Henry Trescot to By the President: Wm. M. Evarts, November 17, 1880

No. 134. The commission to Mr. Evarts.

Sir: In our two dispatches of the same date, we have informed you of the signature of the two treaties, copies of which were inclosed. We also informed you of the condition of the question as to the formal communication between consuls and the higher provincial Chinese authorities.

The only remaining subject of discussion between the two governments is that of lekin taxation, including the system of transit passes, and kindred regulations. As you are aware, this subject has been for some time under consideration by the diplomatic representatives of the treaty powers in Peking.

Since our arrival here, two conferences of the diplomatic body have been held. The result of those conferences, and communication with the Yamen is at present this: The diplomatic corps have, for many months, been engaged in an effort to secure amendments to the rules which the Chinese Government have instituted in respect to transit passes outwards. The foreign ministers have maintained that some of the rules are in contravention of treaties, and that all have been often enforced in a vexatious and unjust manner. A correspondence has been carried on with the Tsung-Li-Yamen which bids fair to produce desirable results at no distant day. But the correspondence is not yet concluded. The positions taken by the ministers, so far as we have been able to study them, meet with our entire approval.

The Chinese Government seem disposed to accept the rule that an import duty paid once for all at the port of entry, shall protect foreign importation from all other duties, to whatever extent, and in whatever direction, such importation may afterwards pass within the territory of China. But the subject is only under consideration, and there is a very serious difference between the Chinese Government and the treaty powers as to what the amount of such import duty should be.

At the conference held on the 15th instant, Sir Thomas Wade, Her Britannic Majesty’s minister, to whom the subject had been referred, made a report, a copy of which will be found in inclosure No. 1. After hearing this report Monsieur Von Brandt, the German minister, was requested to prepare a memorandum, a copy of which is also inclosed. To this memorandum you will find the names of the commissioners plenipotentiary of the United States appended, signifying their entire agreement with their colleagues.

You will observe that the question of the amount of import still remains under discussion, and that when—if that can be anticipated—the Chinese Government and the representatives of the treaty powers have agreed, then the whole scheme is to be referred back to each government for consideration and instruction. It is unnecessary to point out that this involves a negotiation of no short duration. All that we can now properly do, therefore, is to give whatever weight attaches to the opinion of our government, to the recommendation of the conference. We do not see that any useful purpose could be served by the full commission remaining in Peking during the progress of this discussion and the reference home of its result.

There can be no doubt of the great advantage to foreign trade that the settlement of this question upon the basis indicated would be, but the presence of the commission would, not aid materially in its completion. We have therefore deemed it our duty to address a communication to Sir Thomas Wade, as “doyen of the diplomatic corps,” stating that Mr. Angell was in full possession of the views of our government, and that, upon our departure, was fully authorized to deal with it in any stage of its progress as we would have been. The necessity of this arises from the fact that the commission in its full number was invited to participate in the conferences, and that the absence of two of its members seemed to require some explanation.

We can scarcely anticipate that any practical action in the matter can or will be taken until next spring, when it is possible that a reference may have been made to the respective treaty powers, and their instructions received.

Mr. Swift and Mr. Trescot will accordingly leave this capital for Shanghai on the 20th instant, going thence to Yokahama, whence Mr. Trescot will take the treaties by the first Pacific steamer that he can conveniently reach.

We have, &c.,

Draft of memorandum prepared by Monsieur de Brandt, as representing the opinion of himself and his colleagues, after hearing Sir Thomas Wade’s report of his conference with the Tsung-li-Yamen on November 13, 1880.

The proposal that a single payment at the port of entry should be substituted for the optional payment of the transit duty, all transit dues, as well as the illegally levied inland and li-kin duties, seems admissible; less so the amount of this single payment as proposed by the Yamen.

By the payment of half the tariff duty the merchant can, under existing treaty stipulations, carry his imports free from any taxes, duties, or li-kin to any place in the interior named in the certificate.

The making the payment of the half tariff duty compulsory instead of optional should therefore free all imports from all further taxation, whatever it may be called or whatever its purpose, from the port of entry to any place in the interior to which they might be sent.

Admitting, for argument’s sake, that the Chinese Government has the right to tax imports ad libitum on leaving this place in the interior, all that can, in justice, be claimed by them is that the loss which may arise from the suppression or abandonment of this right shall be made good to the Chinese Government. Imports forwarded from a first market to a second or third will, as long as the means of conveyance remain what they are, represent only a comparatively small percentage on the whole trade. The Chinese Government can therefore not expect more than a small compensation for the abolition of this right.

As Sir Thomas Wade has reminded his colleagues in the Anglo-Chinese convention of 1868, the Chinese Government agreed to free imports from all further taxation in the treaty port provinces in consideration of a compulsory payment of the half-tariff duty at the port of entry, reserving to itself the right to tax the imports ad libitum in other provinces.

If, therefore, fifty per cent. of the tariff duty was considered a fair equivalent for all taxes, dues, or li-kin legally or illegally levied on the large amount of imports within the treaty port provinces, twenty or at the utmost thirty per cent. of the tariff duty would be a fair compensation for the abandonment on the part of the Chinese Government of its right or pretension to levy taxes, duties, or li-kin on the much smaller amount of imports reaching the other provinces and distributed through them.

A proposal to this effect seems all that the representatives of the treaty powers could venture to submit to their governments, and all that these latter would be likely to consider.