George F. Seward to Wm. M. Evarts, February 16, 1880

No. 153. Mr. Seward to Mr. Evarts.

Sir: In September last I transmitted to our several consuls in this empire, through the consul-general, copies of the circular letter addressed in March, 1878, by the Tsung li Yamên to the ministers of China in foreign countries, and requested them to report to me their opinions upon its contents. I did this because I was desirous of bringing to their notice the positions taken up by the Chinese in regard to questions which are of daily interest at the ports, and because I was anxious to place before you evidence from divergent sources of the estimation in which the paper in question may be held.

The responses which I have received have been less full than I expected. It is my intention to gather them together and send them to you when time will permit, but at the moment I can do no more than to forward the fullest and most careful which has come to hand, that of Dr. Lord, consul at Ningpo, the oldest and most experienced of our officers in China.

The report of Dr. Lord has been written from his own standpoint, and with but little opportunity for any comparison of opinions with myself.

It seems to me, however, to sustain perfectly the views upon the various questions involved which were long since embraced by me, and which the foreign representatives here, generally, have come to consider those entitled to support. It is a paper, therefore, to which I invite your especial attention.

It would be tedious as well as unnecessary to review Dr. Lord’s paper, but there are some points in it which need a word of explanation. He refers in sections 3 and 4 to the coast-trade duties, saying that they are not mentioned in the treaties. This is entirely true. The present system was devised after the treaties of 1858 were signed, and was intended to be an equitable arrangement of the matter. Foreign vessels had for a long time shared in the coast trade, paying at the ports of departure and arrival such duties as were demanded of them. Thereafter, however, they were to pay a full duty oh all native goods carried out of a Chinese port, just as if the goods were being exported to a foreign country, and upon importation at the second port a half duty. This arrangement was agreed upon in 1861, by Sir Frederick Bruce, then minister of England, and the Tsung-li Yamên, and has been acquiesced in by all other powers. The details will be found at page 204 of “Mayer’s Treaties” a copy of which is in the Department.

Dr. Lord again refers in the same division of his paper to the option which foreigners exercise to send their imported goods into the interior, and bring native produce from the interior, either under transit passes or without them, and intimates that tariff rule No. VII provides only for the use of transit passes when foreigners desire to move such merchandise.

Tariff rule No. VII will be found on page 30 of “Mayer’s Treaties.” It reads as stated by Dr. Lord, but it is to be construed with reference to the appropriate article of the treaty (XXVIII, page 15), perusal of which will show that the option to use transit passes or not is reserved to British merchants. If there be any doubt on this head, it will be resolved by a reference to a further agreement made by Sir Frederick Bruce and the Tsung-li Yamên, the particulars of which are given at page 203 of “Mayer’s Treaties.”

The articles of our treaties which refer to transit duties are the thirteenth of the treaty of 1844, and the seventh of the supplementary treaty of 1858. Bead by themselves, these articles would indicate that since the latter was signed no transit dues in excess of 2½ per cent, can be levied upon any goods.

In section 5, Dr. Lord refers to the question whether goods not intended for exportation may be brought from the interior under transit passes, and reaches the conclusion that it is equitable to acknowledge the objections made by the Chinese on this score. The merit of their objections is universally recognized, as I believe, and it is generally conceded, also, that the intent of the treaties sustains their view.

With these remarks I again commend Dr. Lord’s paper to your notice.

I have, &c.,