Commercial regulations between China and Corea., December 19, 1882

Commercial regulations between China and Corea.

(Memorandum.)

The Chinese text, from which the foregoing translation was made, was obtained by me indirectly, but was submitted to certain ministers of the foreign office, and pronounced by them to be correct.

As the treaties made by the United States, Great Britain and Germany with Corea are identical in terms, the last two named being merely copies of the first, the comparisons herein made between our treaty with Corea and the Chinese commercial regulations will apply with equal accuracy to the English and German treaties.

If the first sentence in the preamble to these regulations be kept in mind, and the statement that the canons of official intercourse between Corea and China are fixed, be accepted as a fact, as it doubtless is, and it be further borne in mind that the business of negotiating these regulations was carried on in careful conformity to these canons, then much valuable light is thrown upon the question as to the exact relations which exist between the two Governments concerned. Thus the preamble contains no declaration that the King of Corea acted either in his sovereign right, or even of his own option, in the appointment of envoys to negotiate these regulations. And what is far more important and significant, no provision or stipulation is contained anywhere in them for their ratification or rejection by the King. On the contrary, Article VIII provides that the regulations shall go into effect at once, and that in the future desirable amendments or alterations shall be discussed between the Chinese northern superintendent of foreign trade and the King of Corea, acting as equals, and that their conclusions shall be submitted to the Emperor of China, to be approved or rejected by him alone.

The natural inference from this provision, and from the general drift and tenor of the regulations as a whole, would seem to be that His Majesty the Emperor directed his excellency Li and the King of Corea to prepare a series of commercial regulations; that these two high authorities delegated this duty to certain subordinates, and that here the power or authority of the King ended; while, as all the negotiations were conducted at Tien-Tsin, his excellency Li practically superintended and controlled not only the action of his own delegates, but of the Corean delegates as well. There is nothing to show that the King of Corea had either voice or independent control in the business beyond the nominal right to name his substitute.

Articles I, V, VII, and VIII provide that in all negotiations connected with the enforcement of these regulations the Chinese northern superintendent of foreign trade is to correspond upon a footing of equality with the King of Corea. The Chinese text of the articles named shows this beyond the possibility of question. If further proof of this fact were needed, it is found in Article I, in which it is provided that the King of Corea, on his part, shall appoint an envoy and commercial agents to China, and that Chinese commercial agents shall be accredited to the Corean Government, not by the Emperor of China, but by the northern superintendent of foreign trade. Thus, on the part of China, the appointment of commercial agents, or consuls, as we should call them, a prerogative usually reserved to the supreme authority itself, is relegated to a local officer. In other words, these agents are to be appointees of an appointee of the Emperor, and one who, though of high rank, may he removed with or without cause or reason assigned, at the whim of his master.

Article I further provides that the Corean envoy, who is to reside not at Peking, but at Tien-Tsin, shall rank with an intendant of circuit. And this officer, by the various treaties between China and foreign powers, is made equal in rank with a consul. [See Article X of our treaty of Tien-Tsin, and similar articles in other treaties.]

Article I of these regulations also provides that the Corean envoy may be allowed to address either the northern or southern superintendents of foreign trade only as an inferior addresses his superior. This is incontestably shown by the Chinese text. Thus the Corean envoy to China, or more properly to Tien Tsin, would appear to rank with a consul, or, at the utmost, with a consul-general.

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Recurring now for a moment to the point already made that these regulations reduce the King of Corea to a level with the Chinese superintendent of foreign trade, it should be added, in order to avoid misapprehension, that this cannot be fairly held to mean an absolute equality of rank or authority. Within certain well-defined limits officials of different rank correspond upon a basis of equality in China. Thus high ministers of state, members of the privy council, correspond upon such a footing with viceroys and even governors of provinces; and what is more to the point, his excellency Li, the northern superintendent of trade, corresponds upon a basis of equality with his imperial highness Prince Kung, who is practically the present head of the Government.

All that is intended to be maintained is that, by these regulations, the head of the Government of Corea is reduced, so far as all official intercourse is concerned, to a level with an appointee of the head of the Government of China. As stated above, these facts throw much valuable light upon the question of the exact relation which exists between China and Corea, and they also raise certain intricate questions which must be determined by our Government in case our treaty with Corea is put into operation, some of which I beg to suggest.

• First. If, for purposes of international intercourse, the King of Corea is held as the equal of a Chinese minister of state, what is to be regarded as the status of the President of the United States vis-à-vis the King of Corea?
• Second. What is to be the basis of official relationship between the diplomatic and consular representatives of the United States in China and the Corean envoy and commercial agents?
• Third. What is to be the basis of official relationship between the diplomatic and consular representatives of the United States in Corea, and the Chinese commercial agents to that country appointed by the northern superintendent of trade?

The last clause of the preamble to the commercial regulations, in which it is declared that they are to be regarded as so many concessions on the part of China, “and are not within the scope of the favored nation rule” existing between “the several treaty powers and China,” is interesting and might almost be called amusing. As there are absolutely no concessions to Corea found in these regulations which are not already existing in each or all of the treaties between China and the western powers (the recognition of the right of Coreans to trade in Peking excepted), it is quite apparent that this clause was inserted by his excellency Li, under the mistaken idea that it would serve to prevent the application of the “favored nation rule,” as found in the recent treaties between the United States, England and Germany on the one hand, and Corea on the other, to the concessions found in these commercial regulations as made by Corea to China, which have not been made by Corea to the three powers named above; and thus to secure to Chinese subjects the exclusive monopoly of certain rights and privileges in Corea. What these rights and privileges are, and their value and importance, will be pointed out in detail further on. It is manifest, without argument, that the clause in question cannot in any sense serve the purpose for which it was intended, and that, so far as the United States are concerned, it can have value only as, and to the extent that, our Government may see fit to recognize it.

Article II of these regulations determines a system of judicial procedure, in all cases in which Chinese in Corea or Coreans in China are concerned. Cases in Corea in which Chinese subjects are alone interested are heard by Chinese authorities; those in which Coreans are plaintiffs and Chinese are defendants are also heard by the Chinese authorities; and those in which Chinese are plaintiffs and Coreans are defendants are heard by the Chinese and Corean authorities sitting as judges, with conjoint and equal powers. Coreans in China are relegated to the exclusive jurisdiction of the local (Chinese) authorities, the Corean commercial agents having only the right to ask a new trial.

Thus China refuses exterritorial jurisdiction to Corea over Corean subjects in China, and assumes it to an extent never claimed by western powers in this Empire, over her own subjects within Corean territories.

The special interest we may feel in this fact centers in the conclusive answer it affords us to any complaints made in future by China as to the injustice of the exterritorial system as maintained by us here. And a more positive and absolute answer would be hard to find.

While it is true that this article gives to Chinese officials a wider range of exterritorial jurisdiction in Corea than is conceded to United States officers in the same country by Article IV of bur treaty with Corea, it would not, in my opinion, be advisable for Our Government to seek any modification of the stipulations in our treaty upon this point. Our experience for the past forty years in China has plainly shown that the system of joint tribunals unprovided with any common code of laws or judicial procedure, and in which each magistrate must be guided solely by the statutes and regulations of his own country, has entirely failed to work to the satisfaction of either Government concerned. The system embodied in Article IV of our treaty with Corea has been found by universal experience in China to produce” much more satisfactory results, and is now accepted by all the powers having treaties with, this Empire. The pro visions of Article III of these commercial regulations relative to vessels in distress and shipwrecks are substantially identical with the stipulations of Article III of our treaty, and need no comment.

It now remains to compare the commercial rights and privileges granted by these regulations to the subjects of either power, with those granted by treaty to subjects or citizens of other nations in either China or Corea; and more particularly to contrast privileges granted to Chinese in Corea with those granted by ouxtreatv to citizens of the United States in the Corean Kingdom.

The commercial concessions to Coreans in China are easily enumerated. The ancient right of Corean merchants to trade in Peking is reamrmed. JBut it should be stated tbat this right is very closely restricted. It does not permit them to establish themselves permanently as merchants here, nor even to open shops or warehouses for a single day. All it amounts to is this: whenever the, King of Corea sends an embassy of any sort to the Emperor of China, Corean merchantsare allowed to corne to Peking in the train of such embassy. They can either sell their wares at wholesale to Chinese dealers, or peddle them in person about the streets. And within three days after the departure of any embassy, on its return to Séoul, all the merchants who came in its train are required to close their, business and leave this city. In return for this very meager and questionable advantage, Chinese subjects are permitted by Article IV. of these regulations to open warehouses and establish themselves permanently as merchants at Yang-Hua-Chen and Han Cleng, which are the west and east suburbs of the city of Séoul. Corean subjects are also allowed to frequent two trading posts established in Mancliuria near the Corean border, at Chamen and Huci Chun. And as equivalent to this privilege Chinese subjects are permitted to frequent two trading posts established at Icho and Huci King in Corea.

As to other trade privileges in China, Corean subjects are placed at a disadvantage by these regulations even as compared with other foreigners in the Empire. Thus, by Article IV, they are forbidden to transport foreign or native produce to the interior under any terms, and can only bring native produce from the interior to a port upon payment of all local taxes and lekin. These two privileges are not only granted to all foreign merchants in China, but they can also commute the inland taxes and lekin by the use of transit passes. It is true, indeed, that by this same article Chinese merchants cannot take their wares to the interior of Corea, with the exception of course of the two suburbs of Séoul and the trading posts already mentioned. But it must be borne in mind that there are neither inland taxes nor lekin in Corea. Hence, while Corean subjects can only bring native produce from the interior of China at a disadvantage, even as compared with foreign merchants, since the use, of transit passes is denied them, Chinese can go at pleasure to any point in the interior of Corea and bring native produce therefrom free from any duties or charges whatever save the export duty of five per centum ad valorem Thus, it is manifest that under the terms of these regulations, the lion’s share of the benefits of commercial intercourse between China and Corea will fall to the Chinese. And, as though this were not enough, by Article VII, the Corean Government is required to subsidize a Chinese steamship line, by means of the vessels of which this intercourse will be mainly carried on.

To turn now to a particular comparison of the commercial privileges granted by these regulations to Chinese subjects in Corea, with similar privileges granted by our treaty to citizens of the United States in the same country—

• First. Citizens of the United States are permitted to establish themselves at such of the ports of Corea as are open to foreign trade, and to pursue their various callings and avocations within the limit thereof. These ports are understood to be, though hot specified in the treaty, those open to the Japanese, namely, Fu-San, Ren-Chuan, and Yung Sing. To these is to be added Yang-Hua, which by the convention of August 30; 1882, with Japan, is to be opened within one year to foreign traffic. Chinese subjects are permitted by these regulations to establish themselves and to follow their avocations at all these ports, in addition to this, to reside at the two suburbs of Séoul, and at two trading posts, already mentioned, in the interior of Corea.
• Second. Private citizens of the United States, are not permitted to travel in the interior of Corea. Chinese subjects are allowed, by Article V of these regulations, to travel freely throughout the Kingdom under passports, which, upon application, are to be issued by the commercial agents and local authorities acting conjointly. Diplomatic and consular representatives of the United States can travel under passport in the interior by virtue of a stipulation of the Japanese convention mentioned; above.
• Third. Citizens of the United States are forbidden either to transport foreign imp ports to the interior, or to proceed thither to purchase native produce. Chinese subjects are permitted to transport all merchandise of every class to four points named in the interior, two trading posts, and two suburbs of Séoul, and to proceed to any point of the interior, purchase and bring out native produce, paying neither taxes thereon than the export duty.
• Fourth. Citizens, of the United States, are forbidden to transport native produce from one-open port to another open port. Chinese subjects are allowed to transport this class of merchandise from one open port to another, upon payment at the Second port of one-half-of the export duty; that is to say upon payment of 2½ per cent. ad Valorem.
• Fifth. Citizens of the United States are required to pay an import duty or 10 per centum or 30 per centum ad Valorem upon all goods imported into Corea, according as such goods fall within one or the other of two general classes. Chinese subjects can import the same articles into Corea, via either of four trading posts, upon payment of, a uniform duty of 5 per centum ad valorem. (See Article V, of the regulations.) As these posts are situated on the banks of two rivers of some size, this discrimination may prove to be of serious importanee.

Article IV of the regulations prescribes that the subjects of China shall pay, in Corea, duties and tonnage dues according to regulations and tariff fixed by the customs authorities, As it is not known whether these are or are not the same as those prescribed in our treaty with Corea, it is impossible to say whether there is or is not a discrimination against our people upon this point.

To summarize, the following privileges are denied to our people and granted to Chinese in our treaties with Corea.

• —To reside and trade at four points in the interior.
• —To travel in the interior under passport.
• — To take foreign produce to four points in the interior, and to proceed to the interior and bring out native produce.
• —To transport native produce from one open port to another; and
• —A discrimination of ½ in one case and 5/6 in the other to our disadvantage and to the benefit of Chinese importers in the duties on all foreign merchandise imported via certain routes into Corea.

No argument or explanation is needed to show the immense value of the concessions made peculiarly to Chinese merchants and their disaatrous effect upon any attempt made by foreigners of other nationalities to build up commercial enterprises in Corea. With the right to establish themselves permanently at four centers of trade in the interior; to take thither all classes of foreign merchandise for sale; to scour the country from end to end, under the protection of passports, in search of new avenues of trade, and in the purchase of native merchandise either for the open ports or for exports foreign countries; to control the coast trade in native produce, which last they readily do, as other foreigners are shut out from this trade, and Coreans have no steamships—with all these exclusive rights it is easy to see that Chinese merchants, with their keen scent for gain, and free from all danger of successful rivalry or competition, will soon fill Corea like a swarm of locusts, and any attempt to build up American trade with that country will be futile.

Making all due allowance for the imaginary or real rights of Chinese as suzerain of Corea it still remains true that these commercial regulations are greatly one-sided.

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