I have now the honor to hand to your excellency herewith a copy of this memorandum, in Chinese and foreign text, and beg your excellency to give it your consideration. Reply to the Yamên's note forwarding copy of instructions to Chinese ministers abroad. DECEMBER 3, 1879. Sir Thomas Wade presents his compliments to the Prince of Kung and the ministers of the Tsung-li Yamên. Sir Thomas Wade received upon the 30th November a semi-official note from the Yamên addressed to himself and his colleagues, the representatives of the treaty powers recently assembled in Peking. There was forwarded with the note, in English and foreign languages, a printed copy of the instructions issued by the Tsung-li Yamên to the missions of the Chinese Government abroad in March, 1878, with which the representatives addressed were requested to acquaint themselves. Several of the foreign representatives, as the Prince and ministers are aware, have already left Peking. Copies of the note have, however, been forwarded to all. At the request of such of his colleagues as are still here, Sir Thomas Wade acknowledges the note which His Imperial Highness and their excellencies have done them the honor to write. He is to add that the substance of the Yamên's instructions to Chinese missions is believed to be generally known to the representatives of the treaty powers. No. 526.] No. 137. Mr. Seward to Mr. Evarts. LEGATION OF THE UNITED STATES, Peking, December 8, 1879. (Received January 27.) 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. *NOTE.-Printed on pages 174-175 of this volume. 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., &., [Inclosure 1 in No. 526.] GEORGE F. SEWARD. Mr. Bailey to Mr. Seward. No. 730.] SHANGHAI, November 25, 1879. SIR: I have the honor to inclose a letter addressed to yourself by F. B. Forbes, esquire, chairman of the Shanghai General Chamber of Commerce, upon the subject of the case of Messrs. Duff and David versus The Swatow Opium Guild, and cognate subjects. The secretary of the chamber, Mr. George R. Corner, called on me in person to-day and handed me the letter with the request that I should transmit it to you by the first opportunity, which is accordingly done. I have, &c., [Inclosure 2 in No. 526.] Mr. Forbes to Mr. Seward. DAVID H. BAILEY. No. 554.] SHANGHAI GENERAL CHAMBER OF COMMERCE, SIR: The recent suit in the mixed court of two British subjects, Messrs. Duff and David, against the association known as the Swatow Guild, has brought to light certain facts which are of grave importance and cause deep anxiety to the mercantile community of Shanghai. Any discussion of the merits of the case itself is, at present, beyond the province of this chamber, but the committee feels that no time should be lost in protesting against the disregard of treaty stipulations involved in the position held by the Swatow Guild, under sanction of the Chinese authorities. The committee has reason to believe that the collection of the lekin tax on opium at Shanghai and Chin Kiang is entrusted to members of the Swatow Guild, either as direct agents for the authorities, or, more probably, as farmers of the revenue in question. To whatever extent this arrangement may be officially undeclared or disguised, the power exercised by the guild is so far effectual that payment of lekin is said to be refused from China outside of the association, who are further liable to be denounced for attempting to smuggle the very drug on which the tax has been declined. The result is that the members of the guild, being enabled to close to others the only lawful outlet for opium, have acquired for themselves a practical monopoly of the trade at this port. Unfortunately, legal evidence about matters in which the local authorities are interested is never easily obtained in China, and, in this instance, is now impossible to produce. The reason is not far to seek. Since the proceedings in the mixed court the Taotai has issued a proclamation in which he declares the statements of the plantiffs in this case to have been unfounded and malicious, and warns his people to beware of bringing wanton and calumnious accusations in the future. To the Chinese, who are accustomed to read between the lines of such documents, this proclamation is a significant hint to say nothing at all, and the committee has therefore not been surprised within the last few days to be met with blank assertions of ignorance from trustworthy natives who were previously ready to give full information. The difficulty of obtaining evidence is further complicated by the fact that the Swatow Guild has been for many years in undisputed enjoyment of its privileges, which, as the committee is informed, date back to an arrangement made when His Excellency Ting-Jih-Chang was Taotai of Shanghai. However this may be, it is notorious that for a long time past Swatow men have been the exclusive traders in opium here, either as principals or as brokers for non-members of their guild, and the quiet acquiescence of other Chinese merchants in this state of things goes far to prove that it has official sanction. It is probably not too much to say that the arrangement is accepted by every one who is not ready to take the risk of evading the lekin tax altogether. The committee has been verbally informed by Mr. Davenport, Her Britannic Majesty's consul here, that he is sending to His Excellency Sir Thomas Wade such information as he has been able to procure, including, the committee understands, certain important admissions by the present Taotai as to the connection between the Swatow Guild and the opium lekin office. I can only regret that circumstances have precluded the committee from supplementing Mr. Davenport's statement by any direct evidence. It hardly needs argument to show that a trading guild allowed to farm the inland revenue on commodities in which it deals, is a privileged corporation within the meaning of the treaties, and there is no reason why, if found to work successfully in the case of opium, the same system should not be extended to tea, silk, and piece goods. There are indeed serious grounds for belief that fiscal arrangements of this kind at the outports have had much to do with the virtual banishment of foreign importers, which it has been the fashion to ascribe to the greater prudence and economy of the native trader. The Canton Co-hong monopoly, in spite of its one advantage of a collective responsibility enforced by the Chinese Government, was found so intolerable that it was solemnly abolished by treaty. It would appear, however, that the establishment of lekin, in the face of the treaties, has gradually led to other equally illegal combinations which, in port after port, and in one thing after another, threaten to hedge in foreign trade with privileged guilds, worse than the old Co-hong in proportion, as the interests affected are larger and more difficult to combat, because while effectually screened they are not officially recognized before foreign powers. If any additional motive were needed for a vigorous declaration of treaty rights with regard to lekin, the committee would respectfully urge that it may be found in the tempting facilities offered to the collectors of this tax for the evasion or open disregard of other vital stipulations. The committee cannot conceal its anxiety lest, if the present opportunity be allowed to pass without dealing firmly with this question, the development of foreign trade may be still further crippled, if not entirely arrested, by such underhand influences. This statement is submitted in the hope that your excellencies and your colleagues may feel that the circumstances are such as to call for a prompt consideration of an undoubted grievance. I have, &c., &c., F. B. FORBES, Chairman. [Inclosure 3 in No. 526.] No. 205.] Mr. Seward to Mr. Bailey. PEKING, December 5, 1879. SIR: I have had the honor to receive your dispatch No. 730, with which you have transmitted a letter addressed to me by the chairman of the Chamber of Commerce, dated November 22, and having reference to the case of Duff and David versus The Swatow Guild and the danger growing out of the alleged committal to the guild of the collection of lekin taxes on opium. Other allegations of the same kind, notably in reference to the piece-goods trade at Ningpo, having fallen under the observation of my colleagues and myself, the subject will doubtless be presented to the government in as forcible a manner as the evidence will warrant. Please be so good as to transmit the substance of this note to the chamber with an expression of my thanks for the information contained in their communication. I am, &c., No. 138. GEORGE F. SEWARD. No. 530.] Mr. Seward to Mr. Evarts. LEGATION OF THE UNITED STATES, Peking, December 10, 1879. (Received January 27, 1880.) SIR: I have the honor to inform you that I have recently received from Mr. Cheshire, vice-consul at Canton, a copy of rules for the issue of transit passes, framed some months since by the local Chinese authorities, and promulgated without reference to the consulates or the legation. I shall have occasion to refer to these rules again, and to lay a copy of them before you. They are very long, and for the moment we are not able to make a copy. The rules seemed to me so objectionable that I at once placed them before my colleagues, and we agreed together that it is desirable to instruct our respective consuls at the several ports to declare to the authorities that they have no power to assent to any rules whatever without having received first the approval of the legation. To my own circular letter, prepared in accordance with this understanding, I have added a request that our officers should exercise care when sending up statements of the grievances under which trade is suffering, to transmit also documentary evidence of facts alleged. I have, &c., [Inclosure in No. 530.1 GEORGE F. SEWARD. Circular to consuls in China. PEKING, December 3, 1879. The fact having been brought to my knowledge that the Chinese authorities at some of the ports have framed, with or without the concurrence of the consuls, regulations for the issue of transit passes, I have to call your attention to the matter, and to request you to inform the authorities that you have no authority to agree to any regulations so made or proposed, without having first obtained the sanction of the legation. It is my desire and that of my colleagues to frame here, in concert with the government, all the rules necessary to the proper working of the transit pass system. This is desirable for the sake of uniformity and in order that the best possible arrangement may be secured. In responding to this dispatch, please be so good as to hand to me copies in duplicate, in English and Chinese, of the form of transit pass inward and of the transit certificate used for produce coming outward, or in case these forms have been sent to the legation, please refer to the dispatch with which they were transmitted. I desire to call your attention, further, to the fact that in urging upon the attention of the government here the failures and abuses of the transit pass system, and the irregular and undue taxation of uncertificated imports, and of produce intended for exportation, we find no lack of allegations that abuses exist, but the proofs are, in many cases, wanting. You are requested, therefore, to present to me such proofs in documentary form whenever it is possible for you to do so. I am, &c., GEORGE F. SEWARD. No. 531.] No. 139. Mr. Seward to Mr. Evarts. LEGATION OF THE UNITED STATES, Peking, December 11, 1879. (Received February 19, 1880.) SIR: My engagements have been such since my return from the United States that I have not been able to address you in regard to several matters which are of serious concern in this part of the world. One of these is the pending dispute between China and Japan regarding the Lew Chew Islands. It is not my purpose in writing to you now to make an extended statement. It is by no means easy to learn here either the position of the Japanese Government or the considerations upon which they rely to justify their policy towards the Lew Chewans and toward the Chinese in respect to the Lew Chewan matter. You will be advised, however, of the views of the Japanese, and of the facts which constitute their case by Mr. Bingham. In presenting to you, therefore, considerations which tell in favor of the Chinese, I shall put you in position to reach your own conclusions upon the whole matter. As I understand the ministers of the foreign office here, they do not claim that Lew Chew is an integral part of their empire. They assert that the island kingdom has paid tribute to China, and in this and other ways sustained a relationship savoring of dependency. They admit, on the other hand, that the kingdom has been subjected also to certain requirements of the Japanese, which have become, as it were, constitutional, and they ask only that the status of the islands shall revert to what it was, as so indicated, before the recent steps taken to make it an integral part of the Japanese Empire. From their own point of view this proposition is a conciliatory one. They are either unaware that Japan has ever made conquests in Lew Chew, or they ignore those conquests as not having been followed by possession and control. A similar claim of conquest was set up by the Japanese over Formosa five years ago, when they invaded the island ostensibly to punish the aborigines for the maltreatment of some of their own people, while all the world knows that Formosa has been perfectly free from Japanese domination for a very long period. The case, as between Japan and Lew Chew, is un loubtedly stronger, although certainly the Japanese have not, until recently, exercised any very direct or positive interference in the affairs of the island kingdom. Leaving aside, however, the merits of the claims set up by Japan, of which, as I have indicated, I may not be perfectly well informed, I proceed to state the nature of the relationship which has long existed be tween China and Lew Chew. This relationship is very perfectly indicated in a series of papers translated from the Chinese by Dr. Williams and published in the "Journal of the North China Branch of the Royal Asiatic Society," for 1866. The first of these is a request for investiture made by Shang Han, King of Lew Chew, to the Emperor, Chia Ching, in 1807. It begins as follows: Your Majesty's servant, Shang Han, grandson of the King of the Central Mount in Lew Chew, respectfully memorializes the throne, requesting that he be confirmed in his succession to the princely station, which will at once encourage him in his loyalty and render illustrious the great statutes of the empire. You will notice upon reference to this petition, or paper, a copy of which I inclose, that the King of Lew Chew declares that although "his little State lies in the far distance, and is only a foot of ground for size, yet even away in mid ocean it has an established government, and during successive generations its rulers, having received investiture, have guarded the frontiers"; and, having made this preamble, proceeds to name his ancestors who have received such recognition from the Imperial Government. These begin with Shang Chi, "who was indebted to the favor of the Emperor Shun Chi for conferring on him the dignity of King in A. D. 1655," and then are named, successively, Shang Ching, who received investiture from Kanghsi in 1683; Shang Ching also from Kang Hsi in 1719; Shang Muh, from Chien Lung in 1757; and Shang Cheh from Chia Ching in 1801. |