[Inclosure 1 in No. 575.]

AN IMPERIAL DECREE.

Their Imperial Highnesses the Empress Dowager and the Empress Mother decree : Whereas it was ordered that the treaty made by Chung How, and the several papers upon the subject by the foreign office, and the memorials by Wang Ren-kan and Sheng Yu, of the Han Lin, Chang Chihtung, be referred to the grand secretariat, the six boards, the nine lower courts, and the Han Lin for consideration; and whereas the report of the grand secretariat and their associates has been received, together with three memoranda from the vice-president Chang Hui, and memorials from president Wang Ching Li, vice-president Chien Pao Lien, vice-president Chow Le Run, of the astronomical board, Poo Ling, Chang Chai, Kuo Tsung Chu, of the censorate, Yu Shanghua, Wo Chew, Hu Pin Chih, Censor Kung Hsien Chieh, Huang Yuanshan, Lien Han Chih, Leng Chenghsin, all censors, Chang Huakuei, also through the censorate; and also certain memorials hitherto received from Hao Wamping, Leng Chingling, of the censorate, Wo Lapu, Wang Hsien Chien, of the Han Lin, Yu Yinlin, of the Han Lin, Censor Yen Yin Fang:

Let the earlier and later memorials and reports be referred to the princes of the first and second grades, the high ministers of the imperial presence, the grand council, the prince and ministers of the foreign office, the grand secretariat, the presidents of the six boards, and the chief censors for careful consideration and a suitable report. Chun Chin Wang* will, of course, act with them in their deliberations and reports. Respect this.

JANUARY 20, 1880.

* NOTE.-Chun Chin Wang is the seventh prince, being the brother next younger than Prince Kung, and is the father of the present Emperor.

C. H.

The board of civil office memorializes us, in obedience to our command, that they take the matter into grave consideration, and request that Chung How, ex-senior member of the censorate, be removed from office, in accordance with the statutes, for the violation of the regulations.

Chung How, in obedience to our command, went as our envoy abroad, and, without awaiting the Imperial will, ventured of his own motion to return to this capital. The nature of his offense is very grave, and a simple removal from office is not sufficient to cover it.

Let Chung How first be deprived of rank, arrested, examined, and handed over to the board of punishment to be dealt with for his offense. Respect this!

No. 579.]

No. 149.

Mr. Seward to Mr. Evarts.

LEGATION OF THE UNITED STATES,

Peking, January 30, 1880. (Received April 2.) SIR: I beg leave to hand to you, herewith, the response of the foreign office to the joint note in regard to trade grievances, which was addressed to Prince Kung in November last. The note is not free from a certain assumption of independence, and it is disfigured by one or two extreme expressions. It adheres rigidly to the positions taken up by the foreign office in the circular letter addressed to their ministers abroad in 1878. It ends, however, with a plain declaration of willingness to discuss with the foreign representatives measures for the removal of grievances.

The several foreign representatives will meet to discuss the Yamên's note in a few days. In the mean time I refrain from further comments upon it.

I have, &c.,

[Inclosure 1 in No. 579.1

GEORGE F. SEWARD.

Prince Kung to the foreign representatives.

Prince Kung, chief secretary of state for foreign affairs, herewith makes a communication in reply:

Upon the 22d of November last I had the honor to receive a collective note from your excellencies the several foreign representatives in Peking, upon the question of inland taxation upon foreign goods taken to the interior as well as upon native produce intended for export, and stating that as China had repeatedly declared her willingness to enter upon a joint consideration of the question, your excellencies had drawn up a list of grievances to which you invited my careful consideration.

Upon this subject I beg leave to remark that it was not China that sent her agents to the several governments to negotiate the existing treaties. Assuredly it was these several governments who sent their agents to China requesting the negotiation of the treaties. The various articles contained in them were all made on the motion of the several governments, and their stipulations were all determined at the request of the several powers. Aside from the provision that China may establish rules to protect her revenue, this government has no foothold left for itself.

China refused none of the requests of the several foreign powers, and has not failed to take measures to carry into effect these requests.

All these treaties may be said to have been new creations of the past twenty years, and it could hardly be avoided that some of their stipulations should be either unprofitable or detrimental to China, but since the mutual observance of them in this fong period has given reciprocal satisfaction to all parties, a thing difficult to be secured, it cannot be said that their observance has been without advantage.

In reference to the more than twenty grievances inclosed with your excellency's note, they have received careful attention. It would appear as though throughout these twenty years China has been in daily violation of her treaty obligations. If China should write in detail all her grievances against the officials and merchants of the several governments, it is to be feared that they would not be limited to twenty. If any two powers, desiring commercial intercourse, should appoint their agents to fix rules of intercourse, these rules naturally being difficult to arrange, it would ordinarily be difficult to provide against future differences of opinion between them.

In regard to the relations of the past twenty years between China and foreign powers, it has happened that a certain government has sent a high official to China to discuss certain business. After a negotiation, extending over a long period, a conclusion was reached. Thereafter the stipulations proposed, and to which China had assented, were transmitted to his government, and, to the surprise of the high functionary, his government refused its consent. It has also happened that a diplomatic agent of a certain government has discussed with the high authorities of China the intent of certain treaty stipulations without coming to agreement. Thereafter his government was of opinion that the representative in question had, in the discussion, made willful misrepresentations.*

Again, a certain consular officer, regardful of the treaties, held that a particular line of action was in accordance with their stipulations and the trade rules. But his superior, at Peking, on the contrary, criticised his action as a violation of the treaties. Again, when the merchants and people of some nation have violated the rules, and China has held that they should be punished, the government of the persons concerned has at times been of the same opinion with China, and at times of a different opinion.

Thus the divergences in the given cases arose, not because the officials and merchants concerned had no thought for the good relations of the governments but because of errors in their action. And hence, of course, in a long period, greater divergences in these directions would result.

This_translation is made as the Chinese text appears to require. But the ministers of the foreign office have informed the interpreter of one of the legations that nothing offensive was intended, and the context appears to sustain this explanation. C. H.

The foreign powers were the parties seeking the treaty stipulations, and China was the party assenting to them. Since the parties who sought them have not been without misrepresentation, how could it be assured that there should be no misunderstanding on the side of the assenting party? But if these differences of opinion are to be construed as violations of the treaties, and as a basis for a breach of good relations, then it would seem as if there had not been a day in all these twenty years when such a breach has not occurred. But China is unwilling to consider the mistake of an individual as the failure of his government, but holds, rather, that when a matter arises it should be dealt with by itself, and when a case occurs, that case should be decided. In regard to the mistakes of Chinese officials in the interpretation of the treaties, or in matters of trade, these certainly cannot be avoided, but will likely be of constant

occurrence.

In regard to the twenty grievances mentioned in your excellency's dispatch, it is probable that at certain places and at certain times there may have been instances of the sort, but not at all places and constantly. How can instances of these sorts be held to prove that China, in all parts and always, acts in this way, and violates her treaty obligations in such manner?

If at any time a question arises, upon representations being made, it can be thereupon adjusted and closed. If at any locality a point of dissatisfaction arises, upon representations being made at the given point, it can there be arranged. If any official commits an error, foreign officials can set forth the error, and China will rectify it, and deal with the offender.

Speaking generally, whatever may be the friendship, it is impossible in a long period to avoid the appearance of suspicions, or the existence of mutual resentments. No matter how perfect the stipulations of the treaties, errors of interpretation cannot be avoided, nor that there will be violators of the regulations. In all matters of intercourse each matter must be dealt with as it occurs, and each party should seek the way to strengthen good relations.

More than half of the twenty grievances mentioned in your excellency's note refer to the collection of the duties and transit dues. This Yamên has three plans in mind upon this subject:

1st. The present regulations may be carried into effect. The high provincial authorities will, on the one hand, be instructed by this Yamên to direct their officials to act in good faith in obedience to them, and, on the other hand, your several consular officers and merchants will be instructed by your excellency to scrupulously obey them.

Or,

2d. The regulations heretofore agreed upon between this Yamên and his excellency, the British minister, Sir Rutherford Alcock, may be put in force. Or,

3d. The stipulation in the several treaties that foreigners shall not be subject to Chinese jurisdiction may be stricken out, and foreigners in China shall be subject to Chinese authority at all places and always, and be dealt with as Chinese subjects.

Their excellencies, the foreign representatives, may indicate which plan they prefer. Or, if the three are all inadmissible, then there will be no difficulty in the way of the consideration of the procedure which, in the minds of their excellencies, seems to be desirable, provided it is practicable for China.

In addition to making answer to each grievance in detail, I have the honor thus to respond to your excellency.

Peking, January 19, 1880.

His Excellency GEORGE F. SEWARD, &c., &c., &c.

[Inclosure 2 in No. 579]

Ca'egorical replies of tre Ya nên to the several foreign grievances.

1st. Treaties allow foreigners of the various nationalities at the several ports to lease land; the land so leased, however, to such foreigners continues to be Chinese territory. Foreign merchants have heretofore sometimes sold foreign goods within the limits of the port, and before they have passed to the interior, to Chinese. The owner is thus a Chinese, and the goods are upon Chinese soil. China temporarily levies lekin for military purposes, which is a matter within her own control. As it is already agreed that foreign imports shall not pay lekin within the limits of the foreign concessions, this point, since such dues are not collected, need not be discussed.

2d. The regulations of trade at the ports provide that foreign imports taken to the interior, if not protected by a transit certificate from the customs, shall pay charges and lekin at each station and barrier passed. Thus imports taken into the interior, on which the transit duty has not been paid and a certificate taken out, should pay the barrier dues and lekin and no other duties are added to them.

3d. According to the treaties, transit certificates must be issued to merchants taking foreign produce inland upon application and payment of transit dues. As passes are of a sudden being applied for for points for which passes have not heretofore been taken out, the local authorities, with the intention of preventing wrong-doing, have consulted as to regulations with the several foreign officials. This certainly is in accord with treaty stipulations, and is neither a refusal to issue passes, nor an enforcement of unnecessary rules.

4th. Merchants taking foreign merchandise into the interior covered by a certificate of the payment of the transit dues, are to produce this certificate for examination at the barriers as evidence. But it has occurred at certain points that the tax officers have refused to respect this certificate when placed before them. This fact having been brought to the notice of this Yamên it must instruct the high authorities concerned to examine into the matter and take action.

5th. By the treaties merchants taking imports covered by transit passes, shall produce the passes for inspection and counterseal at each barrier en route. Excepting cases of passes concealed or false entries in which all goods covered by them are confiscated, in case, at barriers or other stations, the officials demand other than the legal levies, or make pretexts for seizures, this office upon representation will instruct the high officials concerned to inquire and take action.

6th. The trade regulations appended to the treaties provide that merchants who may take imports inland shall inform the customs as to the point to which the goods are to be taken and pay the transit dues. The customs will issue a transit certificate, which shall be produced for inspection at all stations en route, and no matter whether taken to points near or remote no further dues shall be levied. Thus the transit certificate is limited in its application to the point, whether near or remote, for which the merchant reported. On arrival at the point named the certificate becomes of no value.

7th. By treaty, merchants of any nationality are allowed to lease premises and erect warehouses at the several ports for their convenience in the storage of merchandise. His excellency the British minister notified his people that they would not be allowed to establish warehouses in the interior, thus providing against abuses. By treaty, merchants are allowed to hire boats for the transport of merchandise. The Yangtse regulations also provide that foreign merchants may employ boats in inland waters for the transport of goods. All of which are facilities for the benefit of foreign trade. The transport and storage of merchandise must of course be conducted in accordance with the treaties.

8th. In the several provinces, and excepting the foreign customs, the customs stations have had their fixed points of establishment. But the lekin stations are in each province, under the control of a high official, who takes the circumstances into consideration and from time to time increases or diminishes the levies. For the past few years there have been reductions, but no increase. There certainly has never been an establishment of additional lekin stations without the orders of this high official in any province.

9th. The tariff of the foreign customs is provided for in the treaties. The tariff of the Chinese customs is recorded in the regulations of the board of revenue, printed and published long since. But as the lekin is established for the necessities of the military, it has not been provided for by law, and there has been no necessity for its being decreed uniformly in the several provinces.

10th. Foreign merchants taking imports inland should be provided with a transit certificate, and foreign merchants going inland to purchase native produce should have a transit pass. Merchandise not protected by these papers, since, at each barrier and station it pays the dues and lekin, ought to have a receipt setting forth the amounts of dues and lekin paid, and at what points and to what officers. Should any officer without reason refuse to give such receipts, this Yamên must of course, upon proper representation, instruct the high officer concerned to take the proper action in the premises.

11th. Merchandise covered by transit pass, having paid the proper dues, ought of course not to be subject at the several stations and lekin barriers to further levies in violation of law. Where such cases occur the offense of the deputy concerned should be inquired into and clearly established by the high official of the province, and he should be punished according to the laws of China.

12th. Levies exacted in violation of law upon goods passing the customs and covered by transit certificates ought to be returned to the owners. But it would not be proper to accept the simple statement of the merchant concerned. The case should be investigated by the high officer in the given province, and action taken upon the development of the actual facts. Occasionally a case will be contested and much time be consumed in its adjustment.

13th. See No. III.

14th. In all the producing districts in the several provinces of China there is a tax upon the productions, called the "miscellaneous tax." This tax is pail by the pro

ducers to the officers appointed to collect it for remittance, no matter whether merchants do or do not purchase the produce concerned. This tax has been collected in each province for more than two hundred years, and has no connection with the customs or transit dues, or with lekin. This tax exists in all the producing districts of China and is not limited to silk.

15th. The trade regulations for the treaty ports provide that in the case of native produce purchased by foreign merchants at the ports, the inland owner having paid the inland taxes, and the Chinese merchant having paid the various customs dues and lekin taxes, the foreign merchant need not pay the transit dues. But it must be fully determined that the produce purchased by the foreign merchant is the identical produce which has paid the customs dues and lekin taxes.

16th. By the treaties, foreign merchants taking out transit passes in order to bring out native produce from the interior should pay the transit dues and export duty. But native goods bought at the ports, putting aside the export duty, the rules allow that, the native owner having paid the inland customs-dues and lekin tax, the foreign merchant need not pay the transit dues. But where the produce in question has been altered in any way, it cannot be held to be the produce originally purchased; cannot be held to have paid the inland dues and lekin; nor exempted from the transit dues. 17th. The trade regulations appended to the treaties stipulate that articles intended for the personal use of foreigners shall be exempt from import and export duty. If duties are wrongly levied at the customs upon this class of merchandise it is because it has not been already stated that the articles concerned were for personal use, or because it is suspected that they are intended for sale. Orders ought to be given to examine into the business clearly, and take proper action.

18th. The rules of trade at the several ports provide that foreign merchants taking native produce into other ports shall pay the export and half import duty. Thereafter, upon transport of the goods into the interior, whether in the hands of Chinese or foreign merchants, they shall pay the inland customs dues and lekin. Thus native produce taken inland from a second port must, according to the rules, in addition to export and transit dues, pay the inland customs dues and lekin, but no other taxes. 19th. The treaties state clearly that a bank shall receive on behalf of the superintendent of customs the customs revenues, whether in bullion or dollars, taking into consideration the market rate of the dollar in sycee, and making suitable allowances. The bullion received by the customs is in the treasury taël of fine silver. But the price of dollars as compared with bullion differs at different times and places. The superintendents of customs should be instructed in the receipt of duties to take the treasury taël of pure silver as the standard.

20th. The treaties provide that, at the several ports, buoys, light-ships, light-houses, and beacons shall be provided from the tonnage dues. Heretofore the expenditures for these works have been provided from the tonnage dues upon foreign bottoms; but now the tonnage dues received from the vessels of the China Merchants' Steamship Company are also applied to the purposes indicated above.

No. 150.

Mr. Evarts to Mr. Seward.

No. 339.]

DEPARTMENT OF STATE, Washington, January 31, 1880. SIR: I have to inform you that the Department has been advised by the chargé d'affaires ad interim of Brazil in this country of the intention of his majesty, the Emperor, to send an embassy to China for the purpose of entering into certain treaties of amity and commerce with the government of that country, and of his desire that the representative of the United States in China may be instructed to extend to the Brazilian embassy to that country the friendly welcome and the moral support which is naturally to be expected from the intimate relations so happily existing between the United States and Brazil. You are consequently requested to comply with the wish of the Emperor as herein expressed. I am, &c., WM. M. EVARTS.