If, on the other side, nothing effective be done, I must frankly state my conviction that our position in the north will rapidly deteriorate, and our relations be embroiled, if not irreparably injured. I believe means for the amelioration of both may be safely taken, and have long been required; but I feel still more strongly convinced that at no distant period they must be taken, and the longer they are delayed the greater will be the ultimate cost, and the more imminent the hazard to our future trade and relations with China.

If I am correct in these inferences, the conclusion of the whole must be that the time has arrived when it will be no longer safe to defer strong and effective measures in defence of our interests, and that there is a clear necessity for present action to avert at no distant period a costly war and a shock to this empire it is so ill capable of sustaining, that it must of necessity be attended with great peril not only to the present dynasty but to the existing social organisation of the country.

[APPENDIX IV.]
ACCOUNT OF THE SALT TRADE ANNEXED TO MR PARKES' SUMMARY OF THE NATIVE MARITIME TRADE OF FOOCHOW, 1846. (EXTRACTS.)

They have constituted the sale of salt a monopoly, which they place in the hands of a set of merchants whom they hold liable for the payment of a fixed amount of tax. This, in some instances, falls rather heavy upon them, but proves an easy measure to the authorities, who have thus but little trouble or expense of collection. All the supplies of salt are drawn from the sea-shore, and consequently there is an appointment of salt inspector in every maritime province, who superintends everything connected with the gabelle: he holds a high rank and receives good emoluments from the Government, 3000 taels per annum. It also forms one of the duties of the governor-general of the province to act as chief superintendent of salt excise.

Most of the supplies from Fukien have to be sent into the interior and the adjacent province of Kiangsi viâ Foochow. The salt is made all along the shore to the southward....

The salt is made at these places by people belonging to the various localities, and the manufacture gives employment to numbers of individuals, who in those sterile districts have few other means of subsistence. The general method of manufacture is to collect the saturated loam from the beach in heaps, and thence to draw off the brine by drainage into large but shallow-built vats, when crystallisation is effected by exposure to the natural heat of the sun. The brine being all extracted from the heap, it is removed to the beach, and the same earth, having been immersed in the salt-tide, can again be used. In fine weather great quantities can thus be expeditiously manufactured, but a succession of rain stops the works, and a scarcity in the supplies is the consequence. The producers are exempted from all taxes or charges on the part of the Government, on the consideration that they are in mean labouring circumstances, though many of the salt-farms are very extensive, and some of their conductors possessed of better competence than the merchants, on whom the whole burden of taxation falls. Junks are despatched to these places by the salt merchants for freights.

The Government system of exacting a fixed annual amount of gabelle is very defective, and places the trade, which might prosper under other management, on an unhealthy basis. When the trade is dull, it becomes still more depressed by the nature of the liabilities that the merchants have at all times equally to bear, and which then become burdensome; and again, on the other hand, in case of a thriving season, the revenue is in no way advantaged. Their wretched executive, however, prevents any improvement. They therefore content themselves with fixing a stated sum, upwards of 300,000 taels per annum; and if they can secure the requisite number of persons to undertake to dispose of a certain quantity of salt that will yield excise to this amount, they are content. Thus each merchant is bound to conduct the sale of the quantity that he undertakes, or rather is held responsible for the amount of duty due on such quantity, and having once paid this up, should he be so disposed, he is at perfect liberty to transport and sell more salt on his own account, duty free; whilst, on the other hand, should he, from a glut in the market or other circumstances, not be able to dispose of the quantity of which he had undertaken the sale, he has still to pay duty on the whole at a fixed unalterable rate.

It is therefore the imminent risk attending salt speculations that causes people of property to be so averse towards entering them. They involve a great outlay of capital, with continual liability but uncertain remuneration. Thus, if a man embarks the whole or greater part of his means in speculations which do not succeed, he becomes instantly embarrassed with the Government, and, with no incomings to relieve him, may perhaps not succeed in recovering his first failure. Most of the merchants being men who are selected merely on account of their capital, the management of their business is entirely in the hands of those they employ, for whose honesty or capacity they are mainly dependent for success. The charges and expenses connected with carrying on a salt business are very great. Yet there are several instances of old merchants employing good managing men, and possessing plenty of supporting capital, having amassed large fortunes in the trade, though, on the contrary, cases are much more numerous of speculators having suffered losses and contracted debts with the Government. A debt to the State of no less than 1,450,000 taels by the salt dealers of Foochow has thus gradually collected.

The nomination of salt merchants is almost invariably compulsory, and no one can retire from the business without he is totally unable from want of means to continue in it. In these cases the reflection that they were obliged to undertake the transactions that led to their ruin must add increased poignancy to their losses. When once, however, they have undertaken a transaction, they are much favoured by the authorities, who give them entertainments and confer honours and distinctions upon them. There are head merchants appointed, who hold some control over the proceedings of the others. To be a head merchant a man must be of known character and not owing anything to the Government. They are responsible for all the other merchants, who, however trustworthy, have all to be secured by the head merchants. In case of any merchant becoming in arrears with the payment of his duties, the salt inspector orders the head merchants to limit him to a certain time in which to liquidate all charges. According as the case needs, the head merchants convene and consult as to whether they should pray for an extension of the term or require some of the other merchants in substantial circumstances to lend the necessary amounts, or perhaps they may proceed to pay it themselves. If also they find that any of the other merchants are incompetent, from want of means, to manage their business, they represent the same to the salt inspector, that they may be allowed to retire. At present there are four head merchants out of a total of sixty-one....