Eli T. Sheppard to B. P. Avery , United States, March 15, 1875

Mr. Sheppard to Mr. Avery.

Sir: About ten days ago my attention was called to a proclamation which had just been issued by the customs taotai of this place, notifying a change in the heretofore-existing regulations in regard to the collection of native taxes upon goods imported at Tientsin on foreign vessels; and on the 9th instant I received a letter from the local agent of Messrs. Russell & Co., at this port, complaining that the sudden change in the mode of collecting native revenue had created such alarm among native consignees that they had refused to take delivery of their cargoes; and also representing that a continuance of the then existing state of affairs would lead to a commercial panic, and great consequent loss to their company. Simultaneously with this, I was unofficially informed that serious apprehensions were entertained by all the foreign merchants residing here that the new regulations established by the taotai, requiring the payment of local taxes immediately after their discharge from the foreign customs, was intended to apply to and be enforced against foreign goods equally as with native imports; indeed, several of the foreign merchants of other nationalities had made formal complaint to their consuls that the taotai’s deputies had already waited upon them, and notified them to report their own consignments of foreign goods to the native revenue-office for taxation.

All the Chinese importers of foreign goods were unanimous in saying that they had been given to understand that it was the purpose of the taotai to compel the immediate payment of the local tax, without reference to whether the goods were intended for inland transit or local consumption, and for this reason they all alike declined to take delivery of their consignments until the matter was definitely settled. As is usual at the opening of navigation each year, large consignments of foreign goods were arriving daily from Shanghai, fulfilling the accumulated orders of the past winter.

The taotai’s proclamation appeared simultaneously with the arrival of the first steamer. The result in the immediate vicinity of the shipping was magical. In three days the entire cargoes of eleven steamers were piled upon the bund, extending and blocking the way along the whole length of the British concession.

The serious consequences likely to result from such a state of things can be better imagined than described. A sudden fall of snow or rain would occasion great loss and endless litigation. This, however, is nothing compared with the serious detriment to the trade of the port, which is always likely to follow such a sudden shock. It had become apparent that some action on my part and that of my colleagues was demanded in the interest of foreign trade, aside from any individual interest. For the purpose of obtaining the most reliable information respecting the proposed new regulations, and in order to place myself in a position to take suitable action in case it should seem advisable, I asked and obtained an immediate interview with the taotai at his yamen.

He evidently anticipated the purpose of my visit, and seemed to be greatly concerned. He introduced the subject at once, by declaring that he had no intention whatever of interfering with foreign trade in the least, and adding that his action had been willfully misrepresented by the native merchants. He assured me that the new regulation which he had just promulgated was an old rule, in existence since 1860, and which had simply fallen into disuse by the lapse of time.

For your better understanding of the whole question, I beg to hand you herewith (inclosure No. 1) a memorandum of what passed between the taotai and myself upon the subject.

Having thus received the solemn and repeated assurance of the taotai that his action was in no way intended to burden or fetter foreign trade, and that no unusual or wrongful restraint was thereby directly imposed upon it, I did not feel justified in taking any measures beyond suggesting to him in a friendly way that it would have saved great inconvenience and some loss if he had prepared the way for the change by a timely notice of his intention beforehand.

It seems to me that, so long as the status of foreign trade is not directly affected thereby, that it is beyond the power of a consul to interfere with matters which pertain exclusively to the collection of the native revenue. I, however, took especial pains to point out to the taotai the possible danger to which foreign interests are exposed, and the consequent evils which might result to the foreign trade of the port by hasty or violent changes in the method of administering the local revenues.

In order to prevent any further misunderstanding, the taotai on the same day issued a second proclamation, distinctly disavowing any intention whatever of imposing any new or additional taxes upon foreign goods; a copy of which (No. 2) I beg to inclose herewith.

I am glad to inform you that after the issue of the last-named document the native consignees came forward promptly and began taking delivery of their consignments, and, so far as I am advised, business is resuming its wonted activity.

I hope that my action meets your approval. I am, sir, your obedient servant,