§ LORD REAYrose to ask the Undersecretary of State for Foreign Affairs whether he could give any information with regard to the alterations which the Imperial Government of China intended to make in the administration of the Customs. The noble Lord said: My Lords, the Imperial Maritime Customs Service of China, to which my Question refers, controls not only China's import and export trade as carried on in foreign ships, but the collection of dues and duties on much of her coast Trade, her internal transit trade, her riverain trade, and some of her salt and other monopolies. The lighting and buoying of her coasts, the care of her harbours, and a postal service lately established are also under the energetic, able, and tactful supervision of Sir Robert Hart, the Inspector-General.
The service has its origin in the Treaty with China of 1842, when a fixed import and export tariff on all goods carried by vessels under a foreign flag was agreed upon. The first war indemnity was secured on this revenue. About 1855 a 22 committee of consular officials supervised the Customs House at Shanghai. This proved so satisfactory that the system was extended to all open ports. The Treaty of 1858–60 increased the number of open ports and extended and readjusted the tariff. Subsequent treaties between China and the Powers have enlarged the field of operations, and at present forty ports are open to foreign trade with Customs houses under the Inspector-General's administration.
The first Inspector-General was Mr. H. N. Lay, and since the early sixties Sir Robert Hart has been the distinguished head of this important Department. He is responsible for the efficiency of the service to the Foreign Office, the Wai-Wu-Pu, formerly known as the Tsungli-Yamen. He makes his Reports to and receives his instructions from the Foreign Office. English and Chinese are the official languages of the service. Friendly relations exist between the officials and the people. The duties and dues are paid into Chinese banks. When a loan was required by China for the Japanese War Indemnity in 1896–8 one of the conditions of the loan was the grant by the Chinese Government of a guarantee that the present conditions of the Service should continue so long as our loans remain outstanding, and that the Inspector-General should be a British subject while British trade retained its paramount place.
A recent Edict raises the question whether the efficiency of this administration will be impaired. By this Edict Tieh-Liang, President of the Board of Revenue, is appointed superintendent of Customs, and Tong-shao-Yi, Junior Vice-President of the Board of Foreign Affairs, is appointed Associate Minister of Customs. All Chinese and foreigners employed at the Customs offices are placed under their control. This seems to imply that Sir Robert Hart is no longer under the direct supervision of the Foreign Office, but that he will report to and receive his instructions from this new Board. As many questions will have to be referred by this Board to the Foreign Office, the Wai-Wu-Pu, there will be delay, and there is considerable apprehension that the relations between the Inspector-General and the Government and of the Inspector-General and his subordinates may be altered.
23 As the good administration of the Chinese Customs is the sole guarantee for a debt of £40,000,000, the Powers who are the creditors of China are deeply interested in the maintenance of the guarantees of good administration and in defeating any attempt to weaken the authority of Sir Robert Hart. It is also against the interest of China that the financial credit of the country should be shaken. I am aware that His Majesty's Government have taken immediate steps to enforce the fulfilment of the stipulations of the loan contracted in 1898, and that the American Minister at Pekin has been instructed to join in the protest made also, as I understand, by other Powers against the proposed changes. I trust that my noble friend will be able to give the House some reassuring information on this very serious controversy, and perhaps communicate the answer—if it has been received—to the second Note of ourChargé d' Affaires at Pekin.
*THE UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (Lord FITZMAURICE)My Lords, I "think your Lordships will agree that it was very natural, especially as the House will very shortly be adjourning, that the noble Lord should ask a Question on this matter, which is exciting such great interest in commercial circles, and, I may say, in other circles besides. My noble friend has quite correctly described the origin, position, and duties of the Chinese Board of Customs, which is popularly known as the European service. The Chinese loans of 1896–1898 have also been quite correctly described by my noble friend. The exact stipulation which those loans contain is that—
The Chinese Imperial Government under-take that the administration of the Chinese Imperial Maritime Customs shall remain as at present constituted daring the currency of this loan.The 1896 loan was to be current for thirty-six years, and the 1898 loan for forty-five years. An Imperial Edict was promulgated at Peking on May 10th last, appointing Tieh Liang, President of the Board of Revenue, to be Superintendent of Customs Affairs, with Tong-Shao-Yi as Associate Minister of Customs Affairs. All Chinese and foreigners employed at 24 the various Customs offices were placed under their control.It will be seen from the nature of the Edict that a dangerous atmosphere of ambiguity was immediately thrown around the existing staff, and especially the superior staff, involving a doubt as to whether they were in future- to occupy the independent position which hitherto they had occupied. The subject received the immediate attention of His Majesty's Government, and they at once asked for an explanation of the decree, stating that they could not suppose that its object was to interfere with the powers now exercised by the Inspector-General, Sir Robert Hart, but that, if that were the intention, it would be a distinct breach of the engagement given in the loan agreements. The reply which very shortly followed from the Chinese Government was to the effect that they disclaimed any intention of not adhering to the loan agreements. His Majesty's Government understand this to mean that the terms of the decree will not make any change in the present administration of the Customs, but we were not altogether satisfied with the reply received and have asked for a definite assurance to the effect which I have just described. In taking this step His Majesty's Government are acting with the knowledge of the other Powers interested, with whose representatives His Majesty's Chargé d' Affairesat Peking is in communication. I believe the House is aware that Sir Ernest Satow is at this moment on his way back to this country, and that Mr. Carnegie is Chargé d' Affairesat Peking.
My noble friend has very naturally asked whether the reply from the Government of China to the second Note has been received. It has not yet been received, but communications are still proceeding, and we expect a reply to the Note very shortly indeed. There is no intention on the part of His Majesty's Government, I can assure the House, to allow this question to be involved in any undue delay. We fully realise the great interest which is taken in this subject and its great importance to the trade and commerce of this country in China, and indeed of all nations trading with China. We are acting in perfect harmony with the other Powers on this subject, and I include amongst them the United States 25 and Japan. If, however, the maintenance of the present arrangements is desirable, from the point of view of the trade and commerce of this country and other countries trading with China, it is, if possible, even more desirable in the interests of the Chinese Government itself. My noble friend indicated that as his opinion. The benefit and advantage to the Chinese Government of the present system can hardly be exaggerated. It can undoubtedly be described as a model of efficiency and economy not only absolutely and by itself, but in contrast with the confusion of the provincial revenue services, in the midst of which it is carried on.
The training of Chinese by Sir Robert Hart and his staff, able to take the place of foreigners in the Chinese service, may doubtless be said to be itself in a certain way one of the aims of the Foreign Inspectorate, and it may be that in the course of time the Chinese Government may desire and may not be unable to administer this branch of the Civil Service of the country itself. But that day has certainly not yet come, nor do I think any one would be justified in saving it was even near. Meanwhile, no hand should be lightly laid on the Imperial Customs Service which has been recently, and, as I think aptly, described by a writer very familiar with China and its system of Government as the "one reliable and efficient administration, the one bright spot in surrounding chaos." I hope your Lordships will not think that in reserving any further statement I am acting in any way unfairly to the House. I feel sure your Lordships will realise that it would not be desirable for me to convey to the House the substance of any further reply from the Chinese Government until we are fully informed of its nature and are perfectly certain of its meaning.
§ THE MARQUESS OF LANSDOWNEMy Lords, the statement to which we have just listened seems to me entirely satisfactory. The announcement that the Chinese Maritime Customs were likely to pass under Chinese control created some thing like consternation in this country, and the consternation would, I think, have been even more general and more marked if we could really have brought ourselves to believe that the rumour was 26 entirely true. I rejoice that His Majesty's Government have put their foot down with regard to this most important question, and I hope they will keep their foot down, and that we may look before long for some reply from the Chinese Government less evasive and more definite than that with which they characteristically attempted to put off His Majesty's Government at first.
A change in the administration of the Chinese Customs would be disastrous to air parties concerned. It would be most prejudicial to our commercial interests, which greatly exceed those of any other country; it would be prejudicial to the interests of other Powers who, like ourselves, are concerned in the trade of that part of the Asiatic continent; and it is satisfactory to know that all the Powers are at one with us and are giving us their diplomatic support. Last, but not least, as the noble Lord has truly told the House, a change would be disastrous in the interests of China itself. In the wilderness of Chinese maladmistration the Chinese Maritime Customs is the one oasis in which is to be found honest and scrupulous administration; and if that department were to be allowed to fall under the influences which prevail in connection with other departments of the Chinese Government, the Chinese themselves would be the greatest losers of all. We have, as we have been told this evening, a very distinct right to insist upon the retention of English management at the head of the Maritime Customs administration so long as our trade continues to be the largest European trade done with China; and I feel quite sure that His Majesty's Government will see that this right is insisted upon and carefully maintained.