Chester Holcombe to [The schedule to which the foregoing order in council refers.] I. Regulations made by Sir Rutherford Alcock, while Her Majesty’s, February 21, 1882

No. 74. Mr. Holcombe to Mr. Frelinghuysen.

Sir: I have the honor to forward herewith for the information of the Department a copy of an order in counsel issued by the Govenrment of Great Britain, dated October 25, 1881, as published in China under the authority of Sir Thomas Wade, the British minister.

While there is much in this order in council which cannot fail to be of interest to the Department, I beg leave, at the moment, to call your attention to that portion of it, numbers 6 to 20, inclusive, which authorizes Her Majesty’s minister in China to make regulations “for the peace, order, and good government of British subjects resident in or resorting to China.”

The Department is well aware that at all of the open ports in China settlements of foreigners have grown up who are exclusively subject to the jurisdiction of their own authorities, and who directly or representatively control the immense and growing commerce between China and foreign countries. These settlements are invariably cosmopolitan in their character, containing representatives of nearly every known nationality and subjects of every type of human government. It has been manifestly necessary to devise some system under which the heterogeneous population could be governed, and due protection assured to the lives and property concerned.

This has been done by the establishment of quasi municipal organizations at the various ports to which have been delegated the powers ordinarily given to similar organizations at home, subject to the approval and general control of the consular and diplomatic representatives interested.

The authority thus given, and under which taxes have been levied, suitable police regulations maintained, roads and streets been built and kept in order, and the health, convenience, and good order of the settlements generally conserved, has almost invariably been exercised with great discretion and good judgment, and has rarely been called in question.

Cases have, however, arisen in which the legality of this entire system has been disputed. Notably at Shanghai in the spring of 1881, Mr. Frank Reid, an American citizen, refused to pay a tax levied by the municipal council, upon the ground that Congress alone could impose such an obligation upon him, and that the United States minister had no power to make him in any way liable to the demands of such a body as the municipal council of Shanghai. The tax was recovered from Mr. Ried through a suit brought before our consul-general, and by an execution levied on Mr. Reid’s property. I inclose a copy of Mr. Denny’s decision.

Although the case ended in the manner described above, there is grave reason to fear that, could the defendant have taken an appeal to a circuit court of the United States, the decision of such higher court must have been rendered in his favor. And this in turn would have been followed by the downfall of the municipal governments at every port in China, through the refusal of the residents to pay the taxes by means of which such governments can be supported.

There is in my opinion little room to doubt that, owing to the lack of appropriate legislation, many things have in the past been done by the officers of our government here which have been really extra legal, so to speak, that is to say not founded on any plain well-defined statute. It is in the highest degree important that acts of this sort should cease. And it is, on the other hand, vitally important, in view of the large and rapidly increasing population and property interests in these foreign settlements in China, that ample power, clearly defined and carefully guarded, should be vested in the proper department of our government to make and enforce suitable regulations, either singly or in concert with other powers, for the control and government of American citizens resident in China.

I beg, therefore, to call your earnest attention to this subject, and to suggest, in default of a better plan, whether such Congressional action may not be secured as will give to the representative of the United States in China, subject to the approval of the President, power similar to that conferred upon the British minister in China by the order in council inclosed.

There is the more immediate occasion for the consideration of this subject, as the diplomatic body here has now under discussion a new series of municipal regulations for Shanghai which have been submitted to us by our consuls, and which it will be my duty to lay before the Department at an early moment.

I have, &c.,