CHINA. 



117 



most of the American trade is, does not weigh 

 heavily on commerce. The total collections of 

 likin and kindred taxes on imports and exports 

 were estimated by the Chinese commissioners at 

 40,000,000 taels, of which less than 17,000,000 

 taels reaches the Government. Likin is collected 

 at innumerable barriers scattered without system 

 on the chief trade routes of the interior, which 

 may be set up at will by the local authorities. 

 The abuses inseparable from the collection of 

 likin are more onerous than the payment itself. 

 At each barrier goods are delayed and examined, 

 giving the officials an opportunity to squeeze 

 bribes and fees in addition to the likin, or when 

 no likin is due, as on imports that have paid 

 2i per cent, in addition to customs duty at the 

 port of entry, and are thereby free of likin under 

 the treaty. Owing to the uncertainty and irregu- 

 larity in the cost and time of transit the trade 

 in foreign goods can not be developed in the in- 

 terior, while the high duties paid on exports that 

 pass many barriers are fatal to the export trade. 

 There is a limit to the amount of tax payable 

 at one barrier, but there is none to the number 

 of barriers that may be set up. The revision of 

 the existing provisional tariff so as to produce 

 an effective 5 per cent, in accordance with the 

 protocol of Sept. 7, 1901, was interrupted by the 

 Chinese commissioners in consequence of the fur- 

 ther fall in silver, which made the specific duties 

 already agreed on not more than 4 per cent, ad 

 valorem. The old duties, calculated on a basis 

 of 5 per cent, ad valorem according to the prices 

 current in 1858 yielded but little over 3 per cent. 

 The sales of silver that the Chinese Government 

 was compelled to make to raise gold for the in- 

 demnity caused a further break in the silver 

 market. The gold value of the tael fell to 2s. Id., 

 increasing the burden of the indemnity by 20 per 

 cent. The enhancement of the prices of foreign 

 commodities in China was disastrous to the im- 

 port trade. The Chinese Government of its own 

 accord decided to reduce the duty on tea for 

 export, which has been about 40 per cent, of the 

 present value of tea, to a 5-per-cent. basis. 



The International Commission to fix duties 

 under the protocol concluded its labors and the 

 provisional tariff was signed on Aug. 16, to go 

 into force on Nov. 1, 1902. The specific duties 

 agreed to represent an average rate of 4J per 

 cent, of the values current. Russia, Italy, Spain, 

 and Portugal were not represented on the com- 

 mission. Portugal, not being a signatory of the 

 protocol of 1901, claimed a right to import goods 

 under the old tariff, which she offered to relin- 

 quish if China would concede two small islands 

 near Macao in fulfilment of an article in the 

 treaty of 1888, together with the right to build 

 a railroad from Macao to Canton. 



On July 21 the Imperial Government gave its 

 assent to the entire abolition of likin on all mer- 

 chandise, native as well as foreign, throughout 

 the empire. The Yangtse viceroys, who first re- 

 sisted the reform for fiscal revenues, supported 

 Sheng. Ancient recognized customs were to be 

 scheduled, the stations to be fixed and not after- 

 ward increased, and the imperial Maritime Cus- 

 toms was to supervise the whole system of in- 

 land native customs. The likin taxes are not 

 ancient. They were introduced to furnish means 

 to cope with the Taiping rebellion and after- 

 ward extended for the purpose of regaining the 

 revenues from foreign commerce sacrificed in the 

 tariff imposed on China in 1858. The article in 

 the draft treaty abolishing likin was submitted 

 by the Chinese commissioners with the uncondi- 

 tional approval of their Government, but Sir 



James L. Mackay could not agree to it, as he did 

 to the other articles, until he obtained the ap- 

 proval of his Government. Instead of a 15-per- 

 cent, duty on imports, as originally proposed by 

 the Chinese Government, the British merchants 

 were asked to consent to a total duty of 12J per 

 cent. The first seven articles of the treaty pro- 

 vided for registration of trade-marks, bonded 

 warehouses, the navigation of the Yangtse and 

 Canton rivers, equalization of dues on junks and 

 steamers, facilities for drawbacks, the establish- 

 ment of a national currency, and the liability of 

 Chinese stockholders in foreign companies. The 

 eighth article abolished likin and other dues at 

 the place of production, in transit, or at destina- 

 tion in return for a surtax on foreign goods im- 

 ported and Chinese produce destined for export 

 abroad or coastwise, the surtax on imports not 

 to exceed one and a half time the import duty 

 leviable under the protocol of Sept. 7, 1901, 

 and the total taxation leviable on native produce 

 for export abroad not to exceed 1\ per cent, ad 

 valorem. Export duties are to be fixed on a 

 scale of 5 per cent, ad valorem, with a surtax 

 of half that amount in lieu of internal taxation 

 and likin. Silk and cocoons pay no surtax. 

 Likin on salt is abolished, and the amount of 

 the likin and other taxes is added to the salt 

 duty collected at the place of production or in 

 the province where the salt is to be consumed. 

 Native produce transported in the interior pays 

 the 2 surtax at the first custom-house, and a 

 certificate is given good for a year, w r hich frees 

 the goods from all further taxation, examination, 

 delay, or stoppage. Junks, boats, and carts pay 

 an annual license fee and are not liable to any 

 other charges or tolls excepting port dues from 

 junks. The duty and commutation of likin on 

 foreign opium remain as before, a total of 7J 

 per cent., instead of the 12J per cent, charged on 

 other imports. For the taxation of native opium 

 China may retain offices on the borders of each 

 province, where all taxation that is leviable in 

 the province is paid in a lump sum and the cakes 

 are stamped in evidence of payment, but no goods 

 except opium can be stopped or taxed at these 

 offices. The loss of revenue from the abolition 

 of likin and all other kinds of internal taxes on 

 foreign goods imported and on native goods ex- 

 ported abroad and coastwise is only partly 

 made good by the surtax, and therefore it is 

 agreed that China is at liberty to impose a con- 

 sumption tax on articles of Chinese origin not 

 intended for export. This tax shall be levied 

 only at places of consumption, and not on goods 

 while in transit, and the Chinese Government 

 undertakes not to interfere with foreign goods or 

 native goods for export, and when foreign goods 

 are similar to native goods the owner can de- 

 mand on payment of the import duty and surtax 

 a certificate of their foreign origin. This con- 

 sumption duty may vary according as the arti- 

 cles are necessaries of life or luxuries, but it shall 

 be levied at a uniform rate on goods of the 

 same description, whether carried by junks or 

 steamers. Within foreign settlements or conces- 

 sions the consumption tax can not be levied. 

 Yarn and cloth manufactured by machinery in 

 China by foreigners or Chinese pay an excise 

 duty, collected by the imperial Maritime Cus- 

 toms, equal to double the import duty. On raw 

 cotton imported from foreign countries there is 

 a rebate of the import duty and two-thirds of 

 the surtax, and it is exempt from the consump- 

 tion tax and all other duties leviable on Chinese 

 raw cotton used in mills. Having paid excise 

 duty, Chinese machine-made yarn or cloth is 



