May 1, 1894, had been fixed as the date upon which the trade-mart at Yatung was to be opened, and at the appointed time Mr. Claude White, the Political Officer in Sikkim, was sent to visit Yatung, to attend the opening of the mart, and to report on the general situation as regards trade. He was instructed not to raise the question of demarcating the frontier, but to undertake, if the subject was mooted by the Chinese officials, that their views and suggestions should be laid before the Government of India.
Mr. White, writing on June 9 from Yatung, reported that, in the first place, the site of the mart had been “exceedingly badly chosen.” It will be remembered that it was chosen by the Tibetans, and simply accepted by us out of deference to their feelings. It was at the bottom of a narrow valley, shut in by steep hills, with no room for expansion. He further reported that the godowns (stores), or shops, built for the trade would answer the purpose of native shops, but were quite inadequate for the storage of goods or for the use of European merchants, and that the rent proposed was exorbitant, being Rs. 25 a month, when a fair rent would be from Rs. 4 to Rs. 5. He found the Tibetans most discourteous and obstructive, and he believed that the Lhasa authorities had issued orders that the free-trade clauses of the treaty were not to be carried out. The local official at Phari, at the head of the Chumbi Valley, charged 10 per cent. on all goods passing through Phari, both imports and exports; and this action, in Mr. White’s opinion, certainly did away with any freedom of trade, as provided for in the treaty, for it was obviously useless to have provided by treaty that Indian goods should be allowed to enter Tibet free of duty if a few miles inside the frontier, and on the only road into Tibet, a heavy duty was to be imposed upon them.
Mr. White also reported that the Chinese, though friendly to him, and apparently willing to help, had “no authority whatever.” They admitted that the treaty was not being carried out in a proper spirit, and Mr. White gathered that the Tibetans actually repudiated it, and asserted that it was signed by the British Government and the Chinese, and therefore they had nothing to do with it. In any case, they maintained that they had a right to impose what taxes they chose at Phari so long as goods were allowed to pass Yatung free. The Chinese confessed that they were not able to manage the Tibetans. The Tibetans would not obey them, and the Chinese were afraid to give any orders. China was suzerain over Tibet only in name, was Mr. White’s conclusion. Negotiation was, therefore, he said, most difficult, for though the Chinese agreed to any proposal, they were quite unable to answer for the Tibetans, and the Tibetans, when spoken to, either sheltered themselves behind the Chinese or said that they had no orders to give any answer for Lhasa, and could only report.
Mr. White’s immediate superior, the Commissioner of the Rajshahi Division, agreed with him that the levying of a duty of 10 per cent. ad valorem at Phari was a clear breach of the main article of the Trade Convention. He contended that by Article IV. of the Regulations it is provided that goods entering Tibet for British India across the Sikkim-Tibet frontier, or vice versa, shall be exempt from duty for a period of five years, and that this meant a general exemption from all duties, wherever imposed, the place of realization being altogether irrelevant. He recommended, therefore, that this breach of the main article of the treaty, to which all the other provisions were ancillary, should be made the subject of a representation to the Chinese Government.
The Government of Bengal took the same view. They thought the levy of the duty at Phari undoubtedly seemed to be inconsistent with the terms of the treaty, which provided for free trade for a period of five years. And the Lieutenant-Governor felt that no time should be lost in making this matter the subject of a representation to the Government of China.
And in this view our Minister at Peking, Mr. (afterwards Sir Nicholas) O’Conor, Ambassador at St. Petersburg and Constantinople, thoroughly concurred, and suggested to the Viceroy that the imposition of a 10 per cent. ad valorem duty at Phari should be very strongly protested against as contrary to treaty stipulations.
The Government of India, however, "recognizing the necessity for extreme patience in dealing with the Tibetans, decided that it would be premature to make any formal complaint of their obstructiveness."[[6]] They wrote to the Government of Bengal that "The information in regard to the levy of duty at Phari and to the obstructiveness of the Tibetans was certainly unsatisfactory, but the Regulations only laid down that goods entering Tibet from British India across the Sikkim-Tibet frontier, or vice versa, shall be exempt, etc. Phari is a considerable distance from the frontier, and unless it could be shown that the duty to which Mr. White referred was a special one newly imposed it appeared doubtful whether the Government of India could enter a valid objection." “It has always been recognized,” continues the despatch, "that the utmost patience is necessary in dealing with the Tibetans, and having regard to the short time which has elapsed since the date fixed for the opening of the Yatung mart, the Governor-General in Council would prefer to make nothing in the nature of a complaint to the Chinese Government at the present stage."[[7]]
The Viceroy, accordingly, merely wrote to the Amban that he had been sorry to learn from Mr. White’s reports that he was disappointed at the existing conditions of trade between Tibet and Sikkim; that it would seem that Mr. White was of opinion that trade was unduly hampered by the action of the Tibetan officials at Phari; that His Excellency (the Amban) would be interested to hear the views which Mr. White had formed; and that he, the Viceroy, was confident that traders will, under the Amban’s directions, be allowed all the freedom and privileges permissible under the Regulations, and he hoped that before long they might be able to congratulate each other on successful trade development at Yatung. Certainly nothing could have been milder, more patient, and more forbearing—and also, as it proved, less effectual.