Expenditure.
| Taels. | |
| Provincial | 20,000,000 |
| Military and naval | 35,000,000 |
| Metropolitan | 10,000,000 |
| Bannermen (Manchu “soldiers”) | 1,380,000 |
| Palace | 1,100,000 |
| Customs | 3,600,000 |
| Legations | 1,000,000 |
| River works | 940,000 |
| Railways | 800,000 |
| Loans | 24,000,000 |
| Contingent reserve | 3,300,000 |
| ———— | |
| Total | 101,120,000 |
A calculation of revenue from all sources published by the Shanghai Shen Pao in 1908, apparently derived from official sources, gave a total revenue of 105,000,000 taels, or about 15 million sterling. This sum is obviously less than the actual figures. In 1907 Mr H.B. Morse, commissioner of customs and statistical secretary in the inspectorate general of customs, drew up the following table based on the amounts presumed to be paid by the tax payer:—
| Imperial Administration. | Provincial Administration. | Local Administration. | ||
| Taels. | Taels. | Taels. | ||
| I. | Land Tax | 25,887,000 | 67,060,000 | 9,315,000 |
| II. | Tribute | 7,420,000 | 15,582,000 | 2,300,000 |
| III. | Native Customs | 3,790,000 | 1,290,000 | 249,000 |
| IV. | Salt Gabelle | 13,050,000 | 26,000,000 | 25,000,000 |
| V. | Miscellaneous | 3,856,000 | 5,998,000 | 985,000 |
| VI. | Foreign Customs | 31,169,000 | 3,942,000 | 1,230,000 |
| VII. | Li-kin | 13,890,060 | 22,502,000 | 3,639,000 |
| Total | 99,062,000 | 142,374,000 | 42,718,000 | |
Mr Morse adds that the grand total shown, taels 284,150,000[43] “is an obviously insufficient sum on which to maintain the fabric of government in an empire like China, but it has been reached by calculations based on a few known facts and ... is offered as throwing some light on a subject veiled in obscurity.”[44]
The service of the foreign debt, together with the pressure of other needs—such as the cost of education and the army—made more manifest than previously the chaos of the Chinese fiscal system. A scheme to reform the national finances was promulgated under an edict of the 11th of January 1909, but it did not appear to be of a practical character.
Sources of Revenue. I. Land Tax.—In China, as in most oriental countries, the land has from time immemorial been the mainstay of the revenue. In the early years of the present dynasty there was levied along with the land tax a poll tax on all adult males, but in 1712 the two were amalgamated, and the whole burden was thrown upon land, families not possessing land being thereafter exempted from taxation. At the same time it was decreed that the amount of the land tax as then fixed should be permanent and settled for all time coming. It would appear from the records that this promise has been kept as far as the central government has been concerned. In all its many financial difficulties it does not seem ever to have tried to increase the revenue by raising the land tax. The amount of tax leviable on each plot is entered on the title deed, and, once entered, it cannot be changed.[45] The tax on almost all lands is thus stated to be so much in silver and so much in rice, wheat or whatever the principal crop may be. Except in two provinces, however, the grain tax is now commuted and paid in silver. The exceptions are Kiang-su and Cheh-kiang, which still send forward their taxes in grain. The value of the grain forwarded (generally called tribute rice) is estimated at taels 6,500,000. The total collection in silver, as reported by the responsible officials, amounts in round numbers to taels 25,000,000. The total yield of the land tax, therefore, is taels 31,500,000, or say £4,725,000. It will readily be granted that for such a large country as China this is a very insignificant one. In India the land tax yields about £20,000,000, and China has undoubtedly a larger cultivated area, a larger population, and soil that is on the whole more fertile; but it is certain that this sum by no means represents the amounts actually paid by the cultivators. It is the sum which the various magistrates and collectors have to account for and remit in hard cash. But as nothing is allowed them for the costs of collection, they add on a percentage beforehand to cover the cost. This they usually do by declaring the taxes leviable not in silver, but in copper “cash”, which indeed is the only currency that circulates in country places, and by fixing the rate of exchange to suit themselves. Thus while the market rate is, say, 1500 cash to the tael, they declare by general proclamation that for tax-paying purposes cash will be received at the rate of 3500 or 4000 to the tael. Thus while the nominal land tax in silver remains the same it is in effect doubled or trebled, and, what is worse, no return is made or account required of the extra sums thus levied. Each magistrate or collector is in effect a farmer. The sum standing opposite the name of his district is the sum which he is bound to return under penalty of dismissal, but all sums which he can scrape together over and above are the perquisites of office less his necessary expenses. Custom, no doubt, sets bounds to his rapacity. If he went too far he would provoke a riot; but one may safely say there never is any reduction, what change can be effected being in the upward direction. According to the best information obtainable a moderate estimate of the sums actually paid by the cultivators would give two shillings per acre. This on an estimate of the area under cultivation should give for the eighteen provinces £19,000,000 as being actually levied, or more than four times what is returned.
2. The Salt Duty.—The trade in salt is a government monopoly. Only licensed merchants are allowed to deal in it, and the import of foreign salt is forbidden by the treaties. For the purpose of salt administration China is divided into seven or eight main circuits, each of which has its own sources of production. Each circuit has carefully defined boundaries, and salt produced in one circuit is not allowed to be consigned into or sold in another. There are great differences in price between the several circuits, but the consumer is not allowed to buy in the cheapest market. He can only buy from the licensed merchants in his own circuit, who in turn are debarred from procuring supplies except at the depot to which they belong. Conveyance from one circuit to another is deemed smuggling, and subjects the article to confiscation.
Duty is levied under two heads, the first being a duty proper, payable on the issue of salt from the depot, and the second being likin levied on transit or at the place of destination. The two together amount on an average to about taels 1.50 per picul of 133½ ℔ or 3s. 9d. per cwt. The total collection returned by the various salt collectorates amounts to taels 13,500,000 (£2,025,000) per annum. The total consumption of salt for all China is estimated at 25 million piculs, or nearly 1½ million tons, which is at the rate of 9 ℔ per annum per head of the population. If the above amount of taels 1.50 were uniformly levied and returned, the revenue would be 37½ million taels instead of 13½. In this calculation, however, no allowance is made for the cost of collection.
3. Likin on General Merchandise.—By the term likin is meant a tax on inland trade levied while in transit from one district to another. It was originally a war tax imposed as a temporary measure to meet the military expenditure required by the T‘aip‘ing and Mahommedan rebellions of 1850-1870. It is now one of the permanent sources of income, but at the same time it is in form as objectionable as a tax can be, and is equally obnoxious to the native and to the foreign merchant. Tolls or barriers are erected at frequent intervals along all the principal routes of trade, whether by land or water, and a small levy is made at each on every conceivable article of commerce. The individual levy is small, but over a long transit it may amount to 15 or 20%. The objectionable feature is the frequent stoppages with overhauling of cargo and consequent delays. By treaty, foreign goods may commute all transit dues for a single payment of one-half the import tariff duty, but this stipulation is but indifferently observed. It must also be remembered, per contra, that dishonest foreign merchants will take out passes to cover native-owned goods. The difficulty in securing due observance of treaty rights lies in the fact that the likin revenue is claimed by the provincial authorities, and the transit dues when commuted belong to the central government, so that the former are interested in opposing the commutation by every means in their power. As a further means of neutralizing the commutation they have devised a new form of impost, viz. a terminal tax which is levied on the goods after the termination of the transit. The amount and frequency of likin taxation are fixed by provincial legislation—that is, by a proclamation of the governor. The levy is authorized in general terms by an imperial decree, but all details are left to the local authorities. The yield of this tax is estimated at taels 13,000,000 (£l,950,000), a sum which probably represents one-third of what is actually paid by the merchants, the balance being costs of collection.