To the"Rditor of the "Nourm Cmxa Darty News"
Sm,—The resolution passed by the American Association, published in your issue of the 22nd instant, shows plainly that Sir James Mackay's' proposal is not understood by that Association, and as the mistake which the resolution perpetrates has also been made in several other quarters, it may not be amiss to point out where the error lies. Whether we agree, or do not agree, with the proposal is a matter apart, but let us at least know what we are talking about.
In the second "Whereas" of the resolntion of the American Association, it is cited that the proposition of an increase in the import duties to 15% "is urged pri marily in the interest of the Chinese Gover. ment in order to enhance its revenues, that it may more easily meet its oblig: tions to Foreign Powers under the indemnity award of the peace protocol." Presuming that the provisions of the scheme are correctly given in your article of the 18th inst., there is no such intention, but that the surtax on the present. duties is to he applied wholly to provincial purposes, the object being to eompsnsate the provincial exchequers for the loss of revenue which they will sustain through the aholition of likin and other inland taxes of all Kinds. Mr, F. S. Little, in his articles which you have published, falls into the same mistake when he talks if making the payne is ry easy for China by transferring the liability to Western shoulders, and Mr. Blumenfeld in his sneering letter published on Saturday in the "Shanghai Mercury" (the tone of is much to be condenined), shows the same ignorance of what is evidently the intention of Sir James Mackay's proposal, namely the replacement of " corrupt system of taxation by one of honest collection, There is no question of giving the Chinese anything at all, in fact the third "Whereas" of the American resolution expresses the opinion that the proposal jis "illogical, illusory, and contradictory" because it does not give the Chinese an equivalent of what it is proposed to take away—the terms "'illogical, illusory, and contradictory" being of course a corollary from the mistaken premises with which the resolution starts. Many of us may no doubt think that the equivalent may be insufficient, and many vf us undoubtedly do think that the crooked ways of the Chinese will be directed towards securing a "give" where no "give" was intended, hose, however, are points to be consi ed by themselves—points upon which public opinion will he, and no doubt ought to be, fully expressed. But what has got to be understood and which the public apparently do not understand is that Sir James Mackay's proposal, whether practicable or not, does not contemplate giving the Chinese anything; its evident aim is, as I have said, the replacement of a corruptly collected revenue by one yoverned by honest administration. Let us, in our discussions, argue the matter out on this ound, and do not let us be carried away by the false assumption that the suggested surtax is proposed for the purpose of enabling Chink to more easily inet its obligations to Foreign Powers" in the matter of the indemnity.
The fourth " Wheress" of the American resolution strikes me as rather xn extraordinary one as coming from a body of merchants in Shanghai; it states thet "no sufficient data exist, or have been submitted, for approximately estimating the result of such change as is proposed, and that such result is @ matter of con-lecture only." What is meant by the term "result?" It cannot mean "result" to the trade of China, for certainly no one can supply "data" with regard to ® scheme which only at present exists on paper. The term "result" then, I take it, can only refer to financial result, namely to the amount of money which the surtax would provide. On this point it is a strange thing to say that no sufficient data exist," and the complaint that they have not been submitted" must, I take it, be explained by the natural presumption that, with the data easily available, business men would work "results" out for themselves! The data ''exist" in the published Returns of the Imperial Maritime Customs; I do nob say that they are sufficient" for accurate tation, but they at least provide rial for pretty close approximation. Seeing, however, that this fourth Whereas" of the American resolution seems to call for some light on the subject, I may venture to give it.
The duties collected on the landed value of Imports (Upiuin excepted) averaged, during the years 1897-1899 (the period fixed by the protocol for the purposes of valuation), as nearly xs possible 3} per cent. Let us take as a basis for calcula~ tion the largely expanded import trade of 1901 which, again excluding Opium and also excluding articles still retained on the free list, is returned at a landed value of about Tls. 201,500.000. The restoration of the effective 5 per cart" consequently in-cates an increase in Imperislly collected duties of some Tis 8,000,000, which amount stands hypothecated to the service of the indemnity. Supposing the proposed surtax to be 10 per cent. as as-umed by the America" resolution, this would, at" first right, iridiate an increased revenue for provincial purposes of some Tls. 20,000,000 but from this there are deductions to be made. In the fist place there are the Transit Dues, which under Sic James 'Mackay's scheme would of course disappent and which -xst_year amounted to about Tls. 917,000; further, as Sir James Mackay's' scheme provides that articles hitherto on the free list but now dutiable are not to pay more than the "effective 5 percent," we have another deduction to make, difficult to estimate, bu2 which we may reckon at about Tls. 2/300,000. Tuke then these deductions, the accuracy of
Text read from the printed page and cleaned; old type leaves the occasional error.