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send forward their taxes in grain. This is despatched in bulk through a department of the Government to Peking, where it is distributed as rations among the Manchu soldiery and retainers in and about the capital. The value of the grain forwarded (generally called tribute rice) is estimated to amount to 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 £17,000,000, 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. What the actual sums may be which are thus levied and not accounted for it is impossible to tell, but a rough idea may be gathered from a calculation of the probable area under cultivation and the average actual payment. The area of the eighteen provinces constituting China proper is roughly 1,300,000 square miles, and assuming that one-fourth of this is under cultivation, we should have a taxable area of over 300,000 square miles, say 190,000,000 acres, which is probably under the mark. According to the best information obtainable a moderate estimate of the sums actually paid by the cultivators would give two shillings per acre. This for the eighteen provinces should give £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 133J lb 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 1£ million tons, which is at the rate of 9 lb per annum per head of the population. If the above amount of taels 1.50 were uniformly levied and returned, the revenue ought to be 37£ million taels instead of 13i. 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 Taiping and Mahommedan rebellions of 1850-70 ; but the Government has never been able to dispense with it since, and it is now one of the permanent sources of income. In the present disorganized condition of China it would perhaps be difficult to impose any other form of taxation which would yield a like return, but at the same time it is in form as objectionable as a tax can be, and is equally obnoxious to the native as to the foreign merchant. Tolls or barriers are erected at frequent intervals along all the principal routes ot 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 per'cent. The objectionable feature is the frequent stoppages with overhauling of cargo and consequent delays. By


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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, giving rise to frequent complaints on the part of foreign merchants. The difficulty in securing due observance of this treaty right 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, who in this, as in all other matters, have a general legislative power. The yield of this tax is estimated at present at taels 13,000,000 (£1,950,000), a sum which probably represents one-third of what is actually paid by the merchants, the balance being costs of collection. 4. The Imperial Maritime Customs.—The Maritime Customs is the one department of finance in China which is managed with probity and honesty, and this it owes to the fact that it is worked under foreign control. It collects all the duties leviable under the treaties on the foreign trade of China, and also all duties on the coasting trade so far as carried on by vessels of foreign build, whether Chinese or foreign-owned. It does not control the trade in native craft, the so-called junk trade, the duties on which are still levied by the native custom-house officials. By arrangement between the British and Chinese Governments, the foreign customs levy* at the port of entry a likin on Indian opium of 80 taels per chest, in addition to the tariff duty of 30 taels. This levy frees the opium from any further duty on transit into the interior. The revenue of the Maritime Customs has risen from taels 11,000,000 in 1873, to taels 22,500,000 in 1898. In sterling figures, however, it would seem to have fallen, owing to the fall in the gold price of silver. The revenue of 1873, converted into gold at the exchange of the day, was about £3,666,000, whereas that of 1898 would only give £3,375,000. From the point of view of the Chinese Government, which values everything in silver, the revenue has satisfactorily increased. b. Native Customs.—The administration of the Native Customs continues to be similar to what prevailed in the Maritime Customs before the introduction of foreign supervision. Each collector is constituted a farmer, bound to account for a fixed minimum sum, but practically at liberty to retain all he may collect over and above. If he returns more he may claim certain honorary rewards as for extra diligence, but he generally manages to make out his accounts so as to show a small surplus, and no more. Only imerfect and fragmentary returns of the native collectorates have een published, but the total revenue accruing to the Chinese Government from this source does not appear much to exceed two million taels (£300,000). It is believed that if this department were included in the purview of the foreign staff of the Maritime Customs the sum might easily be trebled. 6. Duty on Native Opium.—The growth and manufacture of opium was up till recent years forbidden by the laws of China. It was, however, openly connived at by the officials in several provinces, especially in the south-west, where indeed it seems to have been cultivated from time immemorial, and its taxation formed a main source of their income. The restrictions are now withdrawn, and the central Government have been endeavouring to appropriate the taxation to their own uses. The collection remains in the hands of the provincial officials, but they are required to render a separate account of duty and likin collected on the dr ug, and to hold the sum at the disposal of the Board of Revenue. Opium is pre-eminently a fit article of taxation, and if the levy were faithfully carried out at a rate corresponding, ad valorem, to that which is levied on Indian opium, it would give a revenue sufficient to enable the Government to remit the whole likin taxation on internal trade. The annual import into China of Indian opium amounts to about 50,000 chests, on which the Chinese Government receives from duty and likin combined about million taels (£825,000). The total amoimt of native-grown opium is estimated at about 400,000 chests (53,000,000 ft), and if this were taxed at taels 60 per chest, which in proportion to its price is a similar rate to what is levied on Indian opium, it should give a revenue of 24 million taels. Compared with this the sums actually levied, or at least returned by the local officials as levied, are insignificant. The returns so far as published give a total levy for all the eighteen provinces of only taels 2,200,000 (£330,000). 7. Miscellaneous.—Besides the foregoing, which are the main and regular sources of income, the provincial officials levy sums which must in the aggregate amount to a very large figure, but which hardly find a place in the returns. The principal are land transfer fees, pawnbrokers’ and other licenses, duties on reed flats, commutation of corvee and personal services, &c. The fee on S. III. — 4