No. 46.
Mr. Seward
to Mr. Fish.
Sir: I wrote in my last dispatch regarding the Yunnan case that the British minister was insisting, in his negotiation with the Viceroy Li-Hung-Chang, upon the production and trial of the former governor of Yunnan and of certain other prominent persons who were charged by him with complicity in the attack on Mr. Margary and the Brown party, but that as he had once departed from this line of action, he might perhaps be expected to do so again.
What I thus foreshadowed has come about.
After several unavailing conferences, Sir Thomas Wade consented to state proposals for a different solution of the difficulty, and requested two or three days in which to bring them forward. At about the same time I had the opportunity to intimate to him that I understood that he was likely to agree with the Chinese to refer to the diplomatic body for discussion the commercial issues which he had from time to time brought before them, and to suggest that he should be careful in stating the terms of such a reference, for the reason that these issues may be called up by any of the ministers, and it may be more agreeable to them to choose for themselves the moment for the discussion, and because his reference would necessarily be more or less tainted by the fact that it grew out of a grievance with which other powers have no special concern.
Sir Thomas proceeded to say, upon this, that he was not intending to propose a reference of the commercial issues in question to other powers, as he had done at Peking. In that instance he had asked the Chinese to call upon his colleagues, and himself to unite with the foreign office in a general consideration of those issues. He should now propose to the viceroy a formal adjustment of the lekin question. This adjustment would be subject, of course, to the approval of the British government and all other governments having treaties with China. He then proceeded to state to me the terms contemplated by him, which were, roughly, as follows: The Chinese, in concert with the foreign powers, shall mark out a district at each port within which no lekin taxes shall be levied on foreign goods, but beyond which all goods shall be liable to these taxes, saving those in transitu under transit-passes, which shall be issued as at present, and that in return for permission to levy lekin taxes in this way the Chinese shall open a very considerable number of ports.
At a subsequent brief interview I expressed to him some doubt as to the merit of his scheme, and at a later moment he came to me to ask [Page 74] what my objections were. To this I responded that they were general and special; that I doubted, generally, the wisdom of a settlement with the Chinese in which he should accept as valuable an adjustment of a grave matter, which adjustment would become operative only after it had been approved by all the powers having treaties with China. It would, in my opinion, be much wiser to secure positive and unqualified terms in settlement of his grievance. To this Sir Thomas said that the question is a very serious one; that his settlement of it would be in the general interest; and that, whether or not the approval of the other powers can be secured, he is bound to essay a settlement. He then asked my special objection to his proposal. I responded that it is my understanding of the treaties that opium may be dealt with by the Chinese government as it chooses, after it has paid the import duty of 30 taels and passed into native hands, and that his proposal would make it free at each port within a given radius; that I must look with disfavor upon any scheme which would have this result, and that, in my opinion, my Government would do the same. To this Sir Thomas responded that the letter of the treaties would not support my view, and that the British supreme court at Shanghai had held that the Chinese cannot tax opium within the “port area,” but that he knew the intent of the treaties to be such as I had stated, and that he could not consent to construe them in a different spirit.
I answered that I was more than gratified by this avowal of his position in regard to opium, and that, so construed, his proposal in regard to lekin struck me favorably.
You will remember that I have more than once expressed the opinion that foreign imports which have paid the external or tariff dues may be carried to any part of China, under the provisions of the treaties, without being subject to any further taxation, saving the dues levied at the barriers, which latter dues may be commuted under the transit-pass system. The Chinese hold that they have a right to tax foreign goods in native hands as they like, whether at the ports or in the interior. The English government has long failed to resist the Chinese upon this point, and it has come about in this way that lekin taxes are everywhere imposed by them.
If this procedure is likely to become a settled rule, it will be much better for all concerned here to accept Sir Thomas Wade’s scheme. Perhaps six-sevenths of all the merchandise imported into China is of British origin, and it is not to be expected that other governments will be disposed to stand, under these circumstances, upon rights which the chief party in interest is disposed to yield. The opening of a large number of ports, on the other hand, will prove a great boon to foreign interests. I have spoken of this with particularity in my notes on the German treaty-revision scheme.
I have been much pleased by the British minister’s unqualified admission of the merit of my view in regard to opium. So long as China may tax or otherwise deal with opium in native hands as it likes, so long will there be an answer ready to be returned to those who make the opium-trade a stigma to all foreigners, and to the English in particular; for if the Chinese take no steps to prevent the consumption of the drug by their people, having full power to do so, the responsibility of other governments need not be considered of the most serious sort. But whenever an attempt shall be made to limit the control which the Chinese can exercise over opium in native hands, a different aspect of the case will appear.
The credit to be accorded to the British minister for his position in [Page 75] this matter will be more patent when I state briefly the importance of the interest involved. The Indian government derives a profit in India from the opium monopoly which amounts to about eight million pounds sterling. The opium brought to China paid a few years ago for all the merchandise which China had to export, and still pays for nearly two-thirds of all exports. In fact, England’s commercial and military supremacy in India and the East is very largely due to the drug. It is worth more to her than the gold and silver mines of our Pacific coast.
It is manifestly not our policy on moral or economical grounds to defend the trade. How far opium is a deleterious agent with those who use it has been much discussed, doubtless with exaggeration on both sides. That it is very harmful I do not at all doubt, neither can I doubt that it cheapens whatever we have to offer to the Chinese in exchange for their products, and makes these products more dear to us.
In my conversations with my colleague we ran over at some length the merits of the Yunnan case proper. I could not fail to notice that the answers to my remarks indicative of doubt whether the inquiries made have brought home to the government of China, or any of its officers, proof of complicity in the attack on Margary, were not such as to disabuse one of the conclusions which I had reached. I do not mean to say, however, that this fact relieves the Chinese from a certain responsibility. As I have heretofore pointed out, the government did not show at the outset a right appreciation of the gravity of the matter, and it may be found that their efforts throughout have not been well calculated to bring out the truth.
I took occasion also, in talking with my colleague, to remark upon the importance of the mint and post-office proposals, the most unsatisfactory condition of the judicial system when foreigners and Chinese are the parties concerned, the abuse of inward-transit passes, and the radical imperfection of the outward-transit-pass arrangement.
It remains to be seen what kind of a settlement will be effected by the minister, if any. The Chinese have undoubtedly been brought to feel that the results may be serious if they fail to close matters now. A good deal of what the minister has to urge is simply the observance of actual treaty obligations. His main proposal, that in regard to lekin taxes, is based ostensibly upon a give-and-take principle. He has departed from the more rigid and difficult part of his demands in regard to the Yunnan case proper. Perhaps we may, under these circumstances, look with some confidence for the settlement of this longstanding business.
I have, &c.,