proposed in the British convention of 1869, and which met great favor at the general conferences of last year. I have already informed you, in my dispatch No. 591, of the 10th of February, that, while very anxious to avoid action which will disturb existing treaty stipulations, the circumstances affecting the import trade are such that it appears desirable "to seek a common standing ground with the Chinese in such modifications of the treaties as will more or less perfectly satisfy both sides." The same dispatch contained a statement of the measures which, in my opinion, should be instituted to this end, and which do not differ in principle from the plans proposed in the convention of 1869. The propriety of pursuing this course was assented to at once by the several representatives, and Sir Thomas Wade was requested to reduce the proposal to writing for the more particular discussion of details. I understand that the object of the several ministers is to carry discussions with the Yamén far enough to ascertain exactly what can be accomplished in the several directions named, and then to refer the whole matter to our respective governments with a request for instructions. This, at any rate, is my own proposal. I respectfully ask your approval of the action reported in this dispatch. I have, &c., [Inclosure in No. 665.] GEORGE F. SEWARD. Prince Kung to Mr. Seward. Prince Kung, chief secretary of state for foreign affairs, herewith makes a communication in reply: Upon the 9th instant I had the honor to receive a collective note from your excellencies the foreign representatives in the matter of commercial grievances, stating that upon the 3d of February last they addressed to me a note requesting that a day for a conference be named, but had received no response, &c., &c. I have the honor to observe in response that the note of February 3, from your excellencies, was received, but inasmuch as this office had upon the 19th of January suggested three different propositions in the business, and asked them to indicate which they preferred, I supposed that an answer should be awaited before holding a conference. Being now in receipt of your excellencies' note, I beg that the foreign representatives will suggest the time for the conference. Peking, April 15, 1880. SIR: Referring to my dispatch No. 665, of the 22d instant, in which I informed you that the foreign representatives had agreed with the Tsung-li Yamên to proceed to the discussion of trading grievances, and that I had been requested by my colleagues to present to the ministers of the Yamên a statement of the reforms needed in the collection of customs dues and duties on foreign trade, having reference to the irregularities in the currency system of China, such statement to be based upon the facts and considerations set forth in a memorandum which I had prepared for their examination, I have now the honor to hand to you a copy of my memorandum. The papers referred to therein as bearing upon the subject under consideration were transmitted to the department with my No. 413, of March 6, 1878, and Mr. Holcombe's dispatch No. 11, of June 24, 1878. You will remark upon an examination of the several papers named, that no gold or silver coins are issued by the Chinese government; that bullion, chiefly silver, is passed as money; that the scales by which bullion is weighed and the fineness of the silver vary in different parts of the empire, and even in the ports open to foreign trade; that there is a standard scale and a standard of purity known as the treasury tael; that the exact weight and fineness of this tael have not been determined by foreign processes; and that the customs authorities have set up an arbitrary scale which is somewhat more favorable to the customs than the treasury scale. You will remark, also, that the values of foreign coins relatively to the standard tael have not been, indeed could not have been, determined. You will remark, further, that it is our opinion that the standard or treasury tael should be declared the standard for customs dues and duties; that its weight and fineness should be ascertained; that the weight and fineness of local taels should be ascertained; and the relative values of foreign coins declared. I am of opinion that since the customs tael is somewhat more favorable to the customs than the treasury tael, and since payments to the customs have long been made by the customs tael standard it will not be easy to secure the adoption of the treasury tael standard. For this reason I suggested in my memorandum that a percentage to cover expenses for the examination of bullion, meltage, &c., should be allowed to the customs on all duties and dues collected in treasury taels. These expenses have heretofore been defrayed out of the premia on customs taels, the imperial and provincial authorities receiving from the customs treasury taels only, tael for tael, of the collections made in customs taels. My colleagues are disposed not to yield this point to the Chinese, but I believe that it will be difficult, if not impossible, to carry our proposals unless we do so. I shall report, of course, each step of my procedure in this business. I have, &c., GEORGE F. SEWARD. [Inclosure in No. 666.] MEMORANDUM. Mr. Seward, the minister of the United States, having been requested by his colleagues in conference to prepare a statement of the reforms needed in the collection of customs duties and dues on foreign trade, having reference to irregularities in the currency system of China, submits the following: 1st. The subject has already been studied and certain conclusions stated by Mr. von Brandt, the minister for Germany, and by Mr. Seward. The conclusions of Mr. von Brandt and the data upon which they are founded are contained in a printed paper prepared by the former in February, 1878, and entitled "Memorandum on the Chinese Currency." The conclusions of Mr. Seward and the data upon which they are founded are contained in a printed paper prepared by him in February, 1878,* and entitled * See Foreign Relations, 1878, p. 133 et seq. "Memorandum on the Currency of China." Copies of these papers are appended hereto. Examination of these will show that the results declared by each of the persons named are in substantial accord. 2d. The facts elicited by them are as follows: a. That the standard of value in China, and of the receipts and expenditures of the government, is the Kuping or treasury tael of silver. b. That the weight of this tael and the fineness of the silver have not been determined accurately. c. That customs duties and dues should be paid according to this standard. d. That an arbitrary standard has been set up, called the Haikwan (customs) tael, and that duties are collected, nominally, upon this assumed basis. e. That the weight and fineness of the Haikwan tael have not been determined accurately. f. That customs duties and dues are collected, generally, in the local taels of the ports. g. That the weight and fineness of such local taels, and their values relative to the Kuping and Haiknan taels have not been determined accurately. h. That foreign coins are sometimes paid into the customs, and that the values of these, relatively, to the Kuping and Haikwan taels have not been determined accurately. i. That the values of local taels and foreign coins, relatively to the Haikwan standard, are not constant even at the same port. j. That at one port at least the relative value of local and Haikwan taels have been assessed differently at the foreign customs, respect being shown to the nationality of the merchant. 3d. It is evident from what has been thus stated that it is desirable to take steps intended to give uniform results in assessing the sums due for customs duties and dues on foreign trade, and in collecting such duties and dues. Mr. Seward suggests the following measures to this end, to effect which negotiations with the Chinese Government would be necessary. k. The Kuping tael should be declared the standard for customs collections. 1. The weight of the Kuping tael in grains, troy, and grammes should be ascertained and declared. m. The fineness of silver of the Kuping standard should be ascertained and declared. n. The values of local taels and the fineness of the silver of such taels should be ascertained and declared. o. The values of foreign coins should be ascertained and declared. p. The regularization of customs collections should apply to foreign trade at large, under the treaties, whether conducted by foreigners or natives. Mr Seward suggests further: q. That, in order to make the foreign proposals less difficult for the Chinese Government, a percentage should be allowed upon all customs duties and dues collectable under the treaties, to cover the necessary expenses attending the examination, weighing, &c., of the moneys tendered in payment. Such percentage might be one-half of one per cent. upon collections, or even one per cent., and still leave the foreign merchant less to pay than at present under the Haikwan assumed standard. The sums received from the customs by the imperial and provincial governments would, in such case, not be less than at present, for it is believed that the native bankers who actually receive customs payments do not account for the premia on moneys received, but make their returns in Kuping taels, tael for tael, thus receiving the benefit of the irregularities of which foreigners complain. Mr. Seward believes that the reforms indicated can be demanded of the government, under the treaties, and that they are so far reasonable and in the interest of good government that they may not meet with strenuous opposition anywhere, excepting on the part of those who derive advantage from existing irregularities. Mr. Seward has not spoken of the establishment of a mint, for the reason that foreign representatives have no right to demand such a step; that they have already met with a rebuff in proposing it for the consideration of the government, and because the reforms now sought would go far to prepare the way for it. Mr. Seward believes, however, that so many inconveniences and so much uncertainty attend the passing of bullion for purposes of money, and that Chinese methods of assaying, in particular, are so defective, that no opportunity should be lost to urge upon the government the fact that no currency system which they can devise will meet public wants so perfectly as that which provides for the coinage of the precious metals under governmental supervision. Peking, April 22, 1880. No. 165. Mr. Evarts to Mr. Seward. No. 369.] DEPARTMENT OF STATE, Washington, May 1, 1880. SIR: I have received and read with interest your Nos. 586 and 589 of the 6th and 9th of February. The action taken by you, in conjunction with your colleagues, in addressing a communication to Prince Kung on the subject of the apprehended sacrifice of the life of Chung How, late imperial ambassador to Russia, is approved. It is hoped that the efforts of yourself and colleagues will serve to avert this threatened punishment. The expressions contained in your letter to Prince Kung are commended for their discreetness and dignity. I am, &c., No. 166. WM. M. EVARTS. No. 673.] Mr. Seward to Mr. Evarts. LEGATION OF THE UNITED STATES, Peking, May 1, 1880. (Received June 14.) SIR Referring to my dispatch No. 665, in which I stated that Mr. von Brandt had been charged by the diplomatic body with the duty of preparing a scheme for the control of transit trade outwards, I have now the honor to hand you herewith a copy of his memorandum and of the transit-pass (outward) rules proposed by him and revised by the foreign representatives in conference. Mr. von Brandt is to place this scheme before the Tsung-li Yamên on the part of the diplomatic body. I have, &c., GEORGE F. SEWARD. Inclosure 1 in No. 673.] Mr. von Brandt's memorandum. TRANSIT TRADE OUTWARDS. The Chinese Government has respectfully proposed measures to obviate the abuses which, according to their statements, were occurring in the transport of foreignowned native produce from the interior to an open port for exportation. These proposals not having been entertained by the treaty powers, the Chinese Government has of late proceeded to introduce restrictive measures altering the treaty stipulations, without seeking or obtaining the consent of the treaty powers, by refusing, in the first instance, to issue transit-passes for produce under the treaty regulations, and thereby attempting to force, and in some of the open ports forcing, the foreign merchant to submit to rules contrary to treaty and devoid of the approval of his own authorities. Such rules were introduced at Chinkiang in 1877, and since then at Wunu, another set in 1878 at Pakhoi and Hoikow, and an attempt was made in 1879 to introduce the Chinkiang rules at Shanghai. All these rules, taken as a whole, are highly objectionable, not only on account of the way in which they were put in force, ignoring the rights of the treaty powers, but especially because, not satisfied with remedying such abuses as the Chinese Gov ernment may perhaps rightly complain of, they are evidently aimed at removing the cognizance of and division in cases of fines and confiscations from the authorities in which they are vested by treaty and placing them under the exclusive jurisdiction of the Chinese authorities. A comparison between the different sets of rules will further prove the existence of a desire on the part of those who framed them of placing unnecessary restrictions on the transport of produce from the interior, even leaving the question of treaty rights aside. RULES IN FORCE AT WUHU AND CHINKIANG RULES IN FORCE AT PAKHOI AND HOIKOW In both sets of rules the principal condition under which alone transit-passes are issued is the signing of a bond by the merchant, in which he declares his adherence to the regulations at Chinkiang; this bond is to be signed by the merchant alone, at Pakhoi, with or without securities, at the option of the customs authorities. At the same time a lien is to be given upon the produce. Time within which produce purchased under transit-pass must reach the last barrier. Time within which produce has to be exported when transshipped to another port. CHINKIANG. Twelve months. PAKHOI. Not mentioned. Payment to be made in case of non-exportation of produce damaged in port. |