 chang 
 
 Yung- 
 hip 
 wo 
 
 Super- 
 cargo 
 Sugar 
 Boat 
 
 Cargo 
 
 Boat 
 
 „10 
 
 ., 10 
 
 HjSam- 
 
 pan 
 ,. 18 Sugar 
 
 I Boat 
 ., 28 Lor- 
 
 cha 
 
 Sept.l 
 
 „ 1 
 
 » 1 
 
 >, 1 
 
 Aug. 6 
 
 Cargo 
 Boat 
 
 Sam- 
 pan 
 
 Douglas 
 
 Sophia 
 
 Piiig On 
 Rebecca 
 
 Sfai' of 
 the North 
 
 Cathe- 
 
 False decla- 
 ration of va- 
 lue 
 
 Breach of 
 Rogulation.s 
 
 Attempt to 
 smuggle 
 
 False decla- 
 ration of qu.'t.- 
 lity 
 
 Breach of 
 Regulations 
 
 False decla- 
 ration of va 
 lue 
 
 False decla- 
 ration of 
 weight 
 
 Breach of 
 Regulations 
 Breach of 
 Harbour Re- 
 gulations 
 
 Skizino 
 Offickr 
 
 S. Her- 
 ton 
 
 J. Key- 
 meulen 
 
 G. Bond 
 
 J.S. Hal- 
 sey 
 
 Ping On Loading on 
 Sunday 
 
 G. Bond 
 
 Goods. 
 
 Sen- 
 tence. 
 
 1 pkg. Medicine 
 declared as TIh, 
 23.(5, provetl to 
 be Tl3. .'{7 
 
 Not bringing Pas 
 •sengcr's lugga 
 ge to examina 
 tion shed 
 
 .'53 pees. r-Cloths, 
 18 pees. Dyed 
 Shirtings 
 
 Shark' Fins, pis. 
 8.64 declared as 
 Black, proved 
 
 f^i^l"\^i'te4.32 
 
 ^'^^{Bl.-ick4..T2: 
 
 Carrying Sticksi 
 not brought 
 to examination 
 shed 
 
 Mediciue.pls. 1.50 
 declared as TLs. 
 42, proved to be 
 Tls. 52.3.6.3 
 
 Shark' FinsWhite 
 declared as pis 
 3.39, proved to 
 be peculs 4.29 
 
 Dischai'ging Rice 
 on Sunday 
 
 Fastenened by r 
 Ion g line astei-n 
 and refusing to 
 move when or 
 d^'ed 
 
 Fined 
 
 Confis- 
 cated ... 
 
 Fined 3 
 times the 
 dilferen - 
 ce in du- 
 ty 
 
 Fined ... 
 
 Sc.M 
 realiz- 
 ed. 
 
 Moor"d in a wron g 
 pofiition,aud re 
 fusing to move 
 when ordered 
 
 Fastened by 
 long line astern, 
 and refusing to 
 move when or- 
 dered 
 
 [Fined 3 
 times the 
 differen - 
 ce in du- 
 ty 
 
 Fined 
 
 16 packages Rice Confis- 
 s weepings land-cated . 
 ed without pcr-j 
 mit I 
 
 Total.. B.Tls.. 
 
 H. Th. 
 15.0.0.0 
 
 5.0.0.0 
 
 2.5.0.0 
 64,9.5.0 
 
 12.9.6.0 
 20.0.0.0 
 
 SriziNo 
 OrricKR. 
 
 //. Th. 
 1.5.0.0 
 
 0.5.0.0 
 
 0.2.5.0 
 5.9.7.4 
 
 1.2.9.6 
 2.0.0.0 
 
 e.4..3.6 
 
 6.4.3.0 
 
 4.0.5.0 
 25.0.0.0 
 
 4.0.5.0 
 2.5.0.0 
 
 10.0.0.0 
 
 1.0.0.0 
 
 10,0.0.0 
 
 1.0.0.0 
 
 10.0.0.0 
 
 10.0.0.0 
 
 S.0.0.0 
 
 1.0.0.0 
 1.0.0.0 
 0.5.0.0 
 
 5.0.0.0 
 
 0.5.0.0 
 
 10.0.0.0 
 
 1.0.0.0 
 
 5.0.0.0 
 
 0.5.0.0 
 
 6.0.0.0 
 6.0.0.0 
 5.0.0.0 
 
 0.5.0.0 
 0.5.0.0 
 0.5.0.0 
 
 13.2.3.0 
 
 1.3.2.3 
 
 249.1.2.6 
 
 24.3.9.1
 
 FOREIGN MERCHANT IN CHINA. 239 
 
 dition, two foot-notes of the Commissioner of Customs at 
 Hankow. They read thus : — " An exceptionally heavy fine | j 
 (H. Tls. 30.0.0.0) was inflicted in this case (a native, "land- 
 ing without permission), as the h-audulent intention was 
 manifest, the articles (Silk piece goods) being found con- 
 cealed on the offender's person." And: "It must be dis- 
 tinctly understood that the foreign merchants, whose names 
 are mentioned in the table for the September Quarter, were 
 completely innocent of any fraudulent intentions. In such 
 cases they are misled, and not unfrequently defrauded by 
 their native constituents." 
 
 This, certainly, sounds re-assuring. The chief feature, 
 however, to which I have desired to call here attention, is 
 the extraordinary variety of talent, zeal, and vigilance, em- 
 ployed by the Foreign Inspectorate-General for the protec- 
 tion of the foreign branch of the Chinese Customs Revenue, 
 and the effective preservation of the duty-paying morality of 
 British and other foreign merchants. We tind there are 
 Customs Boatmen, Customs Night Watchmen, Customs 
 Watchers, Customs Spies, and Customs Detectives, besides 
 Tide-waiters, Tax Officers, Examiners, Linguists, Assistants 
 in Charge, nay the " Offices," i. e. the Commissioners of 
 Customs themselves, — all equally intent upon the ac- 
 complislmient of that praiseworthy object. Is it, then, 
 reasonable to assume, that a thousand eyes, to whose quick 
 glance, in 1871, neither nail-brush nor fungus, an old hemp 
 bag no more than an old gun, escaped, should, in 1866, 
 
 I should remark that Passengers' Luggage is by Treaty exempt from duty. It re:ids amus- 
 ingly, when, under the heading of ''Goods," there are euumeriited : — "Fastened by long line 
 astern;" or: '^Mooixxl iu a wrong position, and refusing to move when ordered ;" and '• Dis- 
 charging rice ou Sunday " ; — the latter in contradistinction to " Loading (rice-sweepings) on 
 Sunday," which, in M, Huber's sight and judgment, is an ofl'cncc. whilst " Dischai-fjiiuj rice 
 on a Sunday" cchietitutes a package of merchandise. 
 
 ii It is greatly fjxcccded in severity by the lirst line iu the preceding table.
 
 210 THE TREATY RIGHTS OF THE 
 
 liavo been shut to a quantity of one hundred and twenty 
 thousand bales, or thereabout, of " declared Foreign-owned " 
 Cotton, and a commutation -tax of some Jt5,000 sterling, 
 leviable upon it? If not, we have once more to ask: Why, 
 then, is the money not included in the Inspector-General's 
 j)ubHshed account of "Duties Collected" in that year? And 
 what has become of it ? § 
 
 Mr. Wade, as has been seen, submits to the British 
 Government, that he is happy in believing the Foreign 
 Inspectorate-General of Chinese Maritime Customs to be 
 above suspicion ; and it would grieve me indeed, to see 
 his Excellency shaken in a belief, which contributes to his 
 happiness : but is the honorable and long-sustained repu- 
 tation of the British merchant a matter of less moment to 
 Her Britannic Majesty's Chief Superintendent of British 
 Trade in China, than is the fair repute of a foreign Branch 
 
 & I have confined myself in the text to the one item of approximately £5,000, although 
 but a small fraction of the discrepancies, which appear in the published revenue-accounts 
 of the Foreign Inspectorate-General. The reader, who takes an interest in these matters, 
 is referred to the writer's critical review of the "Returns of Trade," already quoted (page 
 232 note). It is there shown, amidst a mass of conti-adiction, error, and confusion, syste- 
 matic and otherwise, probably without a parallel in the history of official statistics, thaty'. i. 
 the returns of revenue from Transit-dues, Import-duties, and Tonnage-due^, according to the 
 "Abstract of Trade and Customs Revenue Statistics" for 1871, compared with the "Ab- 
 stract" for 1868, exhibit discrepancies discovered to the amount of Tls. 317,636 for the two 
 yeai-s 1864 and 1865 alone, and that of this total only Tls. 21,898 appear, in the latter year, to 
 have been placed to the credit of the public revenue, leaving a remainder of Tls. 295,738, or 
 nearly £100,000 unaccounted for; while, seemingly in order to simply balance the accounts, 
 we find the revenue, returned in the Abstract for 1868, as having been actually collected 
 from Coast-trade-diit'tes in the years 1864 and 1865, in the Abstract for 1871, siknthj re- 
 duced for those two years from Tls. 1,192,864 to Tls. 897,126, /. e. by exactly the discrepancy 
 of Tls. 295,738, referred to above, — a falling oft' in the revenue from Coast-trade duties, 
 within two yeai-s, of more than 40 cent., while the foreign trade generally, within the same 
 period, had increivsed by 16 per cent. 
 
 Again, as regard the Transit-dues collected in the three succeding years 1866-1868, there 
 appear fi-esh discrepancies to the aggregate amount of Tls. 245,253, or upwards of £70,000, 
 rcti\rncd short in the Abstracts up to the year 1870. In the Abstract for 1871, under an alter- 
 ed form which does not facilitate comparison, they have, withiu small the sum of Tls. 1,511, 
 been added to the revenue, it is true; but once more so without one word of expl.anation ; 
 and whether in this wise with real benefit to the Chinese Exchequer or also but nominally, 
 it is hai-d to say. 
 
 The most serious discrepancies in the revenue accounts, however, appear on a comparison 
 of Tart n. of the '• Returns of Trade" or the Returns proper, containing the "Statistics of
 
 FOREIGN MERCHANT IN CHINA. 211 
 
 of the Chinese Customs service ^'*i\ Could he, in the particular 
 case under consideration, and with the Customs Reports 
 before him, reasonably suspect the one, without suspecting 
 the other ? No doubt, there exist commercial firms in 
 China, as there do elsewhere, which possess no title to a 
 name, respected for honor and integrity throughout the 
 world ; no doubt, in China as in England, attempts are 
 made, and will continue to be made, at smuggling and a 
 partial evasion of the payment of national imposts ; but 
 there is, certainly, no greater tendency in this direction 
 observeable among the Foreign mercantile community in 
 China, where a provokingly heavy burden of iUegal taxation 
 is by the Chinese Government laid upon foreign trade with 
 the Interior, than there is among the mercantile commu- 
 nities at home, where inland trade is free, and the imposts 
 are sanctioned by the Representatives of the people. Al- 
 most from the very commencement, the British and 
 Foreign merchant in China, favourable to the Institution 
 of the Foreign Customs Service, has given to it his loyal 
 and steady support, without which, indeed, it could not 
 
 the Trade at each Port," and extending to several hundred pages, with Part i., or the Ab- 
 stract, occupying twenty pages only. The latter, in fact, is a methodical summary of the 
 former, and, so far as I know, alone translated into Chinese for the information of the 
 native Authorities in Peking. On calculating the amount of duties payable to the Chinese 
 Government from the quantities of merchandise imported and exported, etc., as returned in 
 Part II., at the fixed tariiH-rates, and comparing the totals, thus found, with tlie totals, re- 
 turned in Part i. : there results an apparent annual deficit in the latter retui-us of consider- 
 ably more than Tls. 1,000,000 (about £350,000 yje;- HMKMW io the mean) for the Inspector- 
 General to explain. 
 
 1 may just add, that,/", i. in the year IS71, the real value of the " Home,"' /. e. the Coasting- 
 Trade of China, carnicd on in foreign-built vessels, instead of Tls. '229,818,037, as returned 
 by Mr. Hart, was TI*. 20,885,48'J ; and the value of the whole trade, — import-, export-, nud 
 "home"-trade,— Tls. ]78,561,.')K}, instead of Tls. ;m,131,0r)(:, as returned; the latter value 
 being exaggerated by the Inspector-General to the extent of upwards of Tls. 200,000,000, 
 annually. 
 
 ^ In a measure, perhaps, this bias is explained by the fact tli;it, like the Inspector-Ge- 
 neral, Mr. Hart, and a large proportion of his '■ Foreign In-door Staff," Mr. Wade is Irish. 
 In the official list of tluit stall', made up and jirinted, at the suggestion of "the Chinese Se- 
 cretary," by order of the Inspector-General's Cireuhu- No. 20 of lti73. the Iriih cleuicut dis- 
 aj'pcars under the loyal d'juomiuatiuu ; "British."
 
 212 THE TREATY lUGIlfS OF THE 
 
 liavo prospered ; and, under trying circumstances, liis 
 conduct in regard to its Administration has been even 
 ultra-exemplary and over-considerate. Resignedly and 
 without murmuring he has put up with great hardship, 
 and greater injustice. He has submitted to the Coast- 
 Trade duties ; and has not rebelled against the chow-fang 
 and " ever-increasing" /6'-A;/«. He has paid his Tonnage- 
 Dues regularly ; and patiently seen the larger portion of 
 its revenue squandered, — worse than squandered, — upon 
 the Burlingame Mission and other similar and dissimilar 
 anti-foreign inventions. Trustingly he has accepted the 
 Inspector-General's repeated promises of amendment in 
 the application of those Dues ; and vainly, to this day, 
 he applies, again and again, for a safer and more certain 
 access to the very port of Shanghai for his richly-laden 
 argosies.* Nay, at the same time that he exercises so much 
 consideration and forbearance towards the Foreign Admi- 
 nistration of the Customs in all these and many other mat- 
 ters, to which I need not allude, and, in claiming for his 
 native constituents the right of sending foreign merchan- 
 dise mto the Interior under a " transit "-certificate, enforces 
 but a clear Treaty-right, arbitrarily withheld from the 
 Chinese by their Foreign Customs Authorities : the latter 
 assail, or until very recently have assailed, the character 
 of the British and Foreign merchant by accusing him, in 
 thus acting, of iUegal proceedings and fraudulent abuse of 
 Treaties ; whilst all along, they must have Imown those 
 
 * Compare : The Tonnage-Dues Fiind, the Harbour of Shanghai, and tlie Wusung Bar. 
 Shanghai, 1872, 4°. — Recently Prince Kung has officially declared the Bar of the Wusiing 
 river to be, iu a military sense, a protection to China, instituted by He;iven ; whilst the 
 Inspector-General, Mr. Hart, in his pseudo-prophetic memorandum of March 5. 1874, 
 foretells the approaching downfall of Shanghai as a place oi foreign commerce, and throws 
 out some dark and mysterious hints about " no one being able to say, how aoon commerce 
 may cease to ask for access to Shanghai."
 
 FOREIGN MERCHANT IN CHINA. 243 
 
 rights to have been aclmowledgecl by the Chinese Govern- 
 ment itself, and instructions to act in accordance with them 
 from the native Superintendent of Trade, their superior, to 
 shmiber, unheeded, in " the archives of each Custom- 
 house." 
 
 Taking, then, into account the various facts and cir- 
 cumstances, to which I have referred, the reader wiU, no 
 doubt, consider it with me simply prepostorous that, on 
 the sole ground of Mr. Leonard's Keport in 1866, Mr. 
 Wade should have made the gong of alarm — lest the whole 
 Chinese Revenue be defrauded by British merchants, and 
 the bankrupt Government of the Ta Ching Empire be 
 disabled from prosecuting its warlike preparations, may be 
 for further massacre and the expulsion of us " outer bar- 
 barians " from the "bayonet-ploughed soil of Cathay, — to 
 resound through the sensitive minds of the Lords of 
 the British Privy Council for Trade. But that Her 
 Britannic Majesty's Board, too readily listening to, and 
 crediting, the tale of those deceptive sounds, should, 
 without examination and in language, the confusion of 
 which is but the reflection of confused ideas touching 
 the subject, have connected certam malpractices of certain 
 Ningpo traders for a while apparently suffered to prosper 
 by the Foreign Customs Authorities, with " greatly 
 increased difficulties in the way of a just administration," 
 — of the Customs, or else of what ? — and, in an official 
 document submitted to the consideration of the British 
 Government, have ascribed the illegal imposition of the 
 le-kin and other war-taxes upon Foreign merchandise, 
 and the imperfect execution of the Treaty of Tientsin 
 *' in this particular," not only to " the weakness or 
 inaction," instead of the perfidy and rapacity, " of tlie
 
 244 THK TIIKATV ItJGHTS UF THK 
 
 Chinese Government, Imt also to the fraudulent evasion hj 
 British merchants of the obligations and conditions ichich that 
 Treat]) imposes : this has appeared to my judgment a matter 
 so grave and, in its more or less probable consequences, 
 fraught with so much danger, not only to the British and 
 Foreign commerce with China, but to the best interests of 
 China herself, as to deserve a full exposure, — even in refer- 
 ence to " the sale of transit certificates to the Chinese," — of 
 tlie utterly frail or wholly baseless grounds, on which tlie 
 views, adopted by Her Britannic Majesty's Board of Trade, 
 actually rest. 
 
 They may possibly, however, have received additional 
 strength from a despatch of Sir Rutherford Alcock to Consul 
 Medhurst of June 17, 1869, copies of which were commu- 
 nicated to the Chamber of Commerce of Shansrhai and the 
 
 O 
 
 late Lord Clarendon, then English Secretary of State for 
 Foreign Affairs. In this despatch Sir Rutherford Alcock, in 
 reference to the minutes of proceedings at a Meeting of the 
 Chamber, held on May 7, 1869, and the terms of a resolu- 
 tion passed, and conveyed for the information of the British 
 Minister to Mr. Medhurst, expresses himself thus : — 
 
 The Defence of Traffic in Transit Certijicutes. — I confess the arguments 
 employed are to my apprehension only tenable in a total oblivion or 
 disregard of tlie Treaty stipulations. By treaty, a right was given to 
 foreigners to commute all Transit Dues by a fixed payment of 2.1 per cent, 
 for any merchandise constituting their foreign trade, whether import or 
 export. But to make any produce an element or a part of foreign trade, 
 a foreign merchant must own it or at least have a bona tide property in- 
 terest in it either as an import or export. No right was given to a native 
 to share m this, which was a treaty privilege exclusively granted to 
 foreigners, no right, in a word, was given to a native dealer to withdraw 
 native produce in transit for native consumption, from the powers of 
 taxation exercised over all Chinese subjects and trade, by the Emperor 
 in his own territories. No foreigner could transfer his prinlege to a
 
 FOREIGN MERCHANT IN CHINA. 215 
 
 native and so enable liim to defraud the native collector ( ! ), evade his 
 own revenue laws, and, under a false pretext, that the merchandise was 
 foreign property, pay less than he otherwise would. And this under the 
 clauses of a Treaty exclusively applicable to foreigners and foreign trade. 
 
 To call such a collusion as this between foreign and native honest 
 trade, or anything but a fraud, and a breach of Treaty, can only be con- 
 sidered a perversion of terms. 
 
 The result of such a practice being resorted to by certain foreigners is 
 bad enough, since it renders any sj'stem of transit certificates impractic- 
 able; but to me it seems even worse, that by any sophistry it should be 
 possible for a respectable body like the Chamber of Commerce at Shang- 
 hai to defend it. 
 
 If the Chinese had any right, as one of the speakers assumed, to take 
 out exemption certificates, that is transit-passes, to commute the inland 
 dues in like manner as foreigners had by Treaty, why should they have 
 Imdjht them of the foreigner ? The fact of a traffic existing through and 
 by the foreigner alone is a sufficient answer to any such plea. 
 
 If they had the perfect right to take them out, as the Chairman infer- 
 red, of which I do not think he was a very competent judge as between 
 Chinese subjects and their rulers, why did they not exercise this right, 
 I repeat, instead of seeking the foreign dealers ? Between those, who 
 " could not see the injustice done to the Chinese Reveniie " by the sale 
 of transit passes to the Chinese, or any fraud on the revenue, and the 
 seller of such ware, I fear little distinction will be made. It will be 
 thought in England that there must be something peculiarly blinding 
 in the air of Shanghai on commercial questions. 
 
 All I can say is, that to sell a privilege, granted to foreigners only by 
 Treaty, to natives under false pretences and declarations, and in order 
 that he may pass native produce through the inland customs at a 
 cheaper rate than he would be otherwise entitled to do, if this be not 
 fraudulent ab initio, and a designed fraud on the Chinese Revenue, 
 words have no recognised meaning, and if the Chinese adopt a similar 
 view of Treaty rights, and what is fraudulent or honest, there is not 
 much to be hoped I fear from any further revision of Treaties, for these 
 instruments are only valuable in so far as they are interpreted in good 
 faith, and acted upon with honesty of purpose." 
 
 Sir Rntherford Alcock having remarked : — ''The Cham-
 
 240 THE TREATY lUGIITS OF THE 
 
 bcr will, I trust, for its own sake see fit to repudiate (tLe 
 views imputed to the Chamber by the then Eepresentative 
 oi" England) as in any sense giving the deliberate opinion 
 of the largest and most important mercantile community in 
 China : " a reply on the part of the Chamber was thus rend- 
 ered necessary. In it, the Chamber says : — 
 
 No little surprise has been felt by the members of the Committee at 
 the extraordinary interpretation placed upon the words of the speakers 
 at the meeting of May 7th, by his Excellency. They deplore, -what they 
 cannot but feel, its misrepresentation of their expressed sentiments, and 
 take the strongest exception to the conclusions at which his Excellency 
 arrives, as being founded, partly on this misconception and partly on 
 an exaggerated statement of their arguments... 
 
 The vse of Transit Passes by Chinese. — It is to be regretted that Sir 
 Kutherford should have gone out of his way, as it seems to the Com- 
 mittee, to put into the mouths of the speakers at the General Meeting 
 of May 7th, sentiments which they did not utter, and then to express 
 tlie hope that the Chamber would disown or detract them, in terms 
 which cannot be acceptable to any respectable body of merchants. For 
 the intimation is most distinct, that dishonesty is openly declared as a 
 principle, and that unless the Chamber accepts his reproof and listens to 
 his admonition, its character is lost. The truth is, and the statement 
 can be immediately verified by reference to the debate,... As therefore 
 the Chamber has never expressed or adopted the views, ascribed to it 
 by Sir Eutherford Alcock, it has nothing to repudiate, and can saf&ly 
 leave its reputation in the hands of any fair reader of its debates." 
 
 The despatch of Sir Eutherford Alcock is characteristic 
 of the former British Minister, — Ehodes-colossus-like, hol- 
 low but " bestriding the narrow world." He could hardly, 
 in a fewer words, have given a greater proof of superficiali- 
 ty and onesidedness, of presumption, unfairness, and lq- 
 capacity. He had failed to seize the ti'ue and final deter- 
 mination of the transit duties question by Treaty, and its 
 importance to Trade. He was labouring under the delu- 
 sion, that international Treaties of Commerce are concluded
 
 FOREIGN MERCHANT IN CHINA. 247 
 
 for the personal benefit of merchants. He was unable to 
 distinguish between the transit-clauses relative to native 
 produce intended for exportation to foreign parts, and those 
 relative to foreign manufactures destined for native con- 
 sumption in the Interior of China. He was blind to the 
 difference between a bale of English Shirtings protected 
 from illegal taxation by Treaty -rights secured by two wars, 
 and an unprotected Chinaman subject to the despotic 
 powers of taxation of " the One Lord of the World." He 
 contended that the Chinese were not possessed of a " privi- 
 lege," which the Chinese authorities themselves had long 
 since admitted them to possess. He could not realize, that 
 an international Treaty might confer rights on the native as 
 well as on the foreign merchant, nor perceive, why the na- 
 tive merchant, being deprived of the exercise of his rights 
 by an unscrupulous and despotic Government, should desire 
 to avail himself of his " privilege," notwithstanding. He 
 was incapable of seeing, that, abuses of the *' Transit- Sys- 
 tem" having been provided against by Treaty, it rested 
 simply with the Foreign and Native Customs Authorities to 
 deal with, and prevent, them. And on the ground of all 
 this misapprehension and incompetence, associated with 
 less pardonable elements, Sir Kutherford Alcock hesitated 
 not, to accuse the British Merchant in China of designed 
 fraud on the Chinese Eevenue ; to contrast his non-appre- 
 ciation of the solemn nature of Treaty-stipulations and of 
 " vv^hat is fraudulent or honest," with the implied honesty 
 of purpose and good faith of the Chinese Government ; and to 
 call upon the Chamber of Commerce of Shanghai to repu- 
 diate views and doctrines, which his *' extraordinary inter- 
 pretation " alone had ascribed to it. Possibly, Sir Kuther- 
 ford Alcock had read the discussion of the Chamber bv the
 
 218 TIIK TREATY K1(;HTS OF THE 
 
 lil^'Iii of liis own p-ammar, syntax, and logic. This would 
 ^'o far towards explaining that interpretation. 
 
 The licprcsentatives of England in Peking have ever 
 l)cen but too willing to favor the Chinese Government, when 
 in conflict with, or at the expense of, the British merchant. 
 A remarkable and characteristic illustration of this tendency 
 offers a case of confiscation of sixty-three (out of sixty-four) 
 ])ales of silk, worth upwards of .£5,000, the property of the 
 wealthy and highly respected firm of Messrs. Bower & Han- 
 bury of Shanghai, which occurred in 1862. They were 
 seized by James Kennard, " tidc-u-aiter in the Imperial Mari- 
 time Customs," and — an ominous name — Moses Jagger, "tidc- 
 suririfor to the Imperial Maritime Customs," on the ground that 
 the European, in charge of the Silk, had attempted to evade 
 the payment upon it of, wdiat we shall find to have been, tlie 
 le-hin tax, and under circumstances, which will be best 
 gathered from the following "Declaration of Thomas Han- 
 bury," Esq.: — 
 
 I, Thomas Haiibury, English merchant, of Shanghae, iu the Empire 
 of China, do solemnly and sincerely declare as follows : — 
 
 That I have been resident in Shanghae for a period of nine years ; that 
 during that time I have carried on business as partner in two mercantile 
 firms. That during those nine years no case of attempted smuggling 
 was ever charged against myself, or the firm in which I was a partner. 
 That my present and former firm has always paid duties regularly and 
 punctually, according to the established tariff rates. 
 
 That as regards the seizure of sixty-four bales of silk on the eighteenth 
 of January last as they were being conveyed from the interior to Shang- 
 hae, I declare that no instructions were given by myself or any one iu 
 my olfice to attempt the evasion of duty, or to run past the barrier ; 
 further, I declare that those accompanying the silk, and in the employ of 
 my firm, would not have been benefited by the evasion of transit duty. 
 Also, that the position of the barrier had been recently cbauged, and a 
 junk anchored in the stream employed, iublcad of a station on shore.
 
 FOEEIGN MERCHANT IN CHINA. 249 
 
 and that those in the boats coming from the interior were not aware of 
 this fact. Forty-two bales of silk coming from another district were ly- 
 ing at the barrier at the time the sixty-four bales were seized, thus prov- 
 ing what was the custom of my firm in regard to stopping at the barrier. 
 
 At the same time I was of the opinion that the levying of transit dues 
 from British merchants at said barrier, on produce brought down by 
 them without certificate, was illegal, and totally at variance with the 
 notification of Her Majesty's Minister Plenipotentiary, published for 
 general guidance by Her Majesty's Consul on the 23rd Sex)tember, 1861, 
 and which reads as follows : — 
 
 *' 1st. That the British merchant has nothing to do with the payment 
 of transit duties, unless the goods are carried into the country, or brought 
 down from the place of production under certificate as British property. 
 It is optional to the British merchant to take out the certificate or not as 
 he pleases, but if he does not, and he buys or sells at the port of ship- 
 ment, he has nothing to do with the payment of any duty but the one 
 specified in the Tariff on imports and exports." 
 
 And I make this solemn declaration conscientiously beheving the same 
 to be true. 
 
 (Signed) Thomas Hanbury. 
 
 To enable us to judge of the further merits of the case, we 
 have the views of Sir Frederick Bruce, the then British 
 Minister in Peking, as stated in despatches, from which I 
 quote what is necessary for the purpose, together with a 
 letter addressed by Messrs. Bower & Hanbury to Consul 
 Medhurst ; — 
 
 Mr. Bruce to Earl Russell. 
 
 Peking, December 2, 1862. 
 
 My Lord, — I think it advisable to inform your Lordship of the course 
 I have pursued in cases of seizure and confiscation of goods for evasion 
 of duties by the Chinese Custom-house. I therefore inclose the particulars 
 of a case in which sixty-three bales of silk belonging to Messrs. Hanbury 
 & Co., for which no transit-duty certificate had been taken out, were 
 seized by the Chinese and confiscated for having attempted to evade the 
 Customs barrier near Shaughae, estabHshed for the collection of inland 
 duties.
 
 250 THE TREATY EIGHTS OF THE 
 
 Tlie principle I liave laid down is, that in such cases the Chinese au- 
 thorities are bound to prove that the breach of regulation which exposes 
 the goods to confiscation has been committed, and that if tlie fact is de- 
 nied on affidavit they must furnish equally satisfactory evidence on their 
 side in support of their chargo. If not, I consider that restitution may 
 be demanded or compensation required. 
 
 I do not find that there is any disposition on the part of the Chinese 
 authorities to throw difficulties in the way of a full investigation, and as 
 in such cases it is not difficult to ascertain whether the offence has been 
 committed or not, I do not apprehend that the foreign merchant is likely 
 to suffer injustice. 
 
 I may observe that a case arising out of a charge of evading inland 
 duties is not likely to recur; for I have stated as the rule to be observed 
 in future, that if a British subject purchases produce on his own account 
 in the interior, and intends to have his property recognized and pro- 
 tected as British property on its way to the port of shipment, he is bound 
 to cover it by taking out a transit-duty certificate. If, on the other 
 hand he thinks it more for his interest to buy produce and bring it down 
 uncertificated, it will not be entitled to any special protection as British 
 property, but will be subject to such charges and regulations as the Chi- 
 nese authorities may choose to impose. 
 
 I conceive this to be the meaning of Eule No. 7, which was substituted 
 for Art. xxvni. of the Treaty of Tientsin, and that most embarrassing 
 questions will be avoided by adhering strictly to it. The object of the 
 Eule was to substitute one unvarying charge for the arbitrary exactions 
 of provincial authorities, where Her Majesty's subjects bought or sold 
 goods in the interior. But it was not intended to interfere between the 
 Chinese Government and its own subjects. 
 
 I may also remark, that if the Chinese are satisfied with this interpre- 
 tation of the Eule, they waive, in some degree, the right they might 
 claim on a strict interpretation of its terms ; for it is expressly agreed 
 that permission to export produce which cannot be proved to have paid 
 the transit dues may be refused until payment is made of the amount, 
 whereas, hitherto, the Chinese Government has not insisted on proof of 
 such payment in the case of produce which is bought by the exporter at 
 the port of shipment .... 
 
 (Signed) Frederick W. A. Bruce.
 
 FOREIGN MERCHANT IN CHINA. 251 
 
 Mr. Bruce to Consul Mcdhurst. 
 
 Peking, ]May 2, 1862. 
 
 Sm, — With reference to the sixty-three bales of silk belonging to 
 Messrs. Bower, Hanbury & Co., reported to you to be confiscated, I have 
 to observe that 'the account of the transaction given in the Taoutae's 
 letter differs entirely from that given by the Chinese boatmen. 
 
 The depositions of Mr. Hanbury and Mr. Leech, as they were not in 
 the boats at the time, have no bearing on the question at issue, which is 
 simply, Did the boats attempt to pass the barrier without reporting, 
 or not ? 
 
 The Taoutae asserts t^at the boats containing the sixty-three bales 
 forced their way by the barrier; that they were pursued for a le, and ♦ 
 taken ; and that there was a foreigner on board, who declared there were 
 no goods, and that they were discovered on examination. 
 
 The Taoutae is bound to support these statements by the evidence of 
 the persons who made the seizure. 
 
 If he does not, I must assume that the statements of Messrs. Bower 
 & Hanbury 's boatmen are correct. You cannot insist on hearing the 
 case in a Consular Court, but you are entitled to have the evidence on 
 which the Taoutae proceeds communicated to you. 
 
 The Chinese authorities are entitled to levy the half transit-duty on 
 silk brought down uncertificated; and you will warn Her Majesty's sub- 
 jects that non-compliance with the system laid down in the Tariff-rules 
 for their protection exposes them to increased risk and detention. 
 
 I am bound to state that the disappearance of Leech from the boats, 
 taken in connection with the pretension that the half-duty was not le- 
 gally leviable on uncertificated produce, is a suspicious feature in the 
 
 case. 
 
 (Signed) Frederick W. A. Bruce. 
 
 Messrs. Hanbury <£■ Co. to Consul Medhurst. 
 
 Shanghai,- July 12, 1862. 
 
 Sir, — We beg permission to offer a few remarks after a perusal of the 
 affidavits on the strength of which his Excellency the Taoutae has thought 
 fit to confiscate and sell off sixty-four bales of silk belonging to ourselves, 
 without any trial or hearing of our defence. 
 
 Inclosed is declaration of our Mr. Hanbury, showing that for a period 
 of nine years' trading at this port, this is the first accusatiou of an at-
 
 252 TUE TREATY RIGHTS OF THE 
 
 tempt to evade duty that has been brought against him. It is, therefore, 
 a pecuUarly hard case that 5,000Z. worth of property should be summarily 
 confiscated by virtue of the statement of two tide-waiters in the employ 
 of tlie Taoutae, who, as they receive a share of the spoil, are interested 
 in the confiscation, but whose evidence is totally at vg-riance with the 
 four affidavits handed you some time since ; viz : — 
 
 Two from boatmen in our employ who were on the boats at the time 
 of seizure ; 
 
 Charles Brooks, Englishman, in our employ, present at the seizure; 
 
 De Wit C. Deming, American, not in our employ, but present at the 
 time of seizure. 
 
 We feel sure Her Majesty's Minister Plenipotentiary will not permit 
 this gross violation of all rules of English law and equity, and will not 
 allow us to suffer so severely because the Taoutae chooses to ignore the 
 evidence we produce to rebut the charge of his two interested employes, 
 and to judge the matter by Chinese law, not even allowing us, the de- 
 fendants, a hearing. 
 
 We particularly call attention to the fact that the tide-waiter James 
 Kenuard, who boarded the boats, in his declarations fails to state how 
 far the boats were from the Custom-house junk, called the barrier, when 
 they were seized, and that Moses Jagger, the other tide-waiter, only 
 speaks from hearsay on this point; while, on the other hand, all our 
 witnesses are most explicit in declaring that the boats, when seized, were 
 close to the barrier, "within hail," "within stone's throw," &c. The 
 case turns on this point altogether, in our opinion, and the balance of 
 the evidence in regard to it we submit is largely in our favour. 
 
 We further beg distinctly to state that there is no barrier at the place 
 where the boats were seized, but a junk anchored in the river, and the 
 existence of which was unknown to our employes when coming down the 
 river, the Custom-house business formerly being done entu-ely on shore. 
 
 (Signed) Bowkr & Hanbury. 
 
 JMr. Bruce to Consul Medhurst. 
 
 Peking, November 5, 1862. 
 SiB,^— I have gone carefully through the papers bearing on the claim 
 of Messrs. Hanbury & Son for restitution of sixty-three bales of silk con- 
 fiscated by the Taoutae of Shanghae for attempted evasion of the inland 
 dues.
 
 FOREIGN MERCHANT IN CHINA. 258 
 
 I regret to say that a perusal of the evidence forwarded in your des- 
 patch of the 12th of July last leaves no doubt iu my mind that the boats 
 formed part of a number that attempted to pass tlie Custom-house bar- 
 rier without reporting, and that they were overtaken and seized in the act. 
 
 The evidence of Brooks and Deming is untrustworthy. According to 
 their account they were neither pursued, boarded, nor searched. It is 
 evident that they felt the attempt to evade payment of the duties would 
 be established were it admitted that they had past the barrier to such a 
 distance as rendered it necessary to send a boat after them, and had de- 
 nied the existence of the silk on board; and they have consequently sup- 
 pressed the facts in their affidavits, although they have not positively 
 denied them. 
 
 There is nothing to shake the testimony of Kennard and Jagger, and 
 the facts deposed to by them establish a clear case of attempted evasion 
 of duties, subjecting the articles to confiscation. 
 
 You will therefore inform Messrs. Hanbury that I cannot bring for- 
 ward their claim for restitution. 
 
 (Signed) Frederick W. A. Bruce. 
 
 The " Declaration of James Kennard " states : — " That 
 on or about the 18th day of January last I was on duty on 
 board the Custom-house junk stationed at the south barrier, 
 when, between the hours of 5 and 6 p.m., I observed se- 
 veral boats passing down the Pootung side of the river. All 
 the boats which pass down the river are bound to pull up 
 at my station, in order to juiy the transit Dues ; and if they 
 refuse to stop, one of my duties is to follow them up. That 
 accordingly I started with two Chinaman from the said 
 junk, and overtook three of the said boats, and immediately 
 boarded them and inquired if they had any silk on board, 
 to which they [the boats ?] replied in the negative. That 
 I searched the whole of the three boats, and on board two 
 of them I discovered a large quantity of silk, amounting 
 on the whole to sixty-three bales . . . That a few days after- 
 wards I received orders from Mr. Jagger to take both the
 
 25-1 THE TREATY RIGHTS OF THE 
 
 said boats 2ip to the Custom-house at Shanghai, which I 
 accordingly did." The similar " Declaration of Moses 
 Jaggor" has it: — "That on or about the 18th day of 
 January last I was at my station at the south barrier, in 
 the performance of my duty, which is to inspect all boats 
 passing down the south barrier on their stopping to pay the 
 transit dues. That between the hours of 5 and 6 p.m. on 
 that day I observed a large convoy of boats passing on the 
 Pootung side of the river, instead of puUing up at my sta- 
 tion as they were bound to do. That some of the men in my 
 employ on board the Custom-house junk accordingly followed 
 up the said boats and searched them, to ascertain if there 
 was any silk concealed on board any of them. That when 
 the said boats had gone about three-quarters of a mile past 
 the station three of them were, as I am informed and verily 
 believe, overtaken by the men in the Custom-house junk 
 who had pursued them, and were boarded, and the men in 
 charge were asked if they had any silk on board, — to which 
 they replied in the negative. That James Kennard, one of 
 the men who had pursued the said boats, then searched them ; 
 and lifting up* the hatchways discovered sixty-three bales 
 of silk in two of the boats, but none in the other . . . And 
 I further solemnly and sincerely declare that I reported the 
 same to the o^cial mandarin tvho acts tvith me at the said station ; 
 and he, as I am informed and verily believe, thereupon 
 wrote to the Taoutae of Shanghai, who instructed me to have 
 the said boats brought up to Shanghai and delivered over to 
 the Imperial Maritime Customs, which was accordingly done." 
 On the other hand, the " Declaration of Charles Brooks," 
 the European in charge of the three. Boats in question, 
 states : — " On the 19th day of January last, I arrived from 
 the Interior with a quantity of silk, about sixty -four bales
 
 FOREIGN MERCHANT IN CHINA. 255 
 
 in all, I believe ... In coming clown the river, usually I 
 have been in the habit of stopping at the Customs -house, 
 near the Tong-ka-doo French Cathedral, and the boats 
 were proceeding there on this occasion, and they were hailed 
 by the Custom-house junk anchored in the stream ; tliis 
 jiuik was neiohj placed there, and until hailed I was not aware 
 it belonged to the Custom-house. We stopped at once, 
 and our boats with the silk in came alongside the Custom- 
 house junk. I never received any instructions to attempt 
 the evasion of any duty, and I had no intention of doing 
 so on this occasion ; when the boats were seized, they were 
 between the Custom-house jimJc and the Custom-house, within 
 stone's throw of both. "VMien the boats were seized the 
 Custom-house officer did not accuse us of attempting to 
 evade any duty ; he said other boats had lately passed 
 without paying duty, and probably the Taoutae would seize 
 our boats in consequence." The position of the boats, 
 when being hailed, assigned to them by Mr. Brooks, and 
 their going alongside the junk, the distance being no more 
 than thirty yards, is confirmed also, as well as that the day 
 was the 19th of January, by the Declaration of a Mr. De 
 Wit C. Deming, an American, who happened to be in the 
 boat with Mr. Brooks at the time of the occurrence. 
 
 Now, Mr. Haubury's testimony, to the effect that his Agent 
 had neither instructions to evade, nor any interest in evading, 
 the payment of duty on the Silk in question, must be impli- 
 citly accepted. There, consequently, existed no adequate 
 motive for smuggling on the Agent's part. Whether it was 
 his intention to proceed, as usual, to a native Custom-house 
 higher up the river, and he was really not aware of the char- 
 acter and position of the junk, from which pursuit was 
 made, is a question which it might have been more diffi-
 
 2o6 THE TREATY RIGHTS OP THE 
 
 cult to answer in the affirmative, had the Agent's statement 
 that the jmik had been newly placed in the river, been de- 
 nied by the " seizing officers." The latter, on the contrary, 
 had a great and very tempting interest in causing so valua- 
 ble a cargo to be confiscated. Their Declarations contain 
 flagrant contradictions, more especially that of Moses Jag- 
 ger; whilst to the Tautai there appears to have been given 
 a version of the affair entirely differing from the deposi- 
 tions. The distance of " pursuit," — an essential point — 
 which the Declaration of Jagger extends to three quarters 
 of a mile, was even in the mandarin's report reduced to a li 
 or one third of a mile : the European witnesses denying the 
 pursuit altogether, and estimating their distance fi'om the 
 junk, on being boarded, at only thirty yards or a stone's 
 throw. Indeed, this is fully confirmed by the Declaration of 
 Kennard himself, as well as by the corresponding part c^f that 
 of his immediate superior. Both these accounts agree in 
 stating that, immediately on the barges being perceived on 
 the Pootung side of the river, Kennard, with two China- 
 men, started (in a light boat) to hoard them. But, during 
 the hours of 5 and 6 in the evening about the middle of 
 January, at Shanghai, it is either pretty dark, and in that 
 case the barges could not have been seen at any distance ; 
 or else the moon shone, and in this event, Moses Jagger, 
 being " at his station and in the performance of his duty," 
 can hardly have failed to espy the boats even before passing 
 the newly placed floating "barrier." He would seem, more- 
 over, to have been on the look-out for them, unless he and 
 his subordinate knew by instinct that they were laden with 
 Silk, — Kennard's first question on boarding and before he 
 had proceeded to a search, being : had they any silk oia board ? 
 He himself says nothing of a chase*; and there can be no ra-
 
 FOREIGN MERCHANT IN CHINA. 257 
 
 tional doubt, but that the additional " pursuit for three- 
 qaarters of a mile"^a distance which of itself would suffice 
 to discredit the statement,— spoken of in Moses Jagger's 
 Declaration and forming a very awkward and ill-fitting episode 
 ia his narrative, was simply the offspring of his own " ve- 
 rily believing " imagination. There are Moses Jaggers 
 of far higher position and renown than Kennard's superior ; 
 and know we not that, in certain quarters, " Lying " is 
 regarded as a mere " social necessity," in fact as "an 
 accomplishment ?" 
 
 Ill all human probability, the truth here lies between the 
 two depositions of Charles Brooks and Moses Jagger, but 
 greatly towards the side of the former ; and the fact was, 
 that the silk-boats did pass the junk -barrier without re- 
 porting, but were immediately, thereupon, boarded and seized 
 by Kennard. In Sir Frederick Bruce's judgment, the whole 
 Issue of the question depended on the former fact. The 
 view is an obviously erroneous one ; and the British Minis- 
 ter altogether treats the case with a degree of levity, care- 
 lessness, and partiality, which appear to me to assume a 
 character of culpability. He himself observes " that the 
 account of the transaction, given in the Taoutae's letter, 
 differs entirely from that given by the Chinese boatmen ;" 
 yet allows the discrepancy to go for nothing. He pro- 
 noimces "the evidence of Brooks and Deming to be un- 
 trustworthy," because they tndij, and in accordance with 
 Kennard's Declaration, state that they were not pursued, 
 and omit stating that they were boarded and searched ; and 
 decides, that " there is nothing to shake the testimony of 
 Kennard and Jagger," although the latter contradicts him- 
 self, and falscbj asserts that the silk-boats were pursued for 
 three q-i7.arters of a mile, and the former omits to say, that —
 
 258 THE TUICATY IJiOUTS OF THE 
 
 which it would be unreasonable to question, — he hailed the 
 boats, which consequently must have been within hailing 
 distance, immediately before he, (after starting overtook and) 
 boarded them. *' The depositions," Sir Frederick Bruce 
 declares, '* of Mr. Hanbury and Mr. Leech, [should be 
 Mr. Leeds] as they were not in the boats at the time, have 
 no bearing on the question at issue "; and he fails to notice 
 that Mr. Leeds made no deposition at all, and Moses Jag- 
 ger, whose testimony he accepts in tofo, was no more in the 
 boats at the time, than were Mr. Hanbury and Mr. Leeds. 
 He feels " bound to state that the disappearance of Leech 
 [should be : Leeds] from the boats is a suspicious feature 
 in the case ;" and does not perceive, that " the suspicious 
 feature in the case " has, like the person or name of Leech, 
 no other foundation save his inattentive reading, Mr. Leeds 
 not having " disappeared from the silk-boats " and the 
 charge of Mr. Brooks, but preceded him in other boats under 
 his own charge. 
 
 The more important elements of the case, however, are 
 these. In the first place it is explicitly declared by Mr. 
 Brooks, that the Custom-house junk, anchored in the 
 stream, had been neivly placed there, and that he was not 
 aware of its character, — the novel character of a //o«fm^ bar- 
 rier for levying inland tolls or taxes; and the /acf, started 
 by him, has never been denied by the ** seizing officers ;" 
 whilst Mr. Hanbury declared that there had been no inten- 
 tion to evade, and that his agent had had no interest in 
 evading, the papiient of the customary impost on entering 
 Shanghai. Indeed, as the silk came under no certificate, 
 it has necessarily to be assimied that all other inland taxes 
 upon it between the place of purchase and the poi-t had 
 been discharged ; and it has, therefore, to be judged highly
 
 FOREIGN MERCHANT IN CHINA. 259 
 
 improbable, that the property should have been risked by 
 any attempt to evade the last fraction of the imposts levi- 
 able. On the other hand, Mr. Kennard as exphcitly de- 
 clares, that his duty was to follow up boats, passing down 
 the river and " bound to pull up at his (newly established 
 floating) station in order to pay the transit dues," only on 
 tlieir refusing to stop. But, no proof that they were called 
 upon, and refused, to stop, has been so much as tendered 
 by Kennard, who, on the contrary, admits that he im- 
 mediately boarded and seized ; whilst the depositions of 
 Mr. Brooks and Mr. Deming, supported by the testimony 
 of the seizing officer himself, prove that they allowed them- 
 selves to be taken alongside the Customs' junk without any 
 resistance whatever. What value we have to attach to 
 Moses Jagger's "pursuit to about three quarters of a mile" 
 has already been seen. Under the peculiar circumstances of 
 the case, therefore, and keeping in view the admitted fact 
 that the anomalous floating "barrier" presented quite a 
 new phenomenon in the stream, and exhibited no sign to 
 warn the hurried traveller of that phenomenon being the 
 station of " a tide -surveyor to the Imperial Maritime Cus- 
 toms in the performance of his duty :" it appears to me 
 unquestionable, that the latter had no right whatsoever 
 to seize the boats, or the produce conveyed in them, but 
 was only and simply justified in constraining the boats to go 
 alongside " the barrier nearest the port, and, notice having been 
 given to the Customs at the port, to pay the transit dues due on 
 the produce ;" provided always, that such transit dues were 
 payable on the produce in question. 
 
 But, in the second place, there were in this case no 
 " transit-dues," i.e. no inland charges commutation tax, to 
 which the " seizing officers " ostensibly refer, and for the
 
 2G0 THE TREATY RIGnTS OF THE 
 
 attempted evasion of which the goods were seized, if not 
 confiscated, leviable at all ; simply because, contrary to 
 PwULE VII. of the Trade Kiiles, but in accordance with the 
 optional clause of Art. xxviii. of the Treaty , of Tientsin 
 (superseded by the Rule), the practice favored by the Tsung- 
 li Ya-mOn, and the public notification of the British Minister 
 and his despatch to Eari Russell of December 2, 1862, 
 Messrs. Bower & Ilanbury, instead of bringing down their 
 goods under a certificate, had preferred to bring them down 
 uncertificated, not, as Sir Frederick Bruce states, ''subject 
 to such charges and regulations, as the Chinese authorities 
 might choose to Impose," but subject to such customary inland 
 charges as were lawfully payable upon silk between the 
 place of purchase and the port. The whole of these inland 
 dues must be supposed to have been levied upon the goods 
 under Mr. Brooks' charge up to "the south barrier"; be- 
 cause those goods, being uncertificated, had actually come 
 thus far. What, then, were the further dues, demandable 
 upon them, at the '' south barrier" ? The le-kin or war-tax. 
 No other tax is levied at "barriers," -|r. It is a striking 
 circumstance, and one not unattended with a painful im- 
 pression, that Sir Frederick Bruce speaks of this tax, instead 
 of designating it by its proper name, as "the half transit- 
 duty," and that he looks upon Mr. Hanbury's " pretention 
 that the half-duty was not legally leviable on uncertificated 
 produce, as a suspicious feature in the case." That he did 
 not confound it with commutation-tax or half Tarifi" export - 
 duty, is but too plain from his own words. Why, then, 
 disguise the Ic-ldn under the name of " the half transit -di^xtj" 
 which existed not, and "the half (export) duty," which it 
 was in amount only ? Let us conclude that the British Re- 
 presentative in Peking was, at the time, somewhat bewild-
 
 FOREIGN MERCHANT IN CHINA. 2G1 
 
 cred as to the true merits and bearings of the case under 
 consideration. AYe have aheady seen that the Chief Sup- 
 erintendent of British Trade in China continued, for four 
 years after the conclusion of the Supplementary Treaty of 
 Shanghai, v.hicli did away with the optional clause of Art. 
 xxYiii. of the Treaty of Tientsin, in ignorance of the tyue 
 import of the stipulation finally agreed upon, and came to 
 read it aright onlij in. 1863. 
 
 Three questions, then, arise here, namely : — Were the 
 silk-boats really bound to pull up at " the south -barrier," 
 i.e. the floating Jc-hin barrier, newly placed in the stream, 
 "in order to pay the transit-dues," as asserted in the 
 Declarations of James Kennard and Moses Jaj^sfer? Had 
 these tide-waiters in the Foreign Chinese Maritime Customs 
 Service the legal right to board and seize the property of 
 British subjects, for an alleged attempt to evade the pay- 
 ment of /c-Am at a newly launched "barrier?" And was 
 the Tau-tai of Shang-'hai lawfully authorised to confiscate 
 the property of British subjects for such an alleged attempt, 
 "without," as the Messrs. Bower and Hanbury forcibly 
 urge, " any trial or hearing of their defence," and " in 
 gross violation of all rules of English law and equity " ? 
 We have to answer all these questions in the negative. 
 Mr. Hanbury^ in corroboration of the deposition of his 
 agent, "distinctly states that there was no barrier where the 
 boats were seized, but a junk anchored in the river, and the 
 existence of which teas unknown to Mr. BrooJc^ when coming 
 doicn th^e river, the Custom-house business formerly being 
 done entirely on shore." The boats, Mr. Brooks declares, 
 were on their ivaij to the old Chinese Custom-house, (where the 
 final inland imposts used to be levied and paid). There 
 were no ^' frnmiit-dves," i.e. no commutation tnx. pauahJe
 
 '202 THE TflEATY RIGHTS OF THE 
 
 upon British property, which was being conveyed without a 
 certificate, either at ** the south " or any other ** hairier." No 
 British-owned property, though uncertificated, was legally 
 subject to the payment of le-kin, most certainly not, as I have 
 previously shown (pages 56-58) at barriers erected since 
 the ratification of the Treaty of Tien-tsin in October, 1860 ; 
 and "the south -barrier " had been created and set afloat 
 long afterwards, — for the illegal purpose, moreover, of lev)^- 
 ing, contrary to Treaty, upon British-owned (and other) 
 native produce (and British and other foreign goods) a 
 heavy war-tax. Hence, the boats under the charge of Mr. 
 Brooks were not bound to pull up at the south barrier in 
 order to pay the transit-dues. As to the second point : No 
 tide-waiter or tide-surveyor in the Foreign Chinese Maritime 
 Customs Service had any business whatever with the col- 
 lection of Chinese inland imposts, solely and alone excepting 
 the commutation-tax, fixed by Treaty, upon certificated foreign 
 merchandise or foreign-owned or to-be-owned, native pro- 
 duce ; much less had they any business with the collection 
 of le-Un, — a tax unlatvfidly and in open violation of Treaty- 
 provisions imposed upon Foreign and Foreign-owned pro- 
 perty. Hence, Moses Jagger and James Kennard, so far 
 from having a legal right to board the boats and seize the 
 cargo, overstepped, in so doing, and exceeded their duty in 
 every sense ; and, instead of being allowed to share in the 
 spoil, should have been prosecuted and punished for their 
 unlawful proceedings. 
 
 Regarding the third point : Art. xvi of the Treaty of 
 Tien-tsin contains these words : " British subjects, who 
 may commit " (or be accused of having committed) ** any 
 crime in China, shall be tried and punished by the Consul, 
 or other public fimctionary authorised thereto, according to
 
 FOREIGN MERCHANT IN CHINA. 263 
 
 the laws of Great Britain;" and it was in direct violation 
 of this Treaty -provision, that the British Minister in Pe- 
 king directed Consul Medhurst : — "You cannot insist on 
 hearing the case in a Consular Court, but you are " (i.e. 
 are only) *' entitled to have the evidence, on which the 
 Taoutae proceeds, communicated to you." A more ill- 
 considered and culpable abandonment of a most important 
 principle, established by Treaty and dictated by necessity — 
 a necessity involved in the semi-barbarous condition of 
 China and the moral and legal depravity of her Officials, — 
 could hardly have been made to rest on more untenable 
 grounds, namely : that the Chinese Authorities were, des- 
 pite of Treaty stipulations, entitled to levy the illegal le-kin 
 tax on silk brought down uncertificated, but in accordance 
 with the British Minister's own Notification and the Tsung- 
 li Ya -men's own interpretation of the Treaty ; and that the 
 disappearance of Leech (Mr. Leeds, who never disappeared) 
 from the boats, taken in connection with the pretension 
 that "the half duty," i.e. the le-kin, was not legally levi- 
 able on uncertificated produce, formed a suspicious feature 
 in the case. Nor is this all. The silk of the Messrs. Bower 
 and Haubury was not lawfully liable to pay le-kin at the 
 newly invented floating-barrier ; or, for argument's sake 
 assuming that it was, there existed neither ground nor 
 excuse whatsoever for seizing, much less for confiscating, 
 the property ; but simply occasion for its detention until 
 the payment of le-kin, if legally due on it, should be effected. 
 The Taoutai of Shanghai, therefore, possessed no lawful 
 authority to confiscate British property under any circum- 
 stances ; and in the particular case under consideration, 
 not only in violation of international Treaty-stipulations, 
 but also in utter disrcfrard of Chinese law^ and universal
 
 ^f) I Tin-: tiu:aty Knnns of the 
 
 principles of justice. And in this course of arbitrary ille- 
 gality and defiance of Treaty-obligations, adopted against 
 one of the most wealthy, respected, and honorable British 
 merchants of Shang-'hai, the corrupt and unscrupulous 
 Chinese Official, whose rapacity was as well known as the 
 integrity of Messrs. Bower and Hanbury, was supported by 
 the Chief Superintendent of British trade in China, and 
 Her Majesty's Representative in Pe-king. 
 
 There is only one of the extraordinary, feeble, and ill- 
 considered reasons finally assigned by Sir Frederick Bruce 
 in explanation of his decision, to which I have still to refer. 
 It is, that '' a perusal of the evidence had left no doubt in 
 his mind, that the boats formed part of a number that 
 attempted to pass the Custom-house barrier without report- 
 ing." Waiving our right to expect logic and lucidity of 
 expression from a British Minister in Pe-king : what he, I 
 presume, meant to imply or to say was, that the boats, 
 under the charge of Mr. Leeds, which had preceded those 
 under the charge of Mr. Brooks, and did pass " the south- 
 barrier " without reporting, actually had defrauded the 
 Chinese revenue ; and that, consequently, the latter, in at- 
 tempting the same thing, must have had the same object 
 in view, or, belonging to the same convoy, were equally 
 guilty. There would have been at least some degree of 
 apparent force in such an argument, had it been proved, 
 Istly that Mr. Leeds, on that occasion, had defrauded the 
 Imperial revenue, and 2udly, that Mr. Brooks stood, and 
 acted, under his orders. But no such proof had been given 
 in evidence ; an'd the merits of the case had to be judged, 
 not from impressions which might be created in Sir Frederick 
 Bruce s mind, but from facts, which should been substan- 
 tiated in the Consular Court. The only foundatioii for those
 
 FOREIGN MERCHANT IN CHINA. 265 
 
 impressions rested on the Declarations of Moses Jagger 
 and James Kennard, the '' seizing officers." The former 
 states that, on or about the 18th of January, 1862, " he 
 observed a large convoy of boats passing on the Pootung side 
 of the river, instead of pulling up at his station, as they 
 were " (not) "bound to do ;" the former, that " he observed 
 several boats passing down the Pootung side of the river ; 
 overtook three of the said boats, and immediately boarded 
 them ;".... that " the boats so searched by him, formed part 
 of a large convoij consisting altogether of twelve boats or 
 thereabouts, all sailing under the English Union jack, and 
 in charge of two Europeans ;" and that he was unable to 
 state whether the remainder had any silk " — his whole 
 mind appears to be absorbed in silk, — " on board or not." 
 Now, it is manifest from Mr. Kennard' s own words, that 
 he, as well as his superior, stated partially as a matter of 
 personal observation what they could have subsequently 
 learned only fi'om hear-say ; but even they imply in no 
 manner or way, that, from what they had been able to 
 ascertain, — and nothing was easier for them to ascertain 
 than every particular respecting the " large convoy of 
 boats " they had seen pass, and their cargo, — that any 
 attempt at evading the imposts legally paj'able at the Chi- 
 nese Custom-house, had been made by Mr. Leeds. We are, 
 consequently, fully justified in inferring that no such 
 attempt was made ; and a circumstance, which at a first 
 cursory glance, seems to militate, however slightly, against 
 my former reasoning, lends in reality but additional 
 strength to it. 
 
 That, notwithstanding all these striking and prominent 
 features of the case, Earl Eussell, then Secretary of State 
 for Foreign Affairs, should have " entirely concurred " in
 
 266 THE TREATY RIGHTS OF THE 
 
 Sir Frederick Bruce's views and *' approved of" his action, 
 needed hardly be said. I will subjoin his official despatch 
 to this effect : — 
 
 Earl Russell to Sir F. Bruce. 
 
 Foreign Office, April 8, 1863. 
 
 Sir, — I have to state to you that Her Majesty's Government entirely 
 concur in your views and approve the instructions which you have ad- 
 dressed to Her Majesty's Consul at Shanghae, as reported in your des- 
 patch of the 5th November last, with regard to the proposals made by 
 the Taoutae i'or taxing Chinese subjects who reside within tlie limits of the 
 so-called Biitish Concessions. 
 
 The lands situated within the limits of the British Settlement are 
 
 without doubt Chinese territory, and it cannot reasonably be held that 
 
 the mere fact of a residence within those limits exempts Chinese subjects 
 
 from fulfilling their natural obligations. 
 
 (Signed) Russell. 
 
 It may possibly be thought that I have devoted too 
 much space to an incident almost " dead and forgotten ;" 
 but I have done so for various cogent reasons, viz. : in 
 vindicating one of the most respected firms of Shanghai 
 from the charge of smuggling or a A\Tlful evasion of the 
 payment of imposts legally and legitimately due to the 
 Chinese Government, — a charge which I conscientiously 
 believe, and from the published evidence before me have 
 proved, to be devoid of all foundation, — preferred against it 
 by the Chinese Intendant of Trade and supported by. the 
 British Minister in Peking, to vindicate the character of 
 the British merchant in China from such an accusation ; to 
 show, how mextricably, under certain circumstances, the 
 Foreign Customs Service appears to be mixed up with the 
 
 t As a special instance I may here allude to the well-known Sung-Tang claims of Messrs. 
 Jardine, Matheson & Co., for which Sir Rutherford Alcock has failed to obtain compensa- 
 tion, whil'it the similar claims of Russian merchants were successfully enforced by the Rus- 
 sian Minister, General Vlangaly. The ca.se has been fully reported by me elsewhere, and 
 forms one of the most striking instances of the repudiating force of the Chinese Govern-- 
 ment, and the absence of every sense of honor aud juc-tice on its part, on record.
 
 FOREIGN MERCHANT IN CHINA. 267 
 
 levying of illegal inland taxes, which over-burden British 
 trade with the Interior and render the Treaty of Tientsin 
 in this respect " a dead letter ;" to furnish from the period 
 of office of Su- Frederick Bruce, as I have done, here and 
 elsewhere, from that of his successors Sir Ilutherford 
 Alcockt and Mr. Wade, an illustration of the kind of pro- 
 tection and countenance, which British merchants in China 
 have thus far enjoyed at the hands of Her Britannic 
 Majesty's Representatives and Chief Superintendents of 
 Trade in Peking ; to indicate both the necessity and the 
 expediency of the separation of the two charges, and the 
 appointment to Shanghai of a Consul-General for China, 
 entrusted with extensive powers, and in all matters and 
 decisions touching Commerce and Trade independent of the 
 British Minister ; and, lastly, to contrast with the action 
 of the Representatives of England and the British Go- 
 vernment, relative to the obligations imposed by the Treaty 
 of Tientsin, the action of the Chinese Government and the 
 Tsung-li Ya-men. 
 
 I have ah'eady had occasion to remark, that the le-kin, 
 after its first introduction about the year 1843, at the rate 
 of 1*0 per cent., was soon and steadily raised, until, 1856, it 
 reached "per station" 23- per cent, ad valorem. An official 
 tariff of le-kin payable at each "barrier" upon "foreign 
 goods," # M, with the taxes calculated on this scale, or 
 rather, inclusive of a small "squeeze," at " Tls. 2.5.5.0 for 
 every Tls. 100 upon the value of all such merchandise," and 
 dated "the — th day of the 6th month of the 8th year of 
 S'ien Feng (1858), is now before me. Subsequently to the 
 ratification of the Treaty of Tientsin, the rate was made 
 equal to that of the commutation-tax then agreed upon, i. e. 
 to half the Tariff impoi-t- and export-duties, except on " du-
 
 208 THE TREATY RIGHTS OF THE 
 
 ty-free " or such goods as are not mentioned in the Tariff, 
 and on which about 3 per cent, "per station," or half that 
 rate, i. e. about H per cent, at certain intermediate stations 
 or " half-bariiers," are now levied. These rates it had ap- 
 parently been judged expedient at the time not to exceed ; 
 and the method adopted for a further augmentation of the 
 tax, has been to multiply the baniers, or to double the tax 
 at the same baiTier, by giving to the additional " half duty " 
 a different name, such as chow-fang at Shanghai and other 
 ports. The highest rates prevail in those provinces, in those 
 districts, and along those lines of communication, where the 
 largest amount of foreign trade, i. e. trade in foreign goods 
 and native goods foreign-owned or intended for exportatioQ 
 to foreign parts, is carried on, or where it is intended to 
 impede or stop such a commerce altogether. Along lines 
 commanding a trade only or chiefly in merchandise of the 
 country, the tax is even nominally much lighter, and for the 
 same line of road within the same province restricted to nomi- 
 nally 10 or 12, hence in reality to 5 or 6 per cent, as a 
 maximum. For, in practice, native goods enjoy a still greater 
 advantage, as compared with foreign goods, and native goods 
 destined for foreign parts: inasmuch as there prevails a 
 custom, on the part of the Tax-officials, to allow, in consider- 
 ation of the payment of a very moderate " squeeze " or bribe, 
 the native merchant to declare, for articles of home-trade, 
 a fictitious value, which, as a rule, may be taken to reduce 
 the tax to one half its nominal amount; J whereas, not only 
 
 X Mr. Edward B. Drew, Commissioner of Customs at Kiukiang, in a Memorandum on 
 le-kin, of which I shall presently have occasion to speak, states : — " The practice is to de- 
 clare about 80 per cent, of the whole quantity if the cargo be a small one, and some 60 per 
 cent, if it is large." But, not only does he adduce a case, which had come under his per- 
 sonal observation, and in which onlj' 50 per cent, of the value of a cargo of charcoal were 
 declared ; but his Tables, embodying the results of his own calculations, show that, for 
 twenty -six articles of foreign cotton and woollen manufactures, and three kinds of foreign
 
 FOREIGN MERCHANT IN CHINA. 2G9 
 
 is no such reduction allowed for foreign goods and native 
 produce intended for exportation to foreign parts or foreign 
 consumption in China, but official "squeezes" are levied 
 upon them to the utmost extent to which it is found prac- 
 ticable. They vary from 5 per cent, to 30 per cent, or more, 
 and may, in the mean, be estimated at about 20 per cent, 
 upon the nominal duty. Thus, suppose a given quantity of 
 Chinese manufactures, N, and a similar quantity of foreign 
 manufactures, F, each of the taxation-value of £100, to be 
 sent from a port A to an inland mart B, and the nominal or 
 Tariff amount of le-kin, payable upon it, to be 20 per cent. ; 
 or let a given quantity of native produce, say tea, intended 
 for native consumption, N, and a similar quantity, destined 
 for foreign consumption, F, each of the taxation-value of 
 £100, be supposed to be sent from an inland mart D to a 
 port c, and the le-kin payable upon it to be 20 per cent, also. 
 In either case, the value of the goods N would be allowed, 
 on the part of the Chinese Tax-officers, to be declared at 
 one half or £50, and the le-kin, actually levied upon them, 
 would be besides "squeezes," say 10s., £10. 10s.; whereas 
 the value of the goods f would have to be declared in full 
 at £100, and the le-kin, levied upon them, would be £20, 
 besides 20 per cent. " squeezes " = £4 ; making in all £24 : 
 so that foreign inland trade in China, touching le-kin, is under a 
 disadvantage of at least from 13 to 14 per cent, on each line of 
 road, where such trade is carried on, ivithin each Province, as 
 compared ivith native inland trade. 
 
 metals, the declared value, in the mean, deduced from the number of articles and the dutie? 
 computed by Mr. Drew, is only 46 per cent. He also seems not to be aware of the differ- 
 ence m^jj'arti'ce made by the Chinese Tax-officers between foreign goods and native pro- 
 duce destined for foreign consumption, and native goods intended for native consumption. 
 Nor is it easy to obtain correct information upon points like these. It, certainly, is not ob- 
 tainable from Chinese officials.
 
 270 THE TEEATY RIGHTS OF THE 
 
 But this is not the principal point. China differs some- 
 wliat from Western countries. We have seen that the 
 Tsung-h Ya-men allows to a foreign merchant, who intends 
 purchasing native produce at some sta,ted mart in one of 
 the provinces, separated by a second province from the one 
 in which his sea port residence is situated, just 400 days, 
 i. e. one year and thirty-five days, to go, transact his busi- 
 ness, and return. Locomotion is not carried to a hicrh rate 
 of speed in the Celestial lands. The enterprising merchant 
 may travel from one end of the empire to the other, safe 
 from any danger of a steam-boiler exploding or the engine 
 running off the rail. China has no Manchester or Sheffield 
 distributing its manufactures all over the country. Al- 
 most every city is, in a manufacturing sense, isolated, and 
 supplies its own wants alone. Few fabrics and articles 
 such as silk, raw-cotton, grass-cloth, samshu, tobacco, opium, 
 etc., have any large sale beyond local consumption. Even 
 the book trade is to a great extent carried on locally in local 
 editions. As regards the great staple-articles which Eng- 
 land sends out to China, Cotton- and Woollen-Goods, they 
 have mainly to compete with home-made stufts only. The 
 Chinese inter-piovincial trade in these manufactures is alto- 
 gether insignificant. Hence, since no native Cotton- and 
 Woollen-manufactures pass the Custom-houses and Barriers, 
 neither le-Jcin, tolls, nor any other duties levied at those 
 establishments, fall upon them ; and hence again, the inland 
 imposts just alluded to burden in reality, so far as British 
 and foreign imports into China are concerned, almost exclu- 
 sively the British and foreign trade. 
 
 This shows the fallacy per se of Mr. Wade's argument, — 
 adopted also by the British Board of Trade, and resting on 
 the assumption that the le-kin tax weighs equally upon na-
 
 FOREIGN MERCHANT IN CHINA. 271 
 
 tive and foreign inland traffic. Above all, however, the 
 facts, here adduced, on the one hand prove to evidence, that 
 the tax in question was, as Mr. Tsai has it, " invented " by 
 the Chinese Government for the special purpose of obstruct- 
 ing foreign inland trade, whilst simultaneously deriving the 
 largest possible amount of revenue from it; and on the other 
 hand, in combination with the fact that k-kin is included,' 
 and was by the Chinese Government distinctly understood 
 to be included, in the inland charges commutation-tax final- 
 ly agreed upon by Rule vii. of the Supplementary Treaty 
 of Shanghai, they fully explain the anxious efforts of the 
 Tsung-li Ya-men and the high Provincial Authorities to up- 
 hold, despite of that Rule, the optional clause of Art. 
 XXVIII. of the Treaty of Tientsin, — palming their obstruc- 
 tive disingenuousness upon the facile belief of Sir Frederick 
 Bruce, Su- Rutherford Alcock, and Mr. Wade, and through 
 them upon the English Government and the public, for ge- 
 nerosity ; — to discourage the " transit system " under certi- 
 ficate in every possible way ; and to withhold from the 
 Chinese themselves their right, as clear as that of foreigners, 
 to take out certificates both for foreign merchandise intended 
 for sale inland and native produce destined for foreign con- 
 sumption, — a disingenuousness and Treaty-misconstruing 
 efforts, in which they were, and to this day, as we have 
 seen, continue to be, zealously supported by the foreign In- 
 spector-General, Mr. Hart, and his subordinates. 
 
 In 1861, Mr. Horatio N. Lay, who then held the position 
 just referred to, had to go home on sick-leave. He ap- 
 pointed as his representative an English gentleman, the late 
 Mr. FitzRoy, at the tune Commissioner of Customs at Shang- 
 hai, and, conjointly with him, Mr. Hai*t, on account of Mr. 
 FitzRoy's unacquaintance with the Chinese language. Mr.
 
 272 THE THE AT Y RIGHTS OF THE 
 
 Hart, In this capacity, went on a short visit np to Peking, 
 where he arrived on the 5th June, 1861 ; had, on the 15th, 
 a first interview with Prince Kung ; and before the end of 
 the month had became the Tsung-li Ya-men's " own Hart."(j 
 His supposed influence or subservience in this capacity made 
 itself soon felt, as will be seen from the subjoined Cus- 
 tom-house Notice of July 22, 1861, followed by the Cor- 
 respondence and Consular Notification, to which it led : — ■ 
 
 Notice, 
 rules regarding the importation and exportation of chinese produce. 
 
 1. Foreign Merchants in exporting Chinese produce from Shanghae 
 pay, as it is provided in the Treaty, the inland or half-duty, and the 
 export tariff duty. 
 
 2. Foreign Merchants in bringing merchandise from the Yang-tse 
 Eiver have only to pay the inland or half-duty at the time of importa- 
 tion, but if such goods should be exported the export duty will be levied. 
 
 3. Foreign Merchants in conveying Chinese produce from Shanghae 
 into the Yang-tse Eiver have to pay the inland or half duty. 
 
 4. When Foreign Merchants bring Chinese goods from the Yang-tse 
 Eiver to Shanghae, if such goods should not be landed but transhipped 
 for exportation, both the inland or half-duty and the export tariff duty 
 will be levied. 
 
 5. When Foreign goods arrive at Shanghae, if such goods be not 
 landed but transhipped for the Yang-tse Eiver, the import tariff duty 
 and the inland or half duty will be levied on them. 
 
 6. Goods imported to Shanghae by Foreign Merchants from Ningpo, 
 Foochow, Canton, Tientsin, and any of the Treaty ports, should pay the 
 import tariff duty ; but if such goods should be reshipped for exporta- 
 tion the export tariff duty will not for the present be enforced. 
 
 Office of Maritime Customs, 
 
 Shanghae, 22nd July, 1861. 
 
 II See Note || to page (18, above. Sir Frederick Brace's version, in an official despatch, as 
 quoted by Mr. Wilson (History of the "Tai-ping Rebellion," London, 1868, 80, p. 260) is: — 
 '• By his tact, good sense, and modesty, he (Mr. Hart) obtained access to the Prince of Kung, 
 and turned to tisej'ul account the favorable impression he made upon His Royal Highness and 
 his advisers." Let it be remembered, that it is the patron of Mr. Hart, who writes thus ; 
 and the diplomatist's language appears plain enough. In 1863, Mr. Lay's dismissal was ob- 
 tained by the late Mr. Burlinganie under circumstances which I thall relate in another place.
 
 FOREIGN MERCHANT IN CHINA. 273 
 
 British Chamber of Commerce, 
 
 Shanghai, 25tli July, 1861. 
 
 Sir, — Enclosed I have the honour of handmg to you a copy of certain 
 new Kegulations, bearing date the 22nd July, which have been posted 
 up in the Custom-house, and in accordance with which that Office now 
 claims that all the duties in question should be paid. 
 
 It is not the intention of the Chamber on the present occasion to 
 enter at length upon the subject of these Eegulations, but it loses no 
 time in addressing you to protest : Firsthj — Against the act of the 
 Custom-house in framing and attempting to put into force new Eegula- 
 tions without the consent previously obtained of the British Authorities, 
 to whose subjects, trading under Treaty protection, such new Eules 
 must apply; and, secondly — Against the manner in which, under the 
 Eegulations. alluded to, the Custom-house Authorities interpret the 
 Treaty-clause respecting Transit-duties, which, in the opinion of the 
 Chamber, are very clearly defined by Treaty as only leviable upon the 
 transit of either imports or exports the property of Foreigners, and in 
 those cases in which they exercise their- ox^tion of commuting the transit- 
 duties for one-half of the Tariff-duties, between the Treaty ports and the 
 interior of the countri/, and certainly not between one Treaty port and 
 another. 
 
 Further, the Chamber considers that the system of granting exemption 
 certificates on the re-export of goods, whether Foreign or Native, has 
 become by long usage the estabhshed custom of this port, many opera- 
 tions being entered into with this knowledge and in reHance upon this 
 fact, which must be seriously interfered with by any sudden alteration ; 
 that on these grounds alone, without alluding to the right to claim such 
 exemption certificate under the Treaty which the Chamber considers to 
 exist, it is not competent for the Chinese Authorities to alter such 
 established usage without due notice to the Mercantile Community, and 
 certainly not without previously consulting at least the local British 
 Authority, if not Her Majesty's Minister at Pekin. 
 
 Moreover, in the opinion of the Chamber, Clause G of the Eegulations 
 enclosed contains an implication that the Custom-house has a right to 
 impose a duty (which for the present it intends not to enforce), which 
 appears to be quite at variance with Clause 45 of the Treaty of Tien- 
 tsin.
 
 274 THE TREATY RIGHTS OF THE 
 
 For these reasons the Chamber does hereby protest against snch new 
 and unauthorised regulations and alterations ; it requests your im- 
 mediate attention to the matter, and begs that this its protest may be 
 brought without delay before the notice of Her Majesty's Minister and 
 Chief Superintendent of Trade at Pckin. 
 
 I have the honour to be, itc., 
 
 (signed) K. C. Antrobus, 
 
 Chcdrtncm. 
 To W. H. Meddukst, Esquire, 
 
 Her Majesty's Consul, 
 
 Shanghai. 
 
 Bkitish Consulate, 
 
 Shanghai, July 27th, 1861. 
 
 Sib, — I have had the honour to receive your letter dated the 25th 
 instant, calling my attention to a Code of Kegulations under date the 
 22nd July lately jjosted tip in the Custom-house, and requesting me, on 
 behalf of the Chamber, to convey to H.M.'s Minister at Peking their 
 formal protest against the irregular manner in which the said Regula- 
 tions have been promulgated, and the construction which they place 
 on Treaty stipulations. 
 
 The Superintendent of Customs addressed me a letter on the 20th 
 instant, announcing his receipt of instructions from Prince Kung to 
 stop the issue of exemption certificates on China produce carried from 
 one port to another from the 17th instant, and he followed up his notice 
 by a second letter on the 22nd instant, enclosing a copy of the Regula- 
 tions you allude to, which he declared were necessary as a temporary 
 measure, imtil Prince Kung could decide how to treat Chinese x)roduce 
 brought into port after having been before imported elsewhere. 
 
 As I looked upon the issue of Exemption Certificates on Chinese 
 produce as a long-established usage of the port, whether permissible 
 under the 45th Article of the Treaty or not, and therefore not revocable 
 without the assent of H.M.'s Minister and due notice to all persons 
 concerned, and as I considered the Regulations in themselves objection- 
 able on many grounds, I informed the Superintendent of Customs, in a 
 reply dated the 23rd instant, that I could recognize neither innovation, 
 but that I was prepared, if any alteration were desired, to take it into
 
 FOREIGN MERCHANT IN CHINA. 275 
 
 consideration, and refer it for Mr. Bruce's opinion by the next nortli- 
 "ward mail. 
 
 The Superintendent decUned my offer, and persisted in maintaining 
 the correctness of his proceedings, allowing the Eegulations meanwhile 
 to be posted at the Custom-house in the Enghsh language, and to be 
 put in force in several instances on goods landed and shipped by British 
 subjects. 
 
 Under these circumstances I had no alternative than to issue the 
 Notification of the 25th instant, which you have doubtless seen, and to 
 lodge a formal protest stated the 26th instant, against the Superin- 
 tendent's acts, in which I remonstrated not only against the abrupt and 
 discourteous manner in which the innovation had been made, but 
 pointed out the objectionable character of the Regulations themselves. 
 
 That protest, together will all correspondence connected with it, will 
 
 be transmitted to H.M.'s Minister by the next northward mail, and I 
 
 shall take the same opportunity of convejong a copy of your letter under 
 
 acknowledgment, for the information of the Honourable Mr. Bruce. 
 
 I have the honour to be, etc., 
 
 (Signed) W. H. Medhukst, 
 
 H. M. Consul. 
 To R. C. Anteobus, Esq^., 
 
 Chainnan of the British Chaviler of Commerce^ 
 
 Notification, 
 
 British Consulate, Shanghac, 
 23rd September, 1861. 
 
 H. M.'s Minister pLENiPOTENTiABY, &c., &c., at Peking, has pronounced 
 an opinion on the question at issue between the Chinese Superuiteudent 
 of Customs of this Port, and the Undersigned, relative to the indiscrimi- 
 nate levy of transit-duties on aU Chinese Produce, whether brought down 
 from the interior or purchased at a sea-port,^ and the abohtion of Exemp- 
 tion Certificates. 
 
 With respect to the six Rules issued by the Custom-house, on the 22nd 
 July, 1861, H. M.'s Minister decides: — 
 
 1st, That the British Merchant has nothing to do with the payment 
 of transit-duties, unless the goods are carried into the country, or brought 
 down from the place of production, under Certificate as British property. 
 It is optional to the British Merchant to take out the Certificate or not
 
 276 THE TREATY RIGHTS OF THE 
 
 as lie pleases; but if he does not, awcl he buys or sells at the port of 
 shipment, he has nothing to do with the payment of any duty, but the 
 one ppecified in the Tariif on Imports and Exports. 
 
 2iid, Wlien Chinese Produce is procured at one port, and carried 
 thence to be shipped at another port for the Foreign market, such pro- 
 duce is only liable to the Export duty at the first port of shipment, 
 Avhere all duties in the nature of transit duties due by the British Mer- 
 chant ought also to be levied. 
 
 II. M.'s Minister thinks the above is the fair construction of the 
 Treaty. 
 
 As regards the exaction of transit-dues at Shanghai on goods des- 
 patched up or brought down the Yang-tse Eiver, H. M.'s Minister does 
 not admit the principle on which it is founded, as he considers the 
 arrangement adopted for payment of tariff-duties at Shanghae as one 
 eminently favorable to the Chinese Government, and the payment of 
 Transit-dues by the Foreign Merchant is dependent, as has been stated, 
 on his taking out a certificate at the port of shipment, which is in this 
 case either Hankow or Kiukiang. 
 
 As to Exemption Certificates on produce cari'ied coast-wise from one 
 Chinese port for consumption in another, H. M.'a Minister is ready tp 
 agree that tariff-duty be paid at the port of shipment, which shall be 
 brought to account for indemnity, and half-duty at the port of discharge, 
 which being in the nature of a transit-duty, shall not be subject to 
 deduction for indemnity. This rule will apply to cargo of the above 
 denomination carried up or down the River Yang-tse. 
 
 Imports and Exports in the Coast Trade being liable, under the under- 
 standing now declared, to pay a half tariff duty mor« than Imports and 
 Exports in the Trade between China and Foreign Countries, H. M.'s 
 Minister thinks that the Custom-house will be entitled to make such 
 arrangements as shall prevent the loss to the Revenue that would be 
 occasioned, were goods, nominally imported for re-shipment outwards, 
 detained and consumed within the Port. 
 
 Pulse and Beancake are declared by H. M.'s Minister to be separately 
 provided for by the 5th Article of the Tariff' Rules. 
 
 The Superintendent of Customs has received instructions from Peking 
 corresponding to the' opinion above detailed, and the Undersigned is 
 now in consultation with him regarding a few Rules which he proposes 
 to issue in pursuance thereof, as also in respect to arrangements for the
 
 FOREIGN MERCHANT IN CHINA. 277 
 
 refund of all duties wliicli have of late been levied in contravention of 
 the principles now laid down by H. M.'s Minister. 
 
 (Signed) W. H. Medhukst, Consul. . 
 
 The entire incident here related, would seem to have 
 lapsed from the Inspector-General's memory, when he 
 wrote his " communicated article on the Transit- System 
 for the North-China Herald." It is from the above Noti- 
 fication, that Mr. Hanbuiy in his deposition quoted the 
 first paragraph regarding the optional clause of Art. xxviii. 
 of the Treaty of Tientsin, The first paragraph of the final 
 " Regulations, sanctioned by Sir Frederick Bruce, regard- 
 ing Transit Dues etc.," and promulgated at Shanghai by 
 Mr. Markham, H.M.'s Vice Consul in charge, on October 
 30, 1861, would have been even more to the purpose, but 
 appears to have escaped his attention. I have to speak 
 of those Regulations now. 
 
 By Art. x. of the Treaty of Tientsin it was conceded 
 that, on account of the Upper and Lower VaUey of the 
 river being then " disturbed by out-laws, — the Tai-pifjgs 
 were not acknowledged as "belligerents," — the only port to 
 be opened to trade, within a year's time, was Chin-kiang. 
 In the early part of 1861, however," Provisional Regulations 
 for Foreign Trade on the Yang-tsze-kiang" were issued by 
 Sir James Hope and Mr., now Sir Harry, Parkes; Sir Fre- 
 derick Bruce having, in NoA^ember, 1860, proposed to the 
 .Tsung-li Ya-men the opening of Kiukiang and Hankow as 
 well. On the 21st September, 1861, the Tsung-li Ya-men, 
 having now the benefit of Mr. Hart's advice, counter-pro- 
 posed to the British Minister "certain necessary alterations 
 in the Regulations provisionally agreed to," trusting "that 
 his Excellency would call on Merchants trading on the 
 Great River, to abide by them (the proposed alterations)."
 
 278 THE TREATY RIGHTS OF THE 
 
 At the same time, the Tsmig-U Ya-meii fm-ther proposed 
 certain Regulations affecting the " Transit- System " and the 
 Coast-Trade. Sir Frederick Bruce, having revised the 
 former and formulated the latter, communicated his " Re- 
 vised Provisional Regulations for British Trade hi the Yang- 
 tze River," and " Regulations (sanctioned hy Mr. Bruce) 
 regarding Transit Dues, Exemption Certificates, and Coast 
 Trade Duties " to the Tsung-li Ya-men, the Home Govern- 
 ment, and, by Notification published at Shanghai in October 
 30, 1861, to the British community in China. In his des- 
 patch of October 26, 1861, to Earl Russell, he gave " a short 
 statement of the considerations which had induced him to 
 issue these Notifications." 
 
 On the part of the Tsung-li Ya-men, too, the Chinese 
 versions of these documents were communicated to the na- 
 tive Superintendents of Trade and, it is to be presumed, to 
 the Foreign Inspectorate-General. The Superintendent of 
 Trade for the Southern Ports imparted them to the Intend- 
 ants of Customs and others for their guidance, in a Notifica- 
 tion dated " S'ien Feng, the 11th year, the 9th month, the 
 30th day " (Oct. 4, 1861). In the former Notification Eng- 
 land is simply styled ^M "the Eng or rather Ying) 
 State " and, at the first occurrence of the term, placed con- 
 temptuously at the foot of the Tsung-li Y^a-men, which, of 
 course, is duly raised two lines; whilst in other places, the 
 same as the name of the British Minister h 5S S, "the 
 Honourable Pu " (Sir Frederick Bruce), itis, also in disregard 
 of every Chinese rule of propriety and respect, ^vritten on the 
 common level of the lines, or embodied in the iTmning text. 
 Then follow the *' Twelve Temporary Regulations for Trade 
 on the Great River," as understood, and originally proposed, 
 hy the Tsiuig-U Ya-men, succeeded by the "Eng State's Noti-
 
 FOREIGN MERCHANT IN CHINA. 279 
 
 fication," ^ ^ -^ J3t, (Sir Frederick Bruce's emendations), 
 wherein England appears, from being again placed on the 
 common level of the lines, in the position of a subordinate 
 Tributary State, to whose " Notifications " the Chinese Offi- 
 cials are, in view of the Ya-men's Regulations, expected to 
 pay what heed they may judge proper. Next come, similar- 
 ly arranged, the Tsung-h Ya-men's ''Five General Regu- 
 lations regarding Trade " touching |^ ^, "the payment of 
 duties," as understood by the Ya-men; and finally the "Eng 
 State's Notification" regarding them, in which )k^ ^^ 
 ^ E h, "the Great Eng (lish) (Chinese-) Imperially ap- 
 pointed Commissioner, the Hon. Pu " (raised two lines), 
 says so and so. Sir Frederick Bruce's name is here raised, 
 because he is designated, not as the Envoy of "the Great 
 Eng State," ^^m [i^ Hi , but as if ^, a (Chinese) "Im- 
 perially appointed Commissioner," — so the term is usually 
 translated when applied to an Envoy or Authorised Agent 
 of the Emperor of China, — being ^^ iWi A] a native of 
 the Great (Tributary) State Eng. The character ^ " Im- 
 perial" is exclusively used in relation to the Emperor of 
 China, and never applied to, or in connection with, any 
 other Prince. Our phrase, therefore, describes Sir Frederick 
 Bruce as being in the special service of " the one Lord of the 
 AVorld." So greatly the Tsung-li Ya-men must have been 
 pleased with his "Regulations regarding Transit Dues, etc.," 
 or with their Chinese version as composed or sanctioned by 
 the then Interpreter of the British Legation in Peking, Mr. 
 Wade ; or with both, and other matters connected with the 
 subject. 
 
 Now, it is distinctly stated in the Tsung-li Ya-m.-n's des- 
 patch to the British Minister of September 31, (also printed 
 in- the Blue Book, but which should be Sept. 21), 1871, that
 
 280 THE TREATY RIGHTS OF THE 
 
 llie proposed Eegiilatious as regards ^ ^, ''the payment 
 of duties," also, shall be forwarded, together with the pro- 
 posed Temporary liegulations for Trade on the Great River, 
 in a separate despatch. The translation of this despatch, 
 of the same date, appears in the printed Official CoiTes- 
 pondence, and has the following concluding paragraph : — 
 *'A necessary commmiication, to which are appended the 
 Eegulations of Trade on the Great River, addressed to the 
 Hon. Mr. Bruce, etc" Even without the preceding notice, 
 I could have safely affirmed, that the " etc." of the transla- 
 tion will not be found in the original ; but, instead of it, 
 and preceding the words " addi-essed to the Hon. Mr. 
 Bruce," the " Five General Regulations for Trade," jl "^ 
 ^ P 3® ^ ^ ^ 5. i^j touching ^ ^, " the payment of du- 
 ties." But no translation of these proposed Regulations is 
 printed in the official correspondence, presented to the 
 House of Commons ; and to all appearance, their contents 
 have been actually withheld from the knowledge of the Bri- 
 tish Government. The proposed " Provisional Regulations 
 for Foreign Trade on the Yang-tsze-kiang " alone are ap- 
 pended to the Enghsh version of the Tsung-li Ya-men's 
 despatch. 
 
 The omission and the apparent corresponding mutilation, 
 of the concluding sentence of the Tsung-li Ya-men's des- 
 patch referred to, may not unreasonably be accounted for 
 by the fact, that the Ya-men's proposed Regulations state 
 distinctly and repeatedly, that " the foreign as well as the 
 Chinese merchant shall equally, on coming to any Custom- 
 house pay duty, and on passing any harrier pay le-kin," 
 # ^ ^ 1^ J^ it nil ^ ^ i^ 1^ ifl M, both upon foreign 
 goods intended for inland consumption, and upon native 
 produce destined for exportation to foreign ports. This is
 
 FOREIGN MERCHANT IN CHINA. 
 
 281 
 
 sufficiently startling. But what is still more so is the 
 Chinese version of the " Regulations sanctioned by Mr. 
 Bruce regarding Transit Dues, Exemption Certificates, and 
 Coast Trade Duties," communicated, in the original text, 
 by the British Minister to his Government, and by public 
 Notification, — at Shanghai on October 30, 1861, — to the 
 English mercantile community in China. I will subjoin 
 this text, so far as it relates to " Transit-Dues," and side 
 by side with it a faithful translation of the corresponding 
 Chinese version, rendered as literally as possible : — 
 
 Befjulations sanctioned by Mr. Bruce 
 r^garcUng Transit Dues, Exemp- 
 tion Certificates, and Coast 
 TroAie Duties. 
 Notice is hereby given, tliat the 
 following are the arrangements 
 sanctioned by Her Britannic Ma- 
 jesty's Envoy Extraordinary, Chief 
 Superintendent of Trade, &c., &c., 
 regarding Transit-Dues, Exemp- 
 tion Certificates, and Coast-Trade 
 Duties : — 
 
 1. Transit Dues. 
 
 1. It is at the option of the Bri- 
 tish merchant to clear foreign im- 
 ports to an inland market, or na- 
 tive produce to a port of shipment, 
 either by payment of the different 
 
 The Great-English (Chinese-) Impe- 
 rialbj-ap2)ointcd Commissioner the 
 Honourable Pu, hereby gives 
 
 Public Notice respecting War- 
 Taxes lyayable at Inland Stations, 
 Coast- Trade (literally : Second-Port 
 Entrance) Duties, and Exemption 
 Certij&cates, as now clearly fixed 
 by his Excellency under Three 
 Heads of Eegulations for the due ob- 
 servance of all English merchants. 
 
 1 . War- Taxes payable at Inland 
 Stations. 
 
 1. Enghsh merchants desuring 
 to send foreign goods into the In- 
 terior for trade and barter, or to 
 convey native produce to a sea- 
 port for shipment, § shall be allow- 
 
 § This, and a similar, passage in the next paragraph of the Chinese version, show, as pre- 
 viously intimated, that the Tsung-li Ya-men looked upon native produce being simply and 
 bona fide intended for shipment at a sea-port, as the one essential condition, which entitled 
 and entitles it to a Certificate. Indeed, when the Ya-men, in § 4, incidentally only, sup- 
 poses the produce to have heau purchased at the inland mart : we find, that it takes the very 
 same view of the whole subject, which has been vindicated by me as the true one, from the 
 Englich icz.iu of the Treaties themselves.
 
 282 
 
 THE TllEATY RIGHTS OF THE 
 
 charges demandecl at the inland 
 Custom-house, or by one payment 
 of a half-Tax'iff duty as provided in 
 Tariff Eule 7. 
 
 2. In the case of native produce 
 the memorandum to be presented 
 at the first inland barrier may be 
 there deposited by the merchant 
 himself or his agent, native or 
 foreign ; but whereas it is alleged, 
 that both native and foreign tran- 
 sit-dues have been totally evaded 
 by the sale of produce in transitu 
 after entry at a barrier as for ship- 
 ment at a Treaty port, the memo - 
 randum tendered must be in the 
 form of a Declaration, signed by 
 the firm or merchant interested, 
 and to the effect that the produce 
 therein specified and entered on 
 date, at • barrier, for ship- 
 ment at port, is the property 
 
 of the Undersigned firm or mcr- 
 
 ed to do so, on either conforming 
 with inland law and paying (by 
 way of tribute) duties at each Cus- 
 tom-house they meet, and le-ldn at 
 each Barrier thet/ jjuss ; or else, ac- 
 cording to the provisions of Rule 
 vii. of the Supplementary Treaty 
 (literally: Bond), — which states 
 that, on apphcation (more literally : 
 on supplication), foreign goods shall 
 be granted a Duties (-paid) Certifi- 
 cate, and native goods a Convey- 
 ance-Pass (undertaking) that Du- 
 ties shall be paid according to 
 Treaty, — by the single payment of 
 one haK of the Tariff (literally: 
 normal) Duties. "With these two 
 alternatives (or essentials) all are 
 bound to comply. 
 
 2. English merchants, convey- 
 ing native produce to a port, shall, 
 on arri\ing at the first station, 
 enter a special declaration, clearly 
 statmg particulars. Either the mer- 
 chant himself, being present and 
 proceeding (to the port), or the 
 agent whom he may employ, whe- 
 ther a native of his own State or a 
 native of the Central State (literal- 
 ly : of the Interior) may make this 
 statement. There are cases, in 
 which goods have arrived at a sta- 
 tion and, having been falsely de- 
 clared to be on their way to a sea- 
 port, have been allowed to pass, 
 whereas afterwards they have been 
 clandestinely sold in transitu with- 
 out paying any Government-duties
 
 FOREIGN MERCHANT IN CHINA. 
 
 283 
 
 chant, and that the said firm or 
 merchant engages to pay the lialf- 
 Tariff transit dues thereon. 
 
 Tliis form will be provided gratis 
 by the Maritime Customs at every 
 Treaty port, and issued on the 
 Consul's application by the Super- 
 intendent of Customs. 
 
 8. Native produce carried in- 
 wards from a port cannot be cleared 
 by a transit-duty certificate, whe- 
 ther in charge of native or foreigner; 
 it is liable to all charges imposed 
 on goods in transitu by the Provin- 
 cial Governments through whose 
 jurisdiction it passes. 
 
 whatever.*^ Considering these con- 
 stant and unlawful evasions, it is 
 now stipulated that the goods shall 
 be clearly specified in tlie Declara- 
 tion, as also the day of their arrival 
 at such and such a station, the 
 port to which the merchandise is 
 really to be conveyed, and where 
 the merchant, who owns the native 
 produce, engages to pay (by way of 
 tribute) the half duty thereon. All 
 of which having been clearly stated 
 in the Declaration,^ there is then at 
 the foot of the document to be af- 
 fixed the merchant's name and sur- 
 name, or else the letter of authority 
 from the mercantile firm concerned, 
 by way of proof.* 
 
 This form of declaration will be 
 provided to any merchant by the 
 Custom-house at each port, and 
 issued at the Consul's request in 
 writing, — free, moreover, of ex- 
 pense. 
 
 3. Native produce conveyed into 
 the Interior, cannot be franchised 
 by the (tribute-) payment of the 
 half duty. It shall pay, in accord- 
 ance with the inland law of each 
 Province (tribute-) duty at each 
 Custom-house it meets, ami le-Inn 
 at each Barrier it passes. 
 
 ^ The blame of these evasions, in the English text only alleged, and by the Teung-li Ya- 
 men stated to Sir Frederick Bruce to have been eifected by Chinese (see page 91, above) are 
 laid to the charge of the foreign merchant and his agents. 
 
 * Here we have another positive proof, on the part of the Tsung-li Ya-men, against the 
 assertion of the Inspector-General that " Agent, Goods, and Certifirate must travel in corn- 
 pony, to sefiirp pxpmption " (see page Sft, aboveK
 
 284 
 
 THE TREATY RIGHTS OF THE 
 
 4. Foreign imports not protected 
 by transit-duty certificates, are lia- 
 ble to the same charges. 
 
 5. No transit duty is leviable on 
 foreign imports or native produce 
 carried up or down the Yang-tze- 
 kiang between Shanghai and the 
 ports on that river now open under 
 provisional rules; but foreign im- 
 ports, carried inland from either of 
 these ports, pay foreign or native 
 transit dues, according as they are 
 certificated or uncertificated. 
 
 4. [In the Chinese version omit- 
 ted] . 
 
 5. If, under the temporarily 
 granted Regulations for the Great 
 River, merchant-vessels, proceed- 
 ing from Shanghai to Hankow or 
 Kiukiang for trade and barter and 
 carrying produce down, or foreign 
 goods up, the river, buy or sell 
 whilst just touching at the port, 
 they shall in neither case have to 
 j)ay (by way of tribute) Govern- 
 ment-duties. But foreign goods, 
 which arrive in Hankow or Kiu- 
 kiang, and are stored and subse- 
 quently conveyed into the Interior, 
 or native produce purchased in the 
 Interior, shall, when accompanied 
 by a Certificate en regie, pay the 
 half duty; or else, when holding 
 no Certificate, they shall pay (tri- 
 bute-) duty at each Custom-house 
 they meet, and le-kin at each Bar- 
 rier they pass — in accordance with 
 (Chinese) principles of administra- 
 tion. 
 
 It would be difficult to assign any reason for this Notice 
 in so far as it relates to the '' Transit-System," considering 
 that the latter had been distinctly regulated by Art. xxviii. 
 of the Treaty of Tientsin and Kule vii. of the Supple- 
 mentary Treaty of Shanghai ; but what renders the Notice 
 still more unmtelligible is, that it violates those Treaties in 
 material points, and in a sense altogether favom-able to the 
 Chinese and detrimental to the interests of British and 
 Foreign Trade. For, in the first place, it upholds the
 
 FOREIGN MERCHANT IN CHINA.. 285 
 
 optional clause of Art. xxviii. against the final stipulation 
 of Rule vii. I have already shown, that this was an ob- 
 ject stealthily but persistently sought to be accomplished 
 by the Tsung-li Ya-men and the Provincial Authorities, 
 burning for the le-Jcin and the " squeezes " bound up in it, 
 and as yet without a machinery to secure at the inland 
 mart, to which foreign goods might be sent under Certifi- 
 cate, the booty which would thus escape them in transitu, — 
 a point to which I shall revert in the sequel. In the second 
 place, the Notice admits upon uncertificated goods the pay- 
 ment of all " the different charges demanded at the Inland 
 Custom-house," than which a more latitudinarian, un- 
 statesmanlike, and irrational concession of the kind could 
 hardly be imagined. True, only the inland Custom-house 
 {M> to be distinguished from -jr, a Barrier) is spoken of ; 
 but in the foUowmg paragraph "bamers" are mentioned, 
 and here to insist, therefore, on the distinction alluded to, 
 would be a mere quibble. What the Notice reaUy gi-ants 
 are all charges, of whatever kind, " which the rapacity or 
 the necessities of Chinese officials may impose upon foreign 
 trade," and demand, at the various inland stations, barriers 
 as weU as Custom-houses. And hence, it sanctions, hj 
 implication, as in the Chinese version of the Notification it 
 does in direct terms, the payment of le-kin upon all uncerti- 
 ficated merchandise, whether foreign goods intended for 
 sale in the Interior, or native produce destined for exporta- 
 tion to foreign ports. 
 
 In a former section of this essay, I have produced to 
 evidence : — 1, That the Treaty of Tientsin, taken, as it 
 should be (Art. i. and liv.), in connection with the Treaty 
 of Nanking, renders the levying of le-hin altogether, and 
 that of other inland charges, in the aggregate exceedmg the
 
 2H(» THE TREATY RIGHTS OF THE 
 
 StipuliiteJ Treaty-rate upon foreign inland trade, (whether 
 carried on under Certificate or not,) illegaL — 2, That the 
 Treaty of Tientsin, even when read by itself, renders the 
 levying of Ic-kin, at other stations, and at higher rates, than 
 those established or in legal use at the time, and the levying 
 of any inland charges whatsoever, in the aggregate exceeding 
 the stipulated commutation-tax upon foreign inland trade, 
 (whether carried on under Certificate or not,) equally illegaL 
 — 3, That the Tsung-li Ya-men and the Chinese Provincial 
 Authorities themselves distinctly understand the le-kin and 
 other " war-taxes " to be included in the stipulated inland 
 charges commutation-tax. — 4, That, by the payment of this 
 commutation-tax, the goods, upon which it had been, or had 
 to be, paid, whether foreign manufactures or native pro- 
 duce, and whether in the possession, or the property, of 
 British or Chinese subjects, were to be exempted from all 
 further inland imposts whatsoever. And — 5, that the whole 
 of the foreign inland trade w^as to be carried on^under Cer- 
 tificate ; in other words, that, independently of the stipu- 
 lated import- and export- duties, the Chinese Government 
 should be free to levy upon that trade one-half of such duties, 
 respectively, in addition, and in the shape of inland taxes, 
 but that it should not be free to levy upon it one single cash 
 in excess of this additional half-duty. 
 
 Under these circumstances, two not unimportant ques- 
 tions arise, namely: Are arrangements, come to between 
 the Tsung-li Ya-men and a Representative of England at 
 Peking and approved of, whether silently or otherwise, by 
 Her Britannic Majesty's Secretary of State for Foreign Af- 
 fairs, at variance with Treatij-stipulations, lawful and^binding ? 
 And: Who, in the present case, is responsible for the ar- 
 rangements of this nature, more especially for the le\ning of
 
 FOREIGN MEKCHANT IN CHINA. 287 
 
 le-hin and otlier illegal imposts upon British inland trade in 
 China, conceded, in violation of the clear Treaty -rights of the 
 Merchant, to the Chinese Government ? The former ques- 
 tion may be positively answered in the negative. No inter- 
 national Treaty, once concluded, can, so long as it continues 
 in force, be essentially modified in its provisions by the 
 mere action of a British Envoy al)road, though afterwards 
 concurred in or sanctioned by the Foreign Office at home. 
 
 As to the second question, we have to assume, on the one 
 hand, that the Chinese version of Sir Frederick Bruce's No- 
 tification regarding Transit-Dues, etc., communicated in 
 English to the British Government in his despatch to Earl 
 Eussell of October 12, 1861, is the correct and genuine text, 
 as translated, or approved of, by the Chinese Secretary and 
 Interpreter of the British Legation in Peking, at that time 
 Mr. Wade ; and, on the other hand, that the papers relative 
 to this matter, presented to the House of Commons by order 
 of Her Majesty, are full, correct, and genuine transcripts of 
 Sir Frederick Bruce's correspondence. Both suppositions 
 may, I think, be here unhesitatingly adopted. 
 
 Proceeding, then, to argue on the basis of these supposi- 
 tions: it is clear from the published official correspondence, 
 that a translation of the important draft of Regulations re- 
 specting War-Taxes payable at Inland Stations, etc., submit- 
 ted by the Tsung-li Ya-men on September 21, 1861, to the 
 British Minister, has been designedly withheld from the 
 knowledge of the British Government; and that the same is 
 the case as regards the positive right, conceded to the Tsung- 
 li Ya-men, to levy ad libitum, and in violation of existing 
 Treaties, le-hin and otlier war-taxes upon British inland trade 
 • — in opposition to Rule vii. of the Supplementary Treaty of 
 Shanf^-hai distinctlv allowed, and thus encouraged to be —
 
 288 THE TREATY IIIGUTS OF THE 
 
 carried on without Certificate: a right, conceded in an un- 
 faithful Chinese version of a Notification, officially promulgated 
 in Enghsh for the guidance of the British mercantile com- 
 munity in China. 
 
 It may possihle he urged, that the terms of the original 
 Notification: ''hy payment of the different charges demand- 
 ed at the Inland Custom-house," include le-kin and taxes of 
 any Idnd whatsoever ; and, consequently, that neither the 
 British Government nor the British mercantile community 
 have been deceived hy the special terms, employed in the 
 Chinese version. But such an argument will not hold good. 
 The British Government, no more than the Merchants, can 
 be expected to be acquainted with the working of the fiscal 
 system of the Chinese. It has to trust, in this as in numer- 
 ous other respects, to its Kepresentative and the Members 
 of the Legation. But in reading Sir Frederick Bruce's No- 
 tification, the natural impression, produced on the Em'opean 
 mind by the sentence referred to, is that it speaks of the 
 ordinary road-charges, ....tolls, octrois, etc., — ordinarily levied 
 on inland traffic, and as the English Minister's explanatory 
 despatch to the Foreign Office contains not a syllable to 
 the contrary, not a word indicative of the true nature and 
 amount of the "different charges demanded": that im- 
 pression has to be taken as the actual meaning, which Sir 
 Frederick Bruce intended to convey both to his own Govern- 
 ment and the mercantile community in China. Both, there- 
 fore, in presence of the Chinese version determining the 
 real construction placed by the Tsung-li Ya-men upon the 
 words of the original Notice, were deceived ; and there is 
 here not mere neglect, somewhere, on the part of the British 
 Legation, — there is culpability. How little the Merchants 
 had understood the clause under consideration, is best proved
 
 FOREIGN MERCHANT IN CHINA. 289 
 
 by the incessant and unanimous complaints which the im- 
 position of the le-kin and other " illegal " imposts have sub- 
 sequently elicited from them as a body. 
 
 Sir Frederick Bruce possessed, personally, no knowledge 
 of the Chinese language. Hence, he could not possibly 
 have carried out the apparent deception, commented on, 
 without the participation of his Chinese Secretary and In- 
 terpreter, then, Mr. Wade. What presents itself to us as 
 the only subject for inquiry, is : Whether Sir Frederick 
 Bruce was at all aware of the real state of the case ? whether 
 the translation of the Tsung-li Ya-men's proposed Kegula- 
 tions regarding War-Taxes payable at the Inland Stations, 
 was by him withheld from the knowledge of the British 
 Government, and the apparent substitution of " etc." for 
 the title of that document in the translation of the Ya-men's 
 despatch of September 21, 1861, effected by his order or at 
 his instance ? and whether, having been duly made ac- 
 quainted Avith the true sense and purport of the official ver- 
 sion into Chinese of the Eegulations regarding Transit 
 Dues, Exemption Certificates, and Coast Trade Duties, 
 sanctioned and publicly notified by him, the British Minis- 
 ter at Peking kept Her Majesty's Secretary of State for 
 Foreign Affairs and the British mercliai!ts in ignorance of 
 that sense and purport ? Or : Whether Sir Frederick Bruce 
 himself was left in ignorance touching the points in ques- 
 tion, end the entire responsibihty of the matter falls, and 
 falls solely, upon his Chinese Secretary and Interpreter ? I 
 am not in a position to solve the problem. Nor have I the 
 desire to do so. There occur expressions in Sir Frederick 
 Bruce's official correspondence, more especially in connec- 
 tion Avith the confiscation-case of Messrs. Bower and 
 Hanburv, which i^mn to betray his consciousness of the
 
 200 THE TREATY RIGHTS OF THE 
 
 le-hiu tax as an impost upon British goods, which the Clii- 
 nese Government was entitled to levy, and an example of 
 great want of national scrapnlosity on his part I have had 
 occasion to adduce elsewhere : still, the expressions alluded 
 to are, after all, quite reconcilea])le with the hypothesis of 
 his having acted, in the Transit-Dues affair, although with 
 extreme laxity and partiality, yet with perfect sincerity and 
 good faith. On the other hand, the Interpreter's participa- 
 tion in the assumed deception appears hardly deniable ; and 
 what gives a worse colouring to the actual extent of his 
 responsibility, is the extraordinary and, it appears to me, 
 irrational warmth with which, in his Memorandum on the 
 Kevision of the Treaty of Tientsin, by Mr. Wade submit- 
 ted to his Government in December, 1868, he, in disap- 
 proving of, defends, and, in condemning, advocates and 
 upholds the Ic-Jcin tax. In simple fairness towards Mr. 
 Wade, however, I have once more to call the reader's atten- 
 tion to the irrcmisses, on which the whole of this argument 
 is made to rest. It would pain me for one moment to 
 doubt his Excellency's ability to offer a perfectly satisfactory 
 explanation of the points at issue. All I have wished here 
 to insist on, is the imperative necessity for such an explanation 
 on his part. 
 
 Meantime, it will add not a little to Mr. Wade's diffi- 
 culties in this respect :|: that, whilst he lays aU the blame, 
 connected with the le-Jdii lax, on the Provincial Authorities, 
 the Chinese version of Sir Frederick Bruce's Eegulations, 
 which, until evidence shall have been offered to the con- 
 trary, must be regarded as Mr. Wade's o\^'n composition, 
 transfers that blame almost entirely to the Tsung-li Ya-men 
 
 X These difficulties are far from being restricted to the point here mooted. I abstain, 
 however, from fiuther alluding to them, as they arc inseparably connected witli matters 
 foreign to the saftject of the present treatise.
 
 FOREIGN MERCHANT IN CHINA, 291 
 
 and the British Legation. Indeed, it turns the tables com- 
 pktely upon kimseh". With the instructions of the Ya-meii 
 and Superintendents of Trade before them: what choice 
 had the native Customs' Officials but to obey ? True, in 
 Chinese fashion, tliey have made and make the most of the 
 opportunity ; but the responsibihty rests with the higher 
 Authorities just named, and through the Ya-mon with the 
 Chinese Government. The action of the latter, so far from 
 finding an excuse in the complaisance of the British Minis- 
 ter — his Chinese Secretary and Interpreter, is but aggra- 
 vated thereby, inasmuch as it hiew that the points con- 
 ceded involved a positive violation of the international 
 Treaty, solemnly concluded with. Great Britain ; that they 
 could not hold good in law ; and that, on the day of reckon- 
 ing, the Government might, and it is to be hoped will, have 
 to refund the large sums, unlawfully levied upon British 
 and Foreign trade., 
 
 And had not also the Inspector-General, Mr. Hart, cog- 
 nizance of the real state of matters ? He was acquainted 
 not only with the Treaties and both the Chinese and En- 
 glish texts of Sir Fredjerick Bruce's Kegulations, but also 
 with the fact that the Tsung-li Ya~men and one of his im- 
 mediate superiors, the then Superintendent of Trade for the 
 Southern Ports, Tseng Kuo -fan, fully admitted the illegality 
 of the Ic-hin tax on foreign trade, nay, as will be presently 
 seen, that the latter warned, or rather instructed his subordi- 
 nates to avoid every collision with foreign Consuls, on account 
 of that tax being contrary to treaty-stipulations. In liis very 
 memorandum, in which he so strongly defends the '* in tran- 
 situ " theory, i.e. the tax in question, he refers to the col- 
 lection of Ying, in which Tseng's despatch is printed. || 
 
 11 See the part, entitled •• ;g Jl # .0 ?! W ^ IT ^ ^. ^°^- IG-lTa.-Comp. 
 
 p. 17, above.
 
 2'.)I TITF. TREATY RIGHTS OF THE 
 
 Reserving the detemiination of the actual amount of the 
 illegal exactions here under consideration for the next sec- 
 tion, I have, in this place, to speak of only two more at- 
 tempts, made by the Customs to modify the practical work- 
 ing of the Trade Rules, attached to the Treaty of [Tientsin, 
 in a spirit diametrically opposed to the stipulations oi that 
 Treaty, and regarding which the Inspector-General in his 
 Memorandum on the "Transit-System" observes silence. 
 The first of these attempts dates from the month of May, 
 1870, and originated in an application to the Tau-tai of 
 Shanghai, (in his capacity of Intendant of Customs) from 
 — if I am well informed — the American Consul -Geneifal, 
 Mr. Seward, for permission to one of his nfstionals to send 
 some coals, in a lorcha owned by the latter, to the island of 
 Tsung-ming, opposite Wu-sung. The application was 
 promptly and peremptorily refused, on the gi-ound of a 
 document, on that occasion framed by the Tau-t'ai T'u for 
 general guidance in future, and which is now Imown as 
 " T'u's Five Rules for the prevention of Smugghng." The 
 following translation of the Chinese text was published, at 
 the time, in the Shanghai Evening Cowier : — 
 
 1. — Whenever a foreign merchant desires to send foreign goods tnt€y 
 the interior of China, he must make a written apphcatiou through the 
 Commissioner of Custofns, stating distinctly what kind of goods he 
 wishes to send ; the quantity, the name of the vessel by which such 
 goods were imported, the name of the place to which they are destined,, 
 the route by which the goods are to. travel, and a description of the boat 
 by which they are to be sent. The Customs will then send a person to 
 examine the boat; and after his report, a permit may be issued for these 
 goods specified to proceed on their route ; said permit is to state the name 
 of the boat-captain ; and if in passing the barriers, there be found no- 
 discrepancy between the goods and the permit, said boat may be allowed 
 to proceed ; but if any discrepancy be found between the cargo and the 
 permit, tlie goods and boat shall be detained, and sent to their place of 
 departure for adjudication.
 
 FOREIGN MERCHANT IN CHINA. 293 
 
 2. — Foreign goods proceeding into the interior will not be allowed to 
 proceed by any other than the interior rotates; nor be allowed on any 
 other than boats used for inland travel ; no sea-going boats can receive 
 such permission to convey goods ; nor can the goods proceed by the sea- 
 coast — so as to allow of smuggling; and any deviation from this rule 
 will render the boat and goods liable to seizure and confiscation, — and 
 the master of the boat liable to punishment by the Chinese authorities, 
 so soon as any attempt is made to pass the barrier at the sea-coast, 
 
 3. — Whenever any person wishes to obtain a pass for goods proceed- 
 ing into the interior, application must be made by the person or hong 
 immediately concerned, and no person or hong may apply for a permit 
 for any other person or hong ; and if any foreigner disposes of his pass 
 to a Chinese, the goods covered by their pass shall all be confiscated; 
 and the foreigner so disposing of his permit shall be sent to the Consul 
 of the nation of which he belongs, for fine and punishment, and the 
 Chinaman who purchases snch permit shall be punished by the Chinese 
 authorities. 
 
 4. — Whenever a boat having foreign goods arrives at a barrier, the 
 permit must be handed to the officer in charge of the barrier for verifi- 
 cation ; and if satisfactory, the seal of the barrier shall be affixed, and 
 the goods allowed to proceed. But if any person fail to hand in his pass, 
 or refuse to allow such verification, or carry any goods not enumerated 
 on the permit, the person in charge of the barrier may detain the per- 
 son, and confiscate the goods, and send the master of the boat to the 
 nearest Chinese magistrate for punishment, and send a report of the 
 case to the officer granting the permit. 
 
 5. — When the foreigner has received a pass for goods to go into the 
 interior, the pass sliall state distinctly the name of the place to which 
 the goods are to be sent, and when the goods have arrived at theii- des- 
 tination, the permit must be handed either to the officer in charge of 
 the barrier there, or to the local Magistrate ; who shall cut off a corner 
 of said permit, and send it to the place whence it issued. And if any 
 person should conceal his permit and attempt to use it a second time, 
 he will render himself liable to fine and punishment. 
 
 These Pailes have since, in his correspondence with the 
 Consuls, been frequently referred to by the Cliinese In- 
 tendant of Customs as authoritative; have given some
 
 21) i THE TREATY RIGHTS OF THE 
 
 tronl))e; and are still, if I am not mistaken, under the con- 
 sidemtion of the Peking Authorities, foreign and native, 
 respectively. In a place, where Memoranda of the Tsung-li 
 Ya-men are liable to turn into "etc.," Copies of the Ti^eaty 
 of Nanking cannot be found on the one hand, and proposed 
 Solutions of the Missionary Question are misplaced on the 
 other, "T'u's Five Rules" stand a fair cliance of going alto- 
 gether astray. 
 
 A second and more ambitious attempt of Chinese en- 
 croachment upon the Treaty of Tientsin, to which allusion 
 has already been made in an earlier portion of this treatise, 
 was undertaken in the summer of 1871, by the native In- 
 tendant T^u, and the Foreign Commissioner, of Customs at 
 Shanghai, Mr, Dick, combinedly. The latter Official name- 
 ly, under instructions from the former, desired to enforce a 
 new form of " Transit Pass to Interior," of which I subjoin 
 a Hteral copy : — 
 
 Teansit Pass to Intekiok. 
 
 Shangliai, 187 . 
 
 Customs No 
 
 Commissioner of Customs,. 
 Applicants 
 
 Please apply to the Superintendent of Customs for a Transit Pass to 
 
 enable the undermentioned merchandise to be sent to .,.,* 
 
 [Table setting forth No. of packages and description of goods.] 
 
 hereby declare that the above mentioned merchandise is wholly 
 
 own property, that have purchased it from , 
 
 and that, intend sending it to , * for the 
 
 purpose ol being sold by , * solely on own 
 
 account. 
 
 (Signature of appHcants.) 
 
 * Name of place and of agent to be given in Chinese. 
 
 The following correspondence relative .to this innovat- 
 ing form of declaration, as published in the North-China
 
 FOKEIGN MERCHANT IN CHINA. 295 
 
 Herald for July 21, and July 28, 1871, will fully explain 
 its tendency and bearing, whilst carrying down its history 
 to the action taken in regard to it by c^he Tsung-li Ya-men, 
 previously referred to in connection with Mr. Hart's anony- 
 mous Memorandum on "the Transit-System" : — 
 
 Taoutai to Consuls. 
 
 Shanghai, June 20, 1871. 
 
 H. E. Too, Tautai of Shanghai, makes the following communication 
 to the several Consuls of Treaty Powers : — 
 
 In regard to Customs passes for transporting foreign merchandise into 
 the interior; if the merchandise is the io?!fl y?r?e property of a foreign 
 merchant, purchased for the purpose of seudhig it to an interior mar- 
 ket, a Customs pass can be granted. 
 
 At present there are at Shanghai a lot of foreign merchants of small 
 capital, who not unfrequently pass goods at the Customs for Chinese, 
 and apply for a Customs pass, in their own name, to transport the said 
 goods into the interior, whereas the said goods are not their own pro- 
 perty, and they are simply acting for the Chinese owner; for which ser- 
 vice they receive a certain consideration. Thus, the Chinese, by bor- 
 rowing the name of others, defraud the Gavernment out of the taxes 
 that would otherwise be collected, by the way, [in transitu] , on the said 
 goods : therefore it is necessary that some regulations should be esta- 
 blished by which a stop may be put to this fraud. 
 
 In future, a foreign merchant applying for a Customs pass, if the 
 merchandise is not his bona fide property, two tilings must be expressed 
 in the Customs pass. Ist, From what hong the goods were pmchased. 
 2nd, The name of the place and the name of the hong or the person to 
 •whom the said goods are consigned for sale, These two regulations 
 cannot in any way be annoying to the foreign merchants, while it will 
 enable the Customs to arrive at the true state of things. There is no 
 difficulty in stating, in the Customs pass, the hongs from which the 
 goods were pi^rchased, while the Customs having this information can 
 be easily satisfied by inquii-ies at the hong. Thus, when the goods are 
 transported to the interior, to a ceiiain place, and consigned to a cer- 
 tain hong or person for sale, it will be easy for the Customs at such place
 
 2nG THE TREATY RIGHTS OF THE 
 
 to inquire of such liong or person, and verify the truth or falsity of the 
 statements made. 
 
 In addition to forwarding by the Superintendent of Customs a blank 
 form of application for Customs passes, and instructing him to act ac- 
 cording to the above regulations, I have tlie honour to enclose the said 
 form of application for your Excellency's inspection, and have to re- 
 quest that you will act accordingly. 
 
 Chamber of Commebce to Consuls, 
 
 Shanghai, June 24, 1871. 
 
 Sir, — I have the honor to solicit the attention of the Consular Body 
 to the accompanying form of application recently adopted by the Cus- 
 toms at this port, in cases where merchants desire to procure Transit 
 Passes for foreign goods to the interior of the country, and I beg refer- 
 ence especially to the declaration required, to the effect that the goods 
 are the property of the person making the application, and to the addi- 
 tional information demanded as to their purchase, the agents' name to 
 whom they are consigned, and the person on whose account they are to 
 be disposed of. 
 
 The Chamber has already so fully expressed the views and the wants 
 of its members with reference to the general question of Transit-dues, 
 that I will not ask your Committee to peruse a reiteration of them ; but 
 as the action of the Customs appears distinctly to point to their insistence 
 iipon the practice of withholding Transit passes for foreign Imports in 
 the hands of Chmese, I have to request that you will kindly bring the 
 matter to the notice of the Foreign Ministers at Peking, in order that a 
 clear declaration of the intentions of the Chinese Government may be 
 elicited; and should the Government purpose to aj)ply the articles of the 
 Treaties in a manner to exclude foreign Imports in any case from the 
 privileges accorded by the 10th Article of the Nanking Treaty and the 
 28th of that of Tientsin, the Chamber trusts that their Excellencies wall 
 take steps to enforce the right of traders under the clauses named. 
 
 Sir Eutherford Alcock has left us no doubt as to the interpretation he 
 attached to the British Treaty in this respect, which by the most favoured 
 nation clause in other Treaties applies equally to Foreigners of other na- 
 tionalities; for in his despatch dated " On the Yang-tsze November 24th 
 1869" addressed to Her Britannic Majesty's Consul, his Excellency, 
 contrasting foreign imports with native produce writes : " It is otherwise
 
 FOREIGN MERCHANT IN CHINA. 297 
 
 "With Foreign Imports. These are entitled to the protection of Transit 
 passes, whether in Chinese or foreign hands." 
 
 This point the Chamher has always maintained ; and an attempt to 
 Hmit the privilege to goods still in the possession of Foreigners it is con- 
 strained to view as an infraction of the Treaty stipulations. 
 
 It cannot be urged by the Chinese Government that Art. 28 of the 
 British Treaty of Tientsin overruled the 10th clause of the Nanking 
 Treaty, for it is expressly stated in Art. i. that: "The Treaty of Peace 
 and Amity between the two nations, signed at Nanking on the 29th day 
 of August, 1842, is hereby renewed and confirmed." And Art. 54 reads: 
 «' The British Government and its subjects are hereby confirmed in all 
 privileges, immunities and advantages conferred on them by previous 
 Treaties." 
 
 This being the case, reference is made to the plain language of the 
 Nanking Treaty, wherein it is stipulated that : " When British merchan- 
 dise shall have once paid" [etc., see above p. 73] ; and this renders it 
 difficult to conceive what plea can be used to authorize the withdi-awal of 
 the privilege thus expUcitly granted in 1842 and confirmed in 1858-60. 
 
 A minor objection to the declaration demanded from apphcants for 
 Transit-passes is its inquisitorial character, for unnecessary inquiries 
 into the details of the business of merchants are regarded as obstacles 
 to trading ; but the main point on which the consideration and action of 
 the Foreign Diplomatic Kepresentatives is asked, is the important ques- 
 tion above brought forward, of the hmitation of Treaty rights concerning 
 foreign Imports. 
 
 I have the honor, etc., 
 
 (Signed) F. Portek, Chairman. 
 
 To tlie Cltairmau of the Committee of Consuls, etc. 
 
 Consuls to Taoutai. 
 
 Shanghai, July 13, 1871. 
 
 Sir, — The undersigned have received your letter of the 20th Juno, in 
 which you propose certain changes in the transit passes system. 
 
 The undersigned behevo that one set of rules for the issue of transit 
 passes should be observed at all the ports. They behevo also that the 
 changes proposed by you are essential innovations, hkely to be very de- 
 trimental to trade. For both reasons they beheve that the subject should
 
 208 THE TREATY RIGHTS OF THE 
 
 be considGred at Peking between tlie Ministers and the Imperial Govern- 
 ment, in order that a perfect and indisputable understanding may be ar- 
 rived at. 
 
 The undersigned therefore invito your Excellency to take the instruc- 
 tions of the Government iu the matter. They will, on their part, bring 
 the subject before their respective superiors. 
 
 The undersigned insist that until instructions shall be received, there 
 ought to be no variation from the system which has been hitherto ob- 
 served at this port, and they respectfully request you to advise the Com- 
 missioner of Customs accordingly. 
 
 The undersigned have the honor to be, etc. 
 
 Taoutai to Consuls. 
 
 His Excellency Too, Shanghai Taoutai, to the several Consuls of 
 Treaty Powers. 
 
 I received on the 30th of the 5th moon the reply of the twelve Consuls, 
 and understand it. 
 
 My propositions in regard to Transit passes are not innovations, and in 
 no way at variance with the Treaty, and could in no way be detrimental 
 to the interests of Foreign merchants. 
 
 Now, since the various Consuls are not satisfied, let the custom, which 
 has hitherto been observed, stand in force, 
 
 In addition to informing the Superintendent of Trade and requesting 
 Tseng-kwo-fan to communicate the matter to the Tsung-li Ya-men and 
 await an answer, I have the honor to make this reply. 
 
 That the Tsung-H Ya-men must have virtually decided 
 against the innovation, proposed by the Taoutai T'u'and 
 Mr. Dick, who would hardly have acted in such a matter 
 without instructions from the Inspector-General, appears 
 from the fact that, practically, Chinamen have since been 
 permitted, the same as Foreigners, to convey, under Certi- 
 jBcate, foreign goods to stated marts in the Interior, from 
 Shanghai and one or two other ports. But no public 
 Notification, recognizing, on the part of the Chinese Govern- 
 ment, the Treaty-right and the principle involved, has ap- 
 peared; and that the Tsimg-li Ya-men "issued (to the
 
 FOREIGN MERCHANT IN CHINA. 2&9 
 
 effect in question) its instructions in 1868, and repeated 
 them to the Shanghai Customs in 1871," is an assertion 
 which rests solely on the anonymous authority of the 
 Inspector-General, who, when " commimicating " this in- 
 formation to a local newspaper, cannot but have kno^vn, 
 that the Tsung-li Ya-men does not correspond with, and 
 does not issue instructions to, *' the Shanghai Customs." 
 The Ya-men corresponded on equal terms with Tseng Kwo- 
 fan; who, as Superintendent of Trade for the Southern 
 Ports (east of Canton), issued instructions to his subor- 
 dinates the (native) Intendants of Customs ; who, in their 
 turn, issued instructions to their subordinates the Foreign 
 Commissioners of Customs, in this case by the Forei^ 
 Inspector-General somewhat vaguely designated as "the 
 Shanghai Customs." He must also have known that 
 Tseng Kwo-fan's despatch of November 5, 1868, does not 
 state, that, in issuing his instructions to the Shanghai In- 
 tendant of Customs, he had been "instructed" to do so, 
 much less that he had been mstructed by the Tsung-li Ta- 
 mcn, from which he received, and would have accepted, no 
 instructions. Lastly, the Inspector-General knew that, at 
 the period in question (June, 1871), the important instruc- 
 tions of the Superintendent of Trade for the Southern Ports, 
 so essentially affecting the practical working of the Treaty 
 of Tientsin, and a copy of which was, no doubt, in the 
 archives of the Inspector-General, as well as of " every 
 Custom-house," had /or 7iearlij three ij ears past been allowed, 
 a dead letter, to lie m those archives ignored and unheeded. 
 Nor is this all. With positive instructions to act in ac- 
 cordance with Treaty stipulations, insuring to the Chinese 
 merchant the right to take out " Transit "-Certificates, 
 and, consequently, to the foreign agent to do so on the
 
 300 THE TEEATY RIGHTS OF THE 
 
 former's behalf, in his possession, Tau-t'ai T'u, in an official 
 despatch to the Body of Foreign Consuls, had the assurance 
 to accuse such agents — "a lot of foreign merchants of small 
 capital" as he styles them, — in using their admitted Treaty- 
 rights, of defrauding the Chinese Government of taxes, 
 fraudulently levied by its own officials upon Foreign Trade ; 
 and he was permitted to do so without even a retractation 
 of, and an apology for, his false charge being demanded of 
 him. Nay, with the same instructions "in the archives of 
 the Shanghai Custom-house," the Foreign Commissioner, 
 in concert with the native Intendant, of Customs at Shang- 
 hai, and in order that "a stop might be put to the " (falsely 
 alleged) " fraud," lends his aid to his native superior, and 
 proposes a new form of declaration, by w^hich the British and 
 Foreign merchant is expected to sign away recognized 
 Treaty-rights, which both the native and the foreign official 
 had, so long as three years previously, been instmcted by 
 the Superintendent of Trade 'for the Southern Ports and 
 Governor-General of the Two Kiang to respect and to act 
 up to, but had ignored and disregarded. The translation 
 of Tseng Kwo-fan's despatch, as published in the North- 
 China Herald, says : — " To this end I have wiitten to the 
 Customs and to the Intendant of Trade to act accordingly." 
 But, there exists no Intendant of Trade ; and the text says 
 only, that Tseng wrote to "the Customs," g|, ?.<'. to the 
 native Intendants of Customs, — with whom alone, on Cus- 
 toms-matters, the Superintendent of Trade corresponds, — 
 impliedlij with instmctions to direct the Foreign Commis- 
 sioner of Customs accordingly. And that this must have 
 been done, appears from the statement of the Inspector- 
 General, who, possessing no knowledge of what the archives 
 of the native Intendancies" but only what those of the
 
 FOREIGN MERCHANT IN CHINA. 301 
 
 Foreign Commissioners, of Customs contain, could other- 
 wise not have been aware of the fact alleged by him. 
 
 Were it not for Mr. Hart's positive statement, I should 
 have been inchned to look upon Tseng Kwo-fan's " instruc- 
 tions " as a mere empty form, and to exonerate the Shang- 
 hai Commissioner from responsibility, in this case, at least so 
 far as the assumption of those instructions having never 
 been communicated to the Foreign branch of the Customs 
 could have done so. Not the least important question now 
 is : whether the Commissioner of Custonos acted in so grave 
 a matter without the knowledge, or with the sanction, of the 
 Inspector-General ; and it appears to me, that both these 
 officials owe it to themselves as well as to the mercantile 
 community, to give a clear explanation of the facts of the 
 case. It can hardly be a matter of indifference to the Bri- 
 tish Government, whether British subjects in foreign employ 
 do or do not, ovei-ste^ping the proper limits of their spheres 
 of official duty, neglect or observe their natural duties of 
 loyalty to, and act or do not act against, the jwsitive in- 
 terests of, their own country. In various and sometimes 
 startling fonns, this problem lias recently forced itself upon 
 public notice ; and it appears desiral^le that, in England too, 
 it should at an early date receive that attention on the part 
 of the Legislature, which has been given to it, long since, in 
 the Law-Codes of other countries. 
 
 One more remarkable feature in connection with this sub- 
 ject, I cannot altogether pass over in silence. The practical 
 carrying into effect of the inland -charges- commutation - 
 clause of the Supplementary Treaty of Shanghai, which, so 
 far as foreign goods are concerned, has demonstrated, by the 
 rapidly progressive development of inland trade attending 
 even its slowly extended application, the wisdom of its pro-
 
 302 THE TREATY RIGHTS OF THE 
 
 vision, it was, on this very account, as I have previously 
 shown, the object of the clear-seeing Chinese Authorities to 
 obsti-uct, if they could not put it down, from the first. 
 Hence, the Tsung-li Ya-men insisted on every fitting occa- 
 sion, that it remained perfectly optional for the Foreign mer- 
 chant to commute inland charges (inclusive of le-kin) or not, 
 as he might judge proper ; hence, Sir Frederick Bruce was 
 persuaded to take for a while at least, the same view ; hence, 
 every means was resorted to, in order to surround the 
 " Transit "-Certificates with vexatious obstacles and dif- 
 ficulties, or to render them of none effect ; and hence, and 
 thus, for the space of more tlian ten years, the native Authori- 
 ties succeeded in virtually depriving the Foreign merchant, 
 together with the native trader, of the exercise of one of the 
 most important of their undisputed Treaty-rights, and in 
 subjecting Foreign inland trade to what they knew to be 
 illegal exactions. In none of the documents already adduced 
 by me, is this so clearly expressed as in the instructions of 
 Tseng Kwo-fan, when he states : — "It is imperative that 
 the Treaty stipulations be observed, and mider no circum- 
 stances should the le-ldn be made to violate existing engage- 
 ments, thus provoking constant disputes with the Consuls." 
 It is true, that the Chinese Government provided against 
 any " loss " of Revenue from the commutation principle, 
 by having recourse to complementary " Stationary " taxes, 
 " Grower's " taxes, and similar imposts. In the case of 
 foreign manufactures, however, much additional expense, 
 squeezing, delay and uncertainty of income attended the lat- 
 ter process ; and it was considered more convenient to keep 
 "stopping the fraudulent practices of the outer barbarian." 
 
 Yet, in the face of all these facts, there are- not only in- 
 di\idual merchants in Shanghai, who look upon the informal
 
 FOREIGN MERCHANT IN CHINA. 303 
 
 and merely temperary desistance of the Customs-officials at 
 this and, may-be, one or two other ports, from opposing 
 and acting in defiance of recognized Treaty-rights, for a 
 space of ten years unlawfully withheld from the mercantile 
 community, as "a valuable concession" on the part of 
 *' the Chinese Government " ; the local Press, moreover, 
 usually supposed to express, and to have an interest in ex- 
 pressing, on matters of public importance the sentiments of 
 the local public, unites in congratulating itself on, and 
 spreading abroad the singular and almost ludicrous idea of, 
 " the Transit Dues Question having been fairly settled." 
 Thus, Mr. J. Barr Robertson writes on November 6, 1871, 
 to the North-China Herald: — ''Of course, the Chmese 
 Government have the most complete liberty to grant what 
 they please so long as it is in the right direction, but by all 
 means let us call things by their right names, and therefore 
 this extension of the Transit Fass system, long and loudly 
 demanded, a neiv and valuable concession." And the Editor 
 of the North-China Herald, in almost literally reproduc- 
 ing on February 1, 1871, a "Eetrospect of the year 1870, 
 published by Messrs. Da Costa & Co. on January 31, 1872, 
 in ^is " Betrospect for 1871," purporting to emanate from 
 the Editor's own pen, observes : — 
 
 " If there is any subject for congratulation, it is, that the Transit Dues 
 ■question has been fairly settled, thanks to the exertions of an active Con- 
 sul. Too much importance can hardly be attached to this fact, nor to 
 the benefit which will, through it, accrue to the importers of foreign 
 manufactures. It may take time to get the machinery into working 
 order, but once this is done, the benefit to foreign trade will be distinctly 
 visible. The very fact of Chinese being able to send foreign goods into 
 the interior under a pass issued by their own government (corrupt as it 
 is known to be) is a subject for congratulation, and a step in the right 
 direction.
 
 304 THE TREATY RIGHTS OF THE 
 
 Had Engluml <a right-mintled Minihitcr at Peking, — (the North- 
 China Herald pluruliwcs and modifies : " Had wc more vjgorous 
 Ministers at Peking,") — the wedge might be still further inserted, and 
 permission obtained for small draft but roomy steamers to convey 
 European goods up the creeks, to such trade centres as Soochow, IIoo- 
 chow and Hangchow, but this, we fear, is only a dreani of the future — 
 (according to the North-China Herald's no-dreamy-fears-indulging ver- 
 sion : " to the trade centres of new districts.") " 
 
 The " fair settlement of the Transit Dues Question," to 
 which in the opinion of the Editor of the North-Cldna 
 Herald, supported by that of the Evening Courier, § too 
 much importance can hardly be attached, amounted just to 
 this, that, previously to the latter part of 1871, applications 
 for Certificates, i.e. for "Receipts for inland taxes duly 
 paid " vipon foreign goods about to be conveyed to an inland 
 mart, had to be, and were, signed by the foreign merchant, 
 whether for himself or on behalf of his htitive constituent ; 
 and that now — pending further decisions, and, at any rate, 
 at Shanghai — the native merchant is graciously permitted 
 by the Chinese Superintendent of Trade for the Southern 
 Ports to sign such applications personally, and, after having 
 duly and in advance paid to his Government the full amount 
 of inland charges by Treaty leviable upon foreign goods, to 
 accept a Receipt for the same. This Receipt, however, or 
 " Pass," issued accordingly, is not issued by the Chinese 
 Government "corrupt as it is known to be" — the logic 
 
 § The Editor of the Shanghai Evening Courier appears to have partly relied on an 
 error in the version of Tseng Kwo-fan's despatch of Nov. 5, 18G8, as copied from the 
 Shani/hai Netos-LtUer in the North-China Herald. The translator, probably overlook- 
 ing that the despatch is printed as registered by the Tau-tai Ying, has erroneously 
 connected the date of the despatch, T'ung Chih, 7th year, 9th month, 21st day (Nov. 5, 
 18G8) with certain " Regulations " of the Tsimg-li Ya-men, issued S'ien Feng llthj'ear 
 (1861), referred to immediately afterwards, and which, omitting the latter date and apply- 
 ing to them the former, he renders '' a communication." The fact that the despatch was 
 received in Shanghai on T'ung Chih, 7th year, 9th month, 26th day, (Nov. 10, 1868), as he 
 himself translates, should have called his attention to the mistake into which he falls, since 
 no despatch from Peking coidd possibly have reached Shanghai, cid Nanking, in five days.
 
 FOKEIGN MERCHANT IN CHINA. 305 
 
 of the North-China Herald is occasionally unintelligible — 
 but, which is a very different thing, by an Intendant or 
 Intendants of Customs, actmg under instructions only from 
 a local Supermtendent of Trade ; and how far this may, or 
 may not, be " a subject for congratulation, and a step in* the 
 right direction " I will leave for the reader to say. State- 
 ments such as those here referred to, playing as they do 
 into the hands of the Chinese Government, can only tend 
 to mislead public opinion both in China and at home. The 
 best comment upon them are the new Transit-Regulations, 
 framed by the Inspector-General, and proposed by the 
 Tsung-li Ya-men.
 
 306 THE TREATY RIGHTS OF THE 
 
 VII. 
 
 ILLEGAL TAXATION. 
 
 Tabular view of the amount of illegal taxation and total amount of im- 
 pcst.s, levied, within tlie importing Province, on Foreign Trade, 
 during the year 1870, by the Chinese Government — Complementary 
 " Stationary "-trade taxes — Produce tax — A " strike" of Chinese mer- 
 chants — Comparison of the Table with the similar Tabic, published 
 in 1869, by the Shanghai Commissioner of Customs, Mr. Dick — 
 Taxes on Opium and Cotton Goods — Principle of Chinese illegal 
 taxation — Taxes on Woollen Goods, Metals and sundry articles of 
 importation — Taxes on Silk, Tea, and sundry articles of exportation 
 — General Eemarks — The Commissioner of Customs at Kiukiang on 
 le-kin — Unreliability of his special data — Examination of details, on 
 which Mr. Dick's Table is based — His Table officially admitted to 
 be restricted to inland charges, collected at, or near, the ports — Hi 
 arithmetical errors and incongruities — Object of its publication — 
 Alleged "loss to Chinese Revenue by Hongkong being a free port" 
 — Mr. Dick's "Hongkong Claims" — Smuggling in Opium — Corrup- 
 tion of Chinese officials — India verms China — The British Possession 
 of Victoria a thorn in Mr. Dick's side — His "Hongkong Claims" 
 examined — The Chinese Customs-tarifl' compared with the tariffs of 
 some other countries — Opium not taxed more heavily in China, than 
 are imports generally — Defence of the Opium trade — Deceptive 
 character of the Tsung-li Ya-men's Opium Memorial — The Memo- 
 rial essentially the composition of a foreigner — Its leading motive — 
 The growth of the poppy in India a legitimate branch of agricultural 
 industry — Annual amount of illegal taxation to which Foreign Trade 
 is subject in China — The Tonnage Dues — Systematic fabrication 
 of Chinese public accounts — Differential Coast-trade duties — Mr. 
 Dick's threatened " Withdrawal of the Department from its connec- 
 tion with the Home trade " — Amount of imposts, by the Chinese 
 Government annually levied on Foreign Trade in open and systema- 
 tic violation of Treaty- stipulations — Estimate of the accumulated 
 debt, thus surreptitiously contracted by China towards England 
 since the Treaty of Nanking. 
 
 The by far most important item, connected with the prac- 
 tical working of the Treaty of Tientsin, is the actual amount 
 of illegal taxation to which Foreign Trade is at present 
 subjccL in China, and to which, to a greater or less extent.
 
 FOREIGN MERCHANT IN CHINA. 307 
 
 it has been subject ever since the conclusion of the Treaty 
 of Nanking. Its determination is, as to details, attended 
 with unusual difficulties. I have sj^ared, however, no trouble 
 in endeavouring to obtain official and other trustworthy in- 
 formation from every source, both native and foreign, ac- 
 cessible to me ; and from the concurrence of many elements 
 and tests, independently collected and applied, I venture to 
 affirm with a degree of confidence amounting to certainty, 
 that the general results at which I have arrived may be ac- 
 cepted as perfectly reliable. They are, for the year 1870, 
 contained in the succeeding annexed table, in which, for the 
 sake of avoiding exaggeration, the 'Hai-kuan' tael has been 
 converted mto English money at the rate of only 6/- a tael. 
 
 Among the documents which I have been able to procure, 
 and which have been used by me, I may mention an official 
 list of all the taxes levied within the Foreign Settlements, 
 by the Taou-t'ai, as Intendant of Customs at Shjtnghai, — 
 # 'iS '^^ # ^ IK: ^i ^ S M ; an authentic list, obtained from 
 the Chow-fang Office. 
 
 The table, it will be noticed, contains only the taxes col- 
 lected on Imports within the importing province, and on 
 Exports for the producing province. If the merchandize 
 pass through other provinces, it becomes Hable to a double 
 and treble amount of such charges. That is to say, if/, i. 
 uncertificated foreign goods, after having paid, within the 
 importing province, besides the import-duty and treaty 
 commutation- or " transit "-tax, 10 per cent, or more ad va- 
 lorem for Ic-Mii and other illegal taxes, they are, on entering 
 a second province, liable to additional illegal imposts of 10 
 per cent, or more ad valorem; and, having thus paid upwards 
 of fully 20 per cent., over and above treaty-rates, on enter- 
 ing a third province, they become liable to further illegal
 
 308 THE TREATY RIGHTS OF THE 
 
 taxes of 10 per cent, or more ad valorem, exclusive of about 
 20 per cent, in each case, upon the illegal amount of imposts 
 levied, for "squeezes." Similarly so in regard to Chinese 
 produce, destined for exportation to foreign countries. 
 
 The local consumption at the ports ls, comparatively 
 speaking, so small that the whole of the imports, the same 
 as the exports, may be considered for our purpose as 
 subject to inland taxation. The additional imposts levied, 
 both in amount and name, differ at the different ports to a 
 greater or less extent; and so do the inland charges on 
 uncertificated imports and intended exports in each pro- 
 vince. But, so far as I have been able to ascertain, the ag- 
 gregate of the dues illegally imposed on foreign goods at 
 Shanghai, being the chief centre of foreign trade in China, 
 represent a fair mean; and it is on this account that the fis- 
 cal documents of which I have been able to avail myself 
 possess, as to details, a greater and more general value than 
 would otherwise be the case. They may to some extent be 
 considered as normal. The wharfage-dues at the port in 
 question are nominally only 1 per mille. Actually, how- 
 ever, they are levied at the approximate rate of 1 per cent. 
 ad valorem; and as a similar tax, though differing in name, 
 is imposed, I learn, at all the^ other open ports, its excess 
 has been carried uniformly through the table. 
 
 When the goods are accompanied by a " transit "-certi- 
 ficate, they pay ostensibly, and should pay only about 2|- 
 per cent., in accordance with Treaty -provisions. In reahty 
 they pay 12|- per cent, ad valorem and upwards, just as 
 though they had been uncertificated. The difierence is 
 made up, in the case of native produce intended for expor- 
 tation abroad, chiefly by the "grower's tax," ^ M ^ or 
 ^ Jfe 1^, besides Licenses, etc.; in case of foreign imports
 
 FOREIGN MERCHANT IN CHINA. dU'J 
 
 by the " Stationary trade tax," ^ M, the former m the pro- 
 ducing districts altogether, the latter, in various forms, 
 mostly levied inland. It is with this view and for this pur- 
 pose, that the merchant has to state, at the port, particulars 
 of goods to be sent into the interior, as weU as the place of 
 their destination, in order that a copy of such particulars 
 may be at once forwarded by the Intendant of Customs to 
 the officials of that place, and thus "the goods" may, to 
 use the words of the Inspector-general, Mr. Hart, " after 
 having once entered the stream of general Chinese trade, 
 become liable to the incidence of local taxation.'' That is to 
 say, in violation of the clearest Treaty -rights of the Foreign 
 Merchant, the Chinese Government having, through the 
 certificate, been prevented from levying in transitu its illegal 
 imposts in full, does so the moment the goods have arrived 
 at their destination, by submitting them, in addition to the 
 half-duty paid, to a complementary duty, to which the gene- 
 ral name of " Stationary trade taxes " is given.* Hence, 
 in some shape or another, the whole of the illegal charges, 
 with which the Chinese Government is "overburdening" 
 foreign trade, are finally levied upon it despite of Treaties 
 and " Transit-Certificates." The total value of British 
 trade with China, in 1870, amounted, according to the In- 
 
 * Mr. Drew, in speaking of this " Stationary Trade Tax," remai-ks : — "It waa establish- 
 ed at Kiukiang a few months after the recapture of the city in 1858, simultaneously with tlie 
 other form of le-ktii . . . The tax consisted of the levy upon every shop of a certain fixed 
 number of cash per diem, greater or less for each according to the supjjosed amount of its 
 daily business. In theory this levy was 2 per cent, of that business. To show what it was 
 practically, it may be mentioned that a certain small groceiy, whose receipts were from 
 15,000 to 20,000 cash, was assessed 06 cash, afterwards 35 cash a day; and that one of the 
 largest piece good hongs paid GOO cash a day; the smallest shops paid only 8 or 10 cash. 
 Payments were made once every five days. The principal abuses said to have been con- 
 nected with it were those which, at the inception of the plan, attended the fixing of the 
 sum each shop should pay. Then and later, partiality was shown by the deputy in the sum 
 assessed— in consideration of value received. This branch of tlie le-kin continued in opera- 
 tion (at Kiukiang) until the summer of 1868, when it was abolished as no longer necessary 
 (at Kiukiang)." My own information is at variance with the latter statement.
 
 310 THE TREATY RIGHTS OF THE 
 
 spector-General's Eeturns, to H. Taels 185,417,000; the 
 trade, carried on under Certificate, reaching H. Taels 
 4,804,000, or less than 2^- percent, on imports, and only 
 II. Taels 341,000 or between } and ^ per cent, on exports. 
 For the reasons stated, the certificated inland trade, gene- 
 rally, does not affect the amount of illegal taxation, unless 
 it be, perchance, in the case of Russia, the " Total Value " 
 of whose trade, " coast- wise, inw^ards, and^outwards," ac- 
 cording to the Statistics published by order of the Inspec- 
 tor-General, and to the unreliability of wiiich I have already 
 had more than once occasion to refer, amounted, in 1870, 
 to H. Taels 194,544, whilst her " Transit-Trade inwards " 
 was of the value of H. Taels 16,530, "outwards" of the 
 value of H. Taels 621,088, together H. Taels 637,618, or 
 more than three times the value of her total trade. 
 
 At an early period of this year (1875) a regular strike 
 on the part of the native merchants at Tientsin and, almost 
 immediately afterwards, at Shanghai, was provoked by an 
 attempted change in the present system of levying the so- 
 called transit-duties. The merchants shut their offices for 
 several days, refusing either to ship or to take delivery of 
 foreign goods, and their guilds declared point-blank to the 
 Intendants of Customs, that they would rather relinquish 
 business than yield. Differences between Chinese guilds 
 and Chinese authorities are not laid bare to the " outer bar- 
 barian;" and by the foreign public the real merits of the 
 case were, as usually, altogether misapprehended. If I am 
 correctly informed, the question was, and is, a grave one, 
 although for the present settled by the obnoxious measure 
 being withdrawn by the Intendants of Customs both at 
 Shanghai and Tientsin. 
 
 For some time past the h-lin tax is understood to have
 
 FOREIGN MERCHANT IN CHINA. 311 
 
 been again the subject of repeated conversations between 
 the foreign Ministers at Peking and the Tsung-H Ya-men, 
 and, as the time for the revision of the German Treaty is 
 approaching, the Chinese Government would seem to have 
 bethought itself of the best manner in which not only to 
 keep up the tax, but to save also the heavy expense of its 
 present method of collection, by " sacrificing " the inland 
 harriers to the urgent demands of Western diplomacy and 
 the Tieeit J -rights of Foreign trade, against a fair compensation 
 in the shape of an increased rate of import-duty on opium, 
 or the like. With this end in view, the Intendants of Cus- 
 toms at Tientsin and Shanghai appear to have received or- 
 ders from the Tsung-li Ya-mun — it may not unreasonably 
 be supposed with the cognizance of the Foreign Inspector- 
 General, — to levy the tvhole of the charges, now levied on 
 foreign Trade at the ports and inland, at the ports. The 
 idea was a brilliant one. No doubt the Chinese Govern- 
 ment calculated, on the part of the foreign merchants, either 
 upon their indifference, having for years past allowed a va- 
 riety of heavy illegal taxes to be imposed on their trade in 
 the very Foreign Settlements, or upon their ignorance of 
 what is going on, in the way of taxing foreign goods, at 
 their own ports ; on the part of Western Powers and their 
 Representatives, upon the theory of the British Board of 
 Trade, supported by the British Minister in Peking and the 
 Foreign Inspector-General of Chinese Maritime Customs, 
 that, in a fiscal sense at least, a bale of shirtmgs or a chest 
 of tea and a Chinaman being identical things. Western Go- 
 vernments have no right to interfere, in the matter of tax- 
 ing, between the Emperor of China and " his subjects." 
 Unfortunately for the success of the measure, it placed the 
 whole burden of the taxes in question on the shoulders of
 
 312 THE TREATY RIGHTS OF THE 
 
 the native merchants at thejiort-s; and the native merchants 
 at the ports being less philosophical and logical than the 
 Lords of Her Britannic Majesty's Privy Council for Trade, 
 and less loyal to " the Son of Heaven " than the Eepresen- 
 tative of England and the Tsiing-li Ya-mcn's foreign confi- 
 dential adviser, they rebelled against that measure f and 
 thus, for the time being, it fell to the ground. 
 Annexed is the Table referred to : — 
 
 t At Shanghai the " Grower's tax " had been levied for some time past, and so far as 
 this particular impost is concerned, it was at the port in question rather against the conti- 
 systcm, that the successful opposition of the mer?hant« w?? directed.
 
 WoOLLBRI,— Cunlets 
 
 
 ^ 
 
 ilili 
 
 
 I
 
 FOREIGN MERCHANT IN CHINA. 315 
 
 It will be interesting as well as instructive to compare the 
 preceding table with a similar, though more general and 
 less complete one, given by Mr. Dick, Commissioner of Cus- 
 toms at Shanghai, in his ** Suggestions for the Kevision of 
 the Chinese Customs Tariff and Trade Regulations," append- 
 ed to the " Eeports on Trade at the Treaty Ports in China 
 for the year 1869, published by order of the Inspector-Ge- 
 neral of Customs," and to which special attention was in- 
 vited, at the time, by the latter. " It will be seen," Mr. 
 Hart in his short Introduction, dated July 21, 1870, re- 
 marks, "that Mr. Dick has worked up his subject with 
 much thoroughness, and that the form in which he pre- 
 sents it is not less calculated to awaken interest, than is 
 the matter, thus brought together, to be of public utility. 
 I desire to take advantage of this opportunity to thank Mr. 
 Dick for the work done by him in this connection." Hence, 
 Mr. Dick's Table may be safely inferred to represent no 
 overdrawn picture of Chinese surcharges. Lideed, the 
 chief results arrived at by both of us differ widely; but, 
 then, this difference will be fully explained by me, and, as 
 I have already had occasion to point out, neither the In- 
 spector-General nor the Commissioner of Customs at Shang- 
 hai, any more than the Commissioner at Kiukiang, Mr. 
 Drew, — whose '^ Memorandum on the Le-kin Taxing Sys- 
 tem of the Province of Kiangsi," previously quoted, I shall 
 have further to refer to, — are over-strong in arithmetic and 
 arithmetical logic. 
 
 The arrangement of the two Tables is not altogether the 
 same. Whilst, in the first place, my own professes to give 
 the mean imposts levied on imports at a port and in the 
 province in which the port is situated, (taking for a main 
 basis the imposts levied on foreign goods at Shanghai, on
 
 310 THE TREATY RIGHTS OF THE 
 
 the way to Sii-cliow, and at and beyond Su-chow, tlie near- 
 est inland centre of commerce or principal mart in the Pro- 
 vince of Kiangsu, in which Shanghai is situated, and the 
 whole of the imposts levied on exports, — the table of Mr. 
 Dick professes to give the mean amomit of imposts levied 
 on imports and exports both at the ports and throughout the 
 Interior. But it really gives the mean imposts, except on 
 Metals, chiefly as levied at the ports alone. His Table is 
 headed thus: — ''Estimated Chinese Revenue from foreign 
 trade, in the shape of import- and export-duties, collected 
 l3y the Foreign Customs, and native charges collected by 
 native offices, on merchandise passing through the Treaty 
 Ports ; excess of the total thus collected over the total due 
 if the Treaty commutation of inland charges were carried 
 into effect; and estimate of the loss caused to the Chinese 
 revenue by Hongkong being a free port." This language 
 is unmistakeable ; and, as though it were to remove every 
 doubt on tlie subject, Mr. Dick observes: — "The informa- 
 tion about inland charges is unavoidably very imperfect, 
 but it is the result of a set of Eeturns obtained from all the 
 Treaty Ports last year, and is the nearest approximation to 
 facts that it is possible to make at present. Against the 
 excess over Treaty rates we have on the other side of the 
 account the hea^^ loss caused to the Chinese revenue by 
 Hongkong being a free port.... On the inland and other na- 
 tive charges generally, the expense and waste of collection 
 must be excessive, as the principal feature of the system is 
 that several officers are kept to do piecemeal what could be 
 done by one, as is exemplified on a small scale by the opium 
 charges levied at Foochow and Shanghai." Finally, in a 
 Table of "Comparison of Tariffs," Mr. Dick states the 
 "Duties (Tarilf and Native charges) in China, 1868, on
 
 L- 
 
 ESTIMATED CHINESE REVENUE moil FOREIGN TRADE, is the sbapk op IMPORT and EXPORT DUTIES, c 
 
 AKD NATIVE CHARGES collected by NATIVE OFFICES, qh MERCHANDISE passiso teboijcb thr TREA: 
 
 EXCESS OF THE TOTAL thus collected over the TOTAL DUE if the TREATY COMMUTATION of INLAND CHARGES i 
 
 AKD ESTIMATE OF the Loss CAtreEii to the CHINESE REVENUE dt HONGKONG beisg a Fhee Poi 
 
 B FOREIGN CUSTOMS, 
 
 „e=. 
 
 Tariff Dutv. 
 
 Ifatltf Charge*, 
 
 on luh goodi at 
 pMtl^UUUr. 
 
 Tdlai of Tariff and Native 
 Charges. 
 
 Treaty ratt o/hatj 
 TariffDulf. 
 
 -xs- 
 
 Toua quantillet 
 
 QuanlitiMirai 
 
 ,r...ZZ\.u... 
 
 .X. 
 
 .... 
 
 Centage 
 
 ^ 
 
 
 ..,.. 
 
 CtiUagt 
 
 r^. 
 
 
 
 
 },. 
 
 80,0)9 
 1C0,M1 
 
 z 
 
 3,431,815 
 818,388 
 
 Hongiong 
 
 uo by Hone 
 
 uid Macao 
 
 90. boiii« 
 
 4099,130 
 £65,280 
 
 8.G9) 
 
 DfreoP 
 
 .l» Opiu 
 
 4,099,436 
 1,146,769 
 ^429 
 
 60S.5U 
 
 «1,7II«| 
 
 eo.uoj 
 
 f>«i. 10l',8D6 
 
 
 '^^o iH i^lSsT 
 
 W0(^^N QoM.3 : laKng Cai^eM 
 
 ffniport Dutitt Mluailff eoilteUd 
 
 A 
 
 «,.« 
 
 ,.™« 
 
 6,616,947 
 
 MM..« 
 
 
 
 TE4: STcrago mine TU.2B per pe- 
 oal; Tariff DtttyTI«.2.D.0.0.. 
 
 peoul ; Tiuifl Dnt; Tb. 10, . . 
 
 8,617,860 
 
 ::::: 
 
 em.im 
 i,eie,(Ma 
 
 '■::: 
 
 zz 
 
 —- 
 
 ml.. K« 
 
 (EnoTt Dutia mtuMv eelUcltd 
 
 B. 
 4,865,627 
 
 «,OO0,E68 
 
 >„ 
 
 6,540.35a 
 
 ,«,., 
 
 
 
 GaAKD ToTU. Tls, 
 
 by Foreign Cuitomi. 
 
 
 ...<. 
 
 tonebBiDe 
 
 tt ia MHnittlcd tt npirarfa o( 
 m Pebimry lllb, 1M9, to Jnn 
 
 „.,.,0.0,„0„. 
 
 
 r^^
 
 FOREIGN MERCHANT IN CHINA. 317 
 
 whole commerce," to have amounted to 12 per cent. As 
 Mr. Dick cannot possibly have been unacquainted with the 
 fact that inland imposts are levied both upon Exports, and 
 upon Cottons, Woollens, etc., as weE as upon Metals, not 
 at the ports alone but tliroughout the Interior, there exists 
 no alternative for us but to conclude, that the Shanghai 
 Commissioner of Customs lias knowingly excluded tlie far 
 greater proportion of the latter taxes, — a very important 
 item, — fi'om his Estimate of Chinese Ke venue derived from 
 Foreign Trade, and ''Excess at present collected." In- 
 deed the truth of this conclusion wiU be proved, in the se- 
 quel, out of his own mouth. 
 
 In the second place, Mr. Dick's Table gives that ''Ex- 
 cess "over the "Amount leviable if Native charges were 
 commuted at Treaty rate of half Tariff duty," i.e. over tlie 
 total of imposts legally leviable in China upon foreign 
 Trade, — import- or export-d.uties and the inland charges 
 commutation-tax. In other words, it gives directly the 
 amomit of illegal taxation to which Foreign Trade is sub- 
 ject; whilst my Table gives the imposts levied in addition 
 to the Tai'iif import- and export-duties, and finally, by de- 
 duction of the half-duty, reduces the total to the standard 
 in ques'tion. The other features, in which the two Tables 
 either differ or agree, speak for themselves, and require no 
 observation. For the sake of comparison, I subjom Mr. 
 • Dick's Table in extcnso : —
 
 318 THE TREATY RIGHTS OP THE * 
 
 I will now go over the two tables seriatim, after observing 
 that Mr. Dick's results are of themselves less exact, because 
 they are based on " average values," and Grey Shirtings, 
 " taken as an example " for Cottons, Camlets taken in the 
 same sense for Woollens, and Nail Rod Iron for Metals. As 
 regards Opium, which does not affect the " Amount of Ille- 
 gal Taxation," Mr. Dick makes the Native charges 11*20 
 per cent., whilst I make them 14-15 per cent., or 2*95 per 
 cent, more I than he does. The difference arises from this, 
 that Mr. Dick calculates the clioiv-fang, w^hich he still terms 
 '' a Defence tax," at Taels 5.5.0.0. and the Wharfage dues 
 at Tl. 0.4.4.0. per chest, i. e. the former impost at about one 
 fifth, instead of Tls. 15 per picul or one half, the import 
 duty, the latter at its nominal rate of 1 per mille. But it is 
 a well-lmown fact that the Tau-t'ai of Shanghai, as Inten- 
 dant of Customs, actually levies just ten times that rate, or 
 1 per cent. At Foochow this charge appears to be collected 
 upon Opium under the name of " Kuan-hang " at the nomi- 
 nal rate of Tls. 1.4.4.0. per picul, or about ^^ per cent., as 
 mentioned by Mr. Dick himself. It would be, indeed, strange 
 if some such impost of questionable accountability were not 
 resorted to by a Chinese official ua the position of an Inten- 
 dant of Customs. As to the amount of chow -fang, it certain- 
 ly figures in an official list, furnished by the Tau-t'ai of 
 Shanghai, and of which I have a copy before me, not at 
 Tls. 5.5.O.O., but plainly at Tls. 5.0.0.0. per chest. In a 
 list, however, indirectly obtained from " the Defence Tax 
 Office " itself, the choiv-fang levied on Opium is returned at 
 Tls. 15.0.0.0. per picul, and, as though for the purpose of 
 
 J At variance herewith, the difEerence between Mr. Dick's percentage of Total Revenue 
 of 18.50 per cent., and mine of 20.63 per cent., is only 2.13 inrtead of 2.95 per cent : differ- 
 ence 0.82 per cent. This arises from the corresponding difference in the percentage of import 
 duty, in Mr. Dick's table == 7.50, in mine = C.'IS per cent, in the mean.
 
 FOREIGN rvIERCHAN'T IN CHINA. 319 
 
 preventing any mistake about it, the chief figure is \mtten 
 in full, viz.: f^ £. M, "ten and five taels" per picul. As 
 this charge is in accordance with the established rule, by 
 which choiv-fanrj is levied at the rate of one half the import- 
 er export-duty, respectively, and moreover brings the total 
 percentage of the " Transit-," as distinguished from the 
 " Stationary "-imposts, up to the nonnal rate of 20 per cent., 
 I have unhesitatingly adopted it. As to the amount of le-kin 
 Mr. Dick very closely agi-ees with me. The whole difference 
 between us here, amounts to 2-13 per cent., for 1870 = about 
 ^165,000, by which he estimates the (tabular) Eevenue || 
 from Opiimi short of the truth. 
 
 The mean rate of import duties on Cotton, as given by 
 Mr. Dick = 3-85 per cent., and myself =3*84 per cent., is 
 virtually identical. But, whilst I make the additional charges 
 = 12-05, the total revenue = 15-89, and the amount of ille- 
 gal taxation (withm the importing province) = 10-13 per 
 cent, he makes the same items = 4*05 for native i.e. addi- 
 tional charges, = 7-86 for the total revenue, and = 2*15 for 
 illegal taxation (throughout China), or 8 per cent in each 
 case less. He omits to state of what elements his 4*05 per 
 cent native charges consist. I make the Port taxes only 
 3*1 per cent; but it is quite possible that they alone, inclu- 
 sive of the native Custom-house charges, which I have not 
 taken into consideration, may amount to about 1 'per cent 
 additional. More probably the difference rests on some er- 
 ror of his own.§ It is simply a fact, however, and one 
 which cannot possibly have been unknown to the Commis- 
 
 II It should be borne in mind that my Table gives only the Total Revenue which is 
 derived from Foreign Imports within the importing Province, and, more especially as regards 
 Opium, independently of all '• Stationary Taxes." 
 
 § This, as the sequel will show, is positively so ; information, subsequently obtained, 
 furnishing the proof. I leave the whole of my argument as it originally stood, since it will 
 not lose in force by independent confirmation.
 
 320 THE TREATY RIGHTS OF THE 
 
 sioner of Customs, that between Shanghai and Su-chow, 
 the nearest centre of trade in the Interior, the amount of 
 le-kin actually levied upon Shirtings and other Foreign Cot- 
 tons, is about 6 'per cent. According to the estabhshed rule 
 of levying le-kin, the same a& chow-fang, at fi-actions of tlie 
 Tariff import- or export -duties, addmg 10 or 20 per cent., 
 respectively, for collecting and other " squeezes," I have 
 put it down at 5^2 per cent only. 
 
 The native consumption of foreign goods at tlie ports and 
 the nearest centres of trade themselves is compai'atively trifl- 
 ing: it mainly takes place beyond the latter places, from 
 which the goods are further dispersed. But, if I am weU 
 informed, — and I have every reason to believe that I am, — 
 the Board of Revenue at Peldng have adopted the principle 
 of levying within the importing province, upon Foreign 
 Trade, a clear 10 per cent, in addition to chow-fang and the 
 import- or export-duties stipulated by Treaty, in the shape 
 of le-lm; of having this tax, together with the chow-fang 
 tax, collected upon opium exclusively at the ports, because, 
 so far as Opium is concerned, there is no legal objection to 
 it; upon other Imports, exclusive of chow-fang, which ap- 
 pears to be not an Imperial but a Provincial tax, solely in 
 the Interior, — namely, three -fifths of the full amount before 
 and at the nearest centre of trade, and two-fifths at inland 
 stations beyond,— because the impost is an illegal one; 
 and upon Exports, for the same reason, — the chow-fang tax 
 excepted,— exclusively at the place of produce and mland 
 stations. Finally, I learn, that the Board of Revenue have 
 laid down the rule that the total amount of taxes levied 
 upon Foreign Trade, whether Imports or Exports, shall, 
 exclusive of tariff import- and export-duty, for the present 
 at least, not exceed twenty per cent, ad valorem. And all this
 
 FOREIGN MERCHANT IN CHINA. 321 
 
 is SO completely in accordance with the character of Chinese 
 administration, the policy of the present Government, and 
 facts actually kno\^T.i, as to exclude every reasonable doubt 
 as to the literal truth of the system here delineated. What 
 tends further to complete the proof is this, that Mr. Dick 
 himself admits the total charges upon Metals, within the 
 importing province, to be 20-00 per cent. ; whilst, comput- 
 ing them on the basis of Tariff and other official lists of du- 
 ties levied at Shanghai, and positive rates of taxes imposed 
 at Su-chow and intermediate stations, complemented by 
 the charge of two-fifths of 10 per cent. = 4 per cent., raised, 
 according to the system indicated, at stations further in- 
 land, I find those total imposts to amount to 19-15 per cent. 
 But a general principle of transaction, which holds good of 
 Metals (and opium besides) : what reason is there to as- 
 sume that it should not hold good of all other articles of 
 commerce as well? It will be seen that such is, indeed, 
 the case. 
 
 To revert now to the special article of Cotton goods. The 
 first 8 per cent, additional imposts, levied upon them at the 
 port and inland up to the nearest centre of trade, are a po- 
 sitively ascertained fact. So is the existence of le-km Bar- 
 riers beyond the nearest centre of trade, both in the im- 
 porting, and other, provinces. That further war-taxes, 
 therefore, are paid within the importing province, is certain. 
 But the particular amount of 4 per cent., which I have 
 adopted for the complement of these charges, is fully war- 
 ranted, — and that in the sense of a minimum, by the inform- 
 ation obtained, and the fact of an analogous tax being ad- 
 mittedly levied upon Metals, — a class of goods far less ob- 
 jectionable to the Chinese Government than are cotton 
 manufactures. Mr. Dick, consequently, estimates the
 
 322 THE TREATY RIGHTS OF THE 
 
 amount of Chinese (tabular) Eevenue from Cottons as ap- 
 plied to 1870, by 8-03 per cent., or about X'410,000 short of 
 the truth. 
 
 For Woollens Mr. Dick takes Camlets as an example, 
 and the import-duty, which I make for Camlets 6*3 per 
 cent., in near accordance with me, at 0-04 per cent. The 
 mean duty amounts to only 4*76 per cent.; but, as Mr. Dick 
 deducts the duty and half duty, according to his own stan- 
 dard, from the total revenue, the difference does not mate- 
 rially affect the result. The native or additional charges, 
 however, which I find to amount to 13*33 per cent., he 
 makes, again without stating of what elements they are 
 composed, 4*41 per cent. only. My charges " at Port " 
 reach 3*5 per cent. The difference, as before, is hardly 1 
 per cent., and it would appear that Mr. Dick's " native 
 charges " either include Custom-house dues, which I have 
 neglected, or that the difference in question is connected with 
 the difference between his " allowing" and ''not allowing" 
 for goods ''paying" or "that paid commuted Transit- 
 Dues." There is confusion here in Mr. Dick's ideas; for, 
 it is plain that his "native charges" represent a definite 
 amount of taxes actually levied, whether in part at 4*4, in 
 part at 3*0, per cent., or at any other rate of per-centage, 
 upon goods of a given value ; that, consequently, the sum 
 of the imposts levied bears but one absolute proportion to 
 the value given; and that there is no room for either " al- 
 lowing " or " disallowing; " while I have previously shown 
 that the commutation-tax does not affect the amount of il- 
 legal taxation, and, hence, that the vaJiie of goods sent un- 
 der transit-passes should not be deducted from the respec- 
 tive total values. His differences, therefore, between 8.50 
 and 7'86 = 0*64 per cent, on Cottons, between 10-98 and 10-45
 
 FOREIGN MERCHANT IN CHINA. 323 
 
 = 0'53 per cent, on Woollens, etc, rest on an erroneous prin- 
 ciple of calculation; and to all appearance he has computed 
 a percentage for native imposts by those differences, re- 
 spectively, short of what he should have done, so that the 
 charges in question represent, for Cottons and Woollens, 
 very nearly the unposts levied at the port alone. The next 
 additional 6 per cent, ofmy Table are taxes positively known 
 to be levied on the latter class of goods ; while the same re- 
 marks, which have been offered on the analogous tax on 
 Cottons, apply to the complementary 4*0 per cent, for k-khif 
 levied at Barriers beyond the centre of trade nearest to the 
 port, in the unporting province. Mr. Dick's estimate of the 
 amount of Chinese (tabular) Kevenue from Woollens, ap- 
 plied to 1870, falls by 7-64 percent, or about ^2128,000 short 
 of the truth. 
 
 In connection with the article of Metals, an entirely new 
 feature in Mr. Dick's Tablo forces itself upon our attention. 
 He makes the import-duty 5.68, whilst I make it 5*77, per 
 cent. He makes the native or additional charges 14.32, 
 whilst I make them 14.18, per cent. He makes the total 
 of Tariff and native charges 20.00, whils I make them 19.95 
 per cent. There is here, essentially, a complete accord be- 
 twcm us. But while Mr. Dick as usual does not state of 
 what elements his 14,32 per cent, of native charges arc 
 made up, my corresponding percentage of 14.18 per cent, 
 is made up of the same elements, and computed on the 
 same principles, which constitute the basis of the Chinese 
 system of taxing Foreign Trade, In this parfmiJar instance, 
 therefore, Mr. Dick fully and literally confirms that system,, as 
 applied hy mc ; and at the same time, more especially when 
 considering that he makes his " Total of Tariff and Native 
 Charges, without allowing for goods paying commuted
 
 324 THE TREATY RIGHTS OF THE 
 
 Transit-Diics," 21*45 per cent., testifies to my having kept 
 irilliin the hmits of actual taxation, as it has been through- 
 out my plan and purpose to do. Exaggeration in a case 
 like the present could only tend to cast suspicion upon the 
 result arrived at, and the cause advocated. Besides which, 
 I am not given to exaggerate in any shape or form. Neither 
 have I the remotest personal interest in the whole question 
 at issue. My " additional imposts Imown to be levied at 
 the port" amount to 3.85 per cent.; those known to be levi- 
 ed at, and between the port and the nearest centre of trade, 
 6*33 per cent., together 10-18 per cent.; whilst the com- 
 plementary imposts which I am informed are levied beyond 
 the nearest centre of trade, within the limits of the import- 
 ing province, are taken, as before, at 4*00 per cent. Mr. 
 Dick, therefore, must, so far as metals are concerned, have had 
 a hioivledge, in accordance with my oivn infarmation, of the 
 ivhole of these charges. Why, then, he should have ignored, 
 and excluded fi'om his table, with the exception of the Port 
 charges, the further analogous imposts upon Cottons, Wool- 
 lens, and other articles of commerce, I am not in a position 
 to explain. In regard to Metals, he estimates the Chinese 
 (tabular) Revenue, as collected in the importing Province, 
 at fully its true amount. 
 
 The import-duties on Sundries I find to be 4-47 per 
 cent., whilst Mr. Dick erroneously adopts only 3*50 per 
 cent, for this item. The reason is chiefly that he has taken 
 the duty upon Opium for 1868 too high, namely, 7*50, 
 whereas I make it from actual returns for 1870 only 6*48 
 per cent. Hence, as we both compute the percentage of 
 duty for Simdries from the remainders of the given Value 
 of Imports and Amount of Duties actually levied by the 
 Foreign Customs, he necessarily finds this percentage too
 
 FOREIGN MERCHANT IN CHINA. '325 
 
 low by a corresponding fraction. I make the additional 
 imposts, with the exception of the complementary 4*00 per 
 cent, which have now been fully established, actually kno^vn 
 to be levied, 12.20 per cent. ; Mr. Dick, without furnishing 
 any details, makes them only 3-50 per cent., being, within 
 0*20, the amount of charges = 3*30 per cent., levied at the 
 ports alone. The total charges, therefore, which he takes 
 at 8*00 per cent., amounting in reality to 16'67 per cent., 
 he estimates the Chinese (tabular) Revenue, as applied to 
 1870, from Sundry Imports by 8°67 per cent, or about 
 ^£444,000 short of the truth. 
 
 While from actual returns I find the export-duty on Silks, 
 for 1870, to be 2*17, IVIi-. Dick makes it, for 1868, = 2.39 
 per cent. The additional charges, according to him, amount 
 to 4*26 per cent. As he does not state what items they con- 
 sist of, it is possible that they include charges levied at the 
 ports only. In none of the official lists which have become 
 known to me, is the amount of choio-fang on this article 
 given ; nor have I succeeded in collecting any positive in- 
 formation on the subject, and, therefore, omitted from my 
 Table the charge altogether. Instead of Mr. Dick's per- 
 centage, just alluded to, I make the le-kiii, inclusive of pro- 
 duce-tax, trade-licences, etc., levied in th« producing locality 
 and at inland stations - 10 per cent., partly on the ground 
 of information obtained, partly on that of positive facts. 
 The former is supported by the circumstance, that the 
 le-hin of 10 per cent, levied upon Silks inlcuid, because ille- 
 gally levied, is but the counterpart of the le-Jcui of 10 per 
 cent, levied upon Opium at the ports, and corresponds to the 
 mean amount of le-kin, hioivn to be levied, — for the reason 
 just stated, inland — upon all other articles of importation. 
 As to the positive facts alluded to, Mr. Dick assures us, it
 
 320 THE TKEATY RIGHTS OF THE 
 
 is trac, that the charges as given by him arc the neare&*t 
 approximations which it is possible to make at present : 
 but we have seen, that this statement is not consistent with 
 the proofs aclduoecl by me ; nor can Mr. Dick have remem- 
 bered, that ah'eady his predecessor, the late Mr. FitzRoy, 
 in his official report, dated March 15th, 1867, stated that 
 Silk, coming from the Interior to Shanghai, was even at 
 that time paying uimanh of Tls. 30 per bale, or Tls. 37*5 
 per pieul, by way of transit-dues. Now, taking the import- 
 duty with Mr. Diok at 2*4 per cent., being Tls. 10 per 
 picul, the rate of Tls. 37*5 itself would make 3| x 2| = 9 per 
 eent. ad valorem ^ hnown to have been levied inland upon 
 Silk, m 1866 and at the commencement of 1867, in the 
 sliape of U-hin ; and if we add to it but Tls. 5 per pici\l for 
 either the margin left by Mr. FitzRoy or for subsequent 
 increase of taxation, w^e obtain the full unpost of 10 per 
 cent., in perfect accordance with the system which has 
 b^en found to obtain in all preceding cases. It will be re- 
 collected also, from the confiscation-case of the Messrs. 
 Bower and Hanbury, that the Barriers lev}ang the Ic-Uit 
 tax upon Silk extended (from the Interior) to the unmediate 
 vicinity of Shanghai, and, it may hence be safely inferred, 
 to that of every other siUi-exporting port. It is, therefore, 
 certain that the total percentage of charges upon Silks, 
 amounting to 13*07^/o5 adopted in my table, is hcloiv the rate 
 actually levied ; and that Mr. Dick's estimate of the Chinese 
 (tabular) Eevenue from this staple article of produce, ap- 
 plied to 1870, fails by at least 6 ••12 per cent, or about 
 ^446,000 short of the trath. 
 
 In regard to Tea, Mr. Dick makes the export-duty 10.87, 
 while I make it 10.91, per cent., the accord being as good 
 as perfect. The choic-fang in my Table is taken from ofidcial
 
 FOREIGN MERCHANT IN CHINA, 327 
 
 lists, and the charges levied at the poii of 5*45 per cent, 
 are, therefore, proven. Mr. Dick states the whole of the 
 native or additional charges to amount to 8- 35 per cent., 
 without, as usual, saying of what elements they consist. 
 They leave only 2' 90 per cent, for inland charges proper, 
 which I make 10*94 per cent., and hence Mr. Dick's total 
 imposts reach only 19-22, whilst mine amount to 27*26 per 
 cent. : the difference being, — as they are approximately 
 throughout save in the case of Metals (and opium), — 8*04 
 per cent. The principal item of the inland chai'ges is the 
 Produce or " Grower's Tax." From the information I have 
 collected, it amounts on Tea in the mean to about 6 per 
 cent. Adding to this and the charges levied at the Port 
 only 5 per cent, for trade -licences and U-hin^ we obtain a 
 total of 16-45 per cent., which coincides as nearly as possi- 
 ble with the mean total of my table. And this, from all I 
 can learn, is hcloio the truth. Thus, I find it stated in the 
 " Annual Eeview of the Shanghai Tea Market for the year 
 1870," issued by the Messrs. Little & Co. who have taken 
 special trouble in inquiring into the amomit of native 
 charges actually levied upon Tea in the Interior, that, 
 calculated for the pound, they may be estimated at 3i^ cents ; 
 or more correctly at $3.5 j^er picul, being as nearly as pos- 
 sible 20 per cent, ad valorem. The total amount of taxation 
 of 27*3 per cent., to which, according to my Table, Tea 
 is subject in China, may at first sight appear excessive ; 
 but it must be remembered that it represents, for the year 
 1870, a value of c£2,476,520 sterling on Piculs 1,369,060, 
 being in round numbers equal to 182,541,000 lbs., that is 
 to say, a value of three pence farthing per lb., and no more. 
 Yet, though out of this tax, the proportion of Illegal Tax- 
 ation amount actually to a penny farthing per pound only ;
 
 828 THE TREATY RIGHTS OF THE 
 
 it is just so much which the consumer pays above what he 
 ought to pay, and in the aggregate comes to nearly one 
 milhon pounds sterhng, year after year taken by China out 
 of England's pocket. 
 
 As regards le-kin payable u^^on Tea, Mr. Drew, it is tme, 
 incidentally remarks, in speaking of " the Hohow Tea pay- 
 ing 1-40 taels Lo-te-shwuy " — Grower's Tax — "besides the 
 usual Ta-ku-t'ang chity," on the character or amount, of 
 which he is silent : — " Tea, unlike other articles, does not 
 [sic] appear to elude native revenue officers. It is well- 
 Imown, too, that it does not pay Likm." But Mr. Drew's 
 Imowledge, like his logic, I fear, is of a somewhat unreliable 
 nature ; and, certainly, does not extend to his colleagues 
 and the Inspector-general. On mere names or designations, 
 moreover, little impoiiiance can be attached in the history 
 of Chinese taxation of Foreign Trade. The chow-fang, at 
 most of the ports, vanishes to the Western eye, because it 
 is levied by the Le-kin Office ; and the le-hin occasionally 
 disappears in certain localities and in connection with cer- 
 tain articles of commerce, because it is colle<;ted either 
 at the Port or at the iimrt of production : but the impost itself 
 remains ; and this is, after all, the principal point which 
 concerns us. Mr. Dick estimates the Chinese (tabular) 
 Kevenue, as applied to 1870, from Tea, by 8-04 per cent., or 
 about .€730,000, short of truth. 
 
 The Export-duty on Sundries Mr. Dick takes at 4*00 
 per cent., while from a careful calculation based on the actual 
 Eeturns of the Custom-house, I make it for 1870 = 5*53 per 
 cent.; and whilst he adopts, without any reason, for the 
 native charges on Sundry Exports, the same low percentage 
 which he had adopted for " Sundry Imports," namely, 4*50 
 per cent., I find it to be 13*70 per cent., calculating on the
 
 FOREIGN MERCHANT IN CHINA. 329 
 
 basis of known facts or established principles. The Chinese 
 (tabular) Kevenue, as applied to 1870, derived from Simdiy 
 Exports, Mr. Dick estimates by 19-23 -8-50- 10-73 per 
 cent., or about ^£265,000, short of the truth. 
 
 These remarks leave me only some few observations of a 
 more general character to add. It may possibly be argued 
 that the details of my " additional " taxatioA are, so far at 
 least as Imports are concerned, chiefly derived from the 
 syBtem practised at Shanghai and between Shanghai and 
 Su-chow ; and that they do not apply generally. But I am 
 able to return a most satisfactory answer to such an ob- 
 jection. For, in the first place, my information as to de- 
 tails is by no means restricted to Shanghai ; the system of 
 taxation, though to some extent its practical application be 
 left optional with the Governors of each province, emanates 
 from the Board of Kevenue in Peking, and is essentially a 
 uniform one ; and the details, collected, are in perfect ac- 
 cordance with that system, as it has been delineated to me 
 by a reliable informant, and professedly from the most 
 authentic source. In the second place, the port of Shang- 
 hai, from its greater importance, may not unreasonably be 
 concluded to represent the normal port for Chinese taxation. 
 And this is fully borne out, in the case of Opium, by a list 
 of " Total charges," furnished by Mr. Dick himself, and 
 which I will here transcribe : —
 
 330 
 
 THE TREATY RIGHTS OF THE 
 
 CnAHGES I.K\IEI> AT THE DIFFERENT TREATI PORTS ON OPIUM, 
 
 (AJter Fngmcnl of Ihr. Trrtiltf Import Duty of TU. 30 per Pecul.) 
 
 Ports. 
 
 Amount of Native Charges per Pkcuu 
 
 QnA.VTITY 
 
 Imported ii^ 
 18C8, 
 
 At the Port. 
 
 On tlic "suy to the 
 
 Principal M*rlvot in the 
 
 Intciior. 
 
 Total. 
 
 Ncwcliirang 
 
 Tientsin 
 
 Clicino 
 
 Tls. 18.6.a0 
 
 „ 17.0,0.0 
 
 „ 18.6.0.0 
 „ 13.9.2.0 
 „ 84.0.0.0 
 „ 38,4.0.0 
 
 y, 37.2.8.7 
 
 „ S4.ao.o 
 
 „ 84.6.4.0 
 „ 32.1.3.6 
 „ 45.3.4.0 
 „ 90.2.9.0 
 „ 11.0..5.0 
 
 „ 23.aao 
 
 Tls, 10.1.^.7 
 1 „ 36.0.0.0 to PeWns 
 I „ 17.0.aO to Shaasi 
 
 „ vi.iJRA 
 „ 16.9.6.0 
 „ 24.0.0.0 
 
 „ 20."8.6.8 
 
 „ 3!7.ilo 
 
 „ 25,a4.8 
 
 Tls. 28.7.9.7 
 „ 53.ao.O to rpkinR ) 
 „ 34.0.0.0 to Slia.u.si j 
 „ IH.6.0.0 
 „ 30.4.a4 
 „ 50.9.6.0 
 „ 62.4.0.0 
 „ 87.2.8.7 
 „ 34.0.a0 
 „ 105.5.0.0 
 „ 32.1.3.6 
 „ 45.3.4.0 
 „ 90,2.9.0 
 „ 14.7.6.0 
 „ 48.3.4.0 
 
 Pels. 2,68.5.41 
 
 „ 7,421.861 
 
 „ 3,37a85 
 „ 2,915.00 
 „ 1,925.08 
 „ 4.877.99 
 „ 10,779.00 
 „ 4,505.23 
 „ 4,963..52 
 r, 931.41 
 „ 1,020.01 
 „ 3,3ia40 
 „ 4,272.00 
 „ 807,00 
 
 ITaiiliow 
 
 KiiVidamp; 
 
 CliinkKMis 
 
 Hli.iiiyliiii 
 
 Fodcliow 
 
 Tani,^iit , 
 
 l^i^OW 
 
 
 
 
 
 Lnperfect, and, as has been seen, in its details unreliable 
 as this table is, it yet furnishes a fair proof, that the charges 
 at Shanghai upon Opium, — and hence we are justified in 
 inferring, generally, — ^are, if anything, below, certainly not 
 above, the mean of the charges levied at the different open 
 ports. For, on adding the principal columns of Mr. Dick's 
 Table, we find by a general process : — 
 
 Amount of Native Charges per picul. 
 
 At llic Port. Total. 
 
 14 Ports (Tls. 497. 6. G. 3.) Tls. G85. 8. 9. 4. 
 
 Mean, for each Port (Tls, 35.5.4.7.) Tls. 48.9.9.2. 
 
 Shanghai ( „ 37. 2. 8. 7.) „ 37. 2. 8. 7. 
 
 Or, adopting a more correct method, apportioning, of the 
 quantity imported into Tientsin, G,000 piculs to Peking, 
 and neglecting fractions of taels and piculs below 0.5 while 
 taking them at and above 0. 5 for units, we find : —
 
 FOREIGN MERCHANT IN CHINA. 
 
 331 
 
 29 X 
 
 Picul 
 
 s 2,685 
 
 = Tl 
 
 s. 77,865 
 
 53 
 
 
 6,000 
 
 = , 
 
 318,000 
 
 34 
 
 
 1,422 
 
 = , 
 
 48,348 
 
 19 
 
 
 3,371 
 
 = , 
 
 64,049 
 
 ,30 
 
 
 2,915 
 
 = , 
 
 87,450 
 
 51 
 
 
 1,925 
 
 = , 
 
 98,175 
 
 62 
 
 
 4,878 
 
 = J 
 
 302,436 
 
 37 
 
 
 10,779 
 
 = , 
 
 398,723 
 
 34 
 
 
 4,505 
 
 — y} 
 
 158,170 
 
 106 
 
 
 4,964 
 
 = ;) 
 
 526,170 
 
 32 
 
 
 931 
 
 = ), 
 
 29,792 
 
 45 
 
 
 1,102 
 
 = )) 
 
 49,590 
 
 90 
 
 
 3,316 
 
 = „ 
 
 298,440 
 
 15 
 
 
 4,272 
 
 = 5J 
 
 64,080 
 
 •48 
 
 
 807 
 
 = „ 
 
 38,736 
 
 for 14 Ports Piculs 53,872 = Tls. 2,555,038 
 
 Mean for each Port... per picul Tls. 47 
 
 Shanghai ,, ,, ,, 37 
 
 The charge at Shanghai, as above, is thus shown to be below 
 the general mean ; which more than confirms the correct- 
 ness of my assumption, and the utmost probability, not to 
 say the certainty, that the results exhibited in my Table 
 do not exceed the truth. 
 
 Mr. Drew, however, states the full inland charges for the 
 province of Kiang-si to be nominally only 10 per cent, ad 
 valorem (with 2 per cent, additional on certain routes), and 
 exclusive of the charges at the port of Kiukiang ; but he 
 generalises somewhat too readily on unreliable data, and is 
 himself, apparently, as unreliable in his statements as he is 
 in his arithmetic. This, in one page he writes : — " In no 
 case that I can learn have the representations of merchants 
 been brought to bear to effect a reduction of the li-kin tariff 
 since it was made, excepting in the mstance of grass-cloth, 
 where their arguments were successful, the hio-h rate on
 
 332 THE TREATY RIGHTS OF THE 
 
 sandalwood, popper, etc,, appearing to be tolerated without 
 munniiring, probably because false declaration of quantity 
 makes it possible to avoid the entire payment due " (I) ; and 
 in the next-following page : — " It has already been mention- 
 ed that the tso-koo was abolished (at Kiukiang) two years 
 ao-o ; the same is true of a tax on the owners of houses, 
 know as " fang-li," the same " li " as in li-kin ; further, at 
 the close of 1868 the maxim vun leviable as li-kin, which had 
 formerly been 1 3 fen, — equal to so many per cent, ad valorem 
 — " for Kiang-si was reduced to 10 fen." Nay, in the very 
 page in which he advances his former opinion, we read : — 
 " In regard to foreign goods it has not been difficult to 
 ascertain the Avay in which the now prevailing li-kin tariff 
 came to. be as it is. IF At the opening of this port in 18G1 
 special exertions were put forth by the wealthy native 
 dealers in foreign textile fabrics who came here " — before 
 the opening of the port, — " in order to get as low a tariff 
 on them as possible, and the influence and various modes of 
 effecting the purpose brought to bear obtained in behalf of 
 these goods a remarkably low valuation, and by consequence 
 a tariff" [ — to native merchants — J "far lower actually 
 than the 10 per cent which it nominally is. A similar 
 course was hardly less successful in regard to metals and 
 sugars. But sandalwood, pepper, cuttlefish, and seaweed 
 had no weighty intercessors to speak for them, and a valor 
 was allowed to be fixed at the discretion of the wei-yuen 
 without external influence. . . The le-kin rates thus esta- 
 
 ^ There is nothing more difficult in China than to obtain correct information respecting 
 SLTxy point of Cliiuese fiscal administration ; and to obtain such information relative to for- 
 eign trade is more difficult than anything else. Chinese officials, as a rule, take a delight 
 in imposing whatever stories may best suit their momentary purposes on European credu- 
 lity, and chuckle over their success. Mr. Kopsch also, the Commissioner of Customs at 
 Chinkiang, decides ex cathedra: — "Transit Dues are not remitted to Peking, as is gener.illy 
 supposed, but are retained by the Provincial Treasuier."
 
 FOREIGN MERCHANT IN CHINA. 333 
 
 blished at Kiu-kiang have, as would naturally be expected 
 in regard to foreign goods ( ! ), come to prevail generally 
 throughout Kiang-si." Again Mr. Drew affirms : — '* No 
 li-kin tariff has ever been published,^"' but the equivalent of 
 a fixed tarifi has gradually grown up in respect of all the 
 important commodities in the shape of a settled custom (!) of 
 paying so-and-so much per package, per pecul, or per piece, 
 according to the article, at the 3 fen barriei*s, and the 
 amount to be paid at the 2 fen places is calculated from the 
 3 fen certificate." I judge it unnecessary to oft'er any re- 
 mark on statements which speak for, and are best left to 
 confute, themselves. When Mr. Drew qualifies the Chinese 
 Atlas, — executed in the most miserable style imaginable, — 
 to which I have alluded in a preceding note, as " the excel- 
 lent Chinese map of the ivorlcl — the ':H, Hn ^ ^ -^ M M M — 
 published at Wu-ch'ang by Kwan Wen in 1863, while 
 Governor-General of Hu-kwang, and based on Jesuit surveys" 
 he betrays thereby that, occasionally, he not only judges of 
 things which he cannot reasonably be supposed to have 
 seen himself, but indulges in observations which indicate a 
 more than ordinary degree of thoughtlessness, and are 
 hardly consistent with the stand-point of a social philo- 
 sopher, a fiscal scientist, an economist, and a moralist, he 
 unitedly claims to occupy. Still, Mr. Drew's paper con- 
 tains, withal, much interesting information : and what it 
 undoubtedly proves is that, in the province of Kiang-si 
 also, the principle of levying, independently of chow-fang 
 
 * Every le-lin Office and Barrier is iu possession of a copy or copies of the official le-kin 
 Tariff, printed on paper of Imperial yellow ; although the officials may not choose to produce 
 
 it or even to own the fact. Mr. Drew writes, without a word of explanation, ^ fyg^ 
 
 instead of ^ ; and styles "Li-kin General Bureau :^ M IS ^ instead of gg 3R I® W* 
 Can the former be the popular designation, as the Head-Office of the drivdin;/ C.ish-(Con- 
 tribution) " ? 1 find it so u.amed also iu the " Ueluriis of Native charges " foi' Niugpo.
 
 334 THE TREATY RIGPITS OF THE 
 
 and other purely provincial or local charges, a clear 10 per 
 cent upon foreign trade, is in force ; although of its applica- 
 tion the writer has, manifestly, been led to forni an alto- 
 gether erroneous opinion. 
 
 Mr. Drew does not mention choiv-fang as levied at Kiu- 
 kiang, and Mr. Dick states : — " The Defence-Tax, levied 
 only on goods landed and shipped by Chinese, is a local one, 
 imposed by the authorities here with the concurrence of 
 Foreign Powers in 1862, for the purpose of raising funds 
 for the defence of the place agamst the rebels " ; whilst in 
 my table it is applied — except upon Silk — to all the ports. 
 On reference to the history of the origin of the " Defence- 
 Tax," which I have given above from official documents, 
 the reader will perceive that Mr. Dick has somewhat mis- 
 apprehended the facts of the case, and that the " concur- 
 rence of Foreign Powers," of which he speaks, really con- 
 sisted in nothing but the qualified concurrence of Sir 
 Frederick Bruce in a temporary capitation-tax to be imposed 
 on Chinese subjects resident in the Foreign Settlement. 
 The Commissioner of Customs sees fit to ignore that the 
 excuse for such a tax has long since ceased to exist ; that 
 when its name was changed from 'Hid -fang to Chow-fang, 
 its character was changed also ; and though, at Shanghai, 
 it continues to be professedly levied only on goods landed 
 and shipped by Chinese subjects, in our sense of the tenn, 
 that, according to the views of Celestial Officials, that 
 term includes the *' barbarian" subjects of the One Auto- 
 crator of the Earth as well. It is true, from the inquiries 
 I have made, that at the various ports it assumes various 
 names, and that, being collected by the Le-hin Offices, it is 
 frequently known by no distinguishing name at all, but in- 
 chided in the general designation ofh'-Jn'n. Thnt, however,
 
 FOREIGN MERCHANT IN CHINA. 335 
 
 as a tax distinct from the le-kin tax properly so called, it is 
 in some shape or other levied at all the poits — which is the 
 main point here, — I feel warranted in affirming positively, 
 on the ground of reliable information collected, and con- 
 firmed, by independent testimony. Thus, Mr. Dick gives a 
 list of the imposts levied on Opium at Fuchow, including 
 " The Le-kin proper, collected by the Le-kin Office Tls. 16, 
 MiUtary tax, (" fang-chow "), collected by the same office, 
 Tls. 9, per pecul." In an official publication of the Cus- 
 toms, to whiclvi-shall presently refer, the " chow -fang " or 
 Defence Tax (ostensibly Tls. 5 per pecul on Opium) is 
 specially named as being levied at Chingkiang ; although 
 the head of the leading mercantile firm at that port, having 
 vainly endeavoured to ascertain the fact, denied it to me. 
 At Ningpo, his native compradore — a Ningpo man — stated 
 from personal knowledge, that it was levied, — in confinna- 
 tion of what, unknown to hun, I had affirmed ; notwith- 
 standing which the Foreign Inspector-General of Customs 
 has naturally remained in ignorance of the fact. His sub- 
 ordinate, the Commissioner at Kiukiang, also, so late as in 
 1869, returned Ic-hin as the only tax levied at that port; 
 yet, in a foot-" Note,"^he remai'ks : — " The collector of the 
 Le-kin tax on Opium is the same one, who collects the other 
 ivdr taxes." And in the case of Metals, in which, as we 
 have seen, Mr. Dick makes the mean total of charges, levied 
 at all the ports, amount to 20 per cent, ad valorem, these 
 20 per cent include chow-fang, computed at the rate of half 
 the import-duty, and, therefore, include it as a tax actually 
 levied, at the mean rate named, at all the ports. But what is 
 true of Metals may here be reasonably concluded to be 
 equally true of every other article of commerce. 
 
 Jn his Memorandum on the Transit Dues, Mr. Johnson
 
 836 THE TREATY RIGHTS OF THE 
 
 speaks of an "arrangement between the Shanghai Opium 
 Guild and tlie native authorities, whereby Opium, which 
 has paid the le-kin and other taxes at Shanghai, may pass 
 absolutely free from further impost througli all the barriers 
 in the province of Keangsoo, Nganwhy, and Kiangsi ;" and 
 Mr. Dick quotes the passage with tacit approval. Mr. 
 Johnson, indeed, is so high an authority on tlie subject 
 under consideration, and so well informed upon all matters 
 relative to it, that it is not without hesitation I question 
 the correctness of his information on this particular point, 
 though it differs from my own. I am supported, however, 
 by Mr. Dick, who writes in 1869 : — " Opium having paid 
 the Taxes at the Opium Office called WM^M IE 1^ Yang- 
 yo-shui-chuen-tsung-chii in Yang-hong-kai, outside the little 
 East Gate of Shanghai, is furnished with a Transit Pass 
 ^ M W- Fen Yuen Tan, exempting it from further charges 
 within the jwisdiction of the said Office, i.e. aU parts of the 
 Kiangsu province South of the Yangtsze." I state this, 
 lest any doubt should arise as ta the fact that the scale of 
 imposts, on which my table is based, is restricted to the im- 
 porting province, and that, on entering a second province, 
 additional duties have to be paid. Mr. Di^w also observes, 
 in reference to what he terms this system of crescit enndo 
 taxation, that/.i., "the officials of Kiangsi will not recog- 
 nize passes issued in Hankow, and vice vo^sd the Hupeh 
 authorities dishonor the passes of Kiukiang." This is the 
 general rule throughout China, although occasional excep- 
 tions to it may occur. 
 
 Having thus, I venture to think, firmly established the 
 basis on which my table is made to rest, and met the ob- 
 jections to which it appeared liable, I may in conclusion 
 proceed to notice an official pubh cation, only just come into
 
 FOREIGN MERCHANT IN CHINA. 337 
 
 my possession, and directly bearing on our subject. It is 
 entitled : " Returns of the Native Charges, as far as they 
 can be ascertained, levied on the principal Imports and Ex- 
 ports, at and near the different Treaty Ports in China ; and 
 of the quantities of goods on which such charges are levied, as 
 compared with the quantities paying the transit-dues speci- 
 fied by Treaty. Published by order of the Inspector-General 
 of Customs. Shanghai, printed at the Customs' Press, 
 December, 1869," pp. 63 and iv., in 4*°. The Table of 
 " Charges levied on the Principal Imports (after payment 
 of Import Duty) — Opium," which occupies page i, is iden- 
 tical with Mr. Dick's Table of " Charges levied at the dif- 
 ferent Treaty Ports on Opium," transcribed above. In fact, 
 the main body of the " Tables of Treaty and Extra-Treaty 
 Charges levied at each Port " appear to contain simply the 
 details, from, and on the ground of, ivhich Mr. Dick had, a few 
 months ])reviouslij, constructed his oivn Table, also published in 
 1869, by order of, and, as has been seen, specially recom- 
 mended to public notice by, the Inspector-General, Mr. 
 Hart. But, while the latter professed to give the aggregate 
 native charges levied upon Foreign Trade throughout China, the 
 former tables profess to give the native charges only, accord- 
 ing to the general title-page levied " at and near the ports," 
 according to the special title-page of the tabular details 
 *' at each port,'' — in perfect accordance with the independent 
 conclusion,t drawn by me from Mr. Dick's Table itself. 
 Both the Inspector-General and the Commissioner of Cus- 
 toms at Shanghai, therefore, appear to me to have laid 
 
 t When analysing Mr. Dick's Table, I was still unacquainted with the existence of the 
 subsequent publication, containing the details, which have obviously served as a foundation 
 for the former. Having in vain applied to the courtesy of the Commissioner of Customs for 
 such information on the subject, as had been /)KWwAe</ by order of the Inspector-General: 
 I am indebted to one of the le;)dinr^ miMCiiiitile firms of Shanghai for the I'ominnuioation of 
 the printptl ••iloturn:^"' iu qu- lion.
 
 338 THE TREATY RIGHTS OF THE 
 
 themselves open, by the publication of* the earlier table, to 
 tlie suspicion, not to say the charge, of having icilfulhj de- 
 sired to mislead their readers as to the actual extent of illefjal 
 taxation, to tohich Foreign Trade is sidiject in China ; and this 
 would seem the more to call for an explanation on their 
 pai't, as I have reason to believe that copies of separate 
 impressions of Mr. Dick's " Suggestions," including his 
 Table, have been communicated to Her Majesty's Board of 
 Trade and distributed in other influential quarters, whilst 
 the details of the "Returns" have been kept back and 
 become very little known. 
 
 It would be a work of supererogation, certainly so f\ir as 
 imports are concerned, to enter into a critical examination 
 of the whole of these fragmentary and more or less unreliable 
 details, since, in a general sense, they have been ah-eady 
 reduced to their proper value, and are now acknoivledged to he 
 restricted to imposts levied at, or at and luar, the ports. One or 
 two of the additional general tables alone, occupying page ii. 
 to iv., deserve notice, to indicate and illustrate the manner 
 in which the details in question have been "made up." For 
 this purpose, I will literally transcribe the first portion of 
 Table ii., *' Charges levied on the Provincial Imports, after 
 payment of Import Duty," relative to Cotton Goods : —
 
 FOREIGN MERCHANT IN CHINA. 
 
 330 
 
 AMOUNT OF KATIVE CHARGES AT AND ON THE WAT FEOM EACH POET, AND 
 
 COMPARISON OF QUANTITIES PAYING TPvEATY TRANSIT DUES 
 
 WITH QUANTITIES PAYINa NATIVE CHARGES. 
 
 
 Amount of Native Charges per Piece. ] 
 
 
 
 Portion 
 
 
 
 
 
 Total Quantity 
 Imported iu 
 
 Portion Pay. 
 inR Treaty 
 
 presnniably 
 
 Ports, 
 
 
 On the Wily to 
 
 
 laying 
 
 
 At the 
 
 .the Priuciiial 
 
 Total. 
 
 1568. 
 
 Transit 
 
 Niktivo 
 
 
 Port. 
 
 Market in the 
 
 
 Dues. 
 
 Charges. ■ 
 
 
 
 Interior. 
 
 
 
 
 
 
 Tl.m.c.e. 
 
 Tl.m.c.e. 
 
 Tl.m.c.e. 
 
 Pieces. 
 
 Pieces. 
 
 PicCPH. 
 
 Newchwang. . 
 
 
 0.0.0.9.6 
 
 {UM).i).6 
 
 121,;;95 
 
 
 l:il,395 
 
 Tientsin 
 
 0.0.4.0 1 
 
 0.0.1.5 to Shansi 
 0.2.0.0 to PekiuR 
 
 0.0.5.5 to Shansi 
 0.2.4.0 to Peking 
 
 1 1,393,377 
 
 
 1,393,377 
 
 Chtjfoo 
 
 
 
 None 
 
 5;%,613 
 
 
 036;613 
 
 Hankow 
 
 0.0.2.3.2 
 
 0.0.0.9.6 
 
 0.0.9.2.8 
 
 1,050,720 
 
 303,582 
 
 720,138 
 
 Iviukiang ; . . . 
 
 0.0.3.7.1 
 
 0.0.8.!;..'; 
 
 0.1.2.3.6 
 
 220,104 
 
 2.000 
 
 218,104 . 
 
 Chiuiiang . . 
 
 
 0.3.5.4.5 
 
 0.3.5.4.5 
 
 174,780 
 
 68,310 
 
 106 440 
 
 Shanghai .... 
 
 0.0.4.2.1 
 
 0.1.2.0.6 
 
 0.1.6.2.7 
 
 563,177 
 
 
 563,177 
 
 Ningi'o 
 
 00.5.9.9 
 
 0.1.3.6.5 
 
 0.1.9.6.4 
 
 295,236 
 
 166,.59G 
 
 1.38,640 
 
 Fooehow 
 
 0.0.5.2.7 
 
 0.1.1.3 
 
 0.1.6.5.7 
 
 65,147 
 
 050 
 
 64,197 
 
 Tfiiusui 
 
 
 
 None 
 
 24,065 
 
 
 24,065 
 
 'I akow 
 
 
 
 ,, 
 
 13,900 
 
 
 13,900 
 
 Am(jy ■' 
 
 0.1.6.0 
 
 
 0.1.0.0 
 
 32,849 
 
 
 32,849 
 
 Kwatow 
 
 
 0.0.3.1 
 
 0.0.3.1 
 
 85,169 
 
 
 85,169 
 
 Canton 
 
 not stated 
 
 not stated 
 
 fO.0.4.0 being the 
 
 114,358 
 
 
 114,358 
 
 
 4,690,890 
 
 558,168 
 
 4,132,722 
 
 
 
 
 Treaty rate). 
 
 
 
 _ 
 
 Cotton Goods. — Qrcy Shirt imjs. — Treaty Import Duty 8 canJareens per piece. 
 Treaty Transit Dues 4 „ „ 
 
 Per piece not exceeding 40 yards by 31 inches. 
 
 * In addition to this amount is paid the Ta Hang Tax, Five per cent, ad valorem. 
 
 In the first place it will be observed, that the expressions 
 " on the way from each Port " and " on the way to the 
 principal market in the interior," are somewhat equivocal, 
 if not deceptive ; for, were it^not for the explanation on the 
 title-page that they are to signify : " near the port," they, 
 certainly, would be misunderstood to include all inland 
 charges, or all inland charges up to the principal market iu 
 the Interior, respectively. In the second place, "it appears 
 unintelligible why, in the case of Amoy, a tax which ex- 
 ceeds by one per cent, the import- duty should have been 
 omitted from the " Total Amount of Native Charges," and 
 consigned to neglect in a foot-note. And lastly, it seems 
 equally strange, that for Canton, where the native charges 
 upon Cotton goods are known to be multifarious and very
 
 340 THE TREATY RIGHTS OF THE 
 
 high, we find them *' not stated." That at Niu-chuang, 
 Tam-sni, Ta-kow, and even at Swatow foreign Cotton ma- 
 nufactures should be subject to no imposts at the ports, is 
 not less remarkable ; but that at Chi-fu, one of the princi- 
 pal importing ports, they escape, both at the port and on the 
 way to the principal market in the Interior, all taxation 
 whatever, is quite surprising. What is only more so, is 
 that, under the circumstances, instead of nearly a million 
 and a half of pieces, a single bale of Grey Shirtings should 
 be sent up to Tientsin, and pay " Tls. 0.0.5.5 per piece to 
 Shan-si or Tls. 0.2.0.0 per piece to Peking," without the 
 Inspectorate-General being apparently able to ascertain 
 which. Yet, whether, out of the 1,393,377 pieces of Grey 
 Shirtings in 1868 imported into Tientsin, a million pieces 
 went to Peking and the remainder to Shansi or vice versciy 
 would involve a difference in the *' Amount of Native 
 Charges " of nearly ^40,000 sterling, and allow a corre- 
 sponding latitude to the Commissioner of Customs in the 
 Returns, and the result deduced from them. 
 
 Although it is, of course, unknown to me what process 
 has actually been adopted by IVIi'. Dick : yet, with the pre- 
 ceding table before us, it is not difficult to trace. Suppos- 
 ing him to have taken of the 1,393,377 pieces of Shirtings 
 alluded to, four-fifths to have gone to Shan-si, i.e. to have 
 paid the trifling imposts of Tls. 0.0.5.5, and one-fifth only 
 to have gpne, not to " Peking " as stated by Mr. Dick, but 
 to Chih-li and the North of China beyond Peking, i.e. to 
 have paid the (nearly five times higher) charge of Tls. 
 0.2.4.0 — which I presume to be about the reverse of the 
 truth — we then, treating fractions of a cash, or the ten- 
 thousandth part of a tael, as before, arrive at the following 
 result: —
 
 { 
 
 FOREIGN MERCHANT IN CHINA. 341 
 
 "Portion presumably Total charges, 
 
 paying native charges." Per piece. Product. 
 
 Pieces 121,395 Tl. 0.0.1.0 Tls. 1,214 
 
 278,675 „ 0.2.4.0 „ 66,882 
 
 1,114,702 „ 0.0.5.5 „ 61,309 
 
 536,613 „ 0.0.0.0 
 
 720,138 „ 0.0.9.3 „ 66,973 
 
 218,104 „ 0.1.2.4 „ 27,045 
 
 106,440 „ 0.3.5.5 „ 37,786 
 
 563,177 „ 0.1.6.3 „ 91,798 
 
 138,640 „ 0.1.9.6 „ 27,173 
 
 64,497 „ 0.1.6.6 „ 10,707 
 
 24,065 „ 0.0.0.0 „ 
 
 13,900 „ 0.0.0.0 „ 
 
 82,849 „ 0.1.6.0 „ 5,266 
 
 85,169 „ 0.0.3.1 „ 2,640 
 
 114,358 „ 0.0.0.0 „ 
 
 Mean 
 
 Pieces 4,132,722 per piece Tl. 0.0.9.7 Tls. 898,783 
 
 Total quantity imported 
 (Pieces 4,690,890 „ „ 0.0.8.5) 
 
 Now, it is plain that, iu order to obtain the correct mean 
 amount of charges per piece — such a mean as is derived 
 from such elements — the product of Tls. 398,783 should be 
 divided by the proper multiplicand, viz. Pieces 4,132,722, 
 showing the charges in question to be Tls. 0.9.9.7 per piece. 
 But Mr.Dick has manifestly taken the improper divisor of 
 Pieces 4,690,890, being the total quantity imported,— upon 
 558,168 Pieces of which the charges, amounting to Tls. 
 88,054, have been excluded from the Product,— and thus 
 obtained the lesser mean rate of Tls. 0.0.8.5 per piece ; 
 because, since he makes Tls. 0.0.8.0 per piece = 3.81 per 
 cent, ad valorem, if we reduce the mean of Tls. 0.0.8.5 in 
 this proportion, we find exactly the percentage of 4.05, at 
 which the total charges are calculated by him in his table ; 
 whilst, *; without allowing for goods paying commuted 
 Transit Dues," he makes the mean rate = 8.50 - 7.86 = 0.64 
 + 4.05 = 4.69 per cent., showing that, in this instance, he 
 has used the proper divisor. For, on reducing the mean
 
 342 THE TREATY RIGHTS OF THE 
 
 rate of Tls. 0.0.9.7 per piece in the proportion of Tls. 0.0.8.0 
 to 3.81 per cent., we find its equivalent to be 4.62 per cent, 
 which nearly enough coincides with Mr. Dick's rate to 
 further prove what his process has been. The difference 
 of 0.64 per cent, is thus seen to rest on his part, as I sus- 
 pected, upon an error in computation, which any tyro in 
 arithmetic should have avoid. Had Mr. Dick calculated 
 correctly, he would have arrived, /?-oot his oxen figures, at the 
 
 following results : — 
 
 Allowing for goods paying Commuted Transit-Dues — 
 
 Pieces 4,132,722— Tls. 398,783— Per pee. Tl. 0.0.9.7=4-62 instead of 4-057o 
 Not allowing for goods paying Commuted Transit-DiTes — 
 
 Pieces 4,090,890— Tls. 484,837— Per pee. Tl. 0,1.0.3 = 4-90 instead of 4-69 °/o 
 
 the equivalent of a difference of 0.57 per cent, on Cotton 
 goods, for 1870, being upwards of ^29,500. 
 
 But, also the elements used by Mr. Dick are, independ- 
 ently of their deficiency, incorrect. I am not speaking of 
 the circumstance that, /. i. in regard to Shanghai, the Com- 
 missioner of Customs keeps lingering, " on the way to the 
 principal niarket in the interior," so close to the gates of 
 the city, as to find it '* impossible " even to reach the 
 second barrier up the Su-chow Creek, much less the princi- 
 pal market . itself, thus escaping, for the greater economy 
 of his table, the heavy rates of Ic-lchi which he knew to be 
 levied at each ; nor of the Ta Hang Tax at Amoy, so easily 
 disposed of in a foot-note. I am speaking of the facts, that 
 Shan-si takes nothing like four-fifths of the imports of Cot- 
 ton goods fi'om Tientsin ; that Mr. Dick includes in his di- 
 visor 121,395 pieces of Shhtings for Niu-chuang with a 
 mere nominal equivalent in the product, and 536,613 pieces 
 for Chi-fu, 24,065 pieces for Tam-sui, 13,900 pieces for Ta- 
 kow, and 114,358 pieces for Canton, together 688,936 pieces 
 without any equivalent at all, thereby vitiating his result to
 
 FOREIGN MERCHANT IN CHINA. 
 
 343 
 
 a corresponding extent ; and that, not satisfied with all this, 
 he still further reduces his " True Amount of Native Char- 
 ges " on Cottons by using a wrong divisor in determining 
 their final proportion, and confounding the effects of " lallow- 
 ing," and " not allowing, for goods paying commuted Tran- 
 sit-Dues." In a similar manner Woollens and other im- 
 ports are treated. 
 
 The taxes which burden the two staple articles of Ex- 
 port, Tea and Silk, are a matter of too great importance 
 not to claim our special attention. 
 
 The Tables vi. of " Charges levied on the Principal Ex- 
 port-Duty," read literally as subjoined : — 
 
 AMOUNT OP NATIVE CHAKGES AT AND ON THE WAY TO EACH POET, AND COMPABISON 
 • OF QUANTITIES PAYING TEEATY TRANSIT DUES WITH QUANTITIES 
 PAYING NATI-S-E CHAEGES. 
 
 
 Ports. 
 
 Amount of Native 
 per Pecul. 
 
 Jharges 
 
 Total 
 
 Qiumtity 
 
 Exported 
 
 ill 
 
 1868.- 
 
 Portion 
 Paying 
 Treaty 
 Trausit 
 Dues. 
 
 K „- tt . 
 
 
 En route 
 
 from the 
 
 place of 
 
 production 
 
 At the 
 Port. 
 
 Total. 
 
 Portion 
 sumnbly ] 
 Native CI 
 and not 
 Ty. T'sit 
 
 
 Tea. 
 
 Tls.m.c.c. 
 
 1.2.5.0 
 1 6.2.1 
 1.4.7.1 
 2.7.0.1 
 2.0.6.7 
 0.1.9.2 
 
 0.2.8.0 
 0.4.0.0 
 
 Tls.m.c.c. 
 0.3.5.0 
 
 2.2.0.0 
 0.0.2.0.6 
 1.3.6.0 
 0.2.4.0 
 
 TIsju.c.c. 
 
 1.6.0.0 
 1.6.2.1 ' 
 1.4 7.1 
 2.7 0.1 
 2.0.6.7 
 2.3.9.2 
 0.0.2.0.6 
 1.6.4.0 
 0.6.4.0 
 
 Peculs. 
 
 403,901 
 
 192,477 
 
 125,493 
 
 603,771 
 
 8,962 
 
 35,721 
 
 96,407 
 
 Peculs. 
 97,862 
 
 Peculs. 
 806.039 
 
 Eiiikiang 
 
 ■ Black Ninprchow & Wuning 
 „ Hohow 
 
 192,477 
 
 
 
 
 125 493 
 
 
 
 603,771 
 
 3,962 
 
 35,721 
 
 96,497 
 
 
 
 
 
 
 
 
 1,461,822 
 
 97,862 
 
 1,363,960 
 
 
 
 
 Chefoo . 
 
 Silk. 
 
 12.4.0.0 
 21.2.3.7 
 22.0.6.4 
 
 i.'e.b.o 
 
 5.6.2.0 
 
 14.6.0.0 
 
 21.2.3.7 
 
 22.0.6.4 
 
 5.6.2.0 
 
 295.57 
 
 1,907 
 42,146 
 
 1,531.40 
 11,683 
 
 1,914.22 
 
 295.57 
 
 
 1,907 
 40,231.78 
 1,531.40 
 .11,683 
 
 Shanghai 
 
 
 
 
 
 
 
 57,562.97 
 
 1,914.22 
 
 55,648.75 
 
 
 
 
 
 Tea.— Expoi-t Duty Tls. 2.5.0.0 per pecul. 
 
 Treaty Transit Dues Tls. 1.2.5.0 per pecul. 
 
 Silk.— Export Duty Tl.«. 10.0.0 per pecul. 
 
 Treaty Transit Dues Tls 5.0.0.0 per pecul. 
 
 * According to the epecial Tabic for Kiukiang, all thoso rates are eiprcs^cd iu Kupiug tacls, and 
 ahould have been reduced to Hai-kwan taela at the rato of 101-88 : 100.
 
 344 THE TREATY RIGHTS OF THE 
 
 We have here again to notice the equivocal and mis- 
 leading character of the expression " at and on the way to " 
 each Port, more particularly in combination with the head- 
 ing : " Amount of Native Charges, en route from the place 
 of production," and the respective headings of the special 
 Tables : " Taxes levied en route from the principal place of 
 production to the Port," and : name and locality of each 
 Barrier where a Tax is collected, name of each Tax, and 
 date of its imposition." When compared with the general 
 title of the special Tables, as *' of Treaty and extra-Treaty 
 charges levied at'cach Port," and the title-page of the pub- 
 lication itself, stating that the Returns refer to native 
 charges " so far as they can be ascertained " and are " levi- 
 ed at and near the different Treaty Ports " : there is an 
 amount of slipperiness, confusion, and contradiction in these 
 various indices, which, with all the want of system, method, 
 and lucidity distinguishing Mr. Hart's administration and 
 statistics, it is difficult to conceive might not have been 
 avoided. On turning to the special tables, we find them to 
 present some curious features. 
 
 Chi-foo appears to be the paradise of freedom from tax- 
 ation. With the exception of opium, on which the inland 
 charges have been reduced from Tls. 30 to Tls. 18.6 per 
 picul, — including a " Commission paid by (Chinese) guild 
 to (foreign,) importers, for reporting opium imported and sold 
 by them " of Tls. 1.6.0.0, — with the view, the Commission- 
 er of Customs informs us, of increasing the revenue (by 
 means of an enlarged importation) : there is no such thing 
 as an impost or a " squeeze " known in that happy region. 
 Taxes payable at the Port : ** None. " Though inland 
 Barriers, it is true, exist in sundry localities : "No taxes 
 are levied en route to any of these places " ; "No taxes
 
 FOREIGN MERCHANT IN CHINA. 345 
 
 levied on transit into the interior " ; "No taxes levied en 
 route fi'om place of production." It must have been a 
 matter of regret to Mr. Dick's Table to find itself unable to 
 increase its divisor by even the unit of a picul of Tea, and 
 no more than Piculs Qj%% of Wild Raw, and Piculs 280i^(5 
 of Yellow, together 295x^0 Piculs of Silk. 
 
 Hankow, on the contrary, exports chiefly Tea. At the 
 Port, the only tax returned is one of Tls. 0.3.5.0 per picul 
 on Leaf, and Tls. 0.0.6.0. per picul on Tea Dust, which 
 latter, in 1868 levied on 11,349 Piculs, is omitted from the 
 general Table. So is the heavier le-kin tax of Tls. 0.3.0.0 
 per picul, levied en route ; whilst for Leaf it is returned at 
 Tls, 1.2.5.0, the Transit Treaty -rate, only. This would, 
 according to Mr. Dick's Table, be equal to 5*44 per cent., 
 or, as it is stated to be levied at three Barriers to 1*81 per 
 cent., no doubt more correctly 2 per cent., the lowest of the 
 usual full Barrier rates, for each Barrier. But that le-kin 
 should be levied at only three Barriers on produce, con- 
 veyed for exportation abroad, from two provinces into a third 
 one, is more than improbable ; and we may safely double 
 and treble the number. The " Amount derived from that 
 known as ' the Grower's Tax ' on Tea," is returned as 
 " Uncertain," and excluded, on 294,877 Piculs, from the 
 General Table. Taking it as given for luukiang, in the 
 mean at only Tls. 1.2.5.0 per picul, or 5*44 per cent, it 
 would, together with the other charges referred to, bring 
 the total of inland imposts on Tea, shipped at Hankow, up 
 to at least 17 per cent,, — in very near accordance with my 
 table, which makes the mean = 16-35 per cent, ad valorem. 
 
 As to Silk, the only tax levied at the Port is stated to 
 be le-kin at the rate of Tl. 1.6.0.0 per picul, or, according 
 to Mr. Dick's table, 0-38 per cent. The rate needs no
 
 3-lG TJIE TREATY RIGHTS OF THE 
 
 comment. Le-k'ui, except on Opium, is not levied at a Port. 
 The tax meant, is probably the nominal rate of Chow-faiuj, 
 levied by the Le-kln Office. The Ic-hiii proper is said to be 
 levied at fom* barriers, at the rates of Tls. 7.0.0.0 per picnl, 
 or 1*47 per cent. ; Tls. 1.6.0.0, or 0*38 per cent., respectively, 
 making in all Tls. 12.4.0.0 per picul, or 2*96 per cent, ad 
 valorem. Barriers could barely support themselves on a 
 tax of little more than one -half per cent, upon inland traffic. 
 At the loivest full rate known to be levied at them, the le-Jcin 
 tax at four barriers would amount to 8 per cent. The 
 "Grower's Tax," as in the case of Tea, being returned 
 " Uncertain," is omitted from the General Table. Taking 
 it at 5 per cent., the inland charges on Silk come to about 
 13 per cent. ; which is probably near the truth. Omitting 
 the choiD-fanfj tax, for which I have no positive data in the 
 case of Silk, I make the total 10-90 per cent. 
 
 KiUKiANG exports tea alone. The taxes levied at the 
 port are stated to be " Nil" ; although upon imports there 
 is the *'le-kin" tax, — no doubt choiu-fang, levied by the 
 Le-kin Office. An unnamed charge is returned for two 
 barriers at Tls. 0.2.2.1, or more correctly H. Tls. 0.2.1.9 
 per picul = 0*88 per cent, in all. It seems to include " an 
 extra payment made to the Customs' officials at Ta-ku-t'ang 
 of one or two candareens per pecul " ; unless this extra pay- 
 ment be identical with "a tax collected at Ta-koo-t'ang, at 
 a branch office of the Kiukiang Native Custom House, 
 being a shiy and dating from early in the reigning dynasty," 
 mentioned in the special Table, but for which 7io amount is 
 returned. On the other hand, the " Amount derived from 
 that known as ' the Grower's Tax ' on Tea " is made up of 
 the followmg items: — two charges "imposed with the 
 name of "Local Tax" by proclamation of Tseng Kwo-fan
 
 FOREIGN MERCHANT IN CHINA. 347 
 
 in July, 1863, the Viceroy plainly asserting that it is dis- 
 tinct from the Transit Dues, and it would be levied, were 
 passes taken out, in addition to the half Tariff Duty," viz.^ 
 of Kuping Tls. 1.4.0.0 per picul = 6-l percent, on Black 
 Ningchow and Wuning, and of Kuping Tls. 1.2.5.0 (which 
 Mr. Drew elsewhere stated to be Tls. 1.4.0.0 also) per 
 picul == 5-4 per cent, on Black Hohow. Besides which there 
 is *'the Grower's Tax" of Kuping Tls. 2.4.8.0 per picul = 
 10-8 per cent, on Green Hohow, — the per-centage being 
 here taken in the mean proportion of Tls. 2.5.0.0 per 
 picul = 10-87 per cent. The total product of this tax upon 
 192,477.29 piculs is returned at H. Tls. 334,649.1.5 ; which 
 gives a mean of Tls. 1.7.9.1 per picul, or 7*79 per cent, ad 
 valorem. If to this we add le-hin, etc., at the lowest full bar- 
 rier rate of 2 per cent., for Ening, Wuning, Takut'ang, and 
 the Kiukiang Native Custom-house, 8 per cent., we obtain 
 a probable total of 15-79 per cent, for inland charges upon 
 Tea, shipped at Kiukiang, which includes no chow-fang^ 
 and yet leaves only 0-56 per cent to bring it up to the 16-35 
 per cent, of my table. 
 
 Shanghai exports both Tea and Silk. In the special 
 Table we find the " Taxes levied at the Port " to amount 
 to " " on Tea, and to "Nil" on Silk, although in- 
 dependently of the notorious Wharfage Dues, levied in ex- 
 cess on both, the official lists certify that clww-fang is paid 
 on Tea at the rate of Tls. 1.2.5.0 per picul, or 5-46 per cent. 
 ad valorem, *' within the (Foreign) Settlement of Yang-king- 
 pang." In the shape of "Taxes levied in the Interior " 
 are given, as "imposed in 1865," on Fychow Teas, 
 coming by way of Hangchow : Produce Tax, per picul Ku- 
 ping Tls. 2.4.8.0 ( = 10-8 per cent.), Local Tax Tls. 0.1.0.0 
 ( = 0-4 percent.), Hangchow Sea Wall Tax Tls. 1.2.0.0
 
 348 THE TREATY RIGHTS OF THE 
 
 ( = 5-2 per cent.), together Kuping Tls. 3.7.8.0 per picul = 
 16-3 '^/o mean per-centage. To lessen the effects of this 
 heavy Tax, it is observed by the Commissioners of Customs, 
 Mr. Dick, that "Very httle Fychow Tea comes to Shang- 
 hai, as by going to Ningpo it avoids some of the charges 
 here enmnerated." Instead of supplying, however, the 
 necessary data, he not only keeps his information back, 
 but, on turning to the special Table for Ningpo, we find no 
 taxes upon Tea corresponding to those enumerated in the 
 table for Shanghai, much less taxes " imposed in 1865." 
 Moreover, Mr. Drew in his Report for 1869, published in 
 the same volume, which contains Mr. Dick's ** Suggestions," 
 states : — " The Fychow district sent of Green Tea fi'om the 
 country in 1868 : via Ningpo to Shanghai Peculs 74,271.78; 
 direct to Shanghai Peculs 12,783.0.0 ; and via Kiukiang to 
 Shanghai Peculs 68,191.04." According to this statement, 
 the ivhole quantity of Tea, viz., Peculs 12,783, which Mr. 
 Dick, in the special table, returns as having been exported 
 fi'om Shanghai in 1868, were Green Fijchow Teas, subject 
 to the higher Grower's Tax of 16*3 per cent. To settle 
 this striking discrepancy between the Commissioners of Cus- 
 toms at Kiukiang and Shanghai, I must leave to them- 
 selves. The inland taxes, also said to be " imposed in 
 1865," wliicli Mr. Dick states to be leaded on " Huchow 
 and Hangchow Teas " are more moderate, viz., "Produce 
 Tax, per pecul Kuping Tls. 0.3.3.6, Li (-kin) Tax, 
 Tls. 0.5.0.4, Measure Tax Tls. 0.1.6.0, and Hangchow Sea 
 Wall Tax Tls. 1.2.0.0, together Kuping Tls. 2.2.0.0 per 
 picul = 9*5 per cent, ad valorem. Mr. Dick remarks : — '* On 
 Huchow and Hangchow Teas the charges are levied, and 
 Passes issued at those places ; the Passes enabling the Teas 
 to come to Shanghai without further charge." What the
 
 FOREI-GN MERCHANT IN CHINA. 349 
 
 Commissioner of Customs, then, means to say is, that on 
 Fychow Teas coming to Shanghai no le-kin is levied at all ; 
 on Huchow and Hangchow Teas only 2-2 per cent, en route; 
 that there are no charges on Tea payable at the Port ; and 
 that, previously to the year 1865, Teas coming to Shanghai, 
 for shipment abroad, were subject to no taxation whatso- 
 ever, that is to say " so far as can be ascertained." And 
 such a statement is ofEcially " published by order of the 
 Inspector-General of Customs " ! If we take the mean of 
 the charges on Fychow and other Teas, however, or if we 
 take the former Teas in quantity only in the proportion of 
 one -fifth, and the latter in that of four-fifths, and add the 
 charges actually levied at the port, we find the probable 
 total of inland taxation on Teas, shipped at Shanghai, to 
 be 17'3 per cent., which is still somewhat above the mean 
 rate of my table. It will have struck the reader that, 
 although for Tamsui the small quantity of Peculs 3,962, 
 taxed Tls. 0.0.2.0.6 per picul, is duly incorporated in the 
 General Table, the quantity of Peculs 12,783, exported in 
 1868 from Shanghai and taxed at least Tls. 2.5.0.0 per 
 picul, has been omitted from it ; the tendency of which, I 
 need not say, is to reduce the "Excess of charges at pre- 
 sent collected " of Mr. Dick's Table accordingly. 
 
 As regards Silk, the by far larger proportion of which is 
 exported from this port, the article, Hke Tea, is returned as 
 free from taxation of any kind, anterior to the year 1865. 
 Nor do the charges, imposed at this recent period, include 
 the obnoxious and much-complained-of le-kin tax. How, 
 under the circumstances, it /. i. happened that, in 1862, the 
 63 bales of Silk, belonging to Messrs. Bower & Hanbury and 
 of which I have previously spoken, were confiscated for an 
 alleged attempt to avoid the payment oUe-kin at " the South
 
 350 THE TREATY RIGIITH OF THE 
 
 Barrier" contiguous to Shanghai, I must leave to the Com- 
 missioner of Customs to explain. He also is, under the 
 Inspector-General, responsible for the statement, that no 
 U-hin is leviable and levied upon Silk, or, indeed, ever has 
 been leviable and levied upon this staple article of Chinese 
 export, — of course, " so far as can be ascertained." The 
 only '' Taxes levied (since 18G5) in the Interior," he states, 
 are the following : — " Produce Tax, per Bale of 80 cts. $16, 
 Sea Embankment Tax $4, Hangchow Public Works or Re- 
 paration Tax $2, Shanghai Tax $4 — equal to Kuping 
 Tls. 22.1.5.0 per picul;" and remarks : — " These taxes ai^ 
 collected of the vendors at the inland markets, who get a 
 Pass exempting the Silk from further exactions en route to 
 the port." Whether the silk-producing districts supplying 
 the Shanghai market have become American dependen<)ies 
 or simply adopted the American standard of currency, I 
 know not; but the taxes in question, taking Mr. Dick's 
 mean import per-centage of 2'39 for a basis, correspond to 
 3-23, 0-81, 0-40, and 0-81 (together 5-25) per cent., res- 
 pectively, and the whole system of Chinese taxation indi- 
 cates a discrepancy in the former charge. It might be 3 per 
 cent ; but, comparing the similar tax levied upon Tea, is 
 more likely to be considerably higher. Of trading-licenses 
 we discover here no trace. Still, the united testimony of 
 the Inspector-General and Commissioner of Customs at 
 Shanghai upon a point like the above, would be entitled to 
 consideration, had we not found it to be in other respects and 
 in most instances of doubtful reliability, and tending to 
 improperly reduce the illegal charges, levied by the Chinese 
 Government upon foreign trade, to a minimum ; did not 
 the information furnished point to an indirect source, and 
 ignore the Imperial le-khi tax, which no local Authority can
 
 FOREIGN MERCHANT IN CHINA. 351 
 
 abrogate ; and were it not at positive variance with the data 
 obtained and officially published by the late Mr. FitzRoy, I 
 Mr. Dick's predecessor, which, instead of a total of 5-25, 
 gives, at the commencement of 18G7, moreover, a total of 
 iipivards of 9 per cent., as the amount of taxes on Silk levied 
 in the Interior, — in perfect accordance with the information 
 I have, myseK, collected from various sources, both native 
 and foreign. It appears to me, therefore, that the details 
 furnished by the special Table under review are in no sense 
 of a nature to cast a doubt upon the corresponding per- 
 centage of 10*90 of my own table, mainly dependent on the 
 inland charges, levied on Silk exported from Shanghai. 
 
 NiNGPO exports Tea and Silk, the latter produce in but a 
 small quantity. For Tea, "Taxes levied af the Port " are 
 returned : — " Nil" ; " x\mount derived from the Tax known 
 as 'the Grower's Tax' on Tea ":—" None." The only 
 " Taxes levied en route " are stated to be the following : — 
 *'0n Kiangnan Teas: Yin-fei Tls. 0.3.0.0, Li-chao Tls. 
 0.7.6.6, Chiian-chao Tls. 1.0.0.0, together Tls. 2.0.6.7 per 
 picul = 9'0 per cent.; with the remark: " First levied in 
 1856. The Chuan-chao was increased 4 mace (Tls. 0.4.0.0) 
 
 in 1863, " : but ivlihout the increase of rate, = 1'7 per 
 
 cent, being taken into account. " On Che-kiang Teas : Nei- 
 ti-cha-chuan " (inland tea-tax) Tls. 1.4.0.0, Chih-tsao (for 
 the purveyor of Clothing to the Court) Tls. 0.1.3.4," together 
 Tls, 1.5.3.4 per picul, = 6-7 per cent. "On Tea Leaf: 
 Nei-ti-cha-chLian Tls. 0.7.0.0, Chi-tsao Tls. 0.1.3.4," to- 
 gether Tls. 0.8.3.4 per picul = 3"6 percent., with the re- 
 mark : " First levied in 1859." The whole amount of such 
 
 } The late Mr. FitzRoy, being an English gentleman, bred and bom, was incapable of an 
 untruth or a wilful misrepresentation. A faithful servant of the Chinese Goverament as 
 Commissioner of Customs at Shanghai, and, for a time, as the then Inspector-Gcnei-al Mr. 
 Lay's chief representative, he, at the same time, never forgot that he was a British subject, 
 and owed allegiance to his country and his Queen,
 
 352 THE TREATY RIGHTS OF THE 
 
 taxes, collected in 1858, is "estimated" at Tls. 152,400.7.6.7, 
 Tls. 15,340, and Tls. 34,783, together Tls. 202,609.7.0.7, 
 on Piculs 125,493.14; being, in the mean, Tls. 1.6.1.5 per 
 picul = 7*0 per cent, ad valorem. The le-kin tax is ignored. 
 Its probable amount would make up the per-centage of my 
 table. 
 
 Silk at Ningpo presents the curious phenomenon, that 
 the "Taxes levied (upon it) at the Port," consist in "Ssu- 
 ch'a-chiian, (a Silken Tea tax), U^-^ ^> 1861," producing, 
 on "Peculs 1,531.40, at the rate of Haikwan Tls. 22.0.6.4 
 per picul," the diminutive sum of Tls. 1,579.0.0.0. The 
 inland imposts are identical vrith those on Silk shipped from 
 Shanghai, even as regards the " Shanghai Tax," and their 
 being rated in American currency per 80 catties ; only that 
 "the Produce Tax," is here termed " the Silk Tax," that, 
 while there "imposed in 1865," they were here "first 
 levied in 1859," and that, while in Ningpo a "Pass exempt- 
 ing the Silk from further exactions en ronte to the Port,'" 
 known at Shanghai, is unknown : the existence of Le-kin 
 Offices in the cities of Huchow and Shao-hsing-fu, by which 
 the charges in question are collected, unknown at Shang- 
 hai, is kno^vn at Ningpo. True, these ojffices would, in that 
 particular part of China, seem to attend — " so far as can 
 be ascertained " — to any save their own business : yet, if 
 we assume them to collect, after all, — ^though, may -be, on 
 the sly, — their proper share of inland taxes, say only 5 per 
 cent., and add the latter to the admitted charges of 5*25 
 and (apparently) 0-24 per cent. : we shall already obtain a 
 total of inland taxes on Silk, shipped from Ningpo, within 
 0-41 per cent, of that of my table. 
 
 Fu-CHOW, of all the Treaty-Ports, exports the largest 
 quantity of Tea. But this is by no means the only thing,.
 
 FOREIGN MERCHANT IN CHINA. 353 
 
 for which the place is remarkable. It is at least equally so 
 for the circumstance that, in the special table, the sphere of 
 action of its Le-kiii Office is extended to exports, and that 
 the " Taxes levied at the Port," for the first time in this 
 instance traced back to about the real date of their intro- 
 duction, consist of : " Le-kin" (either choio-fang, levied by 
 the Le-kin Office, or le-kin proper, levied in the close vicinity 
 of the Port) per picul Tls. 0.9.0.0 = 5*9 per cent., " Kwang- 
 hseang Le-kin " (1854) Tls. 0.3.0.0, " Hwa-cheng-shuey " 
 (1855) Tls. 0.6.7.2, and " Ka-kwan-hseang " (1858) Tls. 
 0.3.2.8, together Tls. 2.2.0.0 per picul, or 9-6 per cent, ad 
 valorem. Of inland barriers only two, at Yen-ping-fu and 
 Chu-ki-wan, are named, and stated to levy " le-kin," de- 
 signated ''B, local tax" (1854), at Tls. 0.0.2.8 and Tls .0.0.1.4, 
 respectively, together Tls. 0.0.4.2 per picul = 0*18 percent., 
 — manifestly some small local charge, or more probably a 
 " squeeze," levied besides the le-kin, not returned. The 
 " Amount derived from the Tax known as * the Grower's 
 Tax' on Tea " is stated to be "not procurable," with the 
 remark " Rate Tls. 0.1.5.0 (Tls. 1.5.0.0?) per picul." Taxa- 
 tion on Foreign Trade at Fu-chow is high in general. If 
 we take the Grower's tax at the Kiukiang mean of 7-8 per 
 cent., we obtain, even without taking the probable amount 
 of le-kin, collected in the Interior, into consideration, for 
 the total of inland charges on Tea, shipped at Fu-chow, 
 17*4 per cent. ; being 1 per cent, above the mean rate of 
 my table. 
 
 Amoy exports only Tea, and also pays " taxes levied at 
 the Port," viz., Tls. 0.1.6.0 ''by the Haekwan (Custom- 
 house), and Tls. 1.2.0.0 "by the War tax M ± authorities," 
 together Tls. 1.3.6.0 per picul = 5-9 per cent. The colimm 
 " Name and locality of each Barrier where a tax is collected
 
 354 THE TREATY RIGHTS OF THE 
 
 (inland), name of each tax, and date of its imposition " 
 furnishes the following information : " At the Poo-nan bar- 
 rier, Ning Yang and Loong Yen teas are charged per picul 
 Tls. 0.1.5.0 ( = 0-7 per cent.). At the Pai-ton barrier, An- 
 c'heih Teas are examined,- but no tax is charged." In 
 certain parts of China, the foreign Commissioners of Cus- 
 toms would seem to look upon the Hr, or barriers, as sim- 
 ply intended for either ornamental purposes, or fmger-posts, 
 or what-nots. And under the heading of '' Amount derived 
 from the tax known as ' the Grower's tax on Tea,' we read : 
 — '^A 'Grower's tax' of Tls. 0.1.3.0 per picul is levied at 
 Ning Yang and Loong Yen. Teas from An-c'heih pay no 
 Grower's tax. Amount derived not ascertainable." 
 
 Canton exports both Tea and Silk. Taxation, however, 
 at this once tax-abounding Port, would, to judge h-om the 
 special table, seem to have fallen into a sad state of prostra- 
 tion. The Hoppo, — who, notwithstanding, is known to remit 
 to Peking, annually, a goodly number of hundreds of thou- 
 sands of taels, by the Chinese Government supposed to be 
 levied upon foreign trade, — must, for the sake of keeping up 
 appearances, do so out of his own pocket. That is clear. 
 For, at Canton, "the Grower's Tax" both upon Tea and 
 Silk is "Nil" ; the taxes levied on Silk in the Interior are 
 *']S[il;" and the information "procurable," manifestly, is 
 well-nigh "Nil" also. At the Port, there are stated to be 
 collected on Tea: " Kwang-fu-shuei " at Tls. 0.0.8.0, and 
 "Kung-hiang" at Tls. 0.1.6.0, together Tls. 0.2.4.0 per 
 picul = 1-0 per cent.; on Silk " Li-kin " at Tls. 4.9.0.0, and 
 " Kwang-fu-shuei " at Tls. 0.7.2.0, together Tls. 6.6.2.0 per 
 picul =1 '3 per cent. The taxes levied inland upon Tea 
 alone are four in number, and, including Ic-kin, four mace, 
 or Tls. 0.4.0.0 per picul = 1*7 i^er cent, in all; making the
 
 FOREIGN MERCHANT IN CHINA. 355 
 
 total inland charges on Tea, shipped at Canton, 2-7 per 
 cent., on Silk 1*3 per cent., ad valorem. 
 
 Such is the nature of the Special Returns, from which the 
 General Table of '* Charges levied on the Principal Exports" 
 is literally made up, and on which, in its turn, Mr. Dick's 
 "Estimate of Chinese Revenue from Foreign Trade, etc.," 
 is literally made to rest. In reference to Tea, Mr. Dick 
 commits the same error which he committed in determin- 
 ing the mean per-centage of his Native Charges on Cotton 
 Goods, in taking the divisor by 97,862 piculs in excess of 
 what he should have done, and confounding the efifects of 
 " allowing," and " not allowing, for goods paying com- 
 muted Transit-Dues ;" whilst he additionally vitiates his 
 result, in the sense of further reducing the amount of 
 Chinese illegal taxation, by omitting from both his Tables 
 the exports of, and charges upon, Tea at Shanghai. More- 
 over, I have now positively shown, as I was led to conclude 
 from the first, that Mr. Dick's " Native Charges," and con- 
 sequently his " Excess of Charges at present collected," 
 are, so far as Imports — with the exception of (Opium and) 
 Metals — are concerned, exclusively based on taxes levied aty 
 or in the immediate proximity of, the Ports ; that, in regard to 
 Exports, they are founded partly on most deficient, cur- 
 tailed, or unreliable elements, partly on distinct omissions 
 of the most important imposts, viz., the Grower's or Pro- 
 duce Tax and the Inland Le-kin Tax, besides other known 
 taxes, so as to comprehend less than one-half of the charges 
 actually collected ; and that, inasmuch as Mr. Dick's Table 
 professes to give the total annual Revenue of China from 
 Foreign Trade, and the total amount of Illegal Taxation 
 included in that Revenue, it positively misleads in regard 
 to these two important points.
 
 356 THE TREATY RIGHTS OF THE 
 
 Indeed, the sole object of the Inspector-General and the 
 Commissioner of Customs at Shanghai, in publishing the 
 Table under consideration, would seem to have been to 
 bring the " Excess of Taxes collected over Treaty Rates," 
 as nearly as could be, down to the " estimated loss to the 
 Chinese revenue by Hongkong being a free port," and to 
 represent the remainder as a paltry sum of half a million 
 pounds sterhng, really not worth the attention of Her Bri- 
 tannic Majesty's Government, nor that the body of Foreign 
 Merchants should raise such an outcry about it. As to the 
 "Loss to Chinese revenue by Hongkong being a free port," 
 Mr. Dicke stablishes it in this wise : — " On Opium, the Vice- 
 roy, with his large preventive service of steamers, is only able 
 to levy 16 taels a chest in the vicinity of Hongkong. This 
 is apparently the nearest approach he can make to the 30 
 taels Tariff duty which at the ports farther up the coast is 
 the first charge paid ; and the same reason — the ease of 
 evasion — which keeps the first charge low, probably also 
 has the same effect all along the Kwang Tung Coast, on 
 the supplementary charges. The loss on all the charges is 
 probably not over-estimated at 50 taels a chest, and as the 
 quantity of Opium annually sent away from Hongkong 
 without reaching Treaty Ports is about 20,000 chests, the 
 total loss under this head may be set down at Tls. 1,000,000 " 
 — about X'300,000 — "besides which there is some loss on 
 other Imports which I have no means of estimating, and 
 there is the heavy expense of the preventive sendee. It in 
 no way meets the case to say that the Chinese Government 
 should maintain a stiU more effective preventive -service 
 than the large one already employed. The expense of a pre- 
 ventive service is quite as serious a cause for complaint as the loss 
 of revenue. The most efficient Government would find it
 
 FOREIGN MERCHANT IN CHINA. 357 
 
 impossible to entirely suppress smuggling in such a posi- 
 tion, and, like China, could only reduce loss by smuggling, 
 by incurring loss in prevention." It may be considered 
 fortunate for England that the foreign Commissioner at 
 Shanghai is not a native Member of the Chinese Privy 
 Council ; or else she might find herself, one of these days, 
 with a second "Alabama Claims" case, — the ^^ Hongkong 
 Claims," based on the erection of Hongkong into a free 
 port, with all its possible and impossible consequences, 
 direct and indirect, past, present, and to come, on her 
 hands. I know not what Mr. Dick's ideas of the efiiciency 
 of the Home Government may be. Without a foreign 
 colony in the position of Hongkong on the Coast, with a 
 moderate Tariff, and in possession of an extensive and ad- 
 mirably organised Coast-Guard Service, it fails in its en- 
 deavours "to entirely suppress smuggling." The Chinese 
 Government, to guard a coast extending through nearly 
 25 degrees of latitude and, excluding Corea, more than 15 
 degrees of longitude, incurs the " heavy expense " involved 
 in a "preventive service," consisting of about a dozen in- 
 efficient gunboats, for the combined purpose of suppress- 
 ing piracy as well as smuggling : and Mr. Dick, blind to 
 everything save the port-freedom of Hongkong, attempts to 
 fasten upon it a loss to the Chinese revenue which is solely 
 and entirely owing, Jirsthj, to the high taxation to which 
 Opium is subject in China ; secondly, to the corruption of 
 Chinese officials ; thirdhj, though in a minor degree, to the 
 lawlessness of the maritime population ; and lastly, to the 
 inefficiency of the Foreign and Native Customs' Service at 
 the ports. 
 
 Mr. Dick would seem to have overlooked the fact that 
 Opium-smuggling is not carried on at the free -port of Hong-
 
 858 THE TREATY RIGHTS OF THE 
 
 jjong, — nor is, as he himself admits, in any way counte- 
 nanced by the British and Foreign Merchant — , but at the 
 Treaty-ports, and at certain smaUer poi*ts on the coast of 
 China, mostly in the vicinity of the Treaty-ports. Thus, 
 f.i., the Commissioner of Customs at Canton reports for 
 1869: — " Eleven hundred peculs of Opium passed this of- 
 fice last year; this is not eight per cent of the total import, 
 the balance being brought in surreptitiously." And in the 
 special Table, presumably furnished by him also, the 
 " Quantity of Opium imported into Canton in 1868 " is 
 stated to be Peculs 807; with the remark: — " Peculs 29t%% 
 imported by Bosman & Co., to be prepared and re-exported 
 to California, and Peculs S/^Ij confiscated Opium, paid no 
 taxes. In addition to the above a large amount is smuggled 
 into the port which pays neither taxes nor duties." Now, 
 setting aside the increase of about 300 piculs in the impor- 
 tation of 1869, and taking the quantity which in 1868 
 passed the Foreign Customs in round numbers at 800 pe- 
 culs ( = 8 per cent of the w^hole imports): the quantity 
 smuggled into the Treaty-port of Canton ( = 92 per cent) 
 would still amount to 9,200 piculs or nearly 8,500 chests; 
 and since, out of this quantity, " the office," despite of its 
 staff of spies and detectives, managed to seize only j3_8_ 
 peculs, — -surely it is quite fair and legitimate to attribute a 
 due share of the wholesale smuggling, which is said to be 
 going on, to what I have just termed the " inefficiency " of 
 the Foreign as well as the Native Customs' Service. 
 
 On the lawlessness of the maritime population of China 
 I need not dwell. Under the Government of a country on 
 whose waters piracy is rampant, and alone and not without 
 difficulty is kept in check by the ships-of-war of Foreign 
 Powers; smuggling assumes the character of a compara-
 
 FOREIGN MERCHANT IN CHINA. 359 
 
 tively honorable trade ; and so it would seem to be regard- 
 ed by the Chinese Government Officials themselves. To 
 their connivance at it the Commissioner of Customs at 
 Swatow, Mr. Kleinwilchter, may testify. " The Opium 
 Statistics," he observes in his Keport for 1869, printed in 
 the same volume in which Mr. Dick's " Suggestions" ap- 
 pear, " present the same unsatisfactory features alluded to 
 in the Report for 1868, nor is there much prospect of the 
 strict enforcement of a proclamation, issued last year by the 
 Taotai of Chao-chow-fu at the instance of H. B. M.'s Act- 
 ing Consul, Mr. Alabaster. This proclamation was in- 
 tended to do away with the disadvantages under which this 
 port lies by the collection of both Tariff duties and li-kin — 
 by this office on the one hand and the local Authorities on 
 the other — against the many small places and ports be- 
 tween this and Hongkong, ivhere the latter tax only — if in- 
 deed that fully — is || collected; and consequently, as a na- 
 tural course, the latter places are || resorted to in prefer- 
 ence as a channel for supplying the markets of this pro- 
 vince and Kiangsi. It was hoped that by equalizing, — i.e., 
 raising the amounts, to be collected in the South, to the 
 same levied here, — would bring about a return of the trade 
 to its legitimate course to this port. That such would have 
 been the certain result of a sincere legislation, there can be no 
 doubt, especiaUy as it was accompanied by a regulation 
 which necessitated each ball or parcel of Opium to be 
 stamped before being retailed on pain of confiscation. But 
 when the Deputy, directed by the Vice-Roy to repair to the 
 city of Hwei-chow-foo, some 150 miles distant from Kow- 
 
 II The printed text, instead of "is" and "are," reads in the first place, marked by an 
 asterisk, "used to be," in the second "were"; which is utterly irreconcilcabic with the 
 plain meaning of the writer, and appears to be an "emendation" bt/ another hand. It renders 
 the text simply senseless ; and involves itst complete misconstruction, by connecting the 
 le-/cin, which alone "used to be collected" with — Hongkong.
 
 300 THE TREATY RIGHTS OF THE 
 
 loon<^ opposite to Hongkong — an important station for 
 cliBtributing supplies through Kwantung — arrived, he was 
 told, it is said, by those interested in the traffic, that the 
 proposed collection at that city would simply divert the 
 trade elsewhere, and leave his office a valueless sinecure. 
 No renewed stejts have thereafter been taken hy the Vice-Boy, and 
 unstamped opium is freely current in that neighbourhood, 
 and, as the lower price at which it can be bought not ten 
 miles from Swatow proves, finds its way in quantities 
 throughout the province. ... No doubt can exist that, as 
 long as a system prevails by ivhich higher duties are levied at 
 Treaty Ports than at those dosed to Foreign Trade, the former 
 must ultimately sink from the position of forming emporiums 
 for the provinces in which they are situated, to that of the 
 centre of peddling trade in their immediate neighbourhood." 
 This narrative delineates only one phase, and one of the 
 higher phases, of the connivance of Chinese officials at 
 Opium-smuggling. It must, however, here suffice. 
 
 Touching the main cause which induces this smuggling 
 trade, I will state it in the words of another Commissioner 
 of Customs, — the late Commissioner at Fu-chow, M. de 
 Meritens. In his Eeport for 1869, like that of Mr. Klein- 
 wachter published side by side with Mr. Dick's " Sugges- 
 " tions," he expresses himself thus : — " Nos importations 
 d'Opium ont dimiuue encore cette annee. . .de 158 caisses 
 ou 208 peculs sur I'annee precedente. Si maintenant nous 
 jetons un coup d'oeil en arriere, nous verrons qu'en 1861 
 plus de huit mille caisses etaient importees a ce port ; en 
 1862, apres I'ouverture de la Douane etrangere, pres de 7500 
 caisses payaient les droits ji cette direction. . . .(Des alors) 
 les importations ont diminue d'annee en annee dans des 
 proportions considerables. Quel phenomene s'est done
 
 FOREIGN MERCHANT IN CHINA. 361 
 
 produit ? La consommation aurait-elle baissue subitement 
 dans les memes proportions ? Non, pas le moins du 
 monde ; seulement on a cherclie les moyens de se soustraire 
 a ties taxes exaggdrces, — et on les a trouvcs. . . D'aprcs les 
 calculs les plus indiilgents, en accordant des primes et des 
 prix de fantaisie a ceux qui transportent I'Opium dans 
 I'interieur, il est constant que les importateurs ou les con- 
 trebandiers, comme vous voudrez les appeler, peuvent ven- 
 dre rOpium a Kieng-ning foo, Yen-ping-foo, ou Cliangchow, 
 a 60 taels meilleur marche que nos negociants ne peuvent 
 le faire a Amoy ou Foocliow. Cette exaggeration d'imjjdt est 
 done en fait ruineuse pour le Gouvernement Imperial, et n'a pas 
 ete autre chose quune prime donnce a la contrehande. Vous 
 savez, sans doute, qu'il etait dit, affiche, et promis que 
 rOpium qui aurait paye Timpot du li-ldn, soit taels 84 par 
 pecul en sus des 30 taels payes comme droit d'importation 
 a la douane etrangere, serait exempte de toute autre taxe 
 dans I'interieur; permettez-moi en regard de cette assertion 
 de vous indiquer iei les droits preleves a chaque cite dans 
 rinterieur sur tout opium qui arrive, soit qu'il passe en 
 transit on soit laisse pour la consommation locale. Yen- 
 ping-foo Tls. 5.3.6.0 ; Kien-ning-foo Tls. 5.3.6.0 ; Shing- 
 Tien Tls. 6.6.8.0 ; Ta-an Tls. 10.2.0.0 ; Ching-woo Tls. 
 5.6.0.0; Show-wa Tls. 5.3.4.0. En tout Tls. 38.50.0, ajoutes 
 aux 84 taels exiges par I'administration du Li-kin (en sus 
 des 30 taels payes comme droits d'importation). II me 
 semble que ces chiffres sont assez eloqucnts, et prouvent 
 jusqu'a la derniere evidence non pas la neccssite de pour- 
 suivre des gens qui, saisis et frappes sur un point, re- 
 paraitront sur un autre, mais bieii Vurgence qu'il y ad changer 
 de systeme et a mettre sous les yeux du Governement centrale 
 les regies de la vraie economic politique, de meme que le
 
 362 THE TREATY KIGIITS OF THE 
 
 relev6 de nos recettes clonanieres Europeennos faisant 
 toucher du doigt cette verite elnmontaire, que les recettes 
 s'elevent et que la contrebande dimiuue en raison directe 
 de I'abaissement des tarifs." 
 
 That, with all these various facts, circumstances, and ar- 
 guments under his very eyes, any rational person should 
 have attributed opium- smuggling in China to "Hongkong 
 being a free port," appears like an infatuation. But the 
 Commissioner of Customs at Shanghai, supported by the 
 Inspector-General of Chinese Maritime Customs at Peking, 
 goes further. I cannot in this place enter into a full discus- 
 sion of the question. But what Mr. Dick proposes is : 
 FirstJij, to raise the import-duty to Tls. 100 per picul, with 
 the view of increasing the Chinese revenue on opium, and 
 to reduce that of India in the same proportion. Again and 
 again he returns to this point, occasionally in something 
 like a threatening tone. " In the case of opium," he thus 
 observes, "the remedy is already in the hands of the Chi- 
 nese Government and people. By developing the cultiva- 
 tion and increasing the Import duty, a large portion of 
 what is at present the Indian revenue on this article may 
 be gradually transferred to China." I might well ask here : 
 "Where do the duties of the British subject, according to 
 Mr. Dick, in his case end, and where do those of the Shang- 
 hai Commissioner of Chinese Customs begin ? In reference 
 to a discussion on the opium trade which took place in the 
 House of Commons on the 10th May, 1870, he remarks : — 
 *' It seems to have consisted in false morality on one side, 
 and loose economy on the other." Mr. Dick's argument 
 obviously partakes of the same character : in regard to his 
 proposal of increasing the import-duty, if the principles of 
 political economy alluded to by M. de Meritcns aud taught
 
 FOREIGN MERCHANT IN CHINA. 363 
 
 by experience are true ; in regard to the threatened deve- 
 lopment of opium cultivation in China, if the saintly horror 
 with which the Chinese Government view the importation 
 of the drug is more than bare hypocrisy. He appears to 
 overlook that the Treaty of Tientsin will have to be revised, 
 not on the basis of his own moral sense, but on that of the 
 Celestial Government as expressed by the Tsung-h Yamen, 
 which professes to consider opium almost as obnoxious as 
 Christianity. And, indeed, had that illustrious Board, in- 
 stead of listening to the " Suggestions " of its " barbarian " 
 servant, washed its hands of opium-taxation altogether, 
 and, with the view of sa\dng the Chinese people from the 
 " demorahsing " mfluences to which the use of " the me- 
 dicme " is said to expose it, mvited our Indian Administra- 
 tion to raise the export-duty upon the article by a hundred 
 pounds sterling a chest, or more : we should then have 
 been able to appreciate at least its consistency, honesty of 
 purpose, and strength of conviction. 
 
 SeconclUf, Mr. Dick, not wishing to deal " imperfectly " 
 with the question by merely raising the rate of the Taritf, 
 but to enforce its operation both at Hoiighong and Macao, — 
 as though the British Possession of Victoria, as such, existed 
 not, — and apparently not as yet seeing his way clear to the 
 uiimediate abolition of its port-fi-eedom, proposes two alter- 
 natives, namely : either " the surroundhig Hongkong and 
 Macao, at a very large expenditure, with Customs' Cruisers" 
 in order to enable the Foreign Chinese Customs to reach 
 the opium imported, — a sort of blockade which has since 
 been actually enforced; — or else, an arrangement " to the 
 effect that a branch of the Foreign Customs should be established 
 at Hongkong, for the purpose of taking an account of, and a 
 bond for, all Opium imported, of passing under cargo certi-
 
 301 THE TREATY KIGIITS OF THE 
 
 ficatcs nil opium re-exported in foreign vessels to Treaty- 
 ports, and of collecting duty only on such opium as was 
 taken over by Chinese purchasers, for shipment in junks, 
 whether to treaty or non-treaty ports ; and tliat a per-ccntaye 
 of the revenue gained by the arrangement, calculated with 
 some reference to the proportion lost at present, should he 
 handed to the Hongkong Government (!). To avoid details," 
 Mr. Dick adds, "I speak at pi^'esent only of opium ; and 
 assume that, if it were agreed to let Opium come under the 
 action of the Customs, suitable arrangements could be made 
 for other goods." A proposition of such a purport and 
 nature renders every comment superfluous ; but I must 
 freely confess, that, in my judgment, no soberly-thinking 
 man and no loyal subject of England could either have ad- 
 vanced or supported it. 
 
 Nor need I dilate on the degree of exaggeration attach- 
 ing to the estimate at a million of taels, or =£300,000, of the 
 alleged annual " Loss to Chinese Eevenue by Hongkong 
 being a free port," and the confusion of ideas upon the 
 whole subject betrayed on the part of the Inspector-General 
 in so strongly recommending the " Suggestions " of his 
 subordinate for their thoroughness, as well as on that of 
 the Shanghai Commissioner of Customs himself. To ex- 
 pose the numerous fallacies and erroneous views to which 
 Mr. Dick has given expression, I must reserve for another 
 occasion. My concern here is with the amount in question. 
 The qnantlty of opium smuggled, and for which Hongkong 
 is held responsible, is taken at 20,000 chests, or 22,000 
 piculs, according to Mr. Dick's remark that "Malwa Opium 
 is 1 picul or (100 catties = ) 133^- lbs. to the chest; Patna, 
 Benares, etc., 120 catties or 160 lbs., and the Opium sent 
 to China is nearly equally divided between the two kinds."
 
 FOREIGN MERCHANT IN CHINA. 365 
 
 He, then, gives the number of chests exported from India 
 to China, taking the Indian particulars up to 1866 from an 
 Indian return, and assuming that about nine-tenths of the 
 total exportation come to China, and after deducting from 
 this quantity the imports into China, as returned by the 
 Inspector-General, draws the inference, that the difference 
 in quantity is smuggled. His process, apparently, is this : — 
 
 Number of Cliests Quantity 
 
 exported to China. imported into China. 
 
 1863 75,331 = Piculs 79,097 Piculs 50,087 
 
 1864 62,025= „ 68,227 ,, 52,083 
 
 1865 75,128= „ 82,641 „ 56,133 
 
 1866 76.863= „ 84,549 „ 64,516 
 
 Piculs 314,514 Piculs 222,819 
 
 Difference for 4 years Piculs 91,695 
 
 Mean annual difference 20,000 Cliests = ,, 22,924; 
 
 and calculating the loss of revenue to China upon this 
 quantity at Tls. 50 per chest, he makes his " Hongkong 
 Claims " to amount to the round sum of Tls. 1,000,000. § 
 
 I ^vill not insist on what I have reason to believe to be 
 the fact, that the exportation of opium from India for con- 
 sumption in the Straits, the adjacent archipelago, the 
 Pliilil3i3ine Islands, Hongkong, California, and other parts 
 of the world, not inconsiderably exceeds Mr. Dick's estimate; 
 nor on the circumstance that he makes no allowances for 
 losses at sea. The first glaring error which he commits is, 
 that he assumes the entire quantity of 20,000 chests, by 
 which he takes the Chinese imports, as returned by the 
 
 § The newly-created " Statistical Depaitmeut," of which Mr. E. C. Taintor has beeu 
 appointed " Statistical Secretary iu the Inspectorate-General, Peking : to reside in Shang- 
 hai " (Customs' Gazette, No. xxii, p. 107), raises the above excess to 3'2,r>r)'2 pictils in 1869 ; 
 36,228 piculs in 1870 ; 30,074 piculs iu 1871 ; by returningy'.j. in the latter year the imports 
 into China, which paid duty to the foreign Customs, by upwards of 11,000 piculs short of 
 the truth.— See : " The Returns of Trade at the Treaty- Porta in China, as published by 
 order of the luKpcctor-Geueral of Customs, critically examined." Shanghai, 187.'), 8o.
 
 3(U> THE TREAT¥ RIGHTS OF THE 
 
 Foreign Customs, to fall short of the Indian exports to 
 CMim, to he sinufif /Jed ; and that he not only connects the 
 whole of this alleged smuggling trade with Hongkong, but 
 actually lays it to the charge of that port. Yet the Com- 
 missioner of Customs himself observes: — "It would be 
 dealing very imperfectly with the question to raise the rate 
 in the Tariff without taking some measures to enforce the 
 operation of the Tariff at Hongkong and Macao ; which 
 being — the one actually and the other virtually — foreign 
 ports, are at 'present so circumstanced that Chinese purchasers 
 carry their Opium from both places, but chiefly from Hong- 
 kong, to the amount of about 20,000 chests (a foui"th of the 
 whole quantity imported), annually, free of Tarif d^ifjj, to 
 the neighbom-mg places on the Canton river, and along the 
 South West Coast, and to those places north of Hongkong, 
 wliich are not too far distant to make it necessary, for the 
 safety of the article, to have it carried in Foreign vessels." 
 If the writer were asked to explain, how any island on the 
 face of the globe can be (temporarily) " so circumstanced," 
 as to compel native and foreign Customs — officials at ports 
 on the coasts of the opposite mainland, — to allow Chinese 
 traders to evade the payment of Tariff-duties on merchan- 
 dise purchased at the island : he would find no little diffi- 
 culty, I opine, in retm-ning a rational answer to such a 
 question. What, however, cliiefly calls here for notice is, 
 that of the 20,000 chests of Opium under discussion, Macao 
 imports montlily, as I learn on unquestionable authority, m 
 the mean upwards of 400 chests, or about 5,000 chests per 
 annum, which reduces Mr. Dick's estimate for Hongkong 
 at once to 15,000 chests. 
 
 Furthermore, it is stated by those who are believed or 
 known to be well informed, that a considerable quantity of
 
 FOREIGN MERCHANT IN CHINA. 367 
 
 Opium is yearly imported, ^vithollt pajdng tlie Tariff-duty, 
 into Shanghai, and from thence into other ports, and which 
 Opium has never touched at Hongkong. That smugghng 
 in this tempting article is gomg on under the very eyes of 
 Mr. Dick, his immediate native superior, the Intendant of 
 Customs, and the Opium office, appears partly from an oc- 
 casional seizure, recorded in the " Customs Gazette," such 
 as 8 chests of Patna Opium ex Bertha, falsely declared as 8 
 packages, about four piculs of diied prawns being packed 
 on top of Opium; partly from Mr. Dick's o^vn words, m 
 givmg /. i. the quantity delivered, by his order and as he 
 asserts, " for the purpose of evadmg the native charges," 
 in 1869, as 1,152-20 piculs and 962 chests, making toge- 
 ther more than 2,000 chests. The Inspector-General would 
 hardly thank me for giving publicity to the information 
 furnished to me m connection with this subject. I will, 
 therefore, confine myself to the remark, that a further quan- 
 tity of Opium of at least 5,000 chests, the alleged smug- 
 gling of which cannot possibly be associated with Hong- 
 kong, has to be deducted from Mr. Dick's charge against 
 the British Colony. And this agrees very well with the 
 somewhat exaggerated statement of the Commissioner of 
 Customs at Canton, in estunating the quantity, smuggled 
 into that port alone, at about 9,200 piculs or 8,430 chests. 
 
 But is even this quantity, at a maximum amounthig to 
 10,000 chests, really smuggled mto Chma? Mr. Dick, 
 strange to say, disregards the fact that the Foreign Cus- 
 toms are but a branch of the Chinese Customs' Service, 
 and ignores the Native branch of the Service, levying at the 
 ports of China unport- and " transit "-duties upon native 
 and foreign trade, carried on m native bottoms, altogether. 
 Yet, he admits at least by implication, as we have seen.
 
 .308 TTIK TREATY rJCUTH OF THE 
 
 tliat tlio allegod smuggling trade in Opium jnircliased by 
 Cliinose merchants at Hongkong is iu native junks almost 
 exclusively carried on with Canton and certain ports on the 
 neighbouring coast; which ports are, and since the first 
 establishment of foreign commerce at Canton have been, 
 under the fiscal jurisdiction of a special Superintendent of 
 Trade, known to foreigners as the Hoppo of Canton. The 
 circumstance, therefore, that out of the ten or eleven thou- 
 sand chests of Opium, wdiich may annually be imported into 
 those ports, only a thousand chests pass the office of the 
 Foreign Commissioner of Customs at Canton, is by no means 
 a proof of the remaining quantity being smuggled. Mr. 
 Dick has no right to assume this without positive e^4dence ; 
 and such evidence he has not even alluded to, much less 
 attempted to adduce. The probability, however, is that a 
 certain proportion of the quantity estimated at 10,000 
 chests really evades the pa}T2ient of import-duty; and, as we 
 will not suppose the Hoppo and the Commissioner of Cus- 
 toms at Canton to discharoje their duties more effectively 
 than do the Intendant, and the Commissioner, of Customs 
 at Shanghai: we may, the total quantities imported being 
 about equal, not unfairly estimate the quantity actually 
 smuggled into the Kuan-tung ports, at about 2,000 chests 
 per annum. 
 
 Whether the intermediate quantity of 8,000 chests pays 
 the regular import-duty at the native Custom-houses, or 
 whether it be introduced into China mider an arrangement, 
 tacit or other^nse, mth the native Customs' authorities, or 
 simply mth their positive connivance : fii either case it cer- 
 tainly cannot be said to be smuggled, since, at the best, no 
 means are taken to ;>/vi-<'«f its introduction "free of Tariff 
 duty." And we have already seen, from the Report of Mr.
 
 FOKEIGN MERCHANT IN CHINA. 309 
 
 Kleinwacliter to the Inspector-General, that such is the case, 
 at least to a great extent. But no one acquamted with 
 Chinese officialdom will for one moment delude himselr 
 with the idea that Chinese traders are permitted to evade 
 " the Tarilf duty," without paying a heavy " squeeze," and 
 the native Authorities levying upon the " smuggled " Opium 
 a tax judged by them more satisfactory to themselves and 
 more beneficial to " the Chinese Revenue " than an import- 
 duty of Tls. 30 per picul, payable to the Foreign Inspector- 
 ate-General, which, moreover, has no busmess whatever to 
 interfere in matters appertaining solely to the native branch 
 of the Service. The office of the Hoppo is still a lucrative 
 one, and mvariably bestowed on a Member of the Imperial 
 family.* In former years its annual receipts amounted to 
 something like Tls. 3,000,000, about one third of which 
 sum only had to be remitted to Peking for the use of the 
 Court. The present income is greatly reduced; to little 
 more than a million of taels, if I am correctly mformed. 
 Out of this sum between Tls. 300,000 and Tls. 400,000 are 
 stated to be derived from Opium. This would give on 
 8,000 chests, for a mean impost in some form or another, 
 from Tls. 37 to Tls. 50 per chest, which tallies well with 
 the more excessive "Tariff" rate of about Tls. 86, le^'ied, 
 at the port, by the Forcif/n Customs' branch ui Canton; 
 and fully confirms my view of the case. 
 
 As to the monetary rate of Tls. 50 per chest of opium, at 
 which Mr. Dick estimates the alleged loss of revenue, aris- 
 ing to the Climese Government — or, according to Mr. Wade, 
 to the Provincial Authorities— from Hongkong bemg a free 
 
 * The Baron is in error iiT>on this point. The Cnnton Hoppo is never a inembor ^'lio Imperial 
 family ITmng-Mh ^ ^), but is always chosen from the Nei-wu-/u (pj ^ flj), a Bounl 
 
 whoso duties correspuud vuij clnstly to those of tlie liOnl Ch;imh(ilain iu Kuj,'lnud. It sui>criutouds aU 
 tlic aoiuestji; aud iiiiauciu,! arruugemcnts of the Imperial household.— Kd.
 
 370 THE TltEATY RIGHTS OF THE 
 
 port : it is based on the fourfold assumption, that " it is not 
 possibh^ to levy charges to any great extent on the article 
 after it leaves the port;" that, on the quantity smuggled 
 into the ports, inland duties to the extent of Tls. 10 per 
 chest only are levied at the Chinese Custom-houses and 
 Barriers ; that the levying, at the ports, of heavy imposts, 
 in addition to the unport-duty of Tls. 30 per picul, stipulated 
 by the Treaty of Tientsm, is not contrary to Treaty ; and 
 that the entire quantity, unported into China, which pays 
 no Tariff-duty at the Foreign Custom-houses, is smuggled. 
 Not one of these assumptions is tenable. It is true that, 
 according to Mr. Dick's table of charges on Opiimi, pre- 
 viously transcribed, the mean sum levied in the Interior 
 amounts, on the whole quantity imported, to Tls. 11 per 
 picul only, or to nearly Tls. 20 on the quantity affected, 
 but, how little reliance can be placed on this table, is proved 
 by the fact that, whilst Mr. Dick, /./., returns the " Amount 
 of native charges, levied on the way to the principal market 
 in the Interior " for Fuchow, at Tls. 20.8.6.0 per picul, the 
 late Commissioner of Customs at Fuchow, M. de Meritens, 
 in the same publication, shows that amount, as a matter of 
 fact, to be Tls. 38.5.4.0 per picul, or nearly double of what 
 Mr. Dick sees fit to state. It is, therefore, quite possible to 
 levy upon opium, at the inland Custom-houses and barriers, 
 a tax not only of Tls. 20 per picul, as Mr. Dick himself ad- 
 mits, but of Tls. 40 per picul, as M. de Meritens certifies, 
 between the port and the nearest centre of trade ; and, since 
 the Ta Ching Dommions, studded over mth -^, extend 
 somewhat farther than from Fuchow to Yen-pmg-fu, or from 
 Shanghai to Suchow, it must assuredly be possible to levy 
 on opium an additional Tls. 10 or Tls. 12 per chest, bejioud 
 the principal markets in the vicinity of the ports. But, if
 
 FOREIGN MERCHANT IN CHINA. 371 
 
 this be conceded, it has to he inferred, without positive 
 proofs to the contrary, or to the effect that the consumption 
 of opium in China is confined to the Treaty ports and ncigh- 
 houruig country — which it is not, — that the full mland 
 charges are leviable upon the article, whether it be smug- 
 gled into the jmrts, or not ; and, if they be not levied, that 
 the fault rest solely with the native Authorities and officials. 
 Nor is it m accordance with Treaty stipulations, tliat the 
 inland or " Transit "-dues on opimn be levied, whether in 
 part or in full, at the ports, in addition to the import-duty. 
 The former become payable only in the Interior, and pro- 
 gressively, according to distance and barrier rates. They, 
 being not commuted, should not, and cannot properly, be 
 levied m advance. It is but in name that they are collected 
 as transit-dues. Vhtually they constitute additional un- 
 port-duties, and reduce the Tariff import-duty to a mere 
 nominal rate. If their collection at the port be not strictly 
 illegal, it certainly is hreconcileable with Treaty stipulations. 
 Mr. Dick's last assumption has already been disposed of. 
 From all tliis it is plain, as a priori it appears obvious to 
 common- sense, that under no cu'cumstances could Hong- 
 kong be held rationally responsible for any loss to the 
 Chinese revenue from smuggling between that port and the 
 Chhiese coast, save for a loss on Tariff import-duty, which 
 Mr. Dick himself states to be at the rate of Tls. 14 per luciil 
 only. And even the amount of this rate is, to say the least, 
 a very questionable one. 
 
 Thus we find "the Hongkong Clahns " already reduced 
 to the modest sum of Tls. 28,000, — being Tls. 14 per chest 
 on 2,000 chests, — as a maximum. Nor is Hongkong, being 
 a free port, responsible even for this amount of alleged loss 
 to the Chinese Revenue from opium-smuSgling. Indeed,
 
 372 THE TllEATY RIGHTS OF THE 
 
 having due regard to Mr. Dick's own statement, I am at a 
 loss to understand the very possibihty of such smuggling, 
 without our having to lay it to the sole charge of the Native 
 and Foreign Customs' Service, respectively. For, on May 
 13, 1869, Mr. Dick writes thus to the Inspector-General, 
 Mr. Hart : — " Hongkong and the Opium revenue. — The Opium 
 duty should be raised to as high rate as may be foimd to be 
 possible without encouraging smuggling, and experience has 
 shoivn that iipumrds of 100 taels a chest can he obtained without 
 much risk." Now, the mean total amomit of native imposts, 
 at present raised according to Mr. Dick, is about Tls. 70 ; 
 the mean amount imposed at the three ports — Amoy, Swa- 
 tow, and Canton less than Tls. 48 ; the amount collected at 
 the port of Canton, at, and m the vicinity of, which smug- 
 gling is said to be chiefly carried on, Tls. 48.3.4.0 ; and the 
 import-duty, which can alone be an encouragement to 
 smuggling between Hongkong and the Chinese Coast, is 
 but Tls. 30, per picul. Hence it is plain that, if an unport- 
 duty of Tls. 100 per chest can be obtamed by the Foreign 
 Customs, — and consequently by the Native Customs as 
 well, — without much risk of inciting to smugglmg, that an 
 import-duty of Tls. 30 per picul, (or even an impost of 
 about Tls. 95 per chest, at present raised at the ports), is 
 obtainable without any such risk. And hence it is equally 
 plain that, according to Mr. Dick's own testimony, there 
 exists no external mcitmg cause for smuggling opium mto 
 China ; that, consequently, Hongkong can possibly be no 
 cause of loss from smuggling to the Chinese Revenue ; and 
 that the only ostensible cause of the loss alleged, which 
 presents itself, is, in combination with the corruption of 
 Chuiese officials, the inrfjiciencij of the Native and Foreign 
 Customs' Scrrice.
 
 FOREIGN MERCHANT IN CHINA. 373 
 
 Again, the circumstance that Hongkong is "a free port," 
 on which Mr. Dick lays the whole stress of his argument, 
 has no bearmg whatever on the question at issue. If Lon- 
 don or Liyerpool, with their bonded docks, occupied the 
 same site, the same trade in opium would be carried on 
 with China from either sea-port to^vn. The British Posses- 
 sion of Victoria is no more responsible to Chma for any 
 smuggling trade going on, in exports from its port, on the 
 coasts of Chma, than France is responsible to England for 
 any smuggling, that may take place in exports from French 
 ports, on the coasts of the United Kingdom ; or than 
 England is responsible to the United States for any smug- 
 gling, in exports from English ports, w^hich the American 
 Customs' Service may fail, or be unable, to prevent on the 
 coasts of the North-American Republic. 
 
 I fear me, then greatly, that the smuggling- claim of 
 Tls. 1,000,000, preferred by the Inspector- General and the 
 Commissioner of Customs at Shanghai against Hongkong, 
 must, being a baseless fabric, fall to the gromid. The 
 character of their own arguments has enabled me to treat 
 the subject somewhat lightly ; and I might have laid even 
 less stress on it, had not Mr. Dick, whilst making up a 
 hollow, exaggerated, and disloyal charge against the British 
 Possession of Victoria in mitigation of unlawful and op- 
 pressive charges, leaded by the Chinese Government upon 
 British and foreign trade, clearly misrepresented* tbe 
 amount of the latter, — thus misleading the British and other 
 Western Governments as well as the public generally in 
 regard to that amount. My proof out of his own mouth is 
 this : — In his table, literally reproduced above, Mr. Dick 
 makes out the total of " excess " of taxation to which 
 Foreign Trade was subject in China in 1858, to be Tls.
 
 374 THE TREATY KIGHTS OF THE 
 
 2,980,224, tliat is " if native charges were commiited at 
 Treaty rate of Tariff duty," and not including opium. If 
 we include opium, "not entitled at present to commutation," 
 there have to be added to the above sum Tls. 4,099,426 
 — (Tls. 1,617,611 + Tls. 808,805 = ) Tls. 2,426,416 = Tls. 
 1,673,010, making the total = Tls. 4,653,234. But in his 
 " Suggestions," addressed to the Inspector-General on 
 January 18, 1869, the Commissioner of Customs states : — 
 " I strongly recommend the views put forward in this 
 despatch to your consideration. In our present position 
 (to sum it up) we collect Import and Export Duties amoimt- 
 ing to nearly Tls. 7,000,000 under a Tariff for Foreign 
 Trade, but we fail to mfluence the extra-Tariff charges 
 amountmg (opium included) to a much larger sum." The 
 expression " a much larger sum " than Tls. 7,000,000, 
 certainly partakes of a somewhat vague character. But if, 
 by way of comparison/./, of the prices of two pieces of silk, 
 the price of one of which had been stated to be £7, we were 
 told that the price of the other piece was " much higher : " 
 we would hardly conclude the latter to be less than <£11 or 
 JglO at least. And a similar language, applied to as many 
 millions, would produce a similar impression. Mr. Dick 
 must, consequently, from his own words be understood to 
 have known, that the " Excess of duties at present collected " 
 over and above the "Amount leviable if native charges were 
 commuted at Treaty rate of half Tariff' duty," and mcluding 
 Import and Export duties exceeds by some six or seven 
 million taels the total of Tls. 4,653,234 (opium included), 
 or the total of Tls. 2,980,224 (not including opium), which 
 his table — to' a corresponding extent misrepresenting the 
 defective Eeturns, on which it is based, as the full charges 
 levied, — makes them out to be. But, that he cannot liave
 
 FOREIGN MERCHANT IN CHINA. 375 
 
 intended to include in his sum of " nearly Tls. 7,000,000 " 
 the imcommuted amoiuit of Tls. 4,099,426, being the total 
 of imposts at present collected on opimn, is proved by this, 
 that it was impossible for him to take the remainder of at 
 most Tls. 2,900,574, as compared with his tabular total of 
 Tls. 2,980,224, — being a smaller sum, — for " a much larger 
 sum," or the amount, of Tls. 7,000,000, as compared with 
 the nearly equal amount of Tls. 7,000,000 for " a much 
 larger amount." Under any circumstances, the Commission- 
 er of Customs at Shanghai knew, and the Inspector-General, 
 having convinced himself that Mr. Dick had worked up his 
 subject with much thoroughness," concm-red in the know- 
 ledge, that, as compared with the amount of Mr. Dick's 
 table, the yearly total of illegal taxation to which British 
 and Foreign Trade is actually subject in China, constitute 
 " a much larger sum." 
 
 All this was written before two impoi-tant documents, 
 fully bearing me out in the view taken of the amomit of 
 illegal taxation, levied by the Chinese Government, had 
 come to my Imowledge. The first are the new Regulations 
 C, framed by the Inspector-General and proposed by the 
 Tsung-li Ya-men. In Rule iii. §1, a fine is miposed of 
 " ten times the half-duty (of I'i) in order to compensate 
 for the duties and the li-kin, (the payment of which is 
 supposed to have been avoided) on the road, i.e. in transitu. 
 Here, then, we have the high and, in a case like this, in- 
 disputable authority of the Tsung-li Yameii itself, as well 
 as that of the Inspector-General, Mr. Hart, for the fact 
 that the war and other taxes, levied on foreign trade in 
 transitu, amount to about 25 per cent, i.e. to about 22^ per 
 cent, ad valorem over and above the half-duty of 2k per 
 cent, stipulated by Treaty. This is probably meant to
 
 37G THE TREATY RIGHTS OF THE 
 
 express the mean rate, as resulting from the transit of 
 foreign goods or native produce through two or more pro- 
 vinces. 
 
 The second document is a Memorial, presented by the 
 native merchants of Shanghai to the Tao-tai, and a transla- 
 tion of which, as published in the North China Daily News 
 of February 9, 1874, I subjoui. It reads as follows : — 
 
 In view of the great depression of trade in Shanghai, ascribed to the 
 heavy and miiltipHed system of taxation existing, the representatives of 
 each trade collectively petitioned the Tautai and other authorities con- 
 cerned on the 13th of this moon, and fearing the subject should not 
 gain publicity far and near, they therefore publish the petition in the 
 tShiuipau, 
 
 " A General Petition from the Merchants of Shanghai. "Whereas the 
 heaviness of Likin dues has led to the stoppage of trade, your petitioners 
 pray for their reduction, that the present deplorable position of mer- 
 chants may be mitigated and business be thereby revived. 
 
 We would humbly advance that the interest of commerce and the 
 welfare of merchants are vitally connected with the subject in question. 
 From the winter of last year to the present time, no less than fifty to 
 sixty merchants have succumbed to the cu'cumstances of the time, the 
 total amount failed for reaching the aggregate of Tls. 2,000,000. Many 
 of these failures have been settled privately, but the suits arising there- 
 from have been so continual as to form sufficient official proof of the 
 facts set forward. An investigation into the course of this widespread 
 adversity, proves it to be owing to the multii)licity of Tax barriers and 
 to the heaviness of the dues collected. During the time of the Rebel- 
 lion, Likin barriers, cash shop and house taxes, import and export 
 duties, market dues, boat and timber dues were all successively estab- 
 lished. The revenue thus collected was exacted from the life-capital of 
 merchants. The merchants continued to struggle against adversity 
 until, the " creek being drained and the hill removed," they were at 
 length brought to a stand. The authorities were afterwards good enough 
 to abolish cash shop, house and market taxes, including them in the 
 Likin tax ; and subsequently Tseng-kwo-fan further lessened the Likin 
 in order to relieve merchants. But the alleviation thus afforded amount-
 
 FOREIGN MERCHANT IN CHINA. 377 
 
 ed only to 30 per cent., and has proved inadequate to relieve the heavy 
 weight on trade. Goods coming from the sea are subject to Import 
 dues, merchandise arriving from the interior pays Li-kin at the Barriers 
 en route, and when reaching Shanghai the " Loh-ti-chuan " ^ i^ ^ 
 is further levied. Again, when re-shipped, those sent by sea have to 
 pay Export dues, and those sent to the interior are subject to Barrier 
 dues. In comparing the total of collection with the value of the goods 
 it amounts to 20 to 30 per cent. 
 
 In former times, when goods arrived, if there was a market for them, 
 they were sold ; if unsaleable they were sent to another market, or 
 from thence perhaps re-imported into Shanghai. The expenses were 
 very small, and merchants therefore gladly repaired to Shanghai. At 
 present, when goods have once entered the town they cannot again leave 
 it, and after they quit the place they cannot return, simply on account 
 of the Loh-ti-chuan. 
 
 We beg to represent that at other Ports, although there are Tax Bar- 
 riers, the "Loh-ti-chuan" impost does not exist, and Shanghai alone 
 is exceptional in the matter. Moreover, in the Province of Chekiang, 
 the law in regard to levying dues is that, if the Li-kin is paid at one 
 Barrier, the receipt then issued carries the goods to all parts of the 
 Province ; but in Kiangsoo dues have to be paid at each alternate Bar- 
 rier ; as for instance on the route to Soochow, where dues have to be 
 paid at three stations and to be vised at two alternate ones. Owing to 
 this great difference against Shanghai, merchants — who assemble only 
 where profit is to be gained — view the Port with fear and distrust. In 
 dejection they leave the place to seek a living elsewhere, and it is thus 
 that the outlets to trade become gradually closed and the demand for 
 merchandise extremely limited. These circumstances are much to be 
 deplored. It is not that we shut our eyes to the necessary requibitions 
 of Government ; and in support of this, we have merely to revert to the 
 manner in which Shanghai responded recently to the critical call for 
 food and clothes for the North — appearing at the head of the list — but, 
 in our in-esent reduced state we cannot but seek after means to revive 
 from the present distress. We therefore pray for special favour at this 
 crisis. 
 
 It has, moreover, to be taken into consideration that with the in- 
 creased circulation of goods the public exchequer benefits equally with
 
 378 THE TREATY RIGHTS OF THE 
 
 the mcrclicaiit. If Kiangsoo should be placed on the same footing a3 
 Chckiang, duties would tliereby be lightened, and there would be every 
 prospect of a revival in the Shanghai trade. In the other alternative 
 it is to be feared that we shall daily sink lower and lower. 
 
 With the great results at stake we cannot remain silent, and we have 
 to beg that his Excellency the Taotai will represent the matter to the 
 Governor-General, the Footai, and to Earl Li Hung-chang. Our prayer 
 is that the state of trade at Shanghai having reached a crisis, from 
 which under the existing regime it will be difficult to recover, the 
 " Loh-te-chuan " tax be at once abolished, and the Barrier levies out- 
 side be placed on the same footing as in Chekiang. 
 
 Here once more the general amount of li-hin and other 
 charges, levied by the Chmese Government on (foreign) 
 inland trade, is stated to be from 20o/q to 30 ^/^ ad valorem, or 
 25 per cent m the mean ; and if the Chinese merchants had 
 not been certain of the fact, they would most assuredly not 
 have dared to state it to the Tao-tai and Intendant of 
 Customs. 
 
 To revert now to my table, the general correctness and 
 results of which have received the fidlest confirmation fi"om 
 what has just been said, and can leave no further room for 
 any reasonable doubt. It presents several features, equally 
 interestmg and remarkable. The first is, that the Chinese 
 Tarifi" is, considering the statement of the country and the 
 requirements of the Government, probably the highest in 
 the world. Yet, in regard to it, an able and well-known 
 writer on Chinese matters, though noted for the incon- 
 sistency of his political views and the strength of his pro- 
 Chinese bias rather than for the reliability of his mformation 
 and the soundness of his arguments, Mr. J. Barr Eobertson, 
 wrote, at that time under the mspiration of the late Mr. 
 Burlmgame, from Shanghai, on January 8, 1868, to the 
 London Dailij Xeics : —
 
 FOREIGN MERCHANT IN CHINA. 379 
 
 " We demonstrate to our ministers and governments the advantages of 
 low tariffs, with a logic to which the United States, Canada, the con- 
 tinent of Europe, and Austraha have as yet turned a deaf ear. Indeed, 
 I may safely challenge a comparison of the China tariff with that of 
 Canada, the United States, or Australia ; but Canada, the United 
 States, and Australia are in no danger of being taught logic at the 
 point of the bayonet ; being civilised, they are entitled to indulge their 
 protective and prohibitive tastes. They may be wooed and won, but 
 it must be by pearl necklaces ; while China is treated to the fraternal 
 embraces of the West by means of Armstrong guns and Enfield rifles. 
 Yet, in addition to an almost unequalled loiv tariff, the Chinese can point 
 to' the immense river steamers which daily glide on the broad bosom of 
 the Yangtsze and steam eight hundred miles into the interior of their 
 empire ; they can point to an organised Customs service of foreigners 
 and Chinese under the directorship of Mr. Hart, which has attained a 
 perfection and completeness not to be surpassed in Europe ; they can 
 point to a beginning in the purchase of gunboats, and to the estabhsh- 
 menfc of arsenals where, under foreign supervision. Chinamen are 
 taught to cast cannon, and to make every single part pertaining to 
 rifles ; they can point to the establishment of a college at Peking for 
 the instruction by foreigneirs of a select body of their youth in European 
 languages, art, and science; they can point to their adoption of 
 Wheaton's international law, to the building of lighthouses, to the 
 introduction of foreigners to drill their troops, to the survey of their 
 coal-fields and mineral resources by a foreigner ; to all this and much 
 more they can point as the evidences of their progress since the treaty 
 of Tientsin." 
 
 The most telling and fatal comment on these panegyrics, 
 perhaps, was the Tientsin massacre. It is with all the 
 facts, save one, of which Mr. Robertson informs the West, 
 China "can boast," as it is with her " almost unequalled 
 low tariff." The exception is her progress in arming herself 
 against Progress, and paying for her armaments out of the 
 "Excess" of taxation, which she illegally imposes upon 
 Foreign Commerce at large and upon British Commerce in 
 particular.
 
 380 
 
 THE TREATY RIGHTS OF THE 
 
 Mr. Dick gives, in 1869, the following '* Comparison of 
 Tariffs," to which I only add the true per-centage for 
 China : — 
 
 
 United States, 
 1866. 
 
 Great Britain, 
 1866. 
 
 India, 
 1866. 
 
 China, 
 
 (Tariff and Native 
 
 Charges), 
 
 1868. 
 
 Turkey. 
 
 
 44 
 free 
 
 60 (Tea, eofteo, 
 Spirits and 
 Wines, To- 
 bacco and 
 Sugar). 
 
 12-6 
 
 free 
 
 lto7i 
 about 8-6 
 
 Mr. Dick. 
 
 In reality, 
 
 including 
 
 " squeezes." 
 
 
 Import Duties — 
 Luxuries . . . .per cent. 
 
 Manufactures., „ 
 
 Metals , . 
 
 Sundries „ 
 
 On total value 
 of Inipoi-ts. . „ 
 Export Duties . . ,, 
 
 18i (0pm.) 
 
 7-86 a 10-45 
 
 20 
 
 8 
 
 12-3 
 11-8 
 
 30 
 
 SO 
 .SO 
 80 
 
 SO 
 30 
 
 5 
 13 
 
 Value of Imports 
 
 ,, Exports 
 
 
 £184,887,802 
 £136,695,085 
 
 £ 29,599,228 
 £ 56,972,859 
 
 Tls. 71,121,213 
 Tls. 69,114,7*3 
 
 
 „ Both 
 
 $642,451,489 
 
 £321,582,907 
 
 £ 86,573,087 
 
 Tls. 140,235,946 
 
 
 
 
 Duties on whole \ _ „f 
 Commerce ) P' 
 
 25 
 
 6-9 
 
 8-2 
 
 12 1 80 
 
 abt. 8i 
 
 Into a discussion of the elements on which this Table is 
 based I need not enter. It matters little whether the mean 
 amount of imposts, levied on commerce in each of the 
 countries chosen by Mr. Dick for comparison, has been 
 quite fairly determined in the case of Great Britain and 
 India, or whether the Tariff of the United States is still as 
 high as it was in 1868. "When we consider the condition 
 of the Army and the Police in China, ill paid when paid at 
 all, and worse taken care of; the fearful misery of the pri- 
 sons; the pittances, with few exceptions, disbursed for the 
 Civil Service; the wretched state of the public roads, 
 wherever such roads exist at all; the neglect of tKe canals ; 
 the ruin and delay of public works; the absence of a Navy 
 possessing any claim to the name, of a Diplomatic Service, 
 of a Postal Service, of a Packet- and Telegraph- Service, of 
 National Collections, and a funded National Debt, etc., 
 etc.: m short, when we compare the Public Administration
 
 FOREIGN MERCHANT IN CHINA. 381 
 
 of China with that of the United States on the one hand, 
 and their tariffs — the present American tariff is for high 
 rates alone comparable with the Chinese tariff — on the 
 other, we cannot but arrive at the conclusion that, even 
 relative to the former, the latter is exorhltant. 
 
 The next prominent featm-e of om- table is, that the Chi- 
 nese Government levies, so far as import- and " transit-" 
 duties are concerned, no heavier imposts upon Opium 
 than it levies upon any other class of foreign goods, or 
 native produce. True, the " Stationary Trade Dues " im- 
 posed on Opium shops, are high. But it is as certain as 
 is the fact that Opium-smoking prevails nowhere to a 
 greater extent that it does in the Tatar Capital, and in no 
 quarter of Pe-king to a greater extent than on good ground 
 it is believed to do in the Imperial Palace, that the Tsung-li 
 Yamen has, for some years been so strongly urging the 
 *' immorality " of the Opium-trade upon the consideration 
 of England and the religionistic sentimentality of the Glad- 
 stone Administration, solelij in the hope of China being, for 
 the excess of her exports, paid in silver, — and in precisely 
 the same proportion, in which it may be found practicable 
 to diminish the importation of the foreigfi-gi'owii drug. 
 There lies the whole moral of the Ya-men's cunningly- 
 worded despatch of July, 1869, to Sir Rutherford Alcock, 
 on the " Opium Trade,"— a despatch betraying itself, by 
 unmistakeable internal evidence, to be, mainbi the cxwijMsi- 
 tion of a Foreigner. I am as strongly opposed to the intem- 
 perate use in China of Opium, as I am opposed to the in- 
 temperate use of alcoholic liquors and tobacco at home. But 
 I should hold it to be a fatal error on the part of the Bri- 
 tish Government, were it to entertain the hypocritical ap- 
 peal of the Tsung-li Ya-men to England's moral sense and
 
 38'2 THE TREATY RIGHTS OF THE 
 
 generosity. For the Chinese Government to make such an 
 ai)peal, constitutes of itself a national offence. For the 
 Ya-men to threaten England, unless she consent to the abo- 
 lition of the cultivation of the poppy in India, with the 
 hatred and anger of the officials and people of China, (i.e. 
 with a repetition of the Tien-tsin Massacre on a larger 
 scale), and the interruption of friendly relations, is, despite 
 of the folly of the thmg, a national insult, based so far as 
 the Chinese people is concerned, on a palpable untruth — an 
 insult, wMch no British Minister save a Eutherford Alcock, 
 no British Cabinet save a Gladstone Cabinet, could have 
 submitted to. 
 
 The trade in Opium is no less honorable than is the 
 trade in Wines or in Tobacco. There is no more '' sin " in 
 the preparation of opium or morphine, than there is in the 
 preparation of laudanum, from the same plant. The grow- 
 ing of the poppy is as lawful as is the growing of the vine. 
 Not the manufacture of opium is an evil, hut the intemperate use 
 of it. To foster the extension of the former, as a legitimate 
 and an important branch of Indian agriculture and indus- 
 try, is the duty of the Government of England ; to check 
 the spreading of the latter, as one of the vices to which the 
 Chinese nation is addicted, the duty of the Government of 
 China. It will perform that duty, not by attempting to 
 intimidate or to cajole England, but by setting, in the Pa- 
 lace and in the Ya-mens of the Empire, the example of 
 temperance, if not of abstinence, to the lower classes; by 
 alleviating the burdens, improving the material condition, 
 and elevating the moral character, of the Chinese people; 
 and, in addition to these essentials, by icise measures of 
 public supervision. The abolition of the use of opium in 
 China, even did the Government seriously contemplate it —
 
 FOREIGN MERCHANT IN CHINA. 383 
 
 which it does not, — would be as idle an undertaking, as 
 would be the attempted abolition of the use of tobacco and 
 alcoholic drinks at home. The people of the West u-ill 
 have the one; and the people of the Far East ivill have the 
 other. And they both have a right to each. Their physical 
 organisation differs essentiallij. As a stimulant and a narcotic, 
 opium is remarkably well — nay, admirably — suited to II their 
 system, and produces, even when taken habitually and in 
 excess, far less injurious effects upon the Chinese, than do gin 
 and tobacco, when taken habitually and in excess, upon the 
 Em'opean and American, physical system.* The moderate 
 use of opium I therefore, hold, — and I am speaking upon 
 mature reflection and fi'om personal observation, — to be at 
 least as rational and legitimate a source of enjoyment and 
 solace to the Chinese, as the moderate use of tobacco and 
 
 ^ I stand by no means singular in this opinion, — the result of personal observation. M. 
 Lamprey, M.B., Surgeon of H.M.'s 67th Regiment, in his Report on the Chinese Hospital 
 at Tientsin. (Shanghai, 1862, 8o., page 14-16) remarks : — " The univeraal use of the Opium 
 pipe among the Chinese must certainly be owing to some peculiarity of their mental and 
 nervous constitution. ... It has already been stated that it was very difficult to produce 
 the anasthetic effect of chloroform upon them without prolonged inhalation, and that in the 
 case of a very young child this was also noticed to a marked degree ; on the other hand 
 Hyoscyamus and Belladonna produce their action much better on the Chinaman, than on 
 the European. The spirit Sam-shoo the Chinaman drinks, is a powerful agent in produc- 
 ing intoxication in the European... ; but it does not appear to be so active on the China- 
 man, who, though he imbibes considerable quantities, is very seldom met with in a state of 
 intoxication. There must be some adaptation of the effects of Opium to the Chinaman, 
 which makes the practice of smoking it so univei-sal among his race." 
 
 I perceive from a leading article in the Shanghai Evening Courier for March 18, 1872, 
 that Consul Dr. Winchester, also, stated in evidence lately given before a Select Committee 
 of the House of Commons, with all the weight of authority conferred by a twenty-six 
 years' residence in China, that, being a medical man, he was " led to the conclusion, that 
 these was a certain aptitude in the stimulant (opium) to the circumstincea of the Chinese 
 people ;" and that " all stimulants having a beneficial use " (when taken in motleration) 
 " and an inj arious use " (when taken in excess), " he considered opium to have both." 
 
 * Mr. Lamprey observes : — " I learned that four or five pipes of Opium had little or no 
 effect on the smokers. A few more j^pes stimulated them as wine wouW: but it was not till 
 twenty pipes were smoked, that anything like very sensible effects were produced." (Re- 
 port on the Chinese Hospital, 1862, p. 15). 
 
 Dr. George Shearer, in his Report on the Kiukiang Dispensary for Chinese (Medical 
 Reports published by order of the Inspector-General of Customs, Slianghai, 1«71, 4o. p. (J2) 
 states :— " The number of Opinm-smokers, who applied for advice during the year 1871, w:»a 
 197. Of these 27 used half a mace (or about half a drachm) daily ; 54 used one mace ; 38 a 
 mace and a h.alf ; 41 two mace, ("one man smoking Xhr drupr for a poriod of 20, another for
 
 384 THE TREATY RIGHTS OF THE 
 
 wine is to Western men. The Government of no people 
 possess the right to interdict to them such a use, and to 
 deprive them of such a solace. Against its abuse there are 
 no other remedies, whether in England, in China or else- 
 where, save those I have indicated. 
 
 If the British Government, under such circumstances, 
 were to listen to the Tsung-li Ya-men's insidious arguments 
 — supported though they be by ill-directed missionary zeal, 
 — and, apparently yielding to the Ya-men's intimidations, 
 to consent to the prohibition of the poppy culture in India : 
 it would, in my judgment, thereby subvert, in principle, 
 the basis of Free -trade ; disown the natural rights of the 
 loyal subject ; acknowledge the arbitrary power of semi- 
 barbarous despotism ; prostitute the logic of facts ; succumb 
 to Tatar cunning and deceit ; and, after all, uselessly 
 sacrifice the legitimate interests of British Commerce and 
 Indian Industry : — for, sacrifice them to what end ? To 
 the end that the Government of China, — not content, w^hile 
 prohibiting the use of the pure, excellent and cheap salt 
 offered by England, to force upon its subjects, for one of 
 
 a period of 30 years) ; 18 used three mace ; 8 used four mace, (one, a subject of asthma 
 and bronchitis for a period of 10 years) ; 7 used five 'mace, (one of the number having 
 smoked opium for a period of 17 years at a cost of $80 per annum) : 4 used six mace, (one 
 of them a Buddhist priest ti.ied this quantity for 17 years;). The whole of these were sup- 
 plied with medicine at the Dispensary, and more than a tenth part returned to report them- 
 selves cured of the craving and habit. It is possible, that a much greater number were 
 really cured, but on the other hand it is highly probable that many relapsed into their old 
 habit when the state of their finances improved. Poverty, and consequent inability to pur- 
 chase the drug, was the general excuse pleaded for coming to see me. iriome reduced the 
 quantity used from 3 or -1 mace to 1 and there stopped." 
 
 Mr. Wingrove Cooke (China, London, 1859, 8o., p. 177-179) relates: — At Ningpo I ac- 
 cepted an invitation from the Rev. Itlr. Russell, the Church of England missionary priest, 
 and the Rev. Mr. Edkins, of the London Mission of Shanghai, to visit the opium dene of 
 Ningpo city. Commander Dew, of the Nimrod, and several of his officers accompanied us. 
 I had seen the opium-eaters of Constantinople and Smyrna, and the hashish-smokers of 
 Constantine, and I was prepared for emaciated forms and trembing limbs. . . . The Chinese 
 exhibition was sufficiently disgiisting, but was otherwise quite a failure. . . . The members 
 of this convivial society were good humoured and communicative. One was a chair-coolie, 
 a second was a petty tradesman, a third was a runner in a mandarin's yamen ; they were 
 all of that class of urban popul ation which is just above the lowest. They were, however)
 
 FOREIGN MERCHANT IN CHINA. 385 
 
 the articles of daily consumption most necessary to health, a 
 product, resembling crystalized mire rather than crystalized 
 sea-water, at an exorbitant price, — might, under the shield- 
 ing mask of its " impotence," encourage the cultivation 
 of the poppy at home ; stealthily and gradually add to its 
 salt-monopoly that of the manufacture and sale of opium ; 
 impose upon the people a deleterious drug, while excluding 
 from the country a superior preparation ; and cause an 
 annual amount of silver, to the extent of eight million £ 
 sterling, to be withdrawn from circulation in England and 
 to be diverted to China. On the other hand, the Tsung-li 
 Ya-men's threat, recently suggested also by Mr. Dick in the 
 shape of " a temporary measure," to withdraw the prohibi- 
 tion on the home growth of the poppy, need not alarm the 
 Indian farmer. The effect would simply be a demand for 
 the purer and better article, increasmg with the increasing 
 free production and use of " the deadly poison " in China. 
 Mr. Dick's theory touching this point is a dream. Experi- 
 ence supports my conclusion. Let the experiment be tried. 
 
 neither emaciated nor infirm. The chair-coolie was a sturdy fellow, well capable of fciking 
 his share in the porterage of a sixteen-stone mandarin ; the runner seemed well able to 
 run ; and the tradesman, who said that he was thirty -eight years old, w;ls remarked by all 
 of us to be a singularly young-looking man for that age. He had smoked opium for seven 
 years. As we passed from the opium-dens, we went into a Chinese tea-garden — a dirty 
 paved court, with some small trees and flowers in flower-po ts, — and a very emaciated and 
 3'awning proprietor presented himself. '"The man has destroj-ed himself by opium-smok- 
 ing," said Ml-. Russell. The man, being questioned, declared that he had never smoked an 
 opium-pipe in his life, — a bad shot, at which no one was more arau.sed than the rev. gentle- 
 man, who fired it. . . . English physicians, unconnected with the missionary societies, have 
 assured me that the coolie opium-smoker dies, not from opium, but from starvation." 
 
 Mr. F. Porter Smith, M.B., in his " First Annual Report of the Hankow Medical Mission 
 Hospital" (Shanghai, 1865, 80., p. 11) states: — " The number of ca.ses of opium-smoking, 
 applying for assistance in renouncing the vicious habit, has not been large, as no encourage- 
 ment has been given to such as desire to aggravate the original sum of their guilt, by the 
 addition thereto of the bonus of hypocrisy. The subjects of this habit have exhibited very 
 little, if anything, of the typical symptoms of opium-smoking. ... It is believed that a 
 small number of cases has been entirely cured. A simple case of opium-eating was the 
 most pitiable instance of the whole number. It is not intended, in these remarks, to justify, 
 in the least degree, this accursed practice, but to show, truthfully, that the -vice as prac- 
 tised here cannot be pictured with all the horrors so frequently described as attending it 
 in some other parts of this conutrj"."
 
 380 THE TKEATY IIIGIITS OF Tilf': 
 
 The last and most important featm-e of our tabic, claim- 
 ing notice, is the boast, that the annual total amount of 
 revenue derived by the Government of China from Foreign 
 Trade, does not fall below four million, as made out by Mr. 
 Dick, but reaches about ten million, £ sterling ; and that 
 the amount of illegal taxation, to which that Trade is 
 subject, exceeds fioe million, instead of falling below one 
 million, £ sterling per annum. It may be argued, in dimi- 
 nution of this sum : Firstly, that the nominal per-centage 
 of inland charges, leviable on foreign goods, is in practice 
 not levied in full, and that a much smaller value than the 
 true value of such goods is permitted to be declared for 
 the purpose of payment of duties. But I have already 
 disposed of this objection, by explaining that the practice 
 in question is restricted to the native inland trade proper, 
 and, though possibly and in certain localities occasional 
 exceptions may occur to the general rule, that foreign goods 
 have to pay the full rates, — as is too well ascertained to 
 admit of so much as a doubt. Secondly, that not the whole 
 of the percentage, leviable in the importing province, is 
 levied ; a portion of the goods passing into the hands of 
 the retail-dealer before they reach the last barrier. True, 
 I have not succeeded in ascertaining whether or not, in 
 such cases, the full duty is collected notwithstanding, either 
 in the shape of a complementary le-kin, or in that of a 
 " Stationary Trade " tax. This is more than proloable. 
 But what is certain is, that a large portion of the goods are 
 not sold within the importing province, but are sent on to 
 a second and a third province ; and thus become subject to 
 double or treble duty. 
 
 Thirdhj, it may be argued, that the total does not go to 
 the Imperial Government, and that a considerable sum has
 
 FOREIGN MERCHANT IN CHINA. 387 
 
 to be deducted from the gross receipts for expenses of col- 
 lection. The first point has already been explained. In 
 regard to the second, Mr. Dick also dwells at some length and 
 with much emphasis on the expense of collocting the native 
 charges, more especially those on opium, to which he adds 
 "the expense of evasion," in order, I presume, to impart 
 to the amount a more respectable appearance, and in one 
 sentence estimating '' the cost of evasion e^waZ to the charges 
 due on the quantity smuggled, less the reduction effected 
 by the smuggling on the general marlcet price of the commo- 
 dity, " — which reduction can, certainly, not benefit the 
 smuggler, so that smuggling opium at Shanghai w^ould 
 appear to be a mere labour of love ; — in the following sen- 
 tence estimating it at " one -half of the amount evaded." 
 Thus, on an " Amount collected " of about X'110,500, he 
 very nearly doubles the expenses of the Opium Office, in 
 1869 about ^6,900,— those of " the Defence Tax "—i.e. the 
 chow-fang-o^ce, engaged in collecting other charges, being 
 in comiection with Opium, according to Mr. Dick, too 
 trifling to be taken into account, — and puts them down at 
 about c£13,400, "for a piece of work, which could be per- 
 formed efficiently by the Foreign Customs without incon- 
 venience to the public, and without adding anything at all 
 to the present labour or expense — inclusive of " the cost 
 of evasion " ? — " of that Department." Truly, the Chinese 
 Government must be blind to their own advantage, in not 
 accepting so generous an ofi'er. And might not the Foreign 
 Commissioner of Customs have been equally prepared to 
 add, on similar terms, to the collection of the native charges 
 on opium, — li-kin, chow -fang, and the like, — free of addi- 
 tional labour to the Customs' employes and of expense to 
 the Chinese Exchequer, the collection of the similar charges
 
 388 THE TREATY RIGHTS OF THE 
 
 on foreign imports at large ? Be that as it may : the col- 
 lection of taxes involves a certain amount of cost, I believe, 
 in all countries ; and Mr. Dick appears to me somewhat 
 unreasonable and ultra-zealous in proposing to deprive of 
 their living, and begrudging to a crowd of poor and ill-paid, 
 though, certainly, not over-honest, native officials mostly 
 of inferior degree, their miserable share in a yearly total 
 of illegal imposts upon Foreign Trade, which they assist in 
 amassing for the Imperial Government. At any rate, the 
 question here is not : — What is the " net " revenue derived 
 by that Government from illegal taxation ? but : — What is 
 the annual burden of illegal taxation, to which Foreign 
 Trade is subject in China ? 
 
 We shall presently see that this burden has for the year 
 1870, to be estimated at nearly six million pounds sterling 
 — a sum,t wdiich would form an item even in the budget 
 of the Chancellor of the English Exchequer, and might 
 occasionally save him some little perplexity. Nor does it 
 constitute the wdiole of the claim, which Foreign Trade can 
 fairly establish against the Celestial Government. 
 
 Of the " Tonnage-Dues " which, in 1870, amounted to 
 Tls. 207,815.3.7.5 I will say nothing. The Inspector-Ge- 
 neral is understood to have written an elaborate Memo- 
 randum on the subject, accounting for every cash collected, 
 and to be still occupied in further elaborating it. If the 
 account give the history of the Fund and every phase of 
 its expenditure : it may be expected — speaking from what 
 
 t Not quite the whole of this sum is devoted to military purposes. Among the imposta, 
 which the Foreign merchant is illegally made to pay in China, we paid/./. :— " Public 
 Works taxes " of vai-ious kinds ; " Transport of Tribute Grain tax :" " Detective Office 
 tax •'' " Inlirmnrv tax ;" '" Hangchow Sea-wall tax ;" " Sea embankment tax ;"' " Measure 
 tax ;" " District Magistrate's tax ;" " Mandarin tax ;" " Lawyer's tax ;" " Guild taxes ;" 
 " Puiveyor of Clothing to the Court tax ;" etc., etc., etc. All these irregular taxes, how- 
 ever, who've (frequently unintelligible Chinese) name is legion, are chiefly local '• squeezes."
 
 FOREIGN MERCHANT IN CHINA. 389 
 
 I happen to know of the details — to prove an instructive 
 and interesting document. + Of course, it will be very dif- 
 ferent from similar Chinese documents. Relative to the 
 latter, Dr. Rennie relates, — in connection with " Hang-ki, 
 who was Hoppo, or collector of Customs, at Canton for 
 five years, out of a salary of about MGOO, effected an annual 
 saving, it was said, of about ^£100,000, and just paid, on 
 his arrival in Peking, a few prehminary " squeezes " 
 amounting to about J02O,OOO, — an amusing anecdote, cal- 
 culated to throw some additional light on Chinese Customs 
 matters. I will, therefore, transcribe it. " In the course 
 of a conversation," Dr. Rennie writes, " which Mr. Hart 
 had a few days ago with Hang-ki's headman, some remarks 
 were made about the misappropriation of Custom-house 
 funds by high Chinese officials, and Mr. Hart remarked, 
 " Now, do you mean to say that the sixty-six thousand 
 taels that Hang-ki has had to pay since his return to Peking 
 have been properly exacted ? '' Yes, it was all right ; the 
 accounts were quite correct and the money regularly accounted 
 for." On being asked for an explanation how this possibly 
 could be in the face of such facts as were before them, he 
 proceeded to detail the grounds on which his notions of the 
 correctness of the transactions were based. He said, that 
 smuggling at that time was very prevalent on the river, and 
 that good grounds existed to justify a considerable expendi- 
 ture in the construction and commissioning of Custom- 
 house cutters and cruizers. This expenditure of public 
 public money, which was fully justified, was not, however, 
 
 X I cannot help thinking, that the conversion of the accumulating Tonnage-dues into a 
 " Mercantile Marine Fund,'' to be administrated by a Mixed Board of Commis-sionere, ns 
 suggested by me, a couple of years ago, in a pamphlet on " The Tonnage-Dues Fund, the 
 Harbour of Shanghai and the Wiisung Bar" (Shanghai, 1872, 4o.) if? more than ever de- 
 serving of the attentioH of the Foreign Governments in treaty-relations with OUiua,
 
 390 THE TREATY RIGHTS OF THE 
 
 made, but it was charged in the accounts as having been 
 made, and that consequently the Government were no 
 sufferers, inasmuch as, had the funds not been appropriated 
 by Hang-ki, they would have been much more expensive 
 for the Government ; consequently, that it was an actual 
 gainer by this arrangement ? There would seem to be 
 little doubt that the Emperor himself must be fully cog- 
 nizant of and encourage irregularities in hooh-keeping, such as 
 just mentioned,.... it being a common occurrence for him to 
 send commissions to the Hoppo of Canton to execute ; and 
 it is an understood thing that sums thus expended are not 
 to aj^pear in the public accounts ; and it is equally well 
 understood that the Hoppo is not to expect any remittances 
 from the Imperial purse. Sums, which the Hoppo is thus 
 called upon to disburse in the course of the year are stated 
 to be considerable. From this it would seem that a systematic 
 falsification of his accounts, forms a portion of the recognized 
 duties of a Chinese collector of Customs." 
 
 Different from the Tonnage Dues are the Coast-Trade 
 Duties. The amomit collected from the latter impost, in 
 1870, by the Foreign Custom-house, reached the sum of 
 about Tls. 1,500,000 ; in conformity with which Mr. Dick 
 in his Suggestions observes : — " On Chinese produce carried 
 from one port of China to another in Foreign vessels, we 
 collect under a misapplication of the Foreign trade Tariff 
 upwards of Tls. 1,500,000,— or about .£450,000— a year." 
 It is true that this sum is levied, in the shape of an exorbit- 
 ant impost, upon native trade proper, but levied upon it 
 only inasmuch as it is carried on in Foreign vessels, and, 
 therefore, placing foreign shipping under a disadvantage out of 
 all proportion, as compared with native shipping. Thus, Messrs. 
 Jardine, Matheson and Co., in a letter of April 27, 1869,
 
 FOREIGN MERCHANT IN CHINA. 3r>l 
 
 called the attention of the Commissioner of Customs at 
 Shanghai, to the follo^^-ing differential duties, payable on 
 the same quantities of the same identical goods : — 
 
 When shipped in Foreign VesseU When shipped in Native Vesseh 
 at the Fori'iyn Custom-house. at the Natiue Cvstum-hoiise. 
 
 Nankeitns.— Package ( FoieiCTi Export Duty. . . .Tls. 1.5.0 ChineHo Kxport DutT TIh. 0.0.4 
 
 of 20 pieces, weigh- - Coast Trade Duty „ 0.7.5 Import Dues . . " . 0.2 
 
 ing about 170 lbs. ( Defence-Tax „ 0.7.5 
 
 (about 18/) Tls. S.0.0 (about 4id.) Tls. 0.0.6 
 
 Silk Piece Goods.— [ Foreign Export Duty . .Tls. 12.0.a Chinese Export Duty Tls. 4.0.0 
 
 Per picul of 133.J -1 Coast Trade Duty „ 6.U.0 Import Dues " „ 1.0.0 
 
 Iba. I Defence Tax „ G.OJJ 
 
 (about ^7.2/) Tls. 24.0.0 (W)out jEI.IO;) Tls. 5.0.0 
 
 The imposition of the former duties, (setting the chow-fmg 
 aside) was iwovisionally granted to the Chinese Government 
 by Sir Frederick Bruce in his fi'equently cited "Regulations 
 regarchng Transit Dues, Exemption Certificates, and Coast- 
 Trade Duties," of which Art. iii. 1. reads: — "Native pro- 
 duce carried coastwise pays full export-duty at the port of 
 shipment ; and at the port of entry, coast-trade duty, the 
 amount of which is declared to be half unport-duty." The 
 chief motive of the British Minister, m thus um-easonably 
 burdening British shippmg, he explams in his despatch of 
 October 26, 1861, to Earl Russell to have been, that he judged 
 it "of considerable importance at that moment, that the 
 moderate party represented by the Pruice of Kmig should 
 be able to show that their policy was justified by its results, 
 and that suggestions, made by them, were considered in a 
 reasonable spirit." 
 
 I cannot but hold that the view taken of this question by 
 Sir Frederick Bruce, was equally far fi-om being reasonable 
 and politic ; and that the tax itself is irreconcileable both 
 with justice and the spirit of the Treaty of Tientshi. It is 
 true that, in most countries, a participation in the coast 
 carrying-trade is not granted to foreign vessels ; but in
 
 892 THE TREATY RIGHTS OF THE 
 
 most countries also tlie caiTying-ser\ace is effectively per- 
 formed by native enterprizc and native craft. || Wherever 
 this is not the case, foreign vessels, unless they are al- 
 together excluded from a country, as from Corea, not only are 
 allowed to participate in, but frequently almost to monopolise 
 the coasting traffic between its principal ports. And this 
 simply because the natives find it to their own advantage to 
 employ them ; so that, inasmuch as they are used by native 
 merchants to carry native goods, being native property and 
 destined for native consumption, they assume the character 
 of native conveyances. In China this is pre-eminently the 
 case ; because not only are foreign steaming and sailing- 
 vessels, notwithstanding the excessive duty to which they 
 render the native merchandise subject, largely employed in 
 the coast-trade by Chmese merchants : the latter are also 
 share-holders to a considemble extent in the local Steam- 
 Navigation-Companies, and, themselves, sole owners of 
 foreign vessels and steamers, engaged in that trade. Yet, 
 simply because they are foreign-built or foreign-shaped, the 
 native goods carried in them, become liable to a five- and 
 even a forty-fold duty ; than which nothing could place the 
 mireasonable character of Sir Frederick Bruce's arrange- 
 ment with the Tsung-li Ya-men on thi^ point in a clearer 
 light. 
 
 The question, however, admits of a more positive solu- 
 tion. It is obvious that, if the higher imposts be justly 
 leviable, they must be so le^^able either on the foreign 
 
 II The Inspector-General, Mr. Hart, iu his "Memo." on the Wusving Bar of March 5, 1874, 
 prophesies that " the competition coming from the Chinese side -will, in ten or twenty 
 years' time, have swept the foreign flag fi-om the coasting trade of China." He also pre- 
 dicts that, within the same space of time, the foreign trade of Shanghai \<ri[\ have been 
 transferred to Chinkiang : but that " the foreign community of Chinkiang will naturally 
 be a smaller one. (Political possibilities aside)." — Would it not have been more prudent of 
 the Confidential Adviser of the Tsung-li Ta-men, to take warning by prophets, who have, 
 over and over again, pre<.Ucted " the destruction of the world ?"
 
 FOREIGN MERCHANT IN CHINA. 803 
 
 vessels as such, or else on the native merchandise, con- 
 veyed in them, as such. Now, they are not leviable on the 
 foreign vessels, as such ; for, Art. xxx. of the Treaty of 
 Tientsm states distinctly: — "The master of any British 
 merchant- vessel may, within forty-eight hours after the 
 arrival of his vessel, but not later, decide to depart without 
 breaking bulk, in which case he \vill not be subject ^ to pay 
 tonnage-dues. But tonnage-dues shall be held due after 
 the expiration of the said forty-eight hours. No other fees 
 or charges upon entry or departure shall be levied." This 
 is conclusive. Neither however, are the higher imports 
 under consideration justly le\iable upon native merchandise 
 as such conveyed from one port to another. For, m the 
 first place, that merchandise has, in its way to the port of 
 shipment, paid or must be supposed to have paid, all inland 
 charges to which it was so far subject ; and that, in the 
 second place, it is, in respect of the transit to the port of 
 destination, held by the Chinese Governrdent itself to be 
 subject only to the additional lower unposts, payable at the 
 Native Custom-houses, is proved by the very fact that no 
 higher duties upon the merchandise are there demanded. 
 This is equally conclusive. Hence, native-owned goods, 
 carried from one port to another in foreign vessels are, 
 justly and at the most, liable to no higher charges than 
 those, levied upon similar goods, when conveyed in native 
 vessels, at the Native Custom-houses. 
 
 I say : at the most are such goods liable to the Native 
 charges. For, when the great and substantial advantanges 
 are considered, which the use of foreign steamers and 
 sailing-vessels, more especially the former, insure to the 
 Chinese merchant and to Chinese property, — quickness of 
 despatch, punctuality of transmission, comparative security
 
 304 THE TREATY RIGHTS OF THE 
 
 against loss at sea, complete security against piratical at- 
 tack and plunder : it ai)pears to me, that an appreciative 
 and enlightened Government, having truly the mterests of 
 its suhjects at heart, would feel prompted to suhsidise those 
 foreign coasting-steamers rather than trammel their use- 
 fulness by indirect taxation ; and that the least, which, in 
 my judgment, the appreciative Members of the Tsung-li 
 Ya-men wdio, in their " overpowering distress and anxiety" 
 of mind, give " day and night most earnest thought" to 
 the welfare of the people, can do in this little matter is, to 
 agree to the abolition of the small native transit-dues, alone 
 justly leviable on the Chinese coast-trade, for foreign 
 steamers and vessels altogether. 
 
 The Commissioner of Customs at Shanghai, Mr. Dick, 
 also is much of the same opinion. He observes, in part 
 very pertinently : — " The taxes which we collect under this 
 mistaken application of the Foreign Tariff are levied, at the 
 ports of shipment and discharge, on goods which are taxed 
 up to the time of their shipment, and from the time of their 
 discharge, in the interior and also at the ports, by the pro- 
 vincial authorities, under circumstances which cannot be 
 brought within the scope of Treaties." But Mr. Dick pro- 
 ceeds to say : — "I, therefore, advocate the withdi-awal of 
 the department [of "Chinese Imperial Maritime Customs"] 
 from its connexion with the Home trade carrried on in 
 Foreign vessels, and the limitation of its work to Import 
 and Export Duties, Transit-dues, and Tonnage-dues, (leav- 
 ing it to Chinese officials to collect the duties, according to 
 Chinese rates, on Chinese produce carried for home con- 
 sumption in Foreign vessels)." I know not by what right 
 and with what propriety a Foreign subordinate Customs' 
 official of the Chinese, who seems, moreover, to identify
 
 FOREIGN MERCHANT IN CHINA. 305 
 
 himself with the Chinese nation, can speak of, and recom- 
 mend to another foreign employe in the same service, 
 though his superior, the ^^ trithdrau-al of the department § 
 from its connection with the Home trade," or, as a British 
 suhject, ignore and of his own authority set aside regula- 
 tions, agreed upon by the British Eepresentative in Peking 
 with the Tsung-li Ya-men, and approved by Her Britannic 
 Majesty's Government. The assumption of Imperial airs 
 would seem to have proved infectious in " the department." 
 Are not the Transit-dues, — native inland charges on inland 
 trade, in the payment of w^iich uncertificated, and even 
 certificated, " foreign-owned " goods are privileged to parti- 
 cipate on a most liberal scale, — connected with the "Home " 
 trade ? Are not the inland taxes on opium so ? Are the 
 le-kin, clioiv-fang, the Grower's tax, and similar imposts, as 
 levied upon Foreign trade, lawful imposts ? Mr. Dick's re- 
 marks were made a propos of •' the proper work of the 
 Foreign Customs;" and "believing in regard to Home 
 trade their position " — his remarks are addressed to the 
 Inspector-General, Mr. Hart — "to be the result of accident 
 rather than of special consideration," he is of opinion, that 
 the w^ork in question should be determined by, and restricted 
 to the collection of duties on, the foreign produce and produce 
 intended for foreign consumption, in which trade is carried on, 
 whether in foreign or native vessels. I am unable to con- 
 cur in that opinion. In China, possessing no native vessels 
 to transmit even her own produce to Western ports, the 
 distinctive feature of Foreign Trade consists in its being 
 carried on in foreign vessels. At any rate, the idea of con- 
 
 § That not, as might possibly be couccived, the department of the Collection of Coast- 
 trade Dues is meant, and the term " withdrawal " to be ,taken in a passive sense, the mar- 
 ginal iudieatiou shows. It reads : — '• Withdrawal of the Department from the collccliou of 
 duties on native trade, recommended."
 
 396 THE TREATY RIGHTS OF THE 
 
 signing a foreign coasting-steamer, laden with native and 
 foreign goods, for the collection of differential duties and 
 clearance, to two distinct Custom-houses — a foreign and a 
 native one, — appears to me so utterly unpractical, as to 
 utterly condemn itself.H The more satisfactory solution of 
 the problem will after all, I inchnc to think, be the one 
 just proposed by me, and presents the greater a claim, 
 perhaps, to the favourable consideration of the Tsung-li Ya- 
 men, as it tends to avert the threatening calamity of " the 
 withdrawal of the department from its <3onnexion with the 
 home trade, carried on in foreign vessels." 
 
 Although the foreign coast-trade duties, them, cannot be 
 designated as illegal in the strict sense of the term, and 
 constitute but an indirect tax upon foreign shipping : yet, 
 they are not only unjust in themselves, but also at positive 
 variance with existing Treaty-stipulations, and -Sir Fre- 
 derick Bruce had no right or authority to grant such a 
 concession. They may, therefore, not unfairly be added 
 to the charges, which are by the Chinese GoTernment 
 levied upon Foreign Trade contraiy to Treaties. The 
 amount of these duties, collected in 1870, is by the Inspec- 
 tor-General returned, by estimate, at only Tls. 1,347,642. 
 I have elsewhere shown, that the approximate real amount 
 appears to have been at least Tls. 1,884,188; while in 
 1871, instead of Tls. 1,138,116, a sum at least of Tls. 
 1,975,015 should apparently have been returned*. Henoe, 
 the item may now be taken at about aC600,000 per annum, 
 instead of upwards of Tls. 1,500,000, as given some years 
 ago, by Mr. Dick. 
 
 ^ Or can the Commissioner of Customs at Shanghai have anticipated the Insi>ector- 
 Ceneral's prophetic euunciatioji, alluded to iu a preceding note, and wished to contribute 
 his mite towards the fulfilment ? 
 
 * Sec the pamphlet ou the ElUiuus of Trade, quoted in a former page.
 
 FOREIGN MERCHANT IN CHINA. 397 
 
 The entire annual amount of illegal and undue taxation, 
 to wliicli Foreign Trade is at present subject in China', 
 may consequently be estimated, in. round numbers, as fol^ 
 lows : — 
 
 On a total' value of .tSl, 558,600 (representing in 1870,. 
 the value of the foreign trade in imports and exports — 
 J&39,291,860, less the value of opium— ^7,733,260) at about 
 10-4 per cent., according to the details of the table 
 
 p. 313 jC3,283,000 
 
 Additional 6 per cent 1,894,000 
 
 Together jC5,177,000 
 
 €oast-trade dues 000,000 
 
 Sum total ^cr annum j£5,777,000. 
 
 This is independently of a yearly sum of nearly c£400,000, 
 which the Chinese Government profits by an excess of duty 
 of about 1 per cent on the whole import- and export-trade, 
 — almost exclusively on the latter — , actually levied over 
 and above the mean rate of 5 per cent, ad valorem, con- 
 templated by Treaty. 
 
 The " additional 6 per cent " represent the amount of 
 illegal taxes, levied on merchandise transiting into a second 
 or third province, whether from the importing or the pro- 
 ducing province, and are arrived at by deducting the 
 mean tariff import- and export-duty of about G per cent, 
 the commutation-tax or half-duty of about 3 per cent, and 
 the tabular duty of about 10 per cent, abeady taken into 
 account, together — 19 per cent, from the aggregate of du- 
 ties levied, viz., 25 per cent, although that aggregate more 
 probably amounts to about 30 per cent, ad valorem, Tlie
 
 308 THE TREATY EIGHTS OF THE 
 
 resulting proportion, however, is a not unlikely one and, 
 certainly, the same as the total amount of illegal taxation 
 thus arrived at, keeps below the truth, — in all prohahility 
 considerably below the truth. 
 
 One might have hesitated in concluding, that on exports 
 also the full mean rate of the le-hin charges should have 
 been imposed by the Chinese Government, if we had not, 
 independently of the positive statement of the Chinese 
 merchants, the unimpeachable authority of the Inspector- 
 General, the Tau-tai and Intendant of Customs at Shang- 
 hai, and the Tsung-li Ya-men for the fact, — intimating as 
 they do in distinct reference to the inland charges on Ex- 
 ports, that the duties and the li-liin, payable on the road from 
 the Interior to the port of shipment, amount to " ten times 
 the half-duty," i.e. to about 30 per cent., independently of 
 export-duty. This leaves, and can leave, no room for 
 reasonable doubt. I may as well, however, take this op- 
 portunity to explain once more, that the impression, so ge- 
 neral among foreigners, as to the poverty of the Chinese 
 Exchequer and the extreme importance to the Govern- 
 ment of the few million sterling, annually collected by the 
 Foreign Branch of Maritime Customs, is utterly devoid of 
 foundation. For obvious reasons, it suits the Tsung-li Ya- 
 men to plead such a state of matters, and through its agents 
 to spread the fiction abroad. At a time when, as Mr. Wade 
 gave Her Britannic Majesty's Government to understand, 
 the Chinese Imperial Court and Household were almost 
 dependent on the Foreign Inspector-General for their 
 means of subsistence, there were Ipng in the Palace itself 
 silver bars to the value of a couple of million pounds sterling, 
 untouched since the days of the Ming. I have already stated, 
 that the Chinese Government can afford to devote, and al-
 
 FOREIGN MERCHANT IN CHINA. 
 
 399 
 
 most exclusively devotes, the whole of the revenue derived 
 from foreign trade, to anti-foreign objects. 
 
 Now, the whole Foreign Commerce of China, in 1870, 
 was thus repartitioned : — 
 
 Country. 
 
 Value ol 
 Imports. 
 
 Value of 
 Expoi'ts. 
 
 Per cent of 
 whole 
 Trade. 
 
 British Dominions. . 
 
 United States 
 
 Japan 
 
 Coiitiuent of Eui'ope 
 
 Bussia 
 
 Diverse Coimtries . . 
 
 £ 18,680,000 
 
 125,000 
 
 480,000 
 
 156,000 
 
 3-->,000 
 
 1,877,000 
 
 £ 12,820,000 
 
 2,550,000 
 
 828,000 
 
 924,000 
 
 280,000 
 
 1,098,000 
 
 £ 81,500,000 
 2,675,000 
 1,258.000 
 1,080,000 
 812,000 
 2,475,000 
 
 £ 20,800,000 
 
 £ 18,500,000 
 
 £ 39,300,000 
 
 Hence, the amount of illegal and undue imposts, now yearly 
 levied by China, contrary to Treaty, upon British trade 
 alone, reaches a minimum of 
 
 ^£4,500,000: 
 say. Four and a half million pounds sterling per annum. 
 
 To an at first moderate extent, but on a rapidly increas- 
 ing scale, this taxation, or rather this international process 
 of robbery on the part of the Chinese Government, has been 
 systematically carried on ever since the conclusion of the 
 Treaty of Nanking, and more especially so since the rati- 
 fication of the Treaty of Tientsin. After a careful con- 
 sideration of the subject, I find that the accumulated sum, 
 exclusive of mterest, and not taldng the Coast-trade dues 
 into account, for which Chma has thus incurred an in- 
 disputable debt to England, may be estimated at 
 
 ^£25,000,000: 
 say, Five and twenty million pounds sterling. There is hardly 
 occasion to calculate what this sum would be, on the com- 
 ing day of international reckoning between her and China, 
 if England were to claim it ^^dth compound interest. Let 
 it meanwhile, however, be borne in mind, that the Western
 
 400 THE TREATY RIGHTS OF THE 
 
 Powers are now allowing the debt of China to increase, 
 year by year, at the rate of nearly six million pounds sterling ; 
 and that the debt is neither an honest debt, nor a debt 
 incurred for honest purposes.
 
 FOEEI-GN MEKCHANT IN CHINA. 401 
 
 VIII. 
 
 CONCLUSION. 
 
 Law, Morality, and Expediency. — The principle of " Free Transit 
 through China " shown to rest on both human law and divine. — 
 War a necessary factor of progress, development and civilisation 
 in the economy of nature and human destiny. — The morality of the 
 Opium Trade, and the justice of the stipulations of the Treaty of 
 Tientsin vindicated. — Politico- social state of England. — Conflict 
 between Labor and Capital. — Necessity of finding wider employ- 
 ment for home Labor. — Obstructive policy of the Tsung-li Ya-mon. 
 — Expansibility of the China Trade. — Actual state of affairs. — 
 Warning to the Manchu Government. 
 
 Having from the outset taken up my standpoint on the 
 gromid of existmg International Treaties, it will have been 
 noticed that I have throughout these pages adhered to it, 
 and, simply insisting on the fulfilment of, and judging the 
 commercial policy and actian of the Chinese Government 
 by, their clear provisions, excluded every discussion of sub- 
 jects, not affecting or reaching beyond the actual and in- 
 dubitable EIGHTS of the foreign merchant. My argument, 
 therefore, may be considered as resting on a strictly legal 
 basis. But there are those, both at home and abroad, who 
 would have the Treaties themselves weighed in the scale of 
 morality, or who, like Her Britannic Majesty's Board of 
 Trade, in defiance of the one and in disregard of the other 
 view, place their interpretation and execution on the hollow
 
 402 THE TREATY RIGHTS OF THE 
 
 and dangerous principlo of expediency. To enter here into 
 a full consideration of the two antagonistic opinions would 
 be out of place. At the same time I cannot well pass them 
 altogether over in silence. 
 
 The moralestic argument assumes the good old maxim 
 that " an Englishman's house is his castle" to be as ap- 
 ])licable to nations as it is to individuals ; and contends that 
 the Governments of the Chinese, the Coreans, and other 
 semi-barbarous or barbarous peoples, had and have as much 
 right to shut, if such be then- will and pleasure, the doors 
 of their respective States against foreign intrusion, as the 
 Briton has to shut the door of his owti private dwelling 
 against whomsoever and whatsoever he may deem fit or 
 proper. This is a fundamental error. 
 
 In the first place : according to the doctrine of modern 
 times, the Government of a country is but the executive of 
 the nation, and the sovereign or chief magistrate but the 
 first servant of the people. Hence, if a people desu-e to 
 hold commercial mtercourse with other peoples, — and the 
 Chinese unquestionably do desu'e this, — its Government 
 cannot lawfully oppose itself to such an intercourse, nor 
 subject it to obstructive regulations and conditions, which 
 shall practically have, or tend to, the same effect. I mean 
 by the term "unlawfully" here: in accordance with a 
 principle of international law involved in the doctrine refer- 
 red to, whether that principle be as yet recognised or not. 
 
 But what is, in the second place, of far greater import- 
 ance : the Earth was not portioned out by God to such and 
 such races, much less to such and such dynasties, to hold 
 as their own personal property. The Earth, remaining 
 God's, was given to vian, and in lease only. Few, if any, of 
 the primitive races survive. The more or less civilised
 
 FOREIGN MERCHANT IN CHINA. 403 
 
 nations of the present day, without exception, hold their 
 territorial leases by virtue of conquest and war. War and 
 conquest, indeed, must be accepted as two great and neces- 
 sary factors of progress, development, and civilisation, in 
 the divme economy of nature and human destiny. There 
 lies, in an international sense, a deep moral and religious 
 truth at the bottom of the proverbial saying that "Might is 
 Eight." 
 
 No savage tribe has ever claimed a larger portion of the 
 Earth's surface than, by right of possession, it actually oc- 
 cupied and deemed necessary for the sustenance, the protec- 
 tion, and the safety of the community : individual posses- 
 sion, within the community and subject to its own particular 
 laws, being invested by those laws and relative to the com- 
 munity, with the character of private property; while moun- 
 tains and rivers, prairies and forests, highways and byways, 
 in short the soil itself together with its natural productions, 
 continued to be regarded as a leasehold, by the Great Spirit 
 bestowed upon the tribe for the use and benefit of all. 
 Among civilised nations private property has vastly extended 
 its domain. Still, as it includes neither the oceans nor the 
 air, so it includes as yet neither rivers nor mountains, neither 
 highways nor byways; and every civilised people of the 
 present day, — recognising, whether consciously or not, the 
 great prmciple that " the Earth is the Lord's " and by Him 
 given to man — freely tlnows open that portion of its terri- 
 torial possessions, to which under its own laws the public 
 rights extend, equally to the foreigner and the native for 
 the purposes of commerce, science, instruction, and all 
 other peaceful, and legitimate pursuits. 
 
 It may, therefore, be regarded and laid down as a funda- 
 mental maxim of International Law, that, except in times
 
 ■/■ 
 
 401 TJFE TREATY RIGHTS OF THE 
 
 of war, tlic people of every country have the natural and ^ 
 iucontf stible right of free access, — for the purposes stated, ■' 
 and subject to the particular laws of each country, provided 
 the latter are based on received principles of justice and 
 humanity, and afford due and efficient protection to the 
 foreigner, — not only to the harbours and frontier-places, 
 but by all public ways of communication available for the 
 native, — lakes, rivers, canals, highroads and byroads, — to 
 the whole Interior of every other country ; and furthermore 
 that, in the event of the Government of one people denying 
 this natural right to another people, the Government of the 
 latter is justified to enforce it by war. and, if necessary, by 
 conquest. 
 
 Touching the bearing of these maxims upon China, I will 
 not urge that the Chinese Government professes to have 
 recently entered the comity of ci^dlized nations, and ac- 
 cepted their principles of International Law. That Govern- 
 ment has ever held as a fundamental doctrine, that all the 
 peoples of the Earth constitute but one single household, under 
 Heaven and the autocracy of Heaven's Vice-gerent, whom 
 we of " the Outer States " are wont to call '' the Emperor 
 of China." It is plain, therefore, that consistently with 
 justice and reason no portion of such a household can be 
 excluded from the enjoyment of its common rights and 
 privileges ; and, hence, that the Chinese Government at no 
 time or period had, either accordmg to its own doctrines or 
 to Western prmciples of International Law, due authority 
 to interdict to the peoples of England and other Outer 
 States, " being members of one family," free access to the 
 ports and, by the pubhc highways, to the Interior of the 
 Central Lands, i.e. Chinese, for the peaceful and legitimate 
 purposes of trade and commerce.
 
 FOREIGN MERCHANT IN CHl5fA. 405 
 
 The Chinese Government, however, did interdict to 
 British merchants and others all and every access to the 
 Interior of the country, and, aggravating what of itself con- 
 stituted and should have been insisted on as a casus belli, 
 by additional outrages, provoked the first war of 1842 with 
 England. It is called "the first Opium war," because 
 opium entered as an element into it ; and this is a further 
 reason, on the ground of which our moralists deprecate or 
 condemn that war, and consequently impugn, moreover, the 
 strict justice of the provisions of the Treaty of Nanking it 
 imposed on the Chinese Government; while they take a 
 similar view of the second war of 1859-60, and the provi- 
 sions of the Treaty of Tientsin. 
 
 The argument in this case is made to rest on " the im- 
 morahty of the opium trade," and is as devoid of founda- 
 tion as we have found the argmnent relative to the presumed 
 right of the territorial exclusion to be. The latter is based 
 on an imagined, analogy, which has no existence ; the 
 former confounds individual abuse of one of the gifts of God 
 with the gift itself, and characterises it by the efi'ects of that 
 abuse. Sam-shu is prepared from the rice-plant, opium 
 from the poppy. Both preparations, tvlien taken in excess, 
 are equally intoxicating and injurious. But so are Guinness's 
 Stout and Bass's Ale. The Tatar Government has, for the 
 reason named, no better right to prohibit even to its own 
 subjects the cultivation of the poppy, than it has to prohi- 
 bit to them the cultivation of the rice -plants or than the 
 English Government has to prohibit to its subjects the 
 growing of hops and the sowing of barley. Besides which, 
 the Chinese Government is as powerless to prevent the 
 people of China from smoking their own opium, as it is to 
 prevent them from drinking their own sam-shu. Nor is it
 
 40G THE TIIEATY EIGHTS OF THE 
 
 more willing, Uian it is powerless, to do so. For the Tsung- 
 li Ya-men, under these circumstances, to demand from the 
 British Government the prohibition of opium-farming in 
 India is hardly less preposterous, than it would be for the 
 British Government to listen to such a demand. For any 
 British subject to support the latter, appears to me scarcely 
 more 103^^1 than it is rational ; the true object of the Tsung- 
 li Ya-men, as previously explained, being transparent. In 
 short : the cultivation of the poppy, undoubtedly, consti- 
 tutes as moral and legitimate a branch of Indian industry, 
 as the cultivation of the vine, undoubtedly, constitutes a 
 moral and legitimate branch of the industry of Spain, of 
 France, of Germany, and other Christian countries ; and 
 the trade in opium is as moral and honorable, as is the 
 trade in wines or any other articles of consumption, by God 
 destined for the use or the solace of man. 
 
 In whatever light, however, this question may be regarded 
 by religionistic enthusiasts or dreamers, the essential fact 
 remains that opium became incidentally only, and as a 
 secondary element, mixed up with the great principle of 
 International Law, the breach of which on the part of China 
 led to the first war between her and England, and to vindi- 
 cate which was its paramount object ; the same as it con- 
 stituted that of the succeeding war, provoked and neces- 
 sitated by China also. Nor were the conditions, imposed 
 by the victors, in any way onerous or unjust. On the con- 
 trary : taking them all in all, they were considerate and 
 lenient to a degree ; — the palpable proof of which is, that, 
 as has been already observed, the Chinese Government has 
 since, of its own free will and accord, granted the same con- 
 ditions to other nations, desirous of entering into diplomatic 
 relations with the Court of Peking. Whether in a divine or
 
 FOREIGN MERCHANT IN CHINA. 407 
 
 in a human sense, therefore, both the Treaties of Nanking 
 and Tientsin and tlie wars undertaken to secure their provi- 
 sions, will bear being weighed in the most sensitive balance 
 of morality as well as of justice ; and there exist, so far as 
 I can see, no tenable reasons whatsoever why, on this score, 
 either the spirit or the letter of those provisions should be 
 departed from or relaxed in any way. ■' , : 
 
 Such being the case, the plea of expedienqj to this effect 
 falls of itself to the ground. Except from impotence to pro- 
 test, it can under no circumstances be expedient for a 
 British or any other Government to sacrifice national rights 
 once justly acquired. When, under the Gladstone Adminis- 
 tration, the Lords of the Committee of Her Britannic 
 Majesty's Privy Council for Trade, in reference to " the view 
 expressed in some of the Memorials (of China merchants) 
 and even at one time by Sir R. Alcock himself, viz., that 
 the payment of the transit-dues ought to be held to exempt 
 the goods upon which it has been paid from all subsequent 
 internal taxation," deliberately declare, that "there is 
 nothing in the terms of the Treaty (of Tientsin) which ap- 
 pears to their Lordships to justify such a sweeping demand," 
 and that * ' in view of the internal taxation to which native 
 goods are subject in China, it would be in their opinion both 
 unjust and inexpedient to enforce such a demand, evm if it 
 tvere warranted hij the terms of Treaty stipidations" : their Lord- 
 ships not only betray a want of sound judgment and a de- 
 gree of unacquaintance both with the Treaties to which 
 they refer and the state of inland taxation in China on 
 which they rest their argument, truly to be lamented ; but 
 they enounce also a new principle of British policy, fatal in 
 itself, and which, if carried out and persisted in, must lead 
 to the ruin of diplomacy and international faith, as well as
 
 408 THE TREATY RIGHTS OF THE 
 
 of Commerce. Their Lordships, under the combined in- 
 fluence of Mr. Wade's strongly biassed opinions and advice, 
 and the unreasonable dread of another war with Cliina, 
 failed to take into consideration, that the surest way to in- 
 duce and finally bring about such a war is to suffer the 
 foundations, on which peace has been laid, to be broken 
 through ; that, without a most faithful observance and the 
 strictest maintenance of Treaty-stipulations, Treaties them- 
 selves become a mere farce ; that, on their faith in those 
 Treaty- stipulations and in the will and power of the British 
 Government to uphold them, British merchants had invested 
 and invest milHons of British money in the China trade, 
 that a British Government who, under the pretext of ex- 
 pediency or any other pretext, decline or evade the respon- 
 sibility of maintaining Treaty-stipulations, involving large 
 commercial and industrial British interests, break faith with 
 the nation ; that a British Board of Trade who, whether in 
 explicit terms or by implication, stigmatise a recent war 
 carried on by England as an unjust war, act, to say the 
 least, with extreme indecorum both towards the nation and 
 the Imperial Government ; and that a British Government, 
 who, whether directly or indirectly, repudiate or abandon 
 without cause important stipulations of existing international 
 Treaties, which have been sealed by the blood and the 
 treasure of the British people expended in two wars, betray 
 at once the people and the trust by the people reposed in 
 them. Fmally, their Lordships would seem to have enter- 
 tained not even a suspicion of the vital principle, involved 
 in the wars to which I have just alluded, and, in its prac- 
 tical application, commonly embodied in the sentence : Free 
 transit through China. 
 
 To carry this principle into effect was, as has been pre-
 
 FOREIGN MEECHANT IN CHINA. 409 
 
 viously slioTMi, the main object of both the Treaties of Nan- 
 king and Tientsin ; and unless it be in future firmly upheld 
 and strictly enforced, England will have the choice only 
 between two alternatives, viz., decennial ivars with China or 
 the gradual abandonment of the China trade * . 
 
 Nor is the question one of trade only. For, what lends 
 to the various matters, discussed in the preceding pages, 
 an importance far beyond the commercial interests involved, 
 is the actual politico-social state of England. That state 
 is not a satisfactory one. Capital and Labour have in our 
 time wonderfully increased ; and Competition, stepping in 
 between them, has turned, and is turning, the scale against 
 Labour at home, and, consequent on the resulting discon- 
 tent and frequent " strikes," somewhat against both home- 
 Labour and home-Capital abroad. Hence, in combination 
 with other causes, the unsatisfactory state referred to. 
 Wliilst Capital is looking for new markets and outlets with 
 a view to the remunerative employment of Labour, the worse 
 fractions of Labour are directing their attention to the 
 doctrines of communistic Republicanism ; the better and 
 preponderating elements are fixing theii* thoughts on Emi- 
 gration. The common tendencies of Labour thus unite in 
 endangering, in presence of the growing strength of Con- 
 tinental competition, the very supremacy of England's 
 manufactming power, as one of the chief sources of her 
 wealth ; and unless, under these circumstances, the private 
 enterprise of Capital be supported in time, by the public 
 policy of the Government, and a due harmony of views and 
 
 * The Inspector-General, Mr. Hart, in predicting this gradual abandonment, would 
 seem to have calculated on what appears to be the confirmed sleepiness of the British Lion, 
 and to look upon another war between England and China as a mere parenthetical possi- 
 bility. (Sec the note to p. 392 above). But let China not deceive herself. The present 
 unsettled state of Europe, to which alone she has been thus far indebted for immunity, will 
 come to an end.
 
 ■11(1 Tlir: TREATY RIGHTS OF THE 
 
 action be restored between Capital and Labour, between 
 Labour and Capital : who would pretend to foresee the con- 
 sequences, to which a permanent and widening breach 
 between these two great sinews of national prosperity might 
 ultimately lead ? Modern as well as Ancient History 
 furnishes its warnings. 
 
 Begarded from this stand-point, " what is called ' opening 
 up ' Chma to foreign trade," — to use a slightly sarcastic 
 expression of the Lords of the Committee of Her Britannic 
 Majesty's Privy Council for Trade, — appears to me not only 
 to merit in the highest degree, but to imperatively claim, 
 the serious attention of the English Government. And 
 when their Lordships, in aUuding to the possible contin- 
 gency of " a more vigorous policy " resulting in war, — 
 which a weak and yielding policy is certain to do, — observe : — 
 " they cannot forget.... that the responsibilities and sacri- 
 fices, involved in the exercise of force, must fall upon the 
 British nation, and not upon that section of its people, 
 which is engaged in the trade with China " : I am unable 
 to concur in a narrow and sectarian view of national consti- 
 tutionalism and economy, which, denying the very founda- 
 tion on which a State is built, — the unity of interests, — 
 must, if it were generally adopted, lead to the rapid disso- 
 lution and the rum of any commonwealth. The one tlihig 
 above all others to be recollected and borne in mind is that, 
 under Providence, England is for her actual prosperity and 
 power mainly indebted to her Commerce and Industry ; and 
 that the interests of British Industry and Commerce are, 
 and so long as England's power and prosperity are to en- 
 dure, ever will be, identical with those of the British nation. 
 
 China, it is true, has disappointed the great expectations 
 held out to British manufactm-ers at the close of the first
 
 FOREI-GN MERCHANT IN CHINA. 411 
 
 war, and she has not realized those entertamed at the ter- 
 mination of the last one. But the cause remains now a 
 mystery no longer. It has not to be sought in the absence 
 of almost unlimited capabilities and resources of the China 
 trade, but in the persistent obstructiveness and bad faith of 
 the Chinese Government, in opposition to the wishes of the 
 Chinese people. In short : the non-fulfilment of tliose ex- 
 pectations may be traced to the one single fact, that the in- 
 dispensable condition of their realisation, free transit through 
 the Interior, — established, as the fundamental principle of 
 future intercourse with China, in the Treaty of Nan-king 
 and upheld in the Treaty of Tien-tsin, — has never been 
 honestly carried into effect. The means, employed by the 
 Chinese Government thus to frustrate the main object of 
 both Treaties and of two Wars have been, on the hand, de- 
 ceit and cunning ; on the other, secret prohibition, over- 
 burdensome taxation, and vexatious impediment. The 
 special circumstances, which not only have enabled the 
 Tsung-li Yamen to pursue a course at once so dishonest 
 and so fatal to British and Foreign interests, but have 
 facilitated its execution have been : — the sectarian, feeble and 
 imnational policy of the Gladstone Administration ; the 
 incapacity, supineness, or subserviency of the Representa- 
 tives of England at Peking, whom the British Government 
 has seen fit to appomt to that responsible post, and to 
 entrust with the Chief Superintendence of British Trade in 
 China, since the ratification of the Treaty of Tientsin ; the 
 swerving, as previously explained, from the principle of free 
 transit, in the practical Trade-Rules of the Supplementary 
 Treaty of Shanghai ; the mysterious and underhand con- 
 sent, given, apparently on the part of England, to the 
 imposition of the le-lcini^x; tha indirect but misdirected aid.
 
 412 THE TREATY IlIGIITS OF THE 
 
 which the Tsiing-U Yamen has received from the Foreign 
 Customs' Depaitmont, notahly from the Inspector-General 
 and the Commissioner of Customs at Shanghai, m carrying 
 out its ohstructive measures ;. the state of the Interior of 
 China, which suhjects the traveller not only to much priva- 
 tion, hardship, and fatigue, but to a great sacrifice of valu- 
 able timte ; the next to insuperable difficulties of the Chinese 
 language and its numerous dialects, rendering the foreign 
 merchant dependent on his incompetent and untrustworthy 
 native mterpreter ; and, finally, the extreme unwillingness 
 of all Chinamen to give information, more especially correct 
 information, to an " outer barbarian." 
 
 It is notivitlutandmg the serious obstacles to trade, thus 
 interposed, and interposmg themselves, between the British 
 manufactnrer and the Chinese consumer, that the imports 
 from the United Kingdom mto China have, since the con- 
 clusion of the last war, continued steadily on the increase. 
 The value of the direct imports alone, according to the 
 Returns of Trade, published by order of the Inspector- 
 General, was in round numbers : — 
 
 18G4. 18G5. 18fifi. 1867. 1868. 1S69. 1870. 1871. 1872. 
 
 £3,490,900 .«3,719,000 £4,700,000 £5,647,000 £7,344,000 £8,361,000 £8,087,000 £8,746,000 £8,755,761 
 
 This progressive increase, however, satisfactory as it is, 
 affords no mdication of the capahilitics of the China trade for 
 extension, as regards the staple-articles of British manufac- 
 ture. Some idea of the latter may be derived from a com- 
 parison of certain of the principal imports into Chmkiang 
 from -1866 to 1872. They were :— 
 
 1SG6. 1867. 1868. 1869. 1870. 1871. 1872. 
 
 Grey Shirtings Pieces 14,384 45,650 174,780 41.%094 553.U23 760,271 1,028,705 
 
 ■^Vhite „ „ l.'iee 5,069 10,250 15.550 18,544 23,278 24,214 
 
 T-Cloths............ ,. 1.539 10,847 37,667 147,720 236,804 309,068 382,097 
 
 Cottons, assorted.... ,, 1,9^3 35,703 80,602 53,919 100,919 124,399 180,324 
 
 ■VYoollen Goods ,. 4,364 9,082 22,440 36,884 65,403 57,736 68,921 
 
 Iron-Nail End PiciUs 5,014 2,899 8,731 15,545 28,293 44,099 42,751 
 
 Foreign Brown Sugar .... „ fi,976 17,372 27,221 60,503 99,489 169.531 169,386 
 
 •S^bite 2,909 8,664 14,719 SS,S46 61,699 115,618 101,970
 
 FOREIGN MERCHANT IN CHINA. 413 
 
 That is to say, in the short space of hah'-a-dozen years the 
 importation into Chinkiang of Grey Shirfmgs had in 1872 as 
 compared with 1866, increased 11^ times ; that of White 
 Shirtmgs 16^ times ; of T-Cloths 248 times ; of Cotton 
 goods assorted 93 times ; and of Woollen goods 16 times. 
 The miportation of Rod and Nail Iron also had, dming the 
 same period, augmented 81- "times ; that of Foreigzl Brown 
 Sugar 19 times ; and of White Sugar 35 times. 
 
 Now, when we inqune into the causes of this remarkable 
 expansion of trade in British manufactures at one of the 
 mmor ports of the Yang-tse, which only commands the 
 markets of limited districts withm the Provinces of the Two 
 Kiang: they are found to consist in the simple fact, that 
 the merchants at Chinkiang, more and more strictly adher- 
 ing to the inland charges commutation-clause of Art. xxviii 
 of the Treaty of Tien-tsin as finally determmed by Eule vii 
 of the Supplementary Treaty of Shanghai, have to the 
 Chinese trader sold theii' goods " deliverable " at the vari- 
 ous inland marts, paid upon them the commuted transit- 
 dues, and forwarded the merchandise under certificate to its 
 destination. Whilst of foreign imports at large, the pro- 
 portion of goods, sent into the Interior under certificate, 
 did not, as has been previously shown, in 1870 reach 3 per 
 cent., this proportion is for Chinkiang a.s follows : — 
 
 18C7. 1868. m'>0. IWO. 
 
 Cotton Piece Goods..., percent. 3-1 32-8 70-2 730 
 
 WooUen „ „ .0-3 12 4 3»'2/ 42-0 
 
 Foreign Sugar „ 0-0 24-1 90-0 99-5 
 
 Other Foreign Goods „ 4-0 174 38-(> 40-8 
 
 Total Imports per cent. 2-0 25-5 645 70-2 
 
 Touching the balance oi per-centage for the latter two years, 
 it is pretty well accounted for by the quantities remaining 
 in stock, or taken for local consumption and d}cing purposes, 
 for military use free of duty, etc., respectively; so that, at
 
 414 THE TREATY RIGHTS OF THE 
 
 Cliiii-ldang, the commutation-principle of E,ule vii may bo 
 regarded as in full operation, or nearly so. The certificates, 
 therefore, were in those parts, generally at least, respected 
 in transitu ; while it must needs be inferred from the trade 
 itself, that both to the intermediary native merchant and 
 the mland retail-trader the business is a profitable one ; and 
 that the 4atter either finds means to evade the collection of 
 heavy- stationary trade dues, or that he can afford to paij them. 
 
 The progressive, and in degree exceptional, development 
 at Cliinldang of the trade in, and the corresponding inland 
 consumption of, British manufactures almost in the direct 
 proportion in which the commutation-principle is applied, 
 leaves no room for doubt as to the nature of the connection 
 between the two phenomena being that of cause and effect. 
 I have had occasion more than once to point out the per- 
 fidious object of the Tsmig-li Ya-men and the Chinese Pro- 
 vincial Authorities, assisted by the Foreign Customs-officials, 
 in obstructing by every means at then- command the fan* 
 execution of the commutation-clause of Rule vii of the 
 Trade Eules attached to the Treaty of Tien-tsin ; in leading 
 the mercantile community, misdirected by Sh* Frederick 
 Bruce's Notification of October, 1861, to hold to the validity 
 and supposed advantages of the optional clause of Art. xxviii 
 of the Treaty itself ; and in withholding for years the exer- 
 cise of his undoubted right to convey under certificate, 
 foreign goods bemg his o^vn or Chinese property generally, 
 fi'om the native trader. The Chinkiang statistics, here 
 adduced, have now placed the object, referred to, in a light, 
 which must exclude every further uncertainty on the sub- 
 ject. 
 
 Although unable to complete the preceding statement 
 for the years 1871 and 1872, no corresponding returns hav-
 
 FOREIGN MERCHANT IN CHINA. 
 
 41i 
 
 ing as yet been published, I will subjoin, in reference to the 
 principal articles first enumerated, a comparative table of 
 the quantities imported into Chinkiang and sent inland 
 under transit-passes during the two years in question and 
 the following year 1873 : — 
 
 
 1871. 
 
 1872. 
 
 1873. 
 
 Description of 
 
 Quantities. 
 
 'J 
 
 Quantities. 
 
 
 Quantities. 
 
 
 
 Im- 
 ported. 
 
 Sent in- 
 land under 
 transit- 
 pass. 
 
 Imported. 
 
 Sent in- 
 land under 
 transit- 
 pass. 
 
 Imported. 
 
 Sent in- 
 land under 
 tiunsit- 
 pass. 
 
 
 Grey Shirtings. .Pes. 
 White „ .. „ 
 
 T-Cloths „ 
 
 Cottons, assorted „ 
 WooUen Goods . . „ 
 Iron, Nail, Kod...Pls. 
 Foreign Sugar. . „ 
 
 760,271 
 23,278 
 
 309,068 
 50,268 
 54.268 
 44,323 
 
 285,150 
 
 647,280 
 14,160 
 
 232,034 
 18,991 
 80,461 
 29,641 
 
 266,093 
 
 85-14 
 60-80 
 75-07 
 37-78 
 5613 
 66-88 
 93-32 
 
 1,' 2^,705 
 24,214 
 
 382,097 
 73,041 
 69,493 
 42,750 
 
 207,832 
 
 876,660 
 18.953 
 
 307,759 
 24,949 
 86,550 
 30,445 
 
 290,570 
 
 85-22 
 78-27 
 80-55 
 34-24 
 52-60 
 71-22 
 108-49 
 
 704,408 
 2;^,396 
 
 231,333 
 68,304 
 58,1197 
 42,685 
 
 261,998 
 
 598,499 
 17,755 
 
 192,396 
 25,260 
 27,280 
 31,187 
 
 259,444 
 
 84-97 
 75-B9 
 8317 
 36-98 
 46-96 
 73-06 
 99-14 
 
 The conclusion to be di'awn from this table is, either that 
 the mean of the quantities of each description of goods, 
 imported into Chinkiang during the last three years, con- 
 stitutes approximately the maximum of trade, for which 
 that port offers at present outlets, or, what appears more 
 probable, that in 1871 the Chinese Authorities had esta- 
 blished a sufficient number of li-hin bai'riers along the new 
 Ime of traffic to check its fm-ther gi-owth, and that the trade 
 in that direction is about to decline. 
 
 Under any ch'cumstances, we gain from the preceding 
 statistics a full confirmation of the result previously arrived 
 at, namely: that the comparative stagnation of the China 
 trade in British and Foreign manufactm-es has been solclij 
 owing to the ohstnictiveness and the bad faith of the Chinese 
 Government ; while they illustrate and prove to evidence the, 
 to England far more important fact, that at least this parti- 
 cular branch of the trade is capable of a general expansion y 
 corresponding to the expansion ichich it had undergone at Chin-^
 
 41G THE TREATY RIOTTTS OF THE 
 
 kiang during seven siiccessice years: in other words, that CJiina 
 presents to the Foreign manufacturer, and more partiadarhj to the 
 manufacturer of England, a field of enterprise, compared with 
 tvhich the similar field of her Indian Possessions sinks into in- 
 significance. If we take the value of the present consum^)- 
 tion of Enghsh staple manufactures in China only at 
 ^10,000^000, which is considerably below the truth, and 
 apply to it but half the degree, or less, of that expansibility 
 of which the experience of Chinkiang has actually proved 
 it to be susceptible : there presents itself, even under the 
 provisions of existing Treaties, the sober and certainly not 
 exaggerated prospect of the value of that consumption 
 coming to reach, within a decennium, an annual total of from 
 je60,000,000 to .£80,000,000 sterling,— pro\ided that the 
 principle oifree transit through China be honestly carried mto 
 effect, and the mineral resources of the country be sufficiently 
 developed to keep the " balance of trade " in a state of due 
 equilibrium. Nor does such an increase of consmnption offer 
 anything very sm-prismg, much less incredible, in itself. 
 Let it be remembered that the population of China embraces 
 nearly " one -third of the human race," i.e. amounts to 
 between 300,000,000 and 400,000,000, exceeding ten times 
 the population of the United Kingdom ; that, generalhj 
 speaking, the bulk of the people are thriving and well to 
 do ; that cotton fabrics almost exclusively serve them for 
 the indispensable article of clothing ; and that the sum in 
 question, after all, represents yearly wants, in the matter of 
 one of the first necessaries of non-savage life, to the extent 
 of barely 5s. per head, whereas in Great Britain, a larger 
 sum per head is annually expended upon a single article of 
 luxury, — tea. 
 
 Considering, then, on the one hand, the actual condition
 
 » FOREIGN MERCHANT IN CHINA. 417 
 
 of England, necessitating the finding of additional employ- 
 ment for Labor at home, and new markets for her staple 
 manufactures abroad ; and, on the other hand, the vast 
 consnming power of China for these very manufactures : 
 there are, in my judgment, few objects more deserving of 
 the earnest attention of the British Govermnent, as well 
 as of Parliament, and the various Chambers 9f Com- 
 merce throughout the Ui;ited Kingdom, than are the Treaty- 
 rights of the Foreign and British Merchant, and the Tran- 
 sit-System, in China, as exposed in the preceeding sections 
 of tliis essay. Her Britannic Majesty's Government will 
 not only have to take into consideration the large pecuniary 
 debt, accmnulating from year to year, which China has sm*- 
 reptitiously contracted, and is going on so to contract, 
 towards England ; together with the heavy amount of an- 
 nual taxation, with and by wliich the Chinese Government, 
 in open and systematic violation of international Treaty- 
 engagements, continues to burden and obstruct British 
 Trade : but also the perfidious manner in which this unlaw- 
 ful system of taxation has been introduced, extended, and 
 enforced ; and the hostile purposes, to which its product 
 lias been, and is being, apphed. That England should, by 
 mere want of good faith, have been deprived of the fruits of 
 two wars ; that her home Labour should have been defrauded 
 of emplo}Tnent for its energies ; and that British Commerce 
 in China should have been made* and be made, to contribute 
 six million pounds a year towards effectmg its own ruin, 
 because of the incapacity of Sir K. Alcock and Mr. Wade, 
 seems hard ; but that the Chinese Government should tax, 
 and thus tax, England, for the mam, if not sole purpose of 
 providing military preparations and armaments to be directed 
 against herself appears simply intolerable. No British Minis-
 
 418 THE TREATY RIGHTS OF THE 
 
 try could, without betraying the best interests of the country, 
 allow such a state of things to endure ; even though Tatar 
 conceit and perverseness render another w^ar unavoidable, — 
 a war, which would, not only on the part of England be a 
 just war, but might be so directed and conducted as to im- 
 part to it a character highly popular with the Chinese 
 people ; *which would involve but a small sacrifice of human 
 life ; the cost of which China herself would be able to bear 
 without difficulty ; and which would place British relations 
 with the Chinese Empire, both politically and commercially, 
 on an entirely new, and for the first time on a solid, basis, 
 — open up to Western enterprise and industry a field of 
 surpassmg vastness, and confer upon the millions of the 
 population of China the benefits and blessmgs of Prosperity, 
 Freedom, and Civilisation. 
 
 But, is not the very prospect of such a war in the highest 
 degree calculated to suggest to the Government of China re- 
 flections, tending to avert its necessity without the sacrifice 
 of its objects, — reflections of the gravest nature ? Let the 
 Tsun2:-li Ya-men for once shut its ear to the flatterinf![ but 
 deceptive whisperings of an ambitious, selfish, Bm-lingame 
 Missions- and Hongkong Claims-planning faction, and listen 
 to the clear voice of well-meaning though plain-spoken Rea- 
 son, of honest though unpalatable Truth. England cannot 
 afford, nor is she willing, to carry on, with a treacherous 
 Government, a distant war. every decennium. If a new con- 
 test be forced upon her, its aim will involve, and must 
 needs lead to, great and permanent changes in China. They 
 might, and probably would, include — a change of dynasty. 
 There exist elements within the Ta-Ching Dominions 
 which, on such a basis,, promise to render easy a satisfactory 
 settlement of pending questions. Let not the Manchu
 
 FOREIGN MERCHANT IN CHINA. 419 
 
 Government imagine, that it is strong enough to resist the 
 power of England or any other Western State : its armies 
 would be swept away like dust before the hurricane. Let 
 not the Imperial Court indulge in the idle dream that, if 
 Peking afford no safety, safety will be found in Jehol or 
 Moukden : not all the lands "within the Four Seas" would 
 offer a secure refuge from the fate invoked. Let not His 
 Imperial Highness, Prince Kung, and his Colleagues delude 
 themselves with the idea, that it will be time enough to 
 yield when another British Army shall be at the gates of 
 Capital : " Too late ! " would then be the only answer vouch- 
 safed. " We come, not to negotiate and to discuss ; but to 
 settle tlie future of China." 
 
 A great and long-delayed crisis in the affairs of tliis 
 ancient Monarchy is at hand. Every well-wisher and true 
 friend of the Reignmg Dynasty and the cliild-Emperor, 
 must counsel them most earnestly, in the interest of 
 peace, to abandon principles belonging to the past 
 and no longer acceptable to the world at large. The West- 
 ern Powers have no wish for either war or conquest in 
 China. They desire nothing but what will be conducive to 
 the well-being of the Chinese people ; nothing but what is 
 consistent with the dignity and the sovereign -rights of the 
 Imperial Government ; notliing but what is just and honour- 
 able for one independent State to demand, and honourable 
 and just for another independent State to concede. But 
 they will no longer suffer the Sovereign of China to assume, 
 even in name, the Autocracy of the Earth, nor hold diplo- 
 matic relations with his Government, save by direct inter- 
 course, and on a footing of equality formally acknowledged. 
 They are — appearances notwithstanding — prepared to en- 
 force the due observance of cxistmg Treaties ; to demand
 
 420 THE TREATY RIGHTS OF THE 
 
 material guarantees for that observance, in order to prevent 
 the necessity for future war; and, if necessary, to effect this 
 object, equally desirable for China and the West, by placing 
 a Chinese Dynasty on the Chinese Throne. 
 
 Such, if I mistake not, is, essentially, the position of 
 affau'S. Let, then, the Emperor and his Government weigh 
 and ponder its contingencies well ; and, thereupon, elect — 
 Peace or War. If, bent on their destruction, they should 
 decide upon war : let them at least so conduct it as to secure 
 for themselves some claims to the generosity of the victor. 
 Let them dismiss from their pohcy and their minds alike, 
 all ideas of a renewal of "the Plot of the Summer-Solstice:" 
 every thought of massacre and poisoning ; the last hope of 
 expelhng the outer barbarian fi'om "the bayonet-ploughed 
 soil of Cathay." True, they might, and probably would, 
 succeed in momentarily exciting the worst passions of the 
 worst classes of the population against the foreigner, and 
 cause the as yet unavenged international crime of Tientsin 
 to be repeated on an extensive scale. But a fearful retri- 
 bution would follow quickly upon the deed of blood. The 
 cities and locahties of murder and atrocity would be razed 
 to the ground, as was the Yiien-ming-yiien ; the guilty, 
 whether coolies of the lowest order, or officials of the 
 highest degree, in any way implicated in the crime, 
 would be blown away fi'om the cannon's mouth; — the 
 hatred of the people of ' Han, ready to bm-st forth, imder 
 the shield of Superior Force, into a consuming fire, would 
 be roused against the Tatar intruder ; and few Manchu 
 would, within the once Ta-Ching Dominions, sui'vive to tell 
 the tale of the extinction of their race. 
 
 If, guided by wisdom and the true interests of China and 
 their own, the Emperor and his Government decide in favour
 
 FOREIGN MERCHANT IN CHINA. 421 
 
 of peace : let them at once, honestly and unreservedly, 
 enter upon a path of well-considered, moderate, and gradual 
 Progress, cease to waste the puhhc revenue upon useless 
 armaments, and devote it to the unprovement of the means 
 of communication, and the development of the internal re- 
 sources of the country : discharge their foreign confidential 
 advisers, — who, from their ignorance of Western politics 
 and State affairs, if for no other reasons, are wholly mcom- 
 petent to advise ; — and trust for information and counsel to 
 the Kepresentatives of allied States. And, as an earnest of 
 their good faith, let them formally resign into the hands of 
 the Western Sovereigns the hollow title of the Cliing 
 Sovereign to Universal Supremacy; accept for "the Central 
 State " the position of one of the Great Powers among the 
 Great Powers of the Earth ; and grant to the Ministers, ac- 
 credited to the Manchu Court, free access to that Com't and 
 the Imperial Presence, and to Foreign Commerce, — Free 
 Transit through China.
 
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