Sewaed to Wm. M. Evarts, December 8, 1879

No. 137. Mr. Seward to Mr. Evarts.

Sir: I have the honor to hand to you herewith a letter which I have received from the consul-general, transmitting one addressed to me by the Chamber of Commerce at Shanghai, in which the belief of the chamber is stated that the Swatow Guild, a combination of Swatow merchants, doing business at the open ports in China, has a recognized connection with the collection at Shanghai of lekin taxes on opium, and that its power in this respect is used to forward its own interests in the trade.

The fact that the collection of lekin taxes is sometimes committed to guilds of native merchants, and that such guilds are able, directly and indirectly, to promote their own interests in this way, and to displace other traders, native and foreign, has already fallen under the observation of the diplomatic body here, and has been included in the list of trading grievances lately transmitted by us to the Tsung-li Yamên. (See my dispatch 510, inclosure 3, grievance number 14.)

It is not singular that, when trade and the opportunities for enterprise are rendered inelastic by repressions everywhere exercised, the efforts of traders should take the form of combinations intended for their defense against the government, and the removal of opposition on the part of those who do not share in the expenses and responsibilities of the combinations so made.

Broader opportunities for enterprise and a right regard for the interests of individuals would go far to break down such combinations, but as things are, this is not to be hoped for in China.

Foreigners cannot join the guilds. They are therefore at especial disadvantage, and it is the more necessary for their national representatives to give them all proper support.

I have, &c., &.,