(Communieated.)
China has incurred an_indebtedness in gold which be indefinitely increased if it sincerely intends to open up the country to steam, while it proposes also to incur expenditure upon armaments to repair the waste of the war. The present service of the debt may be two millions sterling annually, while three millions might easily be expended in munitions of How is China to provide these five millions? Tt cannot do so simply by imports, because whether the tax be in money or in kind neither enables it to pay interest nor to buy arms. Whatever China imports must be paid for in gold or by commodities, and China will not obtain gold by a tax upon imports paid in s it must do so by exporting commodities. China pays for what it imports with produce and by whatever tax it places upon produce, by so much does it diminish the! Quantity of exports and conversely the quantity of imports. To examine these propositions in detail: all governments demand from their subjects a portion of their earnings as provision for maintaining the order and security in which they live, but the more a Government takes from cultivators, the more it diminishes the quantity of produce available for export. But, you may say, that which China takes from its cultivators in the form of taxation is what Government will export for the service of its debt or to buy arms. This is true, so far as it goes, but when cultivators: cannot grow with a margin for profit they: turn. from what does not pay (produce which Government depends upon for export to pay debts with) to something which does pay (produce of less marketable value in Europe which from their very nature, articles the price of cannot be exported). Articles exported are,
which is not determined by China, but by the rest of the world in competition against China, and what governs price in China is the cost at which countries competing against China can sell. It may thus be seen that while China has an external debt, the way to liquidate it would be by removing restrictions upon export and placing restrictions upon imports which necessarily are also paid for by exports of produce. i Li produce is dear, that is, if Government takes 20 per cent' from cultivators instead of 10 per cent, cultivators will have less to exchange for imports. If imports are dear, that is if Government charges 10 per cent duty instead of 5 per cent, people do with less, but in either case, the position of the country from which imports are drawn is the same, for on the one hand China is poor and cannot pay, has only 90 per cent of produce for 100 por cent of imports, and on the other, imports are dear, China' has 100 per cent of produce but imports require 110 per cent.
This view of the situation soften lost sight of by those who see in increased import duty only diminished consumption b use of their increased cost, while, as a mi: ter of fact, diminution in consumption is equally expressed by diminution in the quantity of produce available for export. The Gover ment of China, like that of most semi-civi-ised peoples, encourages agriculture and frowns upon trade.
Tt is the merchant, the man who makes it his business to bring to people things they want in exchatige for things they do not want, who is looked down upon and taxed, but, without him, who is to get produce to a market, and without a market how is China to pay its debts and buy arms? Merchants then are steps very proper persons to consult with upon increase the revenue and, li honest ly inclined, with one voice they will say increase import duties, free expurts, free transit, and encourage manufactures. Each province in Chins isin itself kin dom and isposes of its own revenue, which it raises lugely by taxing marchand in transit through it to provinces beyond Liki skin, if by that is meant octroi such as. imposed in continental cities, need not be interfered th, What have every right to dem treaties is goods d district should not be tas port of a district they merely travers!
This in theory is provided for by transit passes, andi were these honoured in the observance as they have been in the breach, nothing could be said, but the whole history of transit passes in China is th regarded by provincial author central government has so acted as to make Europeans bel issues comnunds it doe: enforce them, and for t it is contended, in an, i dives, that should Ministe from, which ihe: ons on fie part of provincial auth There exists at present what Trade duty,. has 1 ed "upon export duty and in amount it is the same as transit duty. The application of this tax is that while produce shipped from one treaty port to another pays duty export (which it is not, being only a transhipment), it has in addition to pay a coast trade or transit duty of one half more than it would were it leaving the country altogether. As a transit duty there is nothing to be said against this
Text read from the printed page and cleaned; old type leaves the occasional error.