Frederick F. Low to Hamilton Fish, February 20, 1873

No. 57. Mr. Low to Mr. Fish.

Sir: The third commercial rule appended to the treaty of 1858 designates munitions of war and salt as contraband, which can neither be imported nor exported.

About a year ago a quantity of shell, ordered by the Japanese government through an American house, arrived at Shanghai, en route to their port of destination, Nagasaki. Notice was given to the proper authorities that such goods were on the way, and, when the ship arrived, application was made for permission to transship them. The customs authorities refused the permission asked for and seized the goods. The case was tried by a properly constituted court and a decree of confiscation rendered. Subsequently, through the intercession of the consul-general, and upon the owners giving a bond in the full value of the goods, they were released and reshipped to their destination. The condition of the bond was, that the case should be referred to Peking for re-examination by the yamên and the legation, and if, after such examination, it should be decided that the seizure and confiscation were warranted by the terms of the treaty, the sum named should be paid without further question. The owners of the goods were not charged with fraud or evasion; on the contrary, it was conceded that they acted in good faith, not supposing that the bringing of contraband goods into a treaty port, merely for the convenience of reshipping them to foreign countries, would subject them to confiscation or their owners to any other penalty. In presenting the case to the yamên, I asked for the cancellation of the bond, and also that a definite rule should be made and promulgated for regulating transshipment of such goods in the future. After considerable discussion it was agreed that the bond in question should be canceled, the yamên conceding the point on the score of equity alone. This concession was coupled with a declaration that after a certain date transshipment would not be allowed, and that if contraband goods arrived after the time named they would be confiscated. (See inclosure No. 1.) To this I replied, (inclosure No. 2,) objecting to the proposed rule as being in conflict with treaty right, and declining to issue orders to the consuls in accordance with the yamên’s request. Further discussion and correspondence ensued, in which the position on either side was restated and the question argued without reaching any definite result.

In a note received a few days since from the yamên, (inclosure No. 3,) the ministers indicate that they are ready to abandon their position; they now propose to allow transshipment of munitions of war upon conditions which practically concede all that has been contended for. To this I have replied, (inclosure No. 4,) accepting, with certain reservations, the proposition.

The question is, I trust, practically settled in a manner which will facilitate trade and at the same time work no injury to the Chinese government.

The effect of all this will probably be that most of the war material needed for Nagasaki and ports in the inland sea will come to Shanghai for reshipment, and, as American steamers practically control the carrying-trade between Shanghai and those ports, it is obvious that this arrangement will prove of considerable value to our commercial interests.

In view of the facts above stated, I would respectfully suggest that the Treasury Department be informed of the new regulation.

I have, &c.,