might be that he hoped to win the others over to his position. And, so far as I was concerned, a further element of uncertainty was imported into the business by my knowledge that the German minister, while on leave of absence recently, had visited London and met the English minister, who was also on leave. It was possible for me to suppose, under these circumstances, that the two had, in concert with their respective governments, agreed upon a programme to be carried out here, which agreement, for whatever reason, they thought best to keep to themselves until the right moment should arise to disclose it. Under all the circumstances it appeared to me wiser not to take an active part at first in the discussion of trading questions. I asked, therefore, at the outset to be excused from acting upon the committee appointed to consider commercial questions, reserving my interference until they should come before the full body of representatives. As it happened, however, the committee on commercial questions concluded, at their first meeting, to invite me to attend their sessions, and to take part in their deliberations, and I was not a little pleased to note at once upon doing so that the whole matter was being discussed as if no previous arrangements, whether of the British minister, or of the British and German ministers together, would interfere. An inspection of my correspondence from Shanghai and from this capital will show that the position taken up in the protocol of 1876 was essentially that to which I have long adhered. I entered the conference, then, with no uncertain views, and disposed, moreover, to distrust the utility of any proposal which should look to a change of existing stipulations. I could not see that the Chinese Government would have less difficulty in the execution of any new proposals to which we could assent than in the execution of existing stipulations. And moreover, the whole structure of our relations with this empire is unusual and abnormal, and I could but fear that the displacement of this or that part of it might result disastrously. While disposed, however, to take a conservative course, it was only the part of wisdom to enter with my colleagues upon a further study of the whole business lest some feature of it might have escaped my attention, and in order that no proposals to improve matters should pass without consideration. It would be idle to attempt to review in this letter all the proposals which were advanced, whether on the part of those who have been longer on the scene or those who have had less experience in this singular land. It is sufficient to say that at an advanced moment it became evident that while the tendency of opinion was favorable to new treaty stipulations, much divergence of views existed as to the changes which were necessary, and that we could not hope to reach any agreement in the limited time at our disposal. It happened then that the German minister came to me and stated that when at Loudon, on the occasion of which I have already alluded, he had placed before our colleague, the British minister, and the British foreign office, a plan for the adjustment of matters within the lines of existing stipulations; that the substance of this plan had been communicated from Berlin, without reference to its origin, to other powers and had already been accepted by several. He then put the plan into my hands, and asked if I would unite with the British minister and himself in urging its adoption by our remaining colleagues. The document referred to will be found among the inclosures transmitted herewith. I responded at once that I did not regard his proposals as entirely satisfactory, but that I would give them candid consideration. I added, however, that I entertained doubt whether we were proceeding wisely. The time had nearly ar rived when several of our colleagues having their residence at Shanghai or elsewhere must leave Peking for the winter, and that in my opinion it would be desirable to prepare as a first step a declaration of grievances. Having done this we could take time to consider remedies. Mr. von Brandt accepted my suggestion at once, and the result was the introduction by him, at the next meeting of the diplomatic body, of the note verbale which forms inclosure No. 1 with this dispatch. The proposition to prepare a statement of grievances, and to transmit the same to the foreign office as a preliminary step to the further discussion of the business, was accepted by the conference, and we proceeded at once to review the statement prepared by Mr. von Brandt, with the result shown in the protocol, and the note to the Yamên. (Inclosures Nos. 2, 3, and 4.) It happened at the moment when this proposal was advanced before the conference that a letter was placed be. fore us addressed to the doyen of the diplomatic body by the Chamber of Commerce at Shanghai, advocating the view that new treaty stipu lations are not so much needed as the right enforcement of existing stipulations. It was undoubtedly of influence in determining the conference to accept the plan presented by Mr. von Brandt. Under this new phase of the business, it is likely that a discussion will be brought about between the diplomatic body and the foreign office directed, in the first instance, to the accuracy of the statement of grievances. This discussion will necessarily involve questions as to the facts declared, and questions as to the meaning of the treaties. It will naturally lead to a further discussion in regard to remedies, and before this takes place it will become necessary for the foreign representatives to decide whether they will stand for the execution of the treaties or propose new arrangements. My own disposition still is to stand for the execution of the treaties. I do not for a moment suppose that we can secure the perfect execution of the treaties. Illegal taxes will be levied in spite of all that can be done by us. But it may be that we can so defend the transit-pass system that excessive levies will be prevented; that, in fact provincial levies will be brought so low that there will be no occasion to evade them by taking out transit passes. To effect this, much vigilance will be required, but it is to be remembered that the struggle against such levies is one with which the central government sympathizes in a measure. They are imposed in the provinces, often without the knowledge of the general government, often perhaps in excess of the intentions of the higher provincial authorities. As against such levies we can always plead while standing on liberal ground. It is competent for us, for instance, to say that while we are familiar with high tariffs, we at least levy all our duties once for all, and in accordance with the tariffs carefully considered and solemnly proclaimed. And, indeed, if we cannot secure good results under the present treaties, how may we do so? If there is not good faith and competence in the government as respects present stipulations, will there be better faith or more competence if other stipulations are made? The situation as respects trade is like the situation as respects jurisdiction. We have imposed the extraterritorial system upon China, because we cannot trust their jurisprudence. We have imposed treaty tariffs and transit arrangements, because we cannot trust their fiscal and administrative system; we meet many evils under the extraterritorial system and many under the system of treaty tariffs, but both were imposed be cause of the necessities of the case, and both are of measurable advantage. We must make the most of them until the days of better administration arrive, and those days will arrive the sooner if we stand firmly for the rights accorded to us by treaty. Attempts to revise, diplomatically, arrangements which are not logical when regarded from the point of view of the sovereign rights of the state, may bring about a greater degree of confusion than at present exists, to the injury, as we may well believe, of native as well as of foreign interests. While holding these views, I feel bound, of course, to study the subject further, with my colleagues, and without them. I shall feel bound, too, to take no step looking to a change of treaty, without first reporting to yourself for instructions all the facts and considerations involved. I respectfully ask for your approval of the action taken by me as reported in this despatch. I have, &c., GEORGE F. SEWARD. [Inclosure 1 in No. 510.] Note verbale of the German minister.-Translation. The minister of the German Empire has the honor to submit to his colleagues, the representatives of the other treaty powers now assembled at Peking, the following ing suggestions: The discussions which have been going on during the last six weeks on the subject of inland taxation have shown that while there exist nearly unanimous views on the necessity of taking steps to do away with the defects of the present system, and while there exists even a certain degree of unanimity with regard to the measures to be recommended for this purpose, the working out of the details of any scheme, either to be proposed immediately to the Chinese Government or to be submitted first to their home governments for their approval and sanction, is a question not to be disposed of within the limit of time at the disposal of the conference. Under these circumstances, the minister of the German Empire ventures to submit to his colleagues the proposal that what should be done first ought to be, to lay before the Tsung-li Yamên a statement of the grievances under which foreign trade, import and export, is suffering. In this way the discussion would be opened, first on the grievances themselves, then on the remedies to be applied, and it would be possible to obtain from the Tsung-li Yamên a statement of the views of the Chinese Government on these points, perhaps even certain proposals for reforms or alterations of the existing system, without binding the foreign representatives or the treaty powers to any definite line of action as would be the case if the discussion was opened by elaborate proposals being laid before the Tsung-li Yamên. Once the discussion engaged, the foreign legations in China would be at liberty to act as they thought fit, and either to arrive at an immediate understanding with the Yamên on the basis of the now existing treaties, or, should a departure from this basis prove necessary or desirable, to ask for the instructions of their governments. In either case, the material collected during the discussions of the present conference will be of the greatest value. Should this view meet with the approval of his colleagues, the minister of the German Empire would propose that the joint statement, to be laid before the Tsung-li Yamên, should mention the following facts: 1. That, contrary to the treaties, in which it is stipulated that foreign goods once having paid the import duty shall pay no other taxes before they reach the first barrier in existence at the time of the conclusion of the treaty, taxes of different kinds are levied on foreign imports at many places as soon as they leave the hands of the foreign importer, often even before the Chinese purchaser is allowed to take them out of the foreign "godown." 2. That, contrary to the treaties, by which it is stipulated that none but transit duties and only those which existed at the time of the conclusion of the treaty shall be levied, other duties and taxes are levied on foreign goods. 3. That, contrary to the treaties, at several of the open ports, and in some of the provinces of the empire, transit passes are either not issued at all, or that arbitrary and unnecessary conditions are imposed in the issue of passes, or that, when issued at the port, they are not respected in the interior of the province. 4. That, contrary to the treaties, foreign imports forwarded inland under transit passes are often stopped and vexatiously detained by the officers at the stations in order to extort illegal fees, or to further the interests of Chinese guilds having made special arrangements with Lekin collectorates or other Chinese offices. 5. That, contrary to treaty, taxes are often levied on foreign imports carried inland under transit passes immediately after their arrival at the place of destination, or when broken up into parcels for local consumption. 6. That, contrary to the laws of the empire, tax stations not authorized by the Chinese Government or the highest provincial authorities are constantly opened. 7. That, contrary to the laws of the empire, the tariffs under which inland duties are levied are neither published nor for sale. 8. That, contrary to the laws of the empire, very frequently no receipts are given for duties levied. 9. That, contrary to the treaties and to the laws of the empire, officials guilty of having levied illegal taxes or disregarded transit passes are not punished. 10. That the recovery of illegally-levied duties, even if the fact itself is acknowledged by the Chinese authorities, is, if not impossible, at least very difficult, and in the best case accompanied with unnecessary and vexatious delay. 11. That, contrary to the treaties, every difficulty is thrown in the way of foreigners asking for transit passes to bring down Chinese produce from the interior, and that in many instances such passes are either entirely refused or granted only under conditions arbitrarily imposed or contrary to treaty. 12. That, contrary to the treaty, on native produce, and especially on silk, differential duties are levied when sold to foreigners, and that the levy of these duties is farmed out to certain companies, which are enabled thereby to monopolize the trade in certain articles. 13. That, contrary to treaty, attempts are made at several ports to levy inland transit duties on exportation of produce bought in the port. 14. That, contrary to treaty, attempts are made at some of the open ports to levy coast-trade duty on goods duty-free by treaty. 15. That while the treaties grant to foreigners the right to visit the interior and freely to trade there, the action of the Chinese authorities tends to render the right illusory by depriving them of safe means for the transport or the storing of their goods, in refusing to allow them to use their own native-built boats or hire houses for short periods. 16. That, contrary to treaty, the respective value of foreign coins and native taels is fixed arbitrarily and in excess of their true relation to each other, so that by these means a burdensome and illegal tax, amounting often to as much as 12 per cent. on a hundred dollars' worth of goods, is imposed on foreign trade. A declaration might be appended to such a statement of grievances, setting forth that the foreign representatives, while demanding redress and a stricter and better execution of the treaties, are perfectly willing to listen to any proposals the Chinese Government might have to make to them, and to redress on their side any abuses which the Tsung-li Yamên might have to complain of on the part of foreign merchants. PEKING, November 3, 1879. [Inclosure 2 in No. 510. J Protocol on inland taxation. The representatives of foreign powers here assembled for the purpose of considering the relief of foreign trade with China from undue taxation, having had submitted to them, in writing or otherwise, various measures devised to this end, it was this day agreed that, as proposed in a note verbale presented on the third instant, by Monsieur Von Brandt, minister of Germany, a statement of grievances therein inclosed, and adopted after revision by the conference, should be forwarded to the Tsung-li Yamên in a note, the draft of which was also prepared by Monsieur von Brandt, and that without prejudice to any change that delays on the part of the Chinese Government might hereaf er render necessary, the suggestion of remedial measures should be left in the first instance to the Tsung-li Yamên. PEKING, 8th November, 1879. [Inclosure 3 in No. 510.] THOMAS FRANCIS WADE. GEORGE F. SEWARD. J. H. FERGUSON. J. F. ELMORE. FERD. DE LUCA. HOFFER DE HOFFENFELS. A. KOYANDER. R. G. Y OSSA. PATENOTRE. HUB. SERRUYS. Statement of grievances referred to in the foregoing protocol. 1. That taxes of different kinds are levied on foreign imports at some ports as soon as they pass into native hands. 2. That levies are made on foreign imports in the interior which are not properly transit duties, or are in excess of the transit duties which were levied when the treaties were made. 3. That at several of the open ports inward-transit passes are either not issued at all or that the issue is fettered by arbitrary and unnecessary conditions. 4. That inward-transit passes when issued at the port are not respected in the interior of the empire. 5. That foreign imports forwarded inland under transit passes are often vexatiously detained by the officers at the stations in order to extort illegal fees or to further the interests of Chinese guilds who have made special arrangements with lekin collectorates or other Chinese officers. 6. That the protection of the transit-duty certificate is denied to imports when they have passed the barrier nearest the inland market to which they may be consigned under the certificate. 7. That the exercise of the right of foreigners to visit the interior for purposes of trade is unfavorably affected by the want of proper regulations for the temporary storage or transport of their goods. 8. That all over the empire tax stations are constantly opened without due authority. 9. That the tariffs under which inland duties are levied are neither published nor for sale. 10. That very frequently no receipts are given for duties levied. 11. That officials guilty of levying illegal taxes or disregarding transit passes are rarely, if ever, punished. 12. That the recovery of illegally-levied duties, even if the fact itself be acknowledged by the Chinese authorities, is, if not impossible, at least very difficult, and in the best case attended with vexatious and unnecessary delay. 13. That difficulties are frequently thrown in the way of foreigners asking for transit passes to bring down Chinese produce from the interior, and that in many instances such pasɛes are either entirely refused or granted under conditions arbitrarily imposed. 14. That on native produce, and especially on silk, duties are levied after sale and before the goods are delivered to the purchaser, and that levy of these duties is farmed out to certain companies, which are enabled thereby to monopolize the trade in certain articles. 15. That at certain ports, in excess of the export duty, a half tariff duty has been demanded upon the exportation of produce which has been bought at the port. 16. That in some instances half tariff duty is levied on exportation upon goods that have been manufactured out of native produce in the port itself. 17. That in some instances export duty is levied on produce duty-free by treaty when it is carried coastwise. 18. That in some instances differential duties to the prejudice of the foreigner are levied on native produce carried coastwise, in excess of the export and coast-trade duties. 19. That the respective values of foreign coins and native taels are fixed arbitrarily and in excess of their true value, thereby imposing a heavy burden on foreign trade. 20. That the tonnage dues are applied but in part to the provision and maintenance of lights, buoys, beacons, and the like. Approved: T. WADE. M. v. BRANDT. GEORGE F. SEWARD. J. H. FERGUSON. J. F. ELMORE. FERD. DE LUCA. HOFFER DE HOFFENFELS. A. KOYANDER. RAMON GUTIERREZ Y OSSA. HUB. SERRUYS. [Inclosure 4 in No. 510.] Identic note to the Chinese Foreign Office, transmitting the foregoing statement of grievances. PEKING, December 10, 1879. By the note which the undersigned had the honor to address to the Prince of Kung and the ministers of the Tsung-li Yamên, His Imperial Highness and their excellencies are already aware that the question of inland taxation on foreign goods as well as on native produce intended for exportation, which has given rise to so many complaints on the part of the foreign representatives, and to much discussion between them and |