Organization of Government.

In general the domestic government of China is within its own. control; but its operations and, to a certain extent, its personnel, are controlled by treaties and other international conventions or understandings.

Powers of Government.

Fiscal limitations.

1. Treaties with foreign powers fix maximum rates that may be imposed on imports.

2. Certain revenues (e. g., salt gabelle and maritime customs and certain excises) are pledged in payment of interest and principal on certain public debts or liabilities.

3. Alien residents and foreign corporations are not subject to taxation.

4. State undertakings, like railways, banks (Bank of China and Bank of Communications), mines, arsenals, etc., are under varying degrees of foreign control and their revenues pledged as result of special loans.

5. By treaties and other understandings, China is under a great variety of limitations as to parties from whom, or conditions under which, it will make further loans or grant industrial or commercial concessions.

6. By treaties,' certain places made "treaty ports." (See below, p. 110.)

For the final protocol of September 7, 1901, in settlement of demands upon China arising out of Boxer outbreak and the siege of the legations at Peking, see below, p. 111.

Personnel of Government.

1. Is under a number of international obligations as to employment of persons in administrative services-e. g., in salttax administration and collection of maritime customs, in the banks, railways, etc.

2. Is under a number of international understandings as to employment of advisers (military, political, legal, or technical in certain services).

Police jurisdiction.

Limited:

1. By "concessions" in the cities of Shanghai, Tientsin, Canton, and Hankow, and by legation quarter in Peking. 2. By areas "leased" to foreign powers.

3. By military occupation of a portion of Shantung Province by Japanese troops.

4. Generally as to resident aliens and foreign corporations by reason of extraterritorial status enjoyed by them.

5. By rights granted to foreign nations to station troops within her borders at certain points; and to employ "armed guards" on, and alongside of, railway lines. Japan claims also the right to maintain military guards for protection of her consuls in certain places.

6. By special rights granted missionaries and their estab

ments.

7. By agreements on part of China not to station her own troops within certain areas, especially along railways between Tientsin and Peking.

CHINESE SALT TAX (GABELLE).

By the reorganization loan agreement of April 26, 1913, China agreed to an immediate reorganization, with the assistance of foreigners, of a system for the assessment and collection of the salt tax. Previously to this a lien had been given upon the salt revenues for the payment of certain public debts. See below, p. 111. (Final Protocol, Sept. 7, 1901.)

The pertinent clauses of this loan agreement of April 26, 1913, are as follows:

"Art. V. The Chinese Government engages to take immediate steps for the reorganization with the assistance of foreigners of the system of collection of the salt revenues of China assigned as security for this loan, in the manner which has been determined upon by the Ministry of Finance and which is as follows:

The Chinese Government will establish a Central Salt Administration (Yen Wu Shu) at Peking, under the control of the Minister of Finance. This Central Salt Administration will comprise a Chief Inspectorate of Salt Revenues (Chi Ho Tsung So) under a Chinese Chief Inspector (Tsung Pan) and a foreign associate chief inspector (Hui Pan), who will constitute the chief authority for the superintendence of the issue of licenses and the compilation of reports and returns of revenues. In each salt-producing district there will be a branch office of the Chief Inspectorate (Chi Ho Fen So), under one Chinese and one foreign District Inspector (So Chang) who shall be jointly responsible for the collection and deposit of the salt revenues. The engagement and dismissal of these Chinese and foreign District Inspectors and of the necessary Chinese and foreign staff at the Chief and Branch Inspectorates will be decided jointly by the Chinese and foreign Chief Inspectors, with the approval of the Minister of Finance. It will be the duty of the District Inspectors jointly to superintend the issue of licenses and to collect all fees and salt dues:

and to report all receipts and disbursements in full detail to the local Salt Commissioner (Yen Yun Shu) and to the Chief Inspectorate in Peking, which will publish periodical reports of the same after submission to the Minister of Finance.

Release of salt against payment of dues in any District will be made only under joint signature of the Chinese and foreign District Inspectors, the revenues so collected to be lodged by them in a "Chinese Government Salt Revenue Account" with the Banks or with depositories approved by the Banks, and reported to the Chief Inspectorate for comparison with their returns. This Salt Revenue Account shall be drawn upon only under the joint signatures of the Chief Inspectors, whose duty it will be to protect the priority of the several obligations secured upon the salt revenues.

So long as the interest and principal of this loan are regularly paid there shall be no interference with the Salt Administration as herein provided, but if interest and/or principal be in default at due date, then after a reasonable period of grace the said organization shall forthwith be incorporated with the Maritime Customs and the revenues above pledged shall be administered for the account and in the interest of the bondholders."

The text of this agreement is given in Millard, T. F., Our Eastern Question, page 408, New York, The Century Co., 1916.

CHINESE MARITIME CUSTOMS.

On June 29, 1854, an agreement was entered into with the Shanghai local government that a customs office be established under foreign control, each of the consuls of Great Britain, United States, and France nominating an inspector. The customs office opened July 12, 1854.

In 1863 the head offices were transferred to Peking and the services completely reorganized.

"In addition to collecting duties on imports and exports, the imperial maritime customs are charged with the collection of (1) duties on the coasting trade in foreign-built bottoms, whether Chinese or foreign owned; (2) tonnage dues on shipping; (3) transit duties exempting foreign imports from further taxation on removal inland; (4) likin (special levy in addition to the tariff) on foreign opium. They are also responsible for the lighting of the coast and some inland waterways, and at Shanghai they maintain a force of river police. All moneys collected by the customs are paid to an official customs bank, attached to each office, which is under the control of a Chinese superintendent."

"By imperial decree of May 9, 1906, the maritime customs, which had hitherto been (more nominally than actually) under the Chinese Foreign Office, were placed under the direct control of a new board especially created for this purpose the Schuiwuchu or revenue council."

"The imperial Chinese post office, which grew up under the maritime customs and was formally recognized by imperial edict on March 20, 1896, was ordered on May 29, 1910, to be separated from the service and to be put under the ministry of posts and communications, and the actual transfer was carried out in May,

1911."

"The administration of the customs service is now divided into three main sections: (1) The revenue department, (2) the marine department, (3) the works department. The total number of employees (in 1914) is 7,411, while as many more are employed in the postal service. The foreigners in the service number 1,357 (representing 20 nationalities), of whom a little more than 50 per cent are British." (China Year Book, 1914, p. 116, London, Routledge & Sons.)

On February 13, 1898, in reply to a letter from the British minister at Peking, the Chinese Foreign Office gave assurance that the inspector general of the maritime customs should be a British subject as long as the British trade predominates in China.

"Native customs houses exist side by side with the maritime customs at the treaty ports, as well as at all important stations on the coast and inland. At the treaty ports the trade carried on in Chinese sailing craft comes under their jurisdiction. By the Peace Protocol of 1901, the native customs houses within 15 miles of a treaty port have been placed under the supervision of the foreign commissioner of customs of that port, with the result that a regular tariff has in these cases been substituted for the irregular levy or bargaining customary at native customs stations."

GOVERNMENT OF SHANGHAI.

[Quoted from T. R. Jernigan, China's Business Methods and Policy.]

"There is a mixed court for each of the two settlements with original and exclusive, and in some cases, final jurisdiction. In the French Settlement the mixed court is presided over by a Chinese magistrate and an officer from the consulate general of France, and no officer from any other foreign consulate general is permitted, except by the courtesy of the consul general of France, to sit in that court. But in the mixed court that holds its session in the International Settlement, while presided over by a Chinese magistrate, the foreign consular officer who also presides is not restricted to any one consulate general. Generally the foreign consular officers who preside with

the Chinese magistrate in the mixed court of the International Settlement are from the consulates general of Great Britain, Germany, and the United States, and these three officers have an understanding as to the day when one or the other shall preside. There is, however, this exception: Should a case be before the mixed court on the day when the British or German officer presided, and which involved the interest of a citizen of the United States, such a case would be continued in order that the officer from the consulate general of the United States might preside, and vice versa. The mixed court is in session every day, except Sunday, the morning session being mostly devoted to the disposal of police cases, and the afternoon session to the trial of civil cases.

"As the French and International Settlements adjoin, it was necessary to have rules defining the extent of the jurisdiction of the two mixed courts, and such rules were framed by the consular body, with the approval of the diplomatic body of Peking." (Jernigan, T. R., China's Business Methods and Policy, p. 224, London, T. Fisher Unwin, 1904.)

EXTRATERRITORIAL JURISDICTION IN CHINA.

[Quoted from H. B. Morse, The Trade and Administration of China.]

"The law applicable to mixed courts in China at the present day is that prescribed by the Chefoo convention of 1876 with Great Britain, and in Article IV of the American treaty of 1880, given above, but they merely regularized what had been the practice since foreign nations undertook the task of enforcing justice on and for their nationals. There is not anywhere a special tribunal, as in Egypt, for the trial of all mixed cases; but the court is, in each instance, a court of the defendant's nationality, giving its decision under the supervision of a competent representative of the plaintiff's nationality. This is the theory. In practice the Chinese have seldom sent representatives to sit on the bench in the foreign courts, since it has generally been recognized that the judgments rendered there are based on the law and the evidence; on the other hand, the foreign powers have never felt the same confidence in Chinese decisions, and no suit is brought in China by a foreign plaintiff against a Chinese defendant and left to the sole decision of the Chinese judge without the presence of an assessor of the plaintiff's nationality or acceptable to him.

"In a 'concession,' such as those at Tientsin, Hankow, or Canton, this Chinese court for mixed cases sits at the consulate of the lessee power, and the assessor is invariably the consul of that power or his representative, irrespective of the actual nationality of the plaintiff. To allow any other assessor would admit an imperium in imperio..