THE EARL OF CARNARVON
My Lords, I wish, to ask the noble Viscount the Secretary of State for India, Whether any or what steps have been taken under the Chefoo Convention of September, 1876, to give effect to the clauses relating to the importation of opium, the 2 mission of exploration to Thibet and thence to India, and the appointment of a Commission to regulate the differences between the Colony of Hong Kong and the City of Canton? There are many questions of much importance comprised in the Chefoo Convention; but I shall only call your Lordships' attention to those points that are indicated in my Question. The Convention was agreed to two years ago. The first point to which I shall refer are the clauses regulating the importation of opium into China. These clauses, I may explain, provide that the opium should be put into bond, and that when taken out for the purposes of sale it should be subject to a certain tax called the li-kin; the exact conditions of which were to be the subject of agreement. The tax was originally a war tax, imposed in consequence of the Taeping rebellion; but, like our own Income Tax in England, has since been maintained as an ordinary source of Revenue. Before any final settlement had been arrived at, Sir Thomas Wade, our Minister in China, who had come to this country, was sent to India, which country the question mainly affected, in 3 order to confer with the Indian authorities as to what the exact terms of the Convention should be. Sir Thomas Wade, I understand, has now returned to China, and probably he is not only in possession of the opinions of the Indian authorities, but has opened communications with the Chinese Government. I shall be glad to know from the noble Viscount the Secretary of State for India how the matter stands. With regard to the second point in my Question, which relates to a distinct article of the Convention, your Lordships will, no doubt, remember the case of Mr. Margary. It was desired to open up a trade route through Burmah to China, and an expedition—under Colonel Browne, I think—which was sent from India through Burmah with that object, successfully prosecuted its mission up to the borders of China. There it was met by Mr. Margary, Interpreter to the Mission at Shanghai. Mr. Margary was murdered on the Frontier, and the expedition came to nothing. Negotiations, however, were subsequently entered into, and powers were taken in this Convention to open up a trade route, not through Burmah to China, but through China to Thibet—an undertaking which is interesting, not only in a commercial, but also in a scientific and geographical point of view. We have Consular Agents posted at no great distance from the Thibet Frontier; and one of our Agents, I understand, made an expedition last year towards the Thibet Frontier. I shall be glad to know from my noble Friend whether he has received the Report of that expedition, and, if so, whether he will lay it upon the Table; also, whether the Article of the Convention relating to this subject has been carried into effect in any way? Both as regards the opium question and the Thibet expedition, large trade interests are involved; and these interests, so long as the Convention remains unratified, or is not carried into effect, necessarily remain more or less in suspense. I come now to the last point in my Question—that relating to the disputes which have arisen between the Colony of Hong Kong and the City of Canton. For some time past the Hong Kong traders have been accused of systematically violating the laws of China; and, on the other hand, Chinese cruisers have been accused of interfering in an ille- 4 gitimate manner with the trade of Canton. The result, of course, has been a great deal of inconvenience, and sometimes that inconvenience has reached the point of actual mischief and risk. Power was therefore taken under the Convention to appoint a small Commission, composed of persons fully conversant with the details of the question, which, on the one hand, should endeavour to secure a reasonable amount of freedom for the Hong Kong traders, and, on the other hand, should so regulate matters as to prevent illegitimate mischief being done to the Revenue of Canton. The grievances are very strong on each side, and, no doubt, something must be given and taken by each party. I wish to know whether the Commission has been appointed, whether anything has been done in connection with it, and, if so, what?
§ LORD HAMMOND
regretted that the ratification of the Convention should have been so long delayed on our part—the more so, as British commerce was already in the enjoyment of benefits which the Convention was intended to secure; while the advantages to which the Chinese considered themselves entitled had, so far, been steadily withheld. He could not but think that our future relations with China might very much depend upon the manner in which the terms of the Convention were treated by Her Majesty's Government. He was well aware that the date at which China should come into the enjoyment of those advantages was subject to an understanding between Her Majesty's Government and other Powers; but that understanding did not seem yet to have been arrived at; and until the Chinese obtained the advantages which were held out to them—namely, facilities for the suppression of smuggling—he thought they might fairly demand that the British should withdraw from the ports which had been opened to British commerce. The Indian opium trade with China would not, he believed, be prejudiced by the ratification of the Convention; and he would remind those to whom that fact might be a subject of regret that the exclusion of Indian opium from China would not, owing to the extended cultivation of the native poppy, prevent the Chinese from smoking opium. It was to be hoped that the questions respecting prevention of smuggling between Hong 5 Kong and China would be arranged in a manner satisfactory at once to the Colony of Hong Kong and to the Chinese Government. As regarded the opening up of intercourse between China and India through Thibet, it was most desirable, before we attempted to send another mission of exploration, that we should be sure there was no risk of the repetition of the disaster which had occurred in attempting to open intercourse between China and India through Burmah.
§ LORD STANLEY OF ALDERLEY
said, that two years ago he had been asked by those who were interested in the China trade to put the first of the Questions now put to the Secretary of State for Foreign Affairs; but he had to postpone it as the Government had not then come to any decision. The Chinese Government had fulfilled their part of the Treaty, and quite recently an English traveller had journeyed unmolested from Shanghai to Burmah. It was putting Sir Thomas Wade in an unfair position to send him back to Pekin with the Chefoo Convention unratified by us.
§ THE MARQUESS OF SALISBURY
It is perfectly true that, owing to certain defects in the structure of this Convention, it has not been hitherto possible to ratify it; and we are awaiting the Report from Sir Thomas Wade of his communications with the Chinese Government before we can proceed further in that direction. I am wholly unable to agree with the noble Lord the late Under Secretary (Lord Hammond) in thinking that we have done thereby any injury to the Chinese, or that we ought to compensate them for that injury in the manner the noble Lord suggests. He pointed out that the Chinese, by virtue of this Convention, have opened to us a certain number of ports. That stipulation, he says, has been performed; but the stipulation with respect to submitting opium to li-kin has not been performed. We ought, therefore, in honour, he says, to give back to the Chinese that which they have given to us, by withdrawing from those ports which they have opened. My impression is that if the Chinese could be asked they would be ill-satisfied with the demands of their advocate. Certain ports have been opened to British trade—not an injurious thing to the nation in which those ports are situated. I believe a tolerably ac- 6 tive trade is being carried on, and, no doubt, it brings a considerable revenue to the Chinese Treasury. The proposal of the noble Lord—more Chinese in his views of trade than the Chinese themselves—is, that we should close up the avenues of this trade and dry up these sources of revenue, and then tell the Chinese we are compensating them for the non-settlement of the question of li-kin for opium. I think they would repudiate their advocate. This is not a question of hypothesis. By the Convention, the Chinese are only bound to open these ports on the performance of the stipulations with respect to li-kin. They have not waited for the stipulations; they have opened them at once. Do you imagine they have done it out of pure benevolence? Certainly not; for they know it is for their interest as well as ours that the trade between the two countries should be unrestricted. The difficulty which arises under the clause of the Convention is a very simple one. In the first place, the proposal with respect to li-kin on goods in general is that it should be levied on all goods going into China except within a very limited area which is called "the Concessions;" and to that limitation some foreign Governments take strong objection. Therefore, it is provided that the stipulations shall not come into operation until an understanding has been arrived at with them. They have not yet accepted these stipulations of the Convention, and, therefore, it is clearly impossible they should come into operation. That is a matter over which we have not any control. The li-kin is not the ordinary taxation of the country; it is a species of octroi levied at the boundary of every Province; it is levied very much at the discretion of the provincial Governors; they can raise it or lower it as they please; but there is always this security for the foreign trader—that, as long as the collection of the duty is left in the hands of Chinese officials, smuggling, when the duty becomes high, is not a very difficult matter, and, therefore, there is a natural check upon these provincial Governors which prevents them raising li-kin to an extravagant amount. With respect to opium, this Convention proposes what undoubtedly would be a very drastic remedy—that the collection should be placed in the same hands as that 7 which collects the Customs—that is to say, European hands. In that case smuggling would be absolutely barred, and the tax upon opium might be raised to any amount provincial Governors pleased. That would be a result which, practically, would neutralize the policy which hitherto has been pursued by this country in respect to that drug. Nevertheless this is the interpretation which some persons have placed upon the Convention. I think my noble Friend who asked the Question (the Earl of Carnarvon) did not fall into that error. He said, by the last sentence of the 3rd clause of the Convention, that the amount of li-kin collected should not be left to the discretion of these Governors, but that it should be settled, in the first instance, how much li-kin should be levied before they gave to the levying of that li-kin the additional security which the Convention offered. The clause says that the amount of li-kin will be decided by the provincial Governments according to the circumstances of each; but it seems to be a question whether this is, or is not to be, done before the Convention is put into operation. We propose to wait until that clause is put into a less ambiguous form and a distinct understanding is arrived at with respect to it. I do not think this country will be entitled to say that no additional duty in the form of li-kin should be levied upon opium. I conceive there may be circumstances in the financial position of China which would make that a harsh decision. Probably, a certain rise in duty may be effected without a serious interference with the trade; but when we are told that the probable rise is to be something like 300 per cent, it at once becomes evident that if this clause were carried into operation in the form in which some people understand it, the result would not be a benefit to the finances of China, but simply a protection to the growth of the native poppy; and that is a result we cannot favour. Under these circumstances, we felt it necessary that further explanations with the Chinese Government should be entered into, so that a Convention of this important character should be free from doubt as to its exact meaning. The policy which the Government has consistently pursued should be steadily adhered to. I hope we shall soon have a communication from Sir Thomas Wade which will justify 8 us in concluding that a definitive arrangement has been arrived at. With respect to the second Question—that concerning the mission of exploration to Thibet and thence to India—not much progress has been made. Since this Convention was signed the affairs of Central Asia have become much more troubled on the boundaries between Russia and China, in Kashgar; and, again, on the Western boundary of Thibet a very considerable disturbance has occurred, which re-acted on the Government of Thibet—the most jealous Government in the world—making them unwilling, even at the bidding of their superiors at Pekin, to admit an English expedition. We should be incurring dangers which the advantages to be gained would not at all justify if we insisted, in the face of these circumstances, on pushing forward any expedition. With respect to the third matter—the appointment of a Commission to regulate the differences between Hong Kong and the City of Canton—if you look at the 7th section, you will find that this is a unilateral provision in favour of the British Government on account of the interference of the Customs Revenue cruisers with the junk trade of the Colony. It was a provision inserted in order to redress grievances felt by the Governor of Hong Kong. He has reported that the grievance it was intended to remedy has ceased, and there is, therefore, no further reason to appoint the Commission.