III. THE CHINESE MARITIME CUSTOMS.
Extent and audacity of smuggling—Alcock's determination to suppress it—His report on the position—Corruption of the Chinese customs service—Efforts of the British Government to co-operate in collecting dues—Nullified by treaties with other Powers—Consequent injury to all foreign trade—Unexpected solution of the difficulty during the interregnum—Impetus given to trade by the Taiping rebellion—Alcock with French and American consuls takes over the customs and collects all dues in trust for the Chinese Government—Promissory notes employed—Conditions which made it impossible to enforce payment—Notes ultimately cancelled.
Certain crying evils in foreign intercourse having arrested the attention of Consul Alcock from the day of his arrival in China, he bent himself strenuously to the task of overcoming or mitigating them. They formed the subject-matter of many anxious reports to his superiors, for Mr Alcock always took both a serious and a comprehensive view of his duties. For many years there seemed little hope of a successful issue to these labours; but at last a rift in the clouds opened up the prospect of coping with at least one of them, and that was smuggling. So universal was this practice that it seemed a necessary and natural feature of all commercial dealings in China. As its roots lay deep in the Chinese character and civilisation, no stigma attached to the venality of the officials charged with the collection of the maritime revenues. Although the practice was in extent universal, it was by no means wholesale in degree, and where the facilities for evading duties were so tempting, merchants must often have been astonished at their own moderation.
Among the legends of the coast, it is true, there were certain tours de force in the way of smuggling which made good topics for walnuts-and-wine conversation among a community which was rather lacking in subjects of general interest,—as of an apocryphal ship clearing from China in ballast or with coal which would mysteriously land in England a full cargo of tea, which had been taken on board without being passed through the custom-house. Conversely, a shipload of manufactured goods taken on board in England would melt on the passage to China like a cargo of ice, so far as the records in the Chinese custom-house would show. One special feat was kept alive, post-prandially, for many years as the acme of audacious smuggling. British goods were entered at the custom-house "for re-exportation," and no duty paid. The merchant packed the empty cases with silk, which was thus shipped under the original English marks, and was described as calicoes, on which a "drawback" was claimed of import duties which had never been paid at all. Such racy anecdotes belonged to the order of Rabelaisian humour which inspired the boast of a certain Lancashire manufacturer at the time when, owing to the scarcity and high price of cotton, the "filling" of shirtings with plaster of Paris and other substances to make up the required weight of the piece was raised to almost the dignity of a fine art. Complaints being made by the consumer that the cloth so compounded would not wash, this genial Lancastrian declared that for his part he would never rest satisfied until he could turn out his calicoes without any cotton in them at all.
Shanghai, of course, was the great centre of the smuggling trade. What smuggling was done at Canton, being the only other important entrepot, was on a system which was regulated by the customs authorities themselves, and the testimony of Mr Alexander Matheson before the House of Commons Committee was to the effect that their tariff was so light that it was not worth the merchant's while to smuggle. Such, however, was not the view taken by Mr Consul Alcock, who regarded the smuggling system as a very serious evil, against which he waged a relentless war. He not only compelled, as far as lay in his power, the British merchants to comply with the letter of the treaty in their dealings with the customs, but he further considered himself bound to enforce on the Chinese officials themselves the proper discharge of their duty. In these efforts to abolish irregular practices, which all deplored, many of the British merchants were only too willing to co-operate with the consul's efforts, and the Foreign Office was repeatedly moved to take some action in the reform of these abuses. The difficulties and anomalies of the situation were fully set forth by Mr Alcock in many reports made to his superior, the chief superintendent of trade, as the following extract, written in 1851, will exemplify:—
How the commercial and custom-house system of the West and the very opposite principles and practice of the East might be combined so that both should work together with the least possible friction and prejudice, was a difficult problem, no doubt, for those who had the framing of existing treaties. How even the trading operations of foreign merchants, based upon good faith and honesty, could be in any way associated with the corrupt and inept administration of the Chinese custom-house, so that the revenue of the latter alone should be liable to suffer and not the foreign trade, though apparently a simpler task, seems to have presented to the negotiators insuperable difficulties. For one or other of these problems, nevertheless, it was essential they should find some adequate solution, or whatever treaties might be signed their real mission was unfulfilled, and the basis of all future trading relations left unstable and unsatisfactory.
We cannot suppose this important fact was overlooked by the British Government, which, on the contrary, appears to have sought earnestly to meet the difficulty by undertaking in good faith to co-operate with the Chinese authorities in collecting the duties on British trade. Neither is it clear that failure would have attended such a course had not a disturbing element been speedily introduced from without for which adequate provision does not seem to have been made. We allude to the ratification of treaties with other Governments which should repudiate all obligation on this point to contribute to the protection of the Chinese revenue. It might have been supposed that the Chinese Government, having obtained so great and unquestionable an advantage from the Power they had most to fear, would scarcely have been so foolish as to throw it away upon the first occasion, yet such proved to be the fact, and some credit was taken by the United States commissioner for the omission of all co-operative clauses. Two treaties in consequence came into operation, founded upon different principles—the one subversive of the other in a very essential point. So much was this the case that no fair trial could be given to the provisions of the British treaty respecting the payment of duties, and any attempt to act upon the system contemplated in it became altogether unpracticable so soon as the alteration of our navigation laws opened our ports to foreign shipping.
We found that to secure the essential objects of these treaties as they now stand there is one thing plainly wanting and yet essential, an honest and efficient custom-house, and who does not see that this is unattainable in China? Too much or too little has been done, therefore. We should either have refused to concede a right to levy maritime duties, or obtained as the condition some better guarantee for its impartial exercise. It should have been remembered that although a foreign Power might give this right to the Emperor of China, it could not so easily give him honest and faithful servants, without which custom-house duties cannot be fairly levied. The very attempt to profit by such a right partially, and with manifestly imperfect means, could not fail to prove injurious to the trade it was the great object of the treaties to develop and protect. It is superfluous now to say that against this evil no sufficient provision was made, and the result has been perpetual and irreconcilable antagonism. From the first day the American treaty came into operation the contracting parties, Chinese and foreign, have been placed in a false position in regard to each other and to the permanent interests of both. The emperor had obtained a right he could not unaided duly exercise, and the foreign merchant was laid under a legal obligation which under such circumstances tended to make his trading privileges nugatory. The former was daily exposed to the loss of the whole or a part of a revenue to which he was by treaty legally entitled, as the price of commercial privileges to the foreigner; and the latter, in so far as he recognised his obligation to pay to such revenue, was debarred from trading with advantage or profit.
Loss to the custom-house is palpably only one of the mischiefs resulting, and injury to foreign trade is the direct consequence in a far more important degree. There may be some disposed to question this, but when no man can calculate on entering into an operation within 15 or 20 per cent of the prime cost of his merchandise before it shall leave his hands, and his next-door neighbour may gain advantage over him to this amount, while the ordinary margin of profit seldom exceeds that range, it is difficult to arrive at any other conclusion. And when we consider that the natural tendency of partial smuggling is to raise the price in the buying and to lower it in the selling market, its disastrous influence on the general prosperity of the trade must be too plain to admit of contradiction. However it may temporarily enrich a few, it must eventually impoverish many.
The British plenipotentiary may have thought that smuggling, so far as the interests of trade were concerned, would affect only the Chinese revenue: the American commissioner clearly must have concluded so, and on this supposition acted. But experience has abundantly proved such a conclusion erroneous, and based upon a partial view of the whole case.