give an increase of revenue by the facilities custom-houses would afford by preventing smuggling in foreign goods, now carried on to a great extent by native boats at nontreaty ports; and would also tend to put down piracy, especially on the west coast. To the foreign merchant it would be convenient if the intervening ports of Wanchau, Chinchew, and Taichan were made ports of entry, where foreign vessels could land or ship cargoes; and if Pakhai, the port of Lienchau, at the head of the Gulf of Tonquin, were likewise opened in connection with the Hainan port, not only a great blow might be struck to destroy the pirates who infest those waters, but this port, being now the entrepôt of trade between the Gulf of Tonquin and Canton, might lead to the develop ment of a large trade with Kwangsi and Yannan. All these might be mere subsidiary ports of call, with small custom-houses under the foreign inspectorate, while the placing of consular officers there might be optional, and, except at Pakhai, one or the other probably would not be deemed necessary.

The undersigned therefore proposes, in the common interest, that these additional landing places and subsidiary ports of call should be conceded as conducive to three desirable objects, viz: the extension of trade; the increase of revenue; and, in connection with both, the suppression of smuggling and piracy.

In respect to a revision of the tariff, a separate memorandum is attached giving the reasons why the present time is inopportune for a general revision. The Chinese gov ernment now seeks a revision, and proposes the equalization of duties on the bulk of the articles in the tariff to 5 per cent., but doubling those now levied on the three largest staples, tea, silk, and opium. No doubt the revenue might thereby be largely increased, or even doubled, since these articles of luxury would probably bear to have the duty doubled; but the present revenue from foreign trade, under the vigorous and honest administration of the inspector general, is large and certain in its amount, and tends to increase with the extension of trade. If the facilities to such extension be increased as now proposed, an increased revenue would be equally attained without additional taxation, and under conditions alike favorable to foreigners and natives; whereas there would be great opposition to a heavy tax on these three leading articles. Finally, if equalization of duties were alone contemplated, the treaty powers, having each arranged their own tariff in view of the exigencies of their trade, a common consent would be necessary to revise it, and great difficulties would be likely to arise in carrying out any principle of equalization.

In connection with the tariff and administration of customs, various subsidiary questions have been satisfactorily settled. The question of duty-free goods, especially dockstores, including wood, copper, yellow-metal, and all such articles, was one of those submitted to the commission. The proposal to make the required changes under license and bonds, with a charge of only 5 per cent. on ships built in dock, will no doubt meet the object, if care be taken by the inspector general, in consultation with the merchants, to include in the duty-free list all articles that can fairly be considered solely for foreign consumption. The assurance that all restrictions and embargo on rice, sugar, &c., and especially a partial application to foreign vessels, shall be strictly prohibited, and that no monopolies, properly so called, shall henceforth be persevered in by the local authorities, will be received with satisfaction by the merchants, for they have hitherto been exposed to heavy losses from these violations of treaty.

The merchants demand some changes in the matter of drawbacks, both as to the extension of time and repayment in specie, and at some ports the opening of bonded warehouses. The yamun being willing to establish them wherever the interests of trade makes them desirable to the majority of the merchants, the question of drawbacks loses much of its importance. Wherever these merchants are established, care will have to be taken as to the plan adopted. Two systems exist in Europe, one of which enables merchants to place goods under bond in their own warehouses, subject only to the surveillance of the custom-house authorities; and the other requires the goods to be stored in government establishments. Certain advantages result from the first, not attainable by any other. The merchant always has his goods near at hand for inspection, and under his own care as to fire, &c., which greatly facilitates trade. Existing interests or property are not interfered with; and the government is able to initiate a system of bonding far more cheaply than by building extensive warehouses of their own. In a mart like Shanghai, where the vested interest in warehouses is large, it becomes very important which system is adopted; for, against the salaries of a few officers who inspect the godowns where the goods are stored, has to be set off the expense of purchasing or building large government stores. How far one would exceed the other can only be determined at each port by examining the local conditions. It will be necessary, therefore, for the inspector general to consult with the consuls and chambers of commerce, and together determine on the best mode of attaining the end, compatible with present interests. Where it may not be advisable to establish bonded warehouses, the yamun proposes to extend the return of drawbacks from one to three years, which is considered sufficient, and to repay in specie those presented during the current quarter. But this latter time is much too short to be of practical value; not less than six months would avail, and a return in specie within the current

year would be more satisfactory, and offers no serious difficulty in variations of exchange or complication of accounts.

Any step in this direction will be promoted by the success of the measure proposed for assimilating the currency at each port to the Canton standard of 1842, and the appointment of an assayer at each port to carry out the system. Where no gold or silver coinage exists, it cannot but be a difficult work to regularize the payment of duties by fixing the value of sycee at each port, but it is worth while to try.

All drawbacks might be entered in a separate account, to be closed at the end of the year, just as a bank keeps a record of its paper. Those issued in a given year represent so many promissory notes, which the customs is bound to make good on demand, either by receiving them in payment of equivalent value for duties or in specie at the current rate of exchange. Taels and dollars may fluctuate from month to month, but if the merchant receives the same number which the document shows he once paid, it seems to be all he can equitably claim. If either side loses from the fluctuation between specie and exchange in the interval, each may well bear it in consideration of the advantages of the system; for the custom-house has had the use of the money, and the merchant at once receives specie instead of waiting indefinitely, or discounting the paper at an increased loss. There would probably be no great loss on either side during the year. At its end a balance can be struck between the amount issued and those received back for duties, or for cash, and the difference will show the amount of such notes out as a debit against the future receipts of the customs. By this or some other way confusion in the accounts can doubtless be avoided.

Among other wants of trade is a more efficient system for the protection of foreign interests in cases of custom-house confiscation and fines; and the desire of the merchants on this head has been met by the rules recently agreed upon. Another point is a better administration of justice in the mixed cases where natives and foreigners are both concerned. The proposition made by the undersigned in reference to the last, that a code of civil law, with rules of procedure based on broad principles, should be formed, by which cases of civil suit might be tried by a mixed court, has been liberally acceded to by the yamun, and the announcement has been received with great satisfaction. It is to be hoped that the construction of this important work may be undertaken at once, for much time must necessarily be taken to work out the details. With mixed courts, properly constituted for administering justice, guided by rules of practice, that can be accepted by the treaty powers, the way will be prepared for modifying those stipulations which grant exterritorial privileges, and this difficulty will in process of time disappear.

The undersigned regrets that the admission of foreign salt is refused, for he is persuaded that the trade might be productive of great advantage to both countries and benefit the revenue; but he will not now press it further, as the subject has already been fully discussed.

In answer to the observations of the yamun in its memorandum No. 2, the undersigned agrees with the ministers, that it would be to the advantage of both parties if the merchants themselves would observe the distinction made between them and the native traders, and he will not fail to enforce this necessity upon all British subjects by every means in his power. He has to observe, however, that no ship not British-owned is legally entitled to fly the British flag. While the Taipings were at Nanking, a custom grew up in those times of confusion of covering Chinese cargoes, vessels and rafts, with British colors; but it was an abuse, and has been discontinued since his arrival in China. He will take counsel as to the best means of preventing irregular trading under this flag, and the government can take steps to move the other representatives to adopt a similar course for attaining this end.

To sum up. It appears that an agreement has been reached on many points, and those questions on which important differences exist-inland navigation, residence in the interior, and working mines-are questions of degree as to the restrictions which should properly attach to the rights conceded in view of the present state of the country and other conditions. Some relaxation and modification of these may yet remove all divergence of views, and give a completeness to the labors of the commission that would be very acceptable to her Majesty's government; and judging from the opinions expressed by the other representatives, to all the treaty powers which have a common interest in this revision.

The undersigned, therefore, will rejoice much if the prince and ministers can so far modify the views expressed in the memorandum now under reply, in reference to the only three points on which further discussion is required. He will then be prepared to transmit the papers to his government for instructions as to a revision of the treaty of Tientsin in this sense.

SEPTEMBER 8, 1868.

R. A.

K.

Separate memorandum on revision of the tariff, accompanying note of September 8, 1868.

The British minister, in his note communicated last November to the Foreign Office, classing under five heads the objects chiefly to be desired for the removal of the principal grievances of the merchants by the correction of abuses in the levy of taxes, in connection with the grant of greater facilities of trade and residence in the interior, did not propose any general reduction of the tariff, or even an equalization of rates to the original standard of five per cent. ad valorem. He contented himself with specifying some 10 or 12 articles, on which the duties pressed unequally and injuriously, without benefiting the revenue in any material degree. The yamun has met this proposal liberally, in consenting to the reductions suggested; but they propose that the duty be doubled on tea, and silk, and opium, with or without a general revision and equalization of the tariff rates, so as to bring all other articles on the large list to an average of five per cent.

To propose to double the duties on nearly the only great staples of export and import is to raise the whole question of the expediency of a fundamental change and readjustment of the duties, which for various reasons is more than doubtful. In the opinion of the undersigned, as in the opinions of the other foreign representatives, the present time is not favorable for so large an undertaking. The tariff attached to each treaty is regulated by the special conditions and exigencies of trade in each country; and thus it would be necessary to revise each separate tariff, if any extensive changes were made now, before they could take effect. On the other hand, although one of the Chambers of Commerce proposed a general reduction to two and a half per cent., it is stated in the majority of the memorials that the tariff, on the whole, is satisfactory, and the only modifications suggested were in the few articles already specified, and involved ved no general revision.

Under these circumstances, it being in the general opinion undesirable to attempt a revision of the whole of the tariffs, and as any proposition without this to double the duties on the three principal articles of the import and export trade would be generally condemned as impracticable, the question of further changes may be considered at rest for the present. But as regards the future, it may still be worthy of consideration whether, in the interests of China and foreign powers alike, great changes, both in principle and detail, might not be introduced with advantage, first, by simplification; and secondly, by a readjustment of rates. Nearly two-thirds of the whole export and import duties, taking the returns of 1866-67, are at present realized on three articles. Among the exports tea and silk furnish 3,330,000 taels [$4,657,300] out of 4,700,000 taels, [$6,573,420;] and in imports opium yields 2,000,000 taels out of 3,200,000 taels, [$4,475,520.] The remaining thousand articles in the tariff only produce about one-third, a fact that undoubtedly suggests simplification. The duty on tea is now some 10 per cent. ad ralorem, or nearly double the original contemplated rate of five per cent., and it falls very unequally on the different kinds, inferior and superior. On the former it often amounts to 30 or even 35 per cent. It is true that silk, both raw and in piece, is only taxed about two and a half per cent., and might well bear increase; but even if doubled, the gain to the revenue would only be 300,000 taels. And the present tariff rate on opium, which next to tea yields the largest share of the whole customs revenue, is a little over seven per cent. An equalization of these rates to five per cent. would, therefore, produce a very considerable reduction of the revenue.

In the way of simplification, however, a great work might be done at no cost to the Chinese revenue. It may be shown that there are some 500 out of 600 articles enumerated among the reports on which it is not worth while to collect duties, and about 400 out of 500 articles in the imports on which duty is collected to no purpose. The result, therefore, of reducing the number of articles, according to the present tariff, to 100 each of import and export, striking out the other 400 imports and 500 exports, would be a nominal loss of only 200,000 taels annually, which would probably be more than covered by saving in the expenses of collection.

This process of simplification might be carried much further, and the imports be reduced on the tariff list to textile fabrics, metals, and opium; and the exports to 11 articles, not 20 altogether, with a loss to the revenue of 65,000 taels on imports and 380,000 taels on exports-total of 445,000 taels, or little more than five per cent. on the whole revenue, which might easily be met by raising the tariff rate on raw silk and piece goods to the original standard of five per cent., giving an addition on silk of 330,000 taels, and on piece goods of 120,000 taels-in all, 450,000 taels.

There may be objections of a practical nature to any such sweeping measure of simplification in the tariff derived from the intermixture of the native with the foreign trade, native merchants doing a large coasting business in foreign ships; and of course it would be necessary to take into account the revenue yielded by this native tradeboth that portion carried on in foreign bottoms and the still larger part in junks, be

cause if 900 articles were made free in foreign vessels, the same would have to be done for the junks, or the native trade in them would be destroyed by a differential duty, exposing them to a ruinous competition. What duties the junk trade yields can, of course, only be ascertained by Chinese authorities, but probably it is not very large. Such information would be desirable. The export duty on sugars and 17 other articles of Chinese produce, going from one Chinese port to another in foreign vessels, may be estimated at 472,000 taels; and if limited to some 20 articles, there might be a loss of about 142,500 taels.

If, on the other hand, the object were to increase the revenue with the greatest simplification, tea, silk, and opium are all articles of luxury, which might bear a considerable increase of duty, so as even to double the present revenue without probably diminishing, in any perceptible degree, the consumption, and therefore without injury to trade, save that it might somewhat check further demand and expansion. But such increase would be strongly resisted by the whole mercantile class of all nations interested in the trade with China; and probably, therefore, by their respective governments, unless it could be shown that they would obtain some compensating advantage of a very undoubted character, fully equivalent in value to what they might losewhich the Chinese government might be little disposed to grant, even for a large increase of revenue, such as inland river navigation, railroads, and telegraphs.

The revision of the tariff would seem to be a matter, therefore, that may wisely be left for further consideration, and the influence of time and progress in other directions. If, at some future period, the native and foreign customs services should be joined together as a measure of administrative simplification and economy, and the preventive service should also become effective with steamers, it might then be safe to increase the duty on opium without giving a premium to smuggling; and also to take into consideration what corresponding changes could be advantageously made by common consent and the aid of a general revision of the present tariff.

CHINESE LEGATION.

The Chinese Embassy to Mr. Seward.

WASHINGTON, June 2, 1868.

The undersigned, having been commissioned by his Majesty the Emperor of China, Anson Burlingame, of the first Chinese rank, envoy extraordinary and high minister plenipotentiary, and Chih Kang and Sun Chia Ku, of the second Chinese rank, associated high envoys and ministers respectively to the United States of America, have the honor to announce their arrival in those characters. A copy of their credentials is inclosed, and they will thank the Secretary of State to cause a time to be named for them to deliver the original to the President of the United States. The undersigned avail themselves of this occasion to offer to the Secretary of State the assurance of their most high consideration.

ANSON BURLINGAME.
CHIH KANG.
SUN CHIA KU.

Hon. WILLIAM H. SEWARD, &c., &c., &c.

His Majesty the Emperor of China salutes the President of the United States! In virtue of the commission we have with reverence received from Heaven, and as China and foreign nations are members of one family, we are cordially desirous of placing on a firm and lasting basis the relations of friendship and good understanding now existing between us and the nations at amity with China. And as a proof of our genuine desire for that object, we have specially selected an officer of worth, talents, and wisdom, Anson Burlingame, late minister at our capital for the United States of America, who is thoroughly conversant with Chinese and foreign relations, and in whom, in transacting all business in which the two empires of the United States and China have a common interest, we have full confidence as our representative and the exponent of our ideas.

We have also commissioned Chih Kang and Sun Chia Ku, high officers with the honorary rank of the second grade, to accompany Mr. Burlingame to the United States, where

Mr. Burlingame, with the two so appointed, will act as our high minister extraordinary and plenipotentiary.

We have full confidence in the loyalty, zeal, and discretion of the said three ministers, and are assured they will discharge satisfactorily the duties intrusted to them, and we earnestly request that the fullest credence and trust may be accorded to them, that thereby our relations of friendship may be permanent, and that both nations may enjoy the blessings of peace and tranquillity, a result which we are certain will be deeply gratifying.

Dated this sixth day of the twelfth moon of the sixth year of our reign, (December ber 31, 1867.)

TUNG CHIH.

Inspector General of Imperial Chinese Maritime Customs.

W. A. P. MARTIN,

Professor of Hermeneutics, and Translator of the Imperial
Foreign College, Peking.

The Prince of Kung makes a communication:

The yamun has already, as the records show, respectfully copied and forwarded to the United States and other ministers the imperial decrees by which his Majesty the Emperor has specially appointed Mr. Burlingame, and with him Chih-Ta-Chên and SunTa-Chèn, members of the Foreign Office, his high ministers, to proceed to the treaty powers with authority to transact all business in which those countries and China have a common interest. In regard to this appointment of three ministers at the same time, the Prince of Kung begs to explain fully the reasons for this action on the part of the Chinese government, so as to anticipate any apprehensions the foreign representatives in Peking might have, that hereafter, when business has to be transacted with the several governments to which the three ministers are accredited, there is to be no distinct precedence and subordination between them. It is the usage, the prince is aware, among all the great western powers, when peaceful relations exist between them, to send diplomatic representatives, each to the other; and as relations of friendship and amity have now existed between the United States and China for some years, this country ought ere this to have sent to the United States an envoy with diplomatic function; but the taking of this step has been hitherto delayed because China has not been acquainted with the languages and customs of foreign nations. When, however, Mr. Burlingame, a minister who is just in his dealings and agreeable in intercourse, and who is thoroughly acquainted with the relations of China and foreign nations, and in whom the Chinese government on its part has always had full confidence, expressed his willingness to act in this matter for China, his Imperial Majesty, moved by a memorial on the subject, appointed him to be his high minister, to proceed to all the treaty powers, and Messrs. Brown and de Champs to be first and second secretaries respectively, to aid in performing the duties of the legation. His Majesty in this appointment charged Mr. Burlingame, assisted by his secretaries, with the exclusive control and responsibility of the business of the mission.

But if no Chinese high officers had been sent, this country would have remained as unacquainted as before with the duties of diplomatic representation. His Majesty was therefore further requested to appoint Chih-Ta-Chên and Sun-Ta-Chên high ministers to accompany Mr. Burlingame. This step not only shows the genuine feelings of friendship existing, but will also give these high officers an opportunity to acquire practice and experience in diplomatic duties.

As the Chinese government has on this occasion been enabled to avail itself of Mr. Burlingame's weight and position, and of the assistance of the secretaries of legation Messrs. Brown and de Champs, both the business of this particular mission will be performed satisfactorily, and hereafter when envoys are to be sent by China to foreign powers the taking of such action will have been much facilitated, and a mode of procedure that can be followed will have been laid down.

On the arrival of the ministers in the United States and other countries, the government there will discuss and decide with Mr. Burlingame alone, all matters that may have to be dealt with; and when Mr. Burlingame has arrived at any decision, Chih-TaChen and Sun-Ta-Chen will consult with him as to the dispatches on the subject to be sent to the yamun of foreign affairs in Peking. In this way the entire work of the mission, being fully provided for, will proceed smoothly and satisfactorily.