Memorandum on a conference held at the Tsung-li-Yamen on the 13th November, 1880, regarding exemption of foreign imports from taxation inland., November 15, 1880

Memorandum on a conference held at the Tsung-li-Yamen on the 13th November, 1880, regarding exemption of foreign imports from taxation inland.

The origin of all discussions on this point, it will be borne in mind, is the difference of interpretation put by the Chinese authorities and the foreign merchant upon the clauses in the treaties affecting taxation of imports.

The construction most favorable to the foreign merchant has been that his imports, having paid import tariff duty, and a half duty, which it was at the option of the foreigner to pay or not, were thenceforward free of all possible charge, no matter to what part of the empire they might be carried. Some of the treaties, it is held, would scarcely justify so sweeping a claim to exemption, but by the favored-nation clause if so large a measure could be established under any one treaty, all foreign traders alike would of course be equally benefited.

The Chinese have argued that the half duty should clear inland duties leviable in transitu only from port to inland market, the treaties specifying none but the dues leviable at transit duty barriers. These barriers they have multiplied at pleasure, and they have taxed imports long before they could be said to have reached any barrier at all.

The continual altercation to which conflict of opinion on the point at issue has practically given occasion being scarcely less injurious to foreign interests than the unauthorized taxation itself has proved directly to trade it was proposed some time since to draw from the Tsung-li-Yamen the suggestion of some arrangement by which a single payment made in the first instance should clear imports of all further taxation whatever throughout the empire. This was, with a certain difference, the proposition of Sir Rutherford Alcock when negotiating a revision of the British treaty in 1868. The Chinese Government then consented, if the option to pay or not to pay the half duty were extinguished—if the payment of it, that is, were made as obligatory as the impost tariff duty itself—to free imports of all taxation in the maritime provinces. In the inner provinces certificate of the payment of the half duty was still to clear imports in transitu of barrier dues. On arrival at inland centers they were to become liable to taxation once they were separated from their certificate. The present proposal is to effect an arrangement for the clearance of imports by a single payment throughout the empire.

The ministers of the Yamen being called on to say under what conditions this might be secured promptly replied, by increase of taxation. Being pressed to state in what degree, they proposed a reference to the provinces; and this made, they signified their wish that the foreign representatives conferring with them should first declare their estimate. This was the point reached before the conference of the 13th instant. The ground on the foreign side taken on the 13th instant was the following:

The negotiators of the foreign treaties called in question had undoubtedly been of opinion that if the Chinese Government had secured to it the tariff duty, roughly estimated at five per cent, ad valorem, and the half duty—a total, that is, of seven and a half per cent. upon value—it ought to be content. This total it did not now receive. The customs returns of 1879 showed that the duties collected on imports, opium excluded, for the right of the Chinese to tax opium once purchased by Chinese is not contested was, taels 2,262,299. Had immediate payment of the half duty been obligatory there would have been further collected the sum of taels 1,131,149.

The sum collected on transit-passes, the application for these being optional, was but taels 342,795, or little more than one-third of this sum. The obligation to pay down the half duty would, therefore, manifestly be a concession very favorable to Chinese revenue. This was stoutly denied. The li-kin, the chief item of the abnormal taxation, imposition of which on his imports is protested against by the foreigner, amounted, it was affirmed, to a far larger sum than half the tariff duties. Could the Yamen, it was asked, produce statistics? There was some difficulty about a direct answer to this question; but, in the end, it was stated that according to the report of some provincial governments, the li-kin equaled twice, of others three times, the tariff duty. One reason earlier, given for the Yamen’s unwillingness to name the amount to be added to the old tariff, had been its apprehension that the demand of the provinces would be far in excess of the expectations of foreign ministers; and the provincial estimates now referred to prove that the Yamen’s surmise had been correct.

The natural rejoinder to these arguments was that the provincial estimate was far too high, and that the foreigners’ experience authorized a conviction that whatever the amount really levied, but a limited proportion of it found its way into the public chest, central or provincial.

These conclusions were, of course, deprecated, and a suggestion being pressed for as to the utmost increase of tariff duty that foreign representatives might consent to move their governments to adopt, the ministers were assured that taking the tariff duty and the half duty at 7½ per cent., a rise of one-half per cent., or, at the most, of 1 per cent., would be regarded as a very liberal concession. An addition of a half per cent. would have given, in 1879, a total of taels 3,619,677; of 1 per cent., a total of taels 3,845,906.

The ministers were confident that this arrangement would not be satisfactory to the provincial governments, and, if not, would fail of its end. In some jurisdictions at this moment, the li-kin, as it had been stated, equaled three tariff payments; that is to say that, including the tariff, imports paid 20 per cent. In other jurisdictions they paid 15 per cent. Finally, after much discussion, they expressed a belief that 12½ per cent.—that is, a tariff and a half in addition to the present tariff duty—was the minimum that would satisfy the provinces.