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THE  SYSTEM  OF  TAXATION  IN  CHINA 
IN  THE  TSING  DYNASTY,  16444911 


BY 

SHAO-KWAN  CHEN,  A.  M. 


SUBMITTED   IN   PARTIAL   FULFILMENT   OF   THE    REQUIREMENTS 

FOR    THE    DEGREE   OF    DOCTOR   OF    PHILOSOPHY 

IN  THE 

Faculty  of  Political  Science 
IN  Columbia  University 


NEW  YORK 
I914 


Copyright.  1914 

BY 

SHAO-KWAN  CHEN 


n 

n 


Zo  tbe 

Memory  of  My  Father 
MR.  BING-CHANG  CHEN 

WHO  DIED  IN  I913  WHEN  I 

WAS  STUDYING  IN  THE 

UNITED  STATES 


PREFACE 

The  several  Chinese  standard  works  on  the  institutions 
of  the  Tsing  Dynasty,  1644-1911,  give  us  simply  historical 
descriptions  of  taxation  and  there  seems  to  be  room  for  a 
scientific  treatise,  not  too  detailed  in  historical  facts  of 
similar  nature  or  in  local  variations  of  insignificance,  de- 
signed for  both  Occidental  and  Oriental  readers  wishing  a 
general  survey  of  our  taxation  system  as  it  survives  to-day. 
The  present  work  is  an  attempt  to  generalize  logically  the 
facts  connected  with  taxation  in  the  Tsing  Dynasty  and  to 
interpret  their  causes  and  effects  scientifically.  It  includes 
those  taxes  of  considerable  importance  which  are  univer- 
sally imposed  in  all  the  provinces.  It  is  not  worth  while  to 
discuss  those  taxes  which  have  not  developed  into  the  typi- 
cal systems  of  the  Tsing  Dynasty  either  due  to  their  insig- 
nificant yield  or  due  to  the  fact  that  they  are  merely  pro- 
vincial special  taxes  which  have  been  created  during  the 
last  two  decades  of  financial  chaos,  and  subject  only  tO'  the 
temporary  regulations  of  the  respective  provinces.  On  the 
other  hand,  the  discussion  of  the  political  organization  is 
absolutely  necessary  to  a  clear  conception  of  the  system. 
Consequently,  we  have  to  treat  the  government  of  the 
Tsing  Dynasty  and  its  expenditures  and  revenues.  In  con- 
nection with  this  treatment,  the  same  plan  of  generalization 
and  interpretation  is  followed. 

As  to  the  sources  of  information,  the  facts  have  been 

selected  chiefly  from  the  two  standard  works  published  by 

the  government,  vis.,  the  Institutes  of  the  Tsing  Dynasty, 

and  th^  Amendments  of,  the  Institutes  of  the  Tsing  Dynasty. 

149]  7 


8  PREFACE  [150 

The  facts  have  been  chosen  as  carefully  as  possible 
and  arranged  systematically  according  to  my  plan.  In  the 
main,  the  work  of  generalization  and  interpretation  is  based 
upon  personal  knowledge  and  observation.  In  this  way,  it 
is  hoped  that  the  present  work  will  fulfil  the  object  of  ren- 
dering service  to  the  readers.  But  it  must  be  frankly  ad- 
mitted that  this  work  is  by  no  means  satisfactory  from  the 
statistical  standpoint,  but  this  is  because  nobody  can  solve 
the  mystery  of  the  financial  conditions  in  all  the  provinces 
of  China  owing  to  the  inefficiency  of  the  financial  control.^ 

My  chief  obligations  in  connection  with  this  book  are  to 
Professor  E.  R.  A.  Seligman,  for  the  sincere  inspiration 
and  the  valuable  supervision  of  the  whole  work,  and  to  Mr. 
R.  M.  Haig  for  his  valuable  review  of  the  manuscript,  his 
numerous  suggestions  and  his  reading  of  the  proof. 

Shao-Kwan  Chen. 

Columbia  University,  March  26,  1914. 

1  Cf.  infra,  pp.   106-107. 


CONTENTS 

CHAPTER  I 
The  Chinese  Government 

PACK 

Forms  of  Government — The  Emperor — The  Council  of  State — The 
Department  of  Foreign  Affairs— Departments  of  Internal  Affairs 
— The  Department  of  Finance— General  Position  and  Powers  of 
Heads  of  Departments — The  Censorate — Less  Important  Depart- 
ments— Territorial  Divisions  of  Government— Provincial  Admin- 
istration—Local Administration — General  Features  of  Govern- 
ment           II 

CHAPTER  II 

Expenditures  and  Revenues 

Classification  of  Expenditures — Comparative  Importance  of  Expen- 
ditures— Sources  of  Revenue — Appropriations — Transportation  of 
Products — Balance  of  Expenditures  and  Revenues— General  Fea- 
tures of  Expenditure  and  Revenue 31 

CHAPTER  III 

Taxation  of  Land 

The  Land  System — The  Land  Policy— The  Tax  System— The  Land 
Rent — The  Exemption  of  Payment — Existing  Rates — Adminis- 
trative Rules— General  Features  of  the  Land  Tax 47 

CHAPTER  IV 

Taxation  of  Salt 

Production  of  Salt — Consumption  of  Salt — Distribution  of  Salt — 
Taxation  of  Salt — Smuggling  of  Salt — Administration  of  the  Salt 

Monopoly— General  Features  of  the  Salt  Monopoly 70 

iSi]  9 


10  CONTENTS  [1^2 

FAGS 

CHAPTER  V 
Taxation  of  Commodities 

The  Regular  Customs — The  Likin  Duty 93 

Conclusion 106 

Appendices 108 

Bibliography 118 


CHAPTER  I 

The  Chinese  Government,  1644-1911  ^ 

Forms  of  Government 

Even  though  her  great  philosophers,  like  Confucius, 
Mencius  and  many  others,  advocated  the  theory  of  democ- 
racy, China,  before  191 1,  was  a  monarchy.  Its  most  im- 
portant aspects  may  be  described  as  follows : 

( 1 )  The  Chinese  government  was  monarchic,  hereditary 
and  unlimited.  It  was  monarchic  and  unlimited,  because 
the  Emperor,  representing  the  state  as  well  as  the  govern- 
ment, possessed  both  the  sovereign  and  the  governmental 
powers  of  the  land.  Furthermore,  the  hereditary  principle 
was  maintained  not  only  by  the  right  of  inheritance  but 
also  as  a  means  to  the  end  of  stable  government. 

(2)  The  Chinese  government  was  consolidated  and  cen- 
tralized. It  was  not  divided  into  three  independent  depart- 
ments, as  the  legislature,  the  executive  and  the  judiciary. 
The  Emperor,  in  the  exercise  of  his  powers,  found  it  neces- 
sary to  create  several  departments  to  take  charge  of  the 
legislation  and  supervision  of  laws  and  several  judicial 
courts  to  administer  justice.  These  offices,  together  with 
the  Council  of  State,  generally  known  as  the  Grand  Coun- 
cil, constituted,  as  we  shall  see,  the  imperial  government. 

1  The  reorganization  of  government  in  the  period  1906-1911  is  not 
considered  for  three  reasons,  (a)  It  did  not  affect  the  typical  system 
of  the  Tsing  Dynasty,  (b)  It  was  an  unnecessary  and  unsystematic 
reform  causing  a  confusion  of  powers  rather  than  a  better  distri- 
bution of  powers,    (c)  It  bore  no  relation  to  the  tax  systems. 

153]  II 


12  THE  SYSTEM  OF  TAXATION  IN  CHINA  [1^4 

Subordinate  to  it  were  the  provincial  governments,  each 
with  a  governor^  at  its  .head.  Owing  to  the  fact 
that  a  highly  centralized  government  was  not  suited  to  a 
state  like  China  with  vast  territory  and  different  economic 
conditions,  numerous  grants  of  powers  had  to  be  made  to 
the  governors  in  order  that  they  might  adapt  the  execution 
of  the  laws  to  local  conditions.  But  this  does  not  mean 
that  the  Chinese  government  was  decentralized.  First  of 
all,  the  governors  were  subject  to  the  will  of  the  Emperor. 
Secondly,  the  heads  of  the  imperial  governmental  depart- 
ments made  the  laws  which  the  governors  were  bound  to 
obey,  unless  they  disregarded  certain  laws  with  the  consent 
of  the  Emperor.  Thirdly,  the  grand  councillors,  being  the 
advisers  of  the  Emperor,  were  more  influential  than  any 
other  high  officials  in  the  imperial  and  provincial  govern- 
ments. 

In  conclusion,  China  had  a  monarchic,  hereditary,  un- 
limited, consolidated  and  centralized  government.  Unfor- 
tunately, the  political  philosophies  of  Confucius  and  many 
other  great  writers  were  not  carried  out  in  early  times,  and 
China  did  not  become  a  democratic  state  until  the  Revolu- 
tion of  191 1.  With  the  exception  of  the  Emperor,  how- 
ever, the  whole  government  rested  upon  a  popular  basis, 
because  the  candidates  for  lower  offices  were  chosen  by 
competitive  examinations  held  in  the  national  and  provin- 
cial capitals,  while  the  vacancies  of  higher  offices  were  filled 
by  those  selected  among  the  lower  officials.  It  is  true  that 
only  a  minority  of  the  subjects  participated  in  the  actual 
work  of  government.  But  every  male  subject  had  equal 
chance  to  pass  the  examinations  in  order  to  be  admitted  to 
the  government.  In  case  of  failure  in  any  one  examination, 
he  might  take  a  series  of  examinations  during  his  life.    Al- 

1  In  this  book,   I  identify  the  governor-general  with  the  governor. 
For  the  reason  of  this,  cf.  infra,  pp.  23-24. 


1 2^]  THE  CHINESE  GOVERNMENT  13 

though  the  ideal  government  is  one  in  which  every  member 
of  the  state  has  a  share,  a  government  such  as  the  one  which 
existed,  in  which  every  member  might  have  a  share,  is  far 
from  undesirable. 

The  Emperor 
As  China  was  a  monarchic  state,  the  Emperor  enjoyed 
the  sovereign  power.  His  powers  were  neither  enumerated 
nor  residual.  He  might  be  deprived  of  power  only  by  a 
successful  revolution.  As  long  as  he  was  in  power,  the 
governmental  machinery  was  created  and  preserved  by  him, 
and  all  the  officials  thereof  were  responsible  only  to  him. 
His  orders  were  the  laws  of  the  country.  By  the  word 
"  order  "  is  meant  not  merely  his  personal  orders  but  also 
all  the  laws,  drafted  by  his  ministers  with  or  without 
amendments  by  him,  and  promulgated  by  him  in  the  form 
of  an  imperial  order.  In  foreign  relations,  he  represented 
the  country.  Treaties  and  other  agreements  were  promul- 
gated by  imperial  orders  as  a  part  of  the  law  of  the  land. 
Of  course,  he  also  had  power  to  declare  both  offensive  and 
defensive  wars. 

The  Council  of  State 
(i)  The  Inner  Cabinet.  The  Inner  Cabinet  (Nai  Ko) 
was  the  old  Council  of  State.  It  had  two  Chinese  and  two 
Manchu  ministers  appointed  by  the  Emperor  through  the 
nomination  of  the  Inner  Cabinet  itself.  In  addition, 
there  were  two  or  four  associate  ministers,  of  which  one- 
half  were  Chinese  and  the  other  half  Manchus.  They  were 
selected  from  the  heads  of  departments  by  the  Emperor 
himself.  Under  these  ministers  there  were  different  classes 
of  secretaries.     Their  most  important  functions  were: 

(a)  The  discussion  of  state  affairs. 

(b)  The  promulgation  of  imperial  orders. 

(c)  The  conduct  of  great  ceremonials  attended  by  the 
Emperor. 


14  THE  SYSTEM  OF  TAXATION  IN  CHINA  [156 

The  Inner  Cabinet  lasted  until  the  end  of  the  Tsing 
Dynasty.  But  its  great  powers  had  been  gradually  trans- 
ferred to  the  Military  Council. 

(2)  The  Military  Council.  The  Military  Council 
(Tsuen  Tse  Chu),  known  to  the  Western  people  as  the 
Grand  Council,  was  created  by  Emperor  Yung  Tsing,  1723- 
^735>  primarily  for  the  discussion  of  military  affairs.  It 
was  not  an  established  office  but  simply  a  body  of  advisers 
of  the  Emperor.  Its  members  were  chosen  from  the  min- 
isters of  the  Inner  Cabinet  and  the  heads  of  different  de- 
partments, and  called  the  Ministers  of  Military  Affairs  or 
Grand  Councillors.  The  number  was  not  fixed,  varying 
from  four  to  six.  Being  the  advisers  of  the  Emperor,  they 
gradually  encroached  upon  the  power  of  the  Inner  Cabinet 
with  respect  to  the  civil  affairs.  They  had  a  certain  number 
of  secretaries.  Their  chief  powers  and  duties  were  as  fol- 
lows: 

(a)  The  issue  of  decrees  to  announce  the  Emperor's 
acts,  to  approve  or  veto  a  memorial,  to  order  an  approved 
memorial  to  be  adopted  in  the  provinces  and  to  order  a  gov- 
ernor's memorial  to  be  considered  by  a  department. 

(b)  The  issue  of  orders  to  give  instructions  to  the  Im- 
perial Ministers  in  the  dependencies  and  to  the  governors 
in  the  provinces. 

(c)  The  discussion  of  state  affairs. 

(d)  The  trial  of  the  most  important  judicial  cases  when- 
ever ordered  by  the  Emperor. 

(e)  The  investigation  of  military  and  financial  affairs  in 
time  of  war. 

(f)  The  nomination  of  cabinet  ministers,  heads  of  de- 
partments, governors,  heads  of  provincial  departments,  cer- 
tain circuit  governors,  certain  prefects,  generals,  lieuten- 
ant-generals, commissioners  of  examinations  and  superin- 
tendents of  customs. 


1^7]  THE  CHINESE  GOVERNMENT  15 

The  Department  of  Foreign  Affairs 
Organization  and  functions.  The  Dq)artment  of  For- 
eign Affairs  was  created  in  1861  under  the  name  Tsung  Li 
Ydmen.  It  was  controlled  by  a  number  of  princes,  minis- 
ters and  adjunct  ministers.  The  various  classes  of  de- 
partmental heads,  whose  number  was  not  fixed,  were  se- 
lected by  the  Emperor  himself,  the  princes  from  the  various 
classes  of  princes,  the  ministers  from  the  ministers  of  the 
Military  Council  (the  Council  of  State), ^  the  adjunct  min- 
isters from  the  ministers  of  the  Inner  Cabinet  (the  old 
Council  of  State)  "  and  the  heads  of  the  other  departments. 
Their  functions  were  to  make  all  kinds  of  treaties  and 
agreements  involving  the  tariff,  the  regulation  of  inter- 
national commerce,  the  questions  of  territories,  the  settle- 
ment of  relations  between  the  non-Christians  and  Chris- 
tians and  other  kinds  of  intercourse.  These  functions  were 
distributed  among  a  general  committee  and  five  special 
committees  which  were  made  up  by  a  certain  number  of 
Chinese  and  Manchu  secretaries. 

The  Departments  of  Internal  Affairs 

Organization  and  functions.  Among  the  departments 
which  are  not  worthy  of  consideration  so  far  as  actual 
government  is  concerned,  six  were  well  developed,  namely, 
the  civil-service,  financial,  ceremonial,  military,  judicial  and 
public  works  departments.  All  the  different  matters  requir- 
ing attention  from  the  government  would  fall  under  one  of 
these  six  departments.  Each  department  had  two  presi- 
dents, one  being  Chinese  and  the  other  Manchus,  and  four 
vice-presidents,  two  being  Chinese  and  the  other  two  Man- 
chus. It  was  found  necessary  to  make  a  further  division 
of  work,  and  thus  a  certain  number  of  bureaus  were  estab- 

1  Cf.  supra,  p.  14.  -  Cf.  supra,  p.  13. 


1 6  THE  SYSTEM  OF  TAXATION  IN  CHINA  [i^g 

lished  in  each  department.  The  distribution  of  business 
among  the  bureaus  was  made  in  accordance  with  its  nature. 
But  this  method  was  not  always  followed,  because  the  quan- 
tity of  certain  matters  was  too  great  to  be  transacted  by  a 
single  bureau.  In  that  case  the  work  was  divided  accord- 
ing to  geographical  lines  as  well  as  according  to  the  nature 
of  the  function.  In  other  words,  a  function  was  generally 
discharged  by  several  bureaus.  Each  bureau  had  three 
classes  of  secretaries,  and  each  class  consisted  of  a  certain 
number  of  Chinese,  Mongolians  and  Manchus. 

The  Department  of.  Finance  (Hu-Pu) 

Among  the  six  departments  of  internal  affairs  as  men- 
tioned above,  the  Department  of  Finance  should  be  de- 
scribed more  fully,  because  the  administration  of  finance 
was  one  of  the  most  important  functions  of  the  Chinese 
government.  It  framed  and  supervised  the  laws  concern- 
ing territory  and  population.  It  had  power  to  divide  the 
country  into  administrative  divisions,^  vis.,  provinces,  pre- 
fectures and  districts;  to  classify  the  population  according 
to  the  permanent  occupation  and  home ;  to  survey  the  land 
of  the  country;  to  equalize  the  burden  of  taxation  and  ser- 
vice; to  appropriate  the  ordinary  expenditures  of  the  gov- 
ernment; and  to  adjust  the  amount  of  reserved  grain.  It 
had  the  following  bureaus : 

(A)  The  Bureau  of  Kiang-nan^  audited  the  accounts  of 
the  land  tax  of  Kiang-nan  Provinces  and  the  accounts  of 
the  government  silk  factories  in  the  City  of  Nan-king  and 
the  City  of  Soo-chozv  in  Kiang-su  Province;  and  prepared 
the  annual  reports  concerning  the  amount  of  the  balance 

1  Cf.  infra,  pp.  22-23. 

■  Kiang-nan  is  the  collective  name  of  the  two  provinces,  Kiang-su 
and  An-hwei. 


I^p]  THE  CHINESE  GOVERNMENT  17 

charge  ^  of  the  land  tax  in  certain  provinces,  and  the  de- 
ferred payment  of  the  land  tax  in  all  the  provinces. 

(B)  The  Bureau  of  Che-kiang  audited  the  accounts  of 
the  land  tax  of  Che-kiang  Province  and  the  accounts  of  the 
government  silk  factory  in  the  City  of  Hang-chow  in  Che- 
kiang  Province ;  and  prepared  the  annual  reports  concerning 
the  number  of  population  and  the  quantity  of  grain  pro- 
duced in  all  the  provinces. 

(C)  The  Bureau  of  Kiang-si  audited  the  accounts  of 
the  land  tax  of  Kiang-si  Province ;  and  prepared  the  reports 
of  the  inter-provincial  support  of  military  expenses. 

(D)  The  Bureau  of  Fii-kien  audited  (a)  the  accounts 
of  duties  on  commodities  carried  in  native  vessels  to  Tien- 
tsin, Chi-li  Province;  (b)  the  accounts  of  the  land  tax  of 
Fu-kien  and  Chi-li  Provinces;  and  (c)  the  accounts  of  cer- 
tain unprescribed  expenses  drawn  from  the  treasury  of  the 
Department  of  Finance. 

(E)  The  Bureau  of  Hu-kwang  ^  audited  (a)  the  ac- 
counts of  the  land  tax  of  Hu-kwang  Provinces;  (b)  the  ac- 
counts of  regular  customs  in  Hu-peh  Province;  and  (c)  the 
accounts  of  local  supplementary  taxes  on  land,  commodi- 
ties {i.  e.,  regular  customs  duties),  salt  and  tea  in  all  the 
provinces. 

(F)  The  Bureau  of  Shan-tung  had  the  following  duties: 

(a)  The  auditing  of  the  accounts  of  the  land  tax  of 
Shang-hmg ,  Feng-Hen,  Ki-rin  and  Hei-lung-kiang  Pro- 
vinces. 

(b)  The  payment  of  bonus  to  the  "  Eight  Banners  "  ^ 
military  officers. 

1  This  is  charged  for  the  loss  due  to  inaccurate  weighing. 

2  Hu-kwang  is  the  collective  name  of  the  two  provinces,  Hu-peh  and 
Hu-nan. 

8  The  Tartar  soldiers  are  divided  into  eight  corps,  each  having  a 
colored  banner,  viz.,  pure  yellow,  mixed  yellow,  pure  white,  mixed 
white,  pure  red,  mixed  red,  pure  blue  and  mixed  blue.  The  Chinese 
force  has  the  green  banner. 


1 8  THE  SYSTEM  OF  TAXATION  IN  CHINA  [i^q 

(c)   The  control  of  salt  and  ginseng  monopolies. 

(G)  The  Bureau  of  Shan-si  audited  the  accounts  of  the 
land  tax  of  Shan-si  Province. 

(H)  The  Bureau  of  Ho-nan  audited  the  accounts  of  the 
land  tax  of  Ho-nan  Province,  and  the  military  expenses  of 
the  City  of  Sahara  in  Mongolia;  investigated  any  report 
designated  by  the  Emperor;  and  urged  the  revision  of  pro- 
vincial reports  on  any  sort  of  outlay  not  accepted  by  the 
Department  of  Finance. 

(I)  The  Bureau  of  Shen-si  discharged  three  functions, 
namely, 

(a)  The  auditing  of  the  accounts  of  the  land  tax  of 
Shen-si,  Kan-su  and  Chinese  Turkestan  Provinces. 

(b)  The  control  of  the  tea  monopoly. 

(c)  The  disbursement  of  the  expenditures  of  the  im- 
perial government. 

(J)  The  Bureau  of  Sze-chuen,  in  addition  to  its  other 
minor  duties,  performed  the  following  two  functions : 

(a)  The  auditing  of  the  accounts  of  the  land  tax  and 
regular  custom  revenues  of  Sze-chuen  Province. 

(b)  The  collection  of  reports  on  the  condition  of  har- 
vest in  all  the  provinces. 

(K)  The  Bureau  of  Kwang-tung  audited  the  accounts  of 
the  land  tax  of  Kwang-tung  Province. 

(L)  The  Bureau  of  Kwang-si  was  entrusted  with  the 
following  important  business : 

(a)  The  auditing  of  the  accounts  of  the  land  tax  and 
regular  customs  duties  of  Kwang-si  Province. 

(b)  The  regulation  of  mining. 

(c)  The  coinage. 

(M)  The  Bureau  of  Yun-nan  had  charge  of  the  follow- 
ing affairs : 

(a)  The  auditing  of  the  accounts  of  the  land  tax  of  Yun- 
nan Province. 


l6i]  THE  CHINESE  GOVERNMENT  19 

(b)  The  investigation  of  the  report  on  the  collection  of 
mining  royalty  in  Yun-nan  Province. 

(c)  The  care  of  matters  concerning  the  transportation 
of  grain  from  certain  provinces  to  Peking. 

(N)  The  Bureau  of  Kwei-chow  audited  the  accounts  of 
the  land  tax  of  Kwei-chow  Province,  and  supervised  the 
administration  of  both  the  regular  and  maritime  customs 
throughout  the  country. 

In  addition  to  the  above  fourteen  bureaus  there  were  the 
following  organizations : 

(A)  Three  treasuries,  viz.,  money,  satin  and  sundry 
articles,  under  the  control  of  four  ministers  appointed  on 
the  nomination  of  the  department. 

(B)  Four  mints  in  Peking  under  the  control  of  two 
vice-presidents  of  the  department. 

(C)  Thirteen  granaries  in  Peking  and  Peh-tung-chow^ 
under  the  control  of  two  high  officials  having  the  rank 
of  a  vice-president  of  a  department. 

(D)  The  Committee  of  Appropriation.^ 

(E)  The  Committee  of  Cash  Payment  of  the  "  Eight 
Banners  "  Soldiers. 

General  Position  and  Powers  of  Heads  of  Departments 
The  heads  of  every  department  were  appointed  and  re- 
moved by  the  Emperor  with  or  without  the  advice  of  the 
Council  of  State.  They  assumed  joint  responsibility  to 
the  Emperor  only.  They,  however,  might  be  impeached  by 
any  high  official  or  censor  who  had  power  to  present  me- 
morials to  the  Throne.  But  an  impeachment  did  not  nec- 
essarily cause  the  removal  of  a  departmental  head,  be- 
cause the  Emperor  might  not  approve  the  impeachment. 
Therefore,  any  head  of  a  department  remained  in  service 

1  Peh-tung-chow  is  a  river  port  near  Peking. 

2  Cf.  infra,  p.  34. 


20  THE  SYSTEM  OF  TAXATION  IN  CHINA  [162 

until  removed  for  one  of  the  following  causes,  vis.,  promo- 
tion, change,  degradation  or  dismissal  of  office,  death  of 
parents,  absence,  or  retirement.  There  follows  a  summary 
of  the  general  powers  of  the  heads  of  departments. 

(i)  The  participation  in  the  conference  on  important 
matters  ordered  to  be  discussed  by  the  nine  departments.^ 

(2)  The  making  and  amendment  of  laws  subject  to  the 
approval  of  the  Emperor. 

(3)  The  supervision  in  the  execution  of  laws.  This 
means  that  the  heads  of  departments  had  power  to  approve 
or  disapprove  the  provincial  reports  concerning  the  exercise 
of  functions.  But  they  had  no  right  to  direct  the  governors 
how  to  execute  the  laws  because  they  did  not  know  the  local 
conditions. 

(4)  The  nomination  of  certain  subordinate  officials,  not 
nominated  by  the  Department  of  Civil  Service. 

(5)  The  removal  of  subordinate  officials  by  impeach- 
ment through  memorials  presented  to  the  Throne.  Such 
impeachments  were  usually  accepted  by  the  Emperor. 

(6)  The  direction  and  supervision  of  the  subordinate 
officials. 

The  C  ens  orate 

(i)  Organization.  The  Censorate  (Tu-Tsar  Yuen)  had 
at  its  head  two  chief  censors  (a  Chinese  and  a  Manchus) 
and  four  associate  censors  (two  Chinese  and  two  Manchus) 
who  were  appointed  by  the  Emperor.  Under  them  there 
were  six  groups  of  censors  adopting  the  names  of  the  six 
departments,  vis.,  civil,  financial,  ceremonial,  military,  judi- 
cial and  public  works,  and  fifteen  groups  of  censors  taking 

1  The  nine  departments  include  the  six  departments  mentioned  above, 
vis.,  the  civil,  financial,  ceremonial,  military,  judicial  and  public  works 
departments,  and  in  addition  the  Censorate,  the  High  Court  and  the 
Department  for  the  Transmission  of  Memorials. 


163]  THE  CHINESE  GOVERNMENT  2 1 

the  names  of  the  different  provmces.  Each  group  of  cen- 
sors was  composed  of  two  Chinese  and  two  Manchus. 
They  were  appointed  among  the  candidates  of  censors  who 
had  been  previously  selected  from  the  secretaries  of  var- 
ious departments. 

(2)'  Powers  of  the  censors.  The  general  duty  of  the 
chief  censors  and  associate  censors  was  to  look  after  the 
faithful  execution  of  the  laws  of  the  country  and  to  pre- 
vent violation  of  law  or  neglect  by  any  official,  either  im- 
perial or  provincial.  They  were  vested  with  freedom  of 
speech.  The  departmental  censors  and  provincial  censors 
were  supposed  to  assist  the  chief  censors  and  associate  cen- 
sors in  the  exercise  of  the  general  power  of  the  Censorate. 
But  they  also  had  the  right  to  communicate  freely  with  the 
Emperor  by  means  of  memorials.  When  any  censor  did 
not  satisfy  the  Emperor,  he  was  ordered  to  return  to  his 
previous  department  without  punishment. 

The  Less  Important  Departments 

Besides  the  foregoing  branches  there  were  many  other 
offices  of  which  only  the  following  need  be  mentioned : 

(i)  The  Department  of  Dependencies'  Affairs  {Li  Fan 
Yuen). 

(2)  The  Department  of  the  Imperial  Clan's  Affairs 
{T Sling  Yin  Fu). 

(3)  The  Department  of  Palace  Affairs  {Niii  Wu  Feu). 

(4)  The  Department  of  Astronomy  {Tsin  Tien  Tsan). 

(5)  The  Department  of  Imperial  Doctors  (Tai  Yi 
Yuen). 

(6)  The  Department  of  Literary  Men  (Han  Lin  Yuen). 

(7)  The  Department  of  Heir  Tutors  (Tsien  Shi  Feu). 

(8)  The  Department  of  Imperial  Worship  Ceremonies 
(Tai  Shiang  Tsi). 

(9)  The  Department  of  Horse-Breeding  (Tai  Pu  Tsi). 


22  THE  SYSTEM  OF  TAXATION  IN  CHINA  [164 

(10)  The  Department  of  Imperial  Feasts  {Kwang  Lm. 
Tsi). 

(11)  The  Department  of  Palace  Ceremonies  (Heng  Lu 
Tsi). 

(12)  The  High  Court  (Ta  Li  Tsi). 

Territorial  Divisions  of  Government 
Excluding  Mongolia  and  Tibet,  China  was  divided  into 
twenty-two  provinces  (Sheng).  In  some  cases,  a  province 
was  governed  by  a  governor-general  {Tsung  Tu),  such  as 
Chi-li  and  Sse-chuen.  In  other  cases  a  province  had  a  gov- 
ernor (ShUn  Fn),  for  example,  Shan-tung,  Shan-si,  and 
Ho-nan.  In  general,  a  more  important  province  was  under 
the  immediate  jurisdiction  of  a  governor-general,  while  a 
less  important  province  was  governed  by  a  governor  with 
the  nominal  supervision  of  a  governor-general.  Under  the 
governor-general  or  governor  were  the  heads  of  the  Ex- 
ecutive Department  {Bu  Tseng  Shi),  and  the  Judicial  De- 
partment {An  Tsar  Shi)  and  a  number  of  circuit  gover- 
nors (Tao  Tai).  Each  province  was  composed  of  a  num- 
ber of  prefectures  (Fu)  and  direct  districts  (Chi  Li  Chow 
or  Chi  Li  Ting),^  so-called  because  they  were  under  the 
direct  control  of  the  Executive  Department  like  the  pre- 
fectures. The  ruler  of  a  prefecture  was  called  a  prefect 
(Tsi  Fu),  and  that  of  a  direct  district,  a  superior  magis- 
trate (Chi  Li  Chow  Tsi  Chow  or  Chi  Li  Ting  Tung  Tsi),^ 
and  he  was  charged  with  the  functions  of  a  magistrate  and 
the  powers  of  a  prefect.  The  lowest  but  most  important 
units  of  administration  were  the  districts  (Shien),^  several 
of  which  made  up  a  prefecture  or  a  direct  district.    The  ad- 

1  Certain    Chi  Li   Ting   were   not   composed   of   a   number   of   sub- 
ordinate districts  as  all  the  Chi  Li  Chow  were. 

2  Certain  Chi  Li  Ting  Tung  Tsi  had  hot  the  powers  of  a  prefect  as 
all  the  Chi  Li  Chow  Tsi  Chow  had.     See  note  i. 

•^  Some  districts  were  called  in  Chinese  Ting  or  Chow. 


165]  THE  CHINESE  GOVERNMENT  23 

ministrator  of  a  district  was  called  a  magistrate  {Tsi 
Shien)}  All  the  above  officials  were  known  as  the  seal- 
holders  {Tseng  Yin  Kwan),  i.  e.,  the  chief  officers  or  re- 
sponsible officers.  Their  respective  subordinates  were  re- 
garded merely  as  assistant  officers,  and  could  not  act  with- 
out instructions. 

Provincial  A dministration 
( I )  The  governor-general  or  governor.  The  governor- 
general  or  governor  was  appointed  by  the  Emperor.  The. 
governor-general  also  had  the  titles  of  the  Chief  Censor  of 
the  Censorate  and  the  President  of  the  Department  of  Mili- 
tary Service ;  and  the  governor,  the  titles  of  the  Associate 
Censor  of  the  Censorate  and  the  Vice-President  of  the  De- 
partment of  Military  Service.  Both  of  them  remained  in  ser- 
vice unless  prevented  by  promotion,  change,  degradation  or 
dismissal  of  office,  retirement,  death  of  parents  or  absence. 
The  governor-general  was  different  from  the  governor  inas- 
much as  that  the  former  had  the  nominal  power  of  super- 
vision over  the  government  in  the  latter's  sphere  of  author- 
ity, besides  the  virtual  powers  of  direction  and  supervision 
over  the  administration  of  his  own  immediate  jurisdiction. 
Practically,  however,  each  province  had  only  one  head, 
either  a  governor-general  or  a  governor.  The  powers  of  the 
governor-general  or  governor  may  be  fully  stated  as  fol- 
lows: 

(A)  The  nomination  of  certain  circuit  governors,  pre- 
fects, magistrates  and  military  officers  lower  than  the  lieu- 
tenant-generals. 

(B)  The  removal,  by  means  of  impeachment,  of  any 
civil  or  military  official  appointed  through  the  Council  of 
State,  the  Department  of  Civil  Service  and  the  Department 
of  Military  Service  as  well  as  through  his  own  nomination. 

1  Some  magistrates  were  called  in  Chinese   Tung   Tsi   (the  admin- 
istrator of  a  Ting)  or  Tsi  Chow  (the  administrator  of  a  Chow). 


24  THE  SYSTEM  OF  TAXATION  IN  CHINA  [i66 

(C)  Such  direction  and  supervision  of  the  actions  of  all 
his  subordinates  as  seemed  desirable. 

(D)  The  furnishing  of  such  supplementary  ordinances 
as  might  be  necessary  to  the  execution  of  law,  subject  to 
the  approval  of  the  Emperor. 

(E)  Remonstrances  to  laws  or  appointments.  If  the 
Emperor  accepted  the  objection,  the  laws  or  appointments 
were  ordered  to  be  amended  or  changed  by  the  departments. 
Otherwise  the  governor  had  to  accept  them. 

(F)  The  initiation  of  laws  which  were  generally  ordered 
to  be  discussed  by  the  departments. 

(G)  The  execution  of  laws. 

(H)   The  administration  of  justice. 

(1)  The  command  of  the  Chinese  forces  within  the  juris- 
diction. Armed  with  these  powers,  the  governor-general 
or  governor  proceeded  to  discharge  his  executive  and  judi- 
cial functions  through  the  Executive  Department  and  the 
Judicial  Department. 

(2)  The  Executive  Department  and  the  Judicial  Depart- 
ment. The  tenure  and  term  of  office  of  the  head  of  each 
department  were  the  same  as  those  of  the  governor.  Each 
head  of  department  had  the  right  to  direct  and  supervise 
the  actions  of  all  his  subordinates.  It  was  through  the  divi- 
sion of  functions  according  to  their  character  that  these  two 
departments  were  distinguished  from  each  other.  In  other 
words,  the  Executive  Department  discharged  the  executive 
functions,  of  which  the  most  important  is  the  financial;  and 
the  Judicial  Department  had  to  try  and  to  determine  the 
cases  of  appeals  and  to  give  the  final  decisions  of  cases  in- 
volving murder  or  robbery,  removed  from  the  districts. 

(3)  The  circuit  governor  was  appointed  on  the  nomina- 
tion of  the  governor  or  the  Department  of  Civil  Service, 
except  in  a  very  few  cases  when  the  Emperor  made  the  ap- 
pointment.    After  the  expiration  of  a  term,  of  six,  seven 


167]  THE  CHINESE  GOVERNMENT  25 

or  eight  years  ^  the  circuit  governor  was  usually  pro- 
moted; otherwise  he  remained  in  service  until  he  encoun- 
tered one  of  the  following  conditions :  change,  degradation, 
removal  from  office,  retirement,  death  of  parents  or  absence. 
He  was  charged  with  the  general  duty  of  preserving  public 
order  within  his  circuit  composed  of  a  number  of  pre- 
fectures and  direct  districts.  In  fulfilling  his  duty,  he  acted 
as  a  connecting  link  between  the  civil  officials  and  the  mili- 
tary officers.  In  other  words,  he  was  the  man  to  judge 
when  it  was  necessary  to  use  arms  for  the  suppression  of 
riots,  the  execution  of  laws  and  the  administration  of  jus- 
tice. He  had  power  to  direct  and  supervise  the  prefects 
and  magistrates  and  to  demand  the  help  of  the  Chinese 
forces  in  his  circuit.  For  governmental  purposes  he  resided 
in  the  most  important  city  in  his  circuit. 

Local  Administration 

(i)  The  prefect.  The  tenure  and  term  of  office  of  the 
ruler  of  a  prefecture  were  similar  to  those  of  the  circuit 
governor.  He  had  no  territory  and  population  under  his 
own  immediate  government.^  His  powers  were  to  try  and 
to  determine  the  cases  of  appeals,  to  review  the  cases  origi- 
nally decided  by  the  magistrates  and  to  direct  and  supervise 
the  actions  of  all  his  subordinates. 

(2)  The  superior  magistrate.  Each  direct  district  was 
divided  into  several  parts,  one  of  which  was  under  the  im- 
mediate government  of  the  superior  magistrate  himself, 
while  the  other  parts,  constituting  the  subordinate  districts, 
were  governed  by  a  corresponding  number  of  magistrates 
under  his  supervision.     It  was  noticed  that  the  tenure  of 

^  The  duration  of  term  was  different  in  different  provinces. 

2  The  prefects  of  a  few  prefectures  had  immediate  jurisdictions.  In 
those  cases  the  powers  and  duties  of  the  prefects  were  like  those  of 
the  superior  magistrates. 


26  THE  SYSTEM  OF  TAXATION  IN  CHINA  [i68 

office  and  functions  of  the  superior  magistrate  were  like 
those  of  a  magistrate,  the  term  of  office  being  six,  seven  or 
eight  years.  The  former  was  distinguished  from  the  latter 
only  by  the  possession  of  the  powers  of  a  prefect. 

Number  of  Local  Administrative  Districts  in  the  Different 

Provinces 

Province  ^  Districts  Direct  Districts  Total 

.     Chi-li 144  II  15s 

Feng-tien 21  3  24 

Ki-rin 7  2  9 

Hei-lung-kiang     2  2 

Shan-tung  105  2  107 

Shan-si    98  10  108 

Ho-nan    103  4  107 

Kiang-su   67  4  71 

An-hwei    55  5  60 

Kiang-si    78  I  79 

Fu-kien    64  2  66 

Che-kiang  78  r  79 

Hu-peh    67  1  68 

Hu-nan    67  9  76 

Shen-si     85  5  90 

Kan-su     59  7  66 

Turkestan   11  15  26 

Sze-chuen    131  12  143 

Kwang-tung  85  10  95 

Kw^ang-si 66  S  71 

Yun-nan    75  8  83 

Kwei-chow    57  15  72 

Total    1523  134  1657 

1  The  figures  of  Chi-li,  Feng-tien,  Ki-rin,  Kwang-si  and  Kwei-chow 
include  those  administrative  units  under  the  immediate  administration 
of  the  prefects  themselves.  These  units  were  practically  direct  dis- 
tricts, and  the  prefects  had  exactly  the  same  powers  and  duties  of 
superior  magistrates.  Owing  to  thin  population  and  restriction  of  cul- 
tivation, Manchuria  {Feng-tien,  Ki-rin,  Hei-lung-kiang)  and  Turkestan 
had  not  been  organized  as  provinces  until  in  late  years,  Turkestan  in 
1884  and  Manchuria  in  1906.  In  1902  nine  districts  were  added  to  the 
original  number  in  Turkestan;  in  the  period  1906-1907  nine  districts,  in 
Ki-rin ;  and  in  the  period  1904-1908  thirty-five  districts,  in  Hei-lung-kiang. 


169]  THE  CHINESE  GOVERNMENT  27 

(3)  The  magistrate.  The  ruler  of  a  subordinate  district 
of  a  prefecture  or  a  direct  district  was  called  the  magistrate. 
The  magistrates  of  certain  districts  were  appointed  on  the 
nomination  of  the  governor,  while  in  other  districts  they 
were  selected  by  the  Department  of  Civil  Service.  After 
the  expiration  of  a  term  of  ten  years  the  magistrate  was 
usually  promoted ;  otherwise  he  remained  in  service  as  long 
as  one  of  the  following  conditions  did  not  arise:  change, 
degradation  or  dismissal  from  office,  retirement,  death  of 
parents  or  absence.  Under  the  direction  and  supervision  of 
his  superior  officials,  he  discharged  the  following  functions : 

(A)  The  execution  of  all  the  administrative  laws. 

(B)  The  trial  and  decision  of  original  cases.  But  the 
decisions  involving  the  penalty  of  banishment  for  a  limited 
time  were  subject  to  the  approval  of  the  prefect  or  superior 
magistrate ;  and  the  cases  of  murder  or  robbery  were  entitled 
to  a  second  trial  by  the  prefect  or  superior  magistrate  and 
to  the  final  decision  of  the  head  of  the  Judicial  Department. 

Original  cases  involving  robbery  or  murder  committed 
in  the  immediate  jurisdiction  of  a  prefect  or  superior  mag- 
istrate and  decided  by  him,  must  be  approved  or  retried  by 
the  circuit  governor. 

General  Features  of  Government 
In  conclusion,  we  may  summarize  the  important  features 
of  the  Chinese  Government  as  follows: 

(i)  The  authority  of  general  powers.  As  the  Emperor 
was  the  sovereign  of  the  state,  he  was  the  final  interpreter 
of  the  laws  of  the  land.  He  settled  the  conflicts  of  opin- 
ions among  his  ministers  whether  they  were  the  heads  of 
departments,  governors  or  others,  because  they  were  de- 
pendent for  tenure  upon  him.  In  order  to  assist  him  in  the 
exercise  of  his  powers  he  had  the  Council  of  State.  In  any 
case  which  involved  the  councillors,  he  was  obliged  to  de- 
cide without  the  advice  of  any  other  person. 


28  THE  SYSTEM  OF  TAXATION  IN  CHINA  [170 

(2)  The  legislative  powers.  Instead  of  vesting  the  legis- 
lative powers  in  a  single  organization  known  as  the  legisla- 
ture, the  Emperor  distributed  them  among  several  depart- 
ments according  to  the  nature  of  their  functions.  The 
seven  chief  departments  at  Peking  were  really  legislative 
departments  although  they  were  not  shut  out  from  all  par- 
ticipation in  the  work  of  administration,  e.  g.,  foreign  re- 
lations, appropriations  of  revenue,  conduct  of  public  cere- 
monials and  examinations  etc.  In  the  main  these  depart- 
ments were  concerned  with  making  and  interpreting  laws. 
This  may  be  illustrated  step  by  step.  In  the  first  place, 
treaties  concluded  by  the  Department  of  Foreign  x\ffairs 
were  a  part  of  the  laws.  In  the  second  place,  the  nomina- 
tions by  the  Department  of  Civil  Service  and  the  Depart- 
ment of  Military  Service  for  official  appointments  and  re- 
movals was  merely  an  interpretation  of  the  civil  and  military 
service  laws  made  by  the  same.  In  the  third  place,  the  ex- 
ecutive functions  of  the  Department  of  Finance,  the  De- 
partment of  Military  Service  and  the  Department  of  Public 
Works  were  mainly  connected  with  the  control  of  finance. 
In  the  fourth  place,  the  Department  of  Public  Ceremonials 
and  the  Department  of  Military  Service  merely  regulated 
the  matters  of  public  examinations  of  civil  and  military  ser- 
vices, because  the  examinations  were  actually  conducted  by 
the  Imperial  Examiners,  appointed  by  the  Emperor. 

(3)  The  executive  powers.  The  executive  powers  were 
distributed  not  according  to  functions  but  according  to  ter- 
ritories. Therefore,  the  provincial  governments  together 
form  the  executive  branch  of  the  central  government.  In 
each  province,  the  governor  was  the  chief  executive.  The 
detailed  work  of  administration  was  performed  by  the  Ex- 
ecutive Department,  while  the  general  powers  of  direction 
and  supervision  were  delegated  to  the  circuit  governors. 
But  the  governor  was  not  deprived  of  all  participation  in 


171]  THE  CHINESE  GOVERNMENT  29 

the  work  of  legislation  and  in  the  administration  of  justice, 
because  he  had  not  only  the  power  to  initiate  laws,  to  object 
to  them  and  to  issue  orders  but  he  had  also  the  power  to 
control  the  Judicial  Department  of  his  province. 

(4)  Participation  of  the  localities  in  administration.  The 
local  officials  known  as  the  prefects,  the  superior  magis- 
trates and  the  magistrates  were  regarded  simply  as  agents 
of  the  central  government.  All  the  duties  to  be  performed 
by  the  localities  were  fixed  by  the  legislative  branch  of  the 
central  government  (the  chief  department  at  Peking).  Still 
there  was  a  realm  of  action  in  which  the  local  authorities 
possessed  large  discretion,  and  they  look  for  their  authority 
to  the  executive  branch  of  the  central  government  (the  pro- 
vincial governments).  Thus  it  is  evident  that  the  local  au- 
thorities were  subject  to  both  the  legislative  and  adminis- 
trative control. 

(5)  Subordination  of  the  judicial  powers  to  the  other 
authorities.  The  judicial  powers,  on  the  one  hand,  were 
subordinated  to  the  executive,  because  they  were  exercised 
by  the  Judicial  Department  and  the  local  authorities,  subject 
to  the  supervision  of  the  governor.  On  the  other  hand, 
they  were  subject  to  the  legislature,  because  the  Department 
of  Judicial  Affairs  exerted  the  greatest  influence  over  all 
judicial  cases. 

(6)  The  control  over  the  government.  While  the  heads 
of  departments  at  Peking  and  the  governors  in  the  provinces 
controlled  the  actions  of  their  respective  subordinate  offi- 
cials, their  actions  were  in  turn  controlled  by  the  Emperor 
himself.  Besides  this,  there  were  five  other  methods  of 
control.  First,  the  Censorate  might  hear  complaint  by  any 
one  person  against  any  other  person,  no  matter  whether  the 
parties  involved  were  officials  or  not,  and  report  the  case 
to  the  Emperor.  Secondly,  any  censor  might  impeach  any 
official.     Thirdly,  any  minister  might  impeach  any  other 


30  THE  SYSTEM  OF  TAXATION  IN  CHINA  [172 

minister.  Fourthly,  the  Department  of  Civil  Service  might 
impeach  any  civil  official  according  to  the  civil  service  laws. 
Fifthly,  the  Department  of  Military  Service  might  impeach 
any  military  officer  in  accordance  with  the  military  service 
laws.  Having  received  the  case  or  impeachment,  the  Em- 
peror referred  it  to  the  proper  authority,  or  appointed  one 
or  more  ministers  to  investigate  the  matter  in  detail. 

(7)  An  attempt  to  secure  efficient  administration  in  the 
provinces.  The  Department  of  Civil  Service  had  power  tO' 
consider  the  right  of  changing  domicile.^  Such  questions 
arose  when  an  official  applied  for  naturalization  in  his  resi- 
dential province,  which  was  not  his  ancestral  province,  or 
when  he  sought  to  reclaim  his  standing  in  his  ancestral 
province  after  he  had  once  become  naturalized  in  his  resi- 
dential province.^  These  questions  were  numerous,  because 
the  law  forbade  a  man  to  be  an  official  of  his  native  prov- 
ince. Undoubtedly  this  legal  limitation  had  several  advan- 
tages from  the  point  of  view  of  efficiency  of  administration 
in  the  provinces.  First,  when  an  official  was  a  stranger  in  a 
community,  the  community,  having  no  intimate  relation 
with  him,  could  exert  less  influence  over  his  actions.  Sec- 
ondly, the  government  was  free  to  choose  proper  men  to 
fill  the  official  posts  from  the  people  of  all  the  provinces  ex- 
cept one,  without  incurring  the  danger  of  bad  feelings 
among  the  local  communities.  Finally,  the  officials  as- 
sumed responsibility  to  the  government  rather  than  to  the 
different  communities  under  their  respective  jurisdiction,  if 
they  desired  to  maintain  their  positions. 

1  In  China  the  domicile  was  determined  by  the  domicile  of  one's  ances- 
tors rather  than  by  one's  birthplace. 

2  The  qualifications  of  admission  were  the  possession  of  certain  kinds 
of  real  property,  such  as  a  house  or  a  piece  of  land,  and  twenty  years 
of  residence  by  his  grand-parents  or  parents. 


CHAPTER  II 

Expenditures  and  Revenues 

Classification  of  Expenditures 

From  a  review  of  the  government  functions  during  the 
Tsing  Dynasty,  it  appears  that  the  public  expenditures  of 
China  may  be  classified  as  follows : 

( 1 )  Expenditures  for  military  purposes. 

(A)  Regular  pay  of  officers  and  men. 

(B)  Additional  pay  of  officers. 

(2)  Expenditures  for  civil  administration. 

(A)  Salaries  of  civil  officials. 

(B)  Additional  allowances  of  civil  officials. 

(3)  Expenditures  for  the  Emperor's  family. 

(A)  Imperial  tombs'  furnishing. 

(B)  New  Year  expenses  of  the  Emperor's  family. 

(C)  Silk  manufactures  for  the  Emperor's  use  and 
public  use. 

(4)  Expenditures  for  communication. 

(5)  Expenditures    for  the  conservation   of   rivers  and 
ponds. 

(6)  Expenditures  for  social  purposes. 

(A)  Public  worship. 

(B)  Public  gifts  and  charities. 

(C)  Public  schools  and  scholarships. 

(D)  Public  examinations  for  the  selection  of  com- 
petent men  as  candidates  for  public  offices. 

(7)  Expenditures  for  miscellaneous  purposes. 

i73]  31 


32  THE  SYSTEM  OF  TAXATION  IN  CHINA  [174 

Comparative  Importance  of  Expenditures 
Among  all  classes  of  expenditures,  the  military  expendi- 
tures stood  in  the  first  rank,  because  the  existence  of  a  state 
depends  especially  on  peace.  Without  an  army  of  sufficient 
strength,  it  is  impossible  to  protect  the  weak  members  of  a 
society  against  the  encroachment  of  the  strong,  and  to  save 
the  country  from  the  foreign  conquest.  Next  came  the  ex- 
penditures of  civil  administration  which  is  necessary  for 
the  maintenance  of  internal  order  in  a  civil  society.  The 
two  items  in  the  following  table  of  expenditures,  styled  the 
additional  allowances  of  civil  and  military  officials,  are  due 
to  the  fact  that  the  regular  salaries  did  not  suffice  to  meet 
the  higher  standard  of  living.  Thirdly,  the  Emperor  was  a 
great  consumer  of  public  revenues.  The  three  items  con- 
stituting the  expenditures  of  the  Emperor's  family  are  by 
no  means  exhaustive.  They  merely  represent  those  sums 
paid  out  of  the  treasury  of  the  Department  of  Finance  and 
of  the  provincial  treasuries.  For  tw^o  reasons,  it  is  impos- 
sible to  discover  the  amount  of  revenues  wasted  by  the  Em- 
peror, The  Department  of  Palace  Affairs,  which  was  charged 
with  the  administration  of  the  imperial  finances,  was  not 
subject  to  the  supervision  of  the  Department  of  Finance. 
Moreover,  a  great  many  departments  of  civil  administration 
were  established  primarily  for  the  Emperor  and  their  ex- 
penses cannot  be  isolated.  In  the  fourth  place,  the  postal 
stations  were  established  primarily  for  military  and  other 
government  services  instead  of  for  industrial,  fiscal  or  other 
purposes.  The  object  of  the  expenditures  for  the  conser- 
vation of  rivers  and  ponds  was  to  protect  agricultural  land 
against  flood  or  draught.  Next  follow  the  expenditures  for 
social  purposes  which  were  composed  of  four  elements. 

(a)  Public  worship. 

(b)  Public  gifts  and  charities,  which  included  the  pur- 
chase of  boards  bearing  signs  for  identifying  obedient  sons, 


175]  EXPENDITURES  AND  REVENUES  33 

unmarried  widows,  persons  over  one  hundred  years  old,  the 
gifts  of  five  hundred  sine  rice  and  ten  rolls  of  cloth  to  any 
woman  giving  birth  to  three  sons  at  the  same  day,  the 
expenses  connected  with  care  of  widows,  widowers,  father- 
less or  motherless  children,  criminals  and  the  defective  and 
helpless  classes. 

(c)  Public  schools  and  scholarships  for  the  support  of 
poor  students  in  the  district  schools. 

(d)  Public  examinations  for  the  selection  of  competent 
men  as  candidates  for  public  offices.^     • 

According  to  the  order  of  importance,  the  Department  of 
Finance  made  the  permanent  appropriations  for  various 
functions.  In  addition  there  were  extraordinary,  uncer- 
tain or  insignificant  outlays. 

The  Status  of  the  Permanent  Appropriations  during  the  Nine- 
teenth Century 

Regular  Pay  of  Military  Officers  and  Men 14,862,9292 

Additional  Pay  of  Military  Officers  1,398,755 

Sundry  Expenses  in  the  Army  274,523 

Regular  Pay  of  Chinese  and  Manchu  Troops  in  Peking 5,348,5S6 

Regular  Salaries  of  Civil  Officials  1,908,086 

Additional  Allowance  of  Civil  Officials    2,937,369 

Salaries  of  Civil  and  Military  Officials  ^  in  Peking 196,988 

Imperial  Tomb's  Furnishing  106,861 

New  Year  Expenses  of  the  Imperial  Family  Paid  in  Peking  180,000 

Silk  Manufactures  107,833 

Postal  Stations  2,147,961 

Conservation  of  Rivers  and  Ponds  1,618,081 

Public  Worship    210,615 

Public  Gifts  and  Charities  217,420 

Public  Schools  and  Scholarships  197,749 

Miscellaneous  Expenses 4iS,957 

Total 32,129,683 

1  Cf.  Y.  S.  Ho,  Chinese  Education  from  the  Western  Viewpoint 
(New  York,  1913),  PP-  34-41- 

2  The  figures  are  in  taels.  ^  Manchus  are  not  included. 


34  THE  SYSTEM  OF  TAXATION  IN  CHINA  [176 

Sources  of  Public  Revenues 

In  modern  countries  the  revenues  expended  for  public 
purposes  are  often  derived  from  a  variety  of  sources.  In 
consequence  of  economic  conditions,  China,  up  to  the  late 
years,  was  content  with  only  one  fonn  of  revenue,  namely, 
taxation. 

The  Department  of  Finance  classified  the  sources  of  reve- 
nues into  five  items,  namely,  land  taxes  {Fu)  ;  rents 
(Tsoo)  ;  royalties  (Kau)  ;  duties  (Shut) ;  and  tributes 
(Kung).^  For  the  convenience  of  consideration,  it  seems 
better  to  adopt  the  following  classification : 

(i)  Taxation  of  agricultural  lands  including  taxes  and 
rents. 

(2)  Taxation  of  salt  (royalties). 

(3)  Taxation  of  commodities  (duties),  including  regu- 
lar customs  duties  and  li-kin  duties. 

Appropriations 

Having  learned  in  the  preceding  sections  the  different 
classes  of  functions  with  their  amounts  of  appropriated  reve- 
nues and  the  various  sources  of  revenues,  it  is  now  pos- 
sible to  discuss  the  seasonal  appropriations  of  revenues 
made  by  the  Committee  of  Appropriation  in  the  Department 
of  Finance.  The  committee  was  authorized  by  the  heads  of 
the  department  to  appropriate  revenues  for  military  pur- 
poses in  the  winter,  and  for  all  other  purposes  during  the 
spring  and  autumn  upon  the  basis  of  the  provincial  reports 
of  the  amount  of  collected  revenues.  These  appropriations 
were  necessary  for  two  reasons.  First,  there  were  various 
uncertain  elements  of  ordinary  expenditures  which  could 
not  be  accurately  estimated  and  provided  for  beforehand  in 

1  Tributes  and  other  insignificant  sources  of  royalties  and  duties  are 
not  worth  consideration. 


177]  EXPENDITURES  AND  REVENUES  35 

the  permanent  appropriations.  ^  In  the  second  place,  the  bal- 
ance of  outlays  and  incomes  in  the  different  provinces  might 
be  favorable  or  unfavorable.  In  addition  to  the  seasonal 
appropriations,  which  were  general  in  character,  there  were 
special  appropriations  to  meet  the  extraordinary  expendi- 
tures whenever  they  occurred.  Appropriations  were  made 
according  to  functions  and  provinces,  because  practically  all 
district  expenditures  which  can  be  embodied  in  the  perma- 
nent appropriations  were  permitted  to  be  deducted  from  the 
land  tax. 

The  collection  of  revenues  provided  to  meet  the  appro- 
priations was  controlled  partly  by  central  and  partly  by  local 
officials.  First,  the  land  tax  which  is  levied  in  every  prov- 
ince was  divided  into  two  parts.  One  part  was  deducted  by 
the  magistrate  ^  for  the  district  expenditures  and  was  called 
the  reserved  fund,  while  the  other  part  which  was  required  to 
be  sent  to  the  Executive  Department  ^  in  the  provincial  capi- 
tal was  known  as  the  transporting  fund.  All  other  sources 
of  revenues,  such  as  salt  royalties,  maritime  customs  duties 
and  regular  customs  duties  were  national  in  character  and 
were  administered  by  special  officers  under  the  supervision 
of  the  governor.  These  revenues  together  with  the  trans- 
porting fund  of  the  land  tax  constituted  the  available  re- 
sources for  meeting  both  national  and  provincial  appropria- 
tions. As  soon,  as  the  appropriations  had  been  approved  by 
the  Emperor,  those  provinces  whose  collected  revenues  ex- 
ceeded their  expenditures  were  required  to  transport  their 
surplus  revenues  to  Peking  or  to  provinces  in  less  fortunate 
circumstances.  With  the  development  of  banking,  the  gov- 
ernors often  bought  bills  of  exchange  from  the  prominent 
Chinese  bankers. 

1  Cf.  supra,  p.  2,2>-  ^  Cf.  infra,  pp.  64-65. 

•■'  Cf.  supra,  p.  24. 


36 


THE  SYSTEM  OF  TAXATION  IN  CHINA 


[178 


The  Amount  of  the  Transporting  Fund  and  the  Reserved  Fund  in 
THE  Several  Provinces  as  Determined  by  Law 


The    transporting    fund    in 
(aeis  of  silver 

The  reserved  fund  in  faels 
of  silver 

Province 

Revenue  from 
the  regular 
tax 

Revenue  from 
the  compen- 
satory tax 

Revenue  from 
the   regular 
tax 

Revenue  from 
the  compen- 
satory tax 

Chi-li    

1,708,521.486 

20,318.646 

31,956.780 

2,772,630.023 

2,645,503.655 

2,747,240.229 

2,231,264.000 

1,220,310.000 

1,781,607.770 

1,037,992.952 

2,121,750.774 

961,768.653 

936,647.098 

1,341,361752 

214,494.580 

541,501.823 

864,211.117 

330,845-518 

147,000.033 

65,864.800 

211,856.256 

672,622.111 

9,148.082 

144.136 

328,171.084 

312,540.853 

232,944-854 
291,025.478 
250,419.000 

208,547-445 
198,762.640 

239,796.926 

98,403.313 

94,975-866 

278,122.936 

71,441.899 

100,106.861 

161,075.170 

91,207.457 

46,771,297 

28,930.200 

Feng-tien 

3,293-195 
228,638.666 
272,846.752 
244,109.554 
113,231.000 
113,998.200 
86,651.970 

13,379-707 
83,584.128 
71,262.860 

74,935-740 
66,451.728 
10,535.940 

44,696-557 

126,259.512 

12,153.603 

47,641.914 

5,044.100 

Shan-tung   

45,941.962 
86,200.748 
36,272.329 
24,114.852 
55,370.000 

4,864.483 
10,731.109 
10,922.769 

9,497.586 

170,760.000 

29,902.163 

54,900.000 

32,684.796 
14,440.751 

Ho-nani 

Kiang-su 

Kiang-si ' 

Fu-kien    •.«..••••> 

Che-kiang    

Hu-peh    

Hu-nan     .• « - 

Shen-si     ......  .... 

Kan-su    •......-.. 

Sze-chuen    

Kwang-tung ' 

Kwang-si  ' 

Yun-nan 

Kwei-chow 

Total    

23,722,791.689 

1,830,576.382 

3,715,157.608 

586,603.548 

Transportation  of  Produce 
( I )   The  necessity  of  produce  to  the  Peking  Government. 
As  we  know,  the  land  tax  was  paid  both  in  money  and  in 
produce,  viz.,  rice,  wheat,  beans  etc.     Whether  the  money 

1  These  five  provinces  had  an  additional  sum  of  the  reserved 
fund  for  the  leap  month  whenever  it  occurred  i.  e.,  Shan-si  had 
12533.366  taels  of  the  regular  tax  and  .944  tael  of  the  com- 
pensatory tax;  Ho-nan,  15828.521  taels  of  the  regular  tax  and  .038 
tael  of  the  compensatory  tax;  Kiang-si,  7446.035  taels  of  the  regular 
tax;  Kwang-tung,  10493.378  taels  of  the  regular  tax;  and  Kwang-si, 
5958.607  taels  of  the  regular  tax.  These  figures  are  found  in  The 
Amendments  of  the  Institutes  of  the  Tsing  Dynasty,  ch.  clxix-clxx. 


179]  EXPENDITURES  AND  REVENUES  37 

revenues  from  the  land  tax  of  each  province  should  be  de- 
posited in  the  provincial  treasury,  or  transported  to  Peking 
or  elsewhere  was  determined  by  the  appropriations  of  the 
Department  of  Finance.  On  the  other  hand,  the  office- 
holders and  troops  in  the  different  provinces  received  a  part 
of  their  pay  out  of  the  collected  produce  of  their  respective 
provinces,  while  those  in  Peking  were  entitled  to  get  their 
respective  partial  payment  in  produce  from  certain  great 
producing  provinces.  Thus  Shan-tung,  Ho-nan,  Kiang-su, 
An-hwei,  Kiang-si,  Hu-peh,  Hii-nan  and  Che-kiang  were 
required  to  send  a  part  of  the  collected  produce  to  Peking. '^ 
The  quantity  to  be  supplied  by  each  province  was  legally  pre- 
scribed, and  no  deduction  or  commutation  to  money  was 
permitted,  unless  upon  extraordinary  occasions,  such  as  a 
bad  harvest  or  a  rebellion.  An  extra  charge  was  demanded 
for  the  loss  in  weighing,  shipping  or  storage. 

(2)  Transportation  and  storage.  In  autumn  of  the  year 
the  magistrates  collected  the  required  quantity  of  rice  and 
delivered  it  tO'  the  transporters  in  the  respective  harbors. 
This  had  to  be  done  within  a  fixed  period  (within  the  winter 
in  Shan-tung;  from  the  beginning  of  the  twelfth  month  to 
the  end  of  the  second  month  of  the  following  year  in  the 
provinces  of  the  Yang-tze  River;  during  the  entire  first 
month  and  half  of  the  second  in  South  Kiang-su  and  Che- 
kiang).  In  those  districts  which  were  remote  from  the  har- 
bors, or  did  not  produce  the  anticipated  quantity  of  rice, 
the  required  quantity  of  rice  was  paid  in  silver  according 
to  a  fixed  rate  of  exchange,  or  according  to  the  market 
price  of  the  collecting  month.  The  magistrates  bought 
rice  in  the  districts  surrounding  the  harbors  or  trans- 
ferred the  silver  to  the  Department  of  Finance  through 
the    Executive    Department.      The    available    rice    might 

1  The  produce  was  also  used  for  other  purposes  than  the  support  of 
public  servants. 


38  THE  SYSTEM  OF  TAXATION  IN  CHINA  [jgo 

be  transported  by  way  of  the  Grain  Canal,  or  Grand 
Canal  as  it  is  usually  called  by  the  foreigners,  or  by 
sea.  Formerly,  the  public  rice  junks  ^  sailing  along  the 
canal,  started  for  Peh-tung-chozv,  the  river  port  of  Peking, 
in  or  before  the  second  month  of  the  year.  In  1802  the 
rice  of  Soo-chow,  Sung-kimig,  and  Tai-chong  (Kiang-su 
Province)  was  allowed  to  be  transported  by  sea  via  Shang- 
hai. In  1825  Emperor  Tao  Kwang  proposed  that  sea  trans- 
portation be  universally  adopted.  In  1852,  the  rice  paid 
by  the  southern  part  of  Kiang-su  and  Che-Kiang  began 
to  be  transported  by  sea,  because  the  public  rice  junks  were 
so  crowded  on  the  canal  that  many  junks  could  not  arrive 
at  Peh-tung-chow  before  the  freezing  of  the  Peh-ho  River 
in  the  winter.  From  1853  to  1864,  the  rice  was  mostly 
paid  in  money  due  to  the  Tai-ping  Rebellion  of  1850-1864, 
and  the  public  junks  disappeared.  In  1865,  the  canal  trans- 
portation of  rice  paid  by  the  provinces  north  of  the  Yang- 
tze River  was  renewed  and  private  junks  were  hired  to  dis- 
place the  public  rice  junks.  Vessels  carrying  South 
Kiang-su  and  Che-kiang  rice  continued  to  leave  Shanghai 
for  Tientsin  by  sea  in  the  second  month  of  the  year.  In 
1873,  the  sailing  vessels  were  replaced  by  the  steamships  of 
the  China  Merchant's  Steam  Navigation  Company  in 
Shanghai,  while  the  other  southern  provinces  sometimes 
sent  a  part  of  their  rice  by  sea  in  the  following  years. 

The  transportation  was  accomplished  through  the  aid  of 
one  transporter-in-chief, '^  four  provincial  transporters  "  and 
many  military  officers  and  men.     The  civil  and  military 

1  The  number  of  junks  in  1812  was  6242.  Each  junk  had  the  privilege 
of  carrying  goods  equal  in  value  to  twenty  per  cent  of  the  rice  free  of 
customs  duties. 

-  This  official  was  equal  in  rank  to  a  governor. 

**  These  officials  were  equal  in  rank  to  the  circuit  governors.  They 
were  the  heads  of  the  grain  departments  in  North  Kiang-su  (including 
An-hivei),  South  Kiang-su,  Che-kiang  and  Shan-tung. 


i8i] 


EXPENDITURES  AND  REVENUES 


39 


transporters  with  their  soldiers  went  to  Peh-tung-chow  and 
delivered  the  rice  of  their  provinces  to  the  granary  keeper- 
in-chief.  Then  the  rice  and  other  produce  were  kept  either  in 
the  granaries  in  Peking  and  Peh-tung-chow  at.  the  disposal 
of  the  Peking  Government  or  in  the  granaries  in  Tsi-chow 
and  Yi-chow  for  the  garrisons  of  the  imperial  tombs.  For 
the  services  of  collection,  transportation  and  storage,  var- 
ious kinds  of  fees  were  demanded  for  the  collectors,  trans- 
porters and  keepers. 

After  1 90 1,  the  legal  quantity  of  produce  had  been  com- 
muted to  money  in  order  to  save  the  extravagant  cost  of 


The  Quantity  of  Rice  Required  to  be  Transported  to  Peking 
Rice  due  to  the  Rice  due  to  the 


Province 


Shan-tung 
Ho-nan  . . 
Kiang-su  . 
An-hwei  . 
Kiang-si  . 
Che-Kiang 
Hu-peh  . . 
Hu-nan  . . 

Total 


Peking  Gran- 
ary 

28,000,000  sine 
27,000,000  " 
111,300,000  " 
38,700,000  " 
40,000,000  " 
60,000,000  " 
12,294,271-  " 
12,705,728-  " 

330,000,000    " 


Peh-iung-ckow 
Granary 

9,560,000  sine 
11,000,000    " 

9,395,000  " 
20,045,000  " 
17,000,000   " 

3,000,000   " 


70,000,000 


Rice  due  to  both 
granaries 

37,560,000  sine 

38,000,000  " 

120,695,000  " 

58,745,000  " 

57,000,000  " 

63,000,000  " 

12,294,271  " 

12,705,728  " 

400,000,000    " 


The  Quantity  of  Wheat  and  White  Rice  Required  to  be  Trans 

PORTED  TO  Peking 

Wheat   due   to 
Province  the     Peking 

Granary 

ggi,S7(>sinc 


Wheat  due  to  the 

Peh-tun^-chow 
Granary 


White  rice  due  to 
both  granaries 


Shang-tung  .. . 

Ho-nan  2,465,278 

Kiang-su  ^   . . . 
Che-Kiang  ^  . . 

Total  ....       3,456,854 


9Z9MO  sine 
1.276,696   " 


2,215,866   " 


15,043,847  ^t«<r 
6,620,000   " 

^1,663,847    " 


1  The  white  rice  paid  in  Kiang-su  was  really  required  from  only  four 
prefectures,  vis.,  Soo-chow,  Sung-kiang,  Siang-ehow  and  Tai-ehong ; 
and  that  paid  in  Che-kiang,  from  two  prefectures,  viz.,  Tsa-sing  and 

Hu-ehow. 


40 


THE  SYSTEM  OF  TAXATION  IN  CHINA 


[182 


canal  transportation.  Still  in  the  first  decade  of  the  twen- 
tieth century  one  hundred  million  sine  of  rice  from  Kiang-su 
and  Che-kiang  were  transported  from  Shanghai  to  Tientsin 
by  steamers  every  year,  because  the  cost  of  transportation 
was  reasonable. 


Bean  and  Siu^er  Substitutes  for  the  Required  Rice 


Province. 

iS-3    g 
J3  tS    &■ 

—  •2-' 

0    3    0J_ 
tn   va 

e  «  w,  •- 

g  j2  ^  0 

<y 

sine 
11.319.655 

9,616,985 

Quantity  of  white 
rice  for  which 
other  rice  might 
be  substituted."'' 

Quantity  of  rice  for 
which  silver  was  al- 
ways substituted,' 

Quantity  of  rice  de- 
ducted  from   the 
original    quantity 
as  exemption 
since  1865. 

Quantity  of  rice 
substituted  for 
lime.* 

Shan-tung 

'FTn-naii     ........ 

sine 

sine 
7,000,000 

7,000,000 

10,649,269 

sine 

sine 

Kianp-su  .• 

8,141,347 
3,622,500 



54,312,600 
26,676,500 

2,942,422 
4,807,740 

f^Hp-lfli^TlOr  ..-.--- 

7.596,131 

3,252,060 

521.205 



Total 

20,936,640 

11,763,847 

36,018,665 

80,989,100 

7,750,162 

1  In  the  first  column,  the  quantity  of  black  beans  varied  more  or 
less  directly  with  the  quantity  of  rice  in  the  Peking  Granary. 

2  In  the  second  column,  the  quantity  of  white  rice  to  be  exchanged 
was  fixed. 

3  In  the  third  column,  the  exchange  rates  between  silver  and  rice  were 
fixed  according  to  the  market  prices  in  the  provinces. 

*  In  the  fifth  column,  the  quantity  of  rice,  being  substituted  for  a 
certain  quantity  of  lime,  was  not  deducted  from  the  total  quantity  of 
rice  or  white  rice  as  in  case  of  the  preceding  columns ;  but  was,  in  turn, 
replaced  by  a  payment  in  silver.  The  rate  was  fixed  as  follows:  1.2 
tael  of  silver  =^  100  sine  of  rice. 


183]  EXPENDITURES  AND  REVENUES  41 

Minimum  and  Maximum  Rates  1  of  the  Extra  Charge  2  on  the 

Transported  Rice 

Extra  charge  on  every  hun-  Extra  charge  on  every  hun- 

Province  dred  sine  of  rice  due    to  dred  sine  of  rice  to    the 

the    Peking  Granary  Peh-tung-chow  Granary 

Shan-tung  ^  25  ^  17 

Ho-nan  ^ 25-28  17 

Kiang-su  *   25-40  22-30 

An-hwei  30-40  25-30 

Kiang-si   40  40 

Che-kiang  *   40  40 

Hu-peh  5  40 

Hu-nan  ^ 40 

Transportation  Fees  '^ 


Province 

Payments  with  every  hundred 

sine  of  rice  due  to  the 

Peking  Granary 

Payments  with  every  hun- 
dred sine  of  rice  due  to 
the  Peh-tung-chow  Granary 

in  silver 

in  rice 

in  rice 

Shan-tuns' 

.05  tael 
.05     « 
.05     « 
.05     « 
.1       " 

.34     " 
.03     « 

.... 

21  sine 

21     " 
31     « 

31     " 
31     « 

36    « 
52     « 
56     « 
56    " 

Ho-nan    

Kiang-su  (North) . . . 
Kiang-su  (South)  . . 
Che-kianp 

2     « 
2     « 
2     " 

Kianp-^i   ......  .... 

2     " 

Hu-peh    ••....  .... 

Hu-nan 

1  See  The  Amendments  of  the  Institutes  of  the  Tsing  Dynasty,  chs. 
cxciv-cxcvii. 

2  For  the  extra  charge,  see  supra,  p.  37. 

3  Shan-tung  and  Ho-nan  paid  to  these  granaries  wheat  and  beans  at 
the  same  rates  of  extra  charge. 

*  The  rates  of  extra  charge  on  every  hundred  sine  of  wfhite  rice  were 
thirty  sine  in  Kiang-su  and  forty  sine  in  Che-kiang. 

5  Hu-peh  and  Hu-nan  had  no  rice  due  to  the  Peh-tung-chow  Granary. 

^  Figures  are  in  sine  per  one  hundred  sine  of  the  transported  rice. 

"^  This  table  does  not  include  the  collection  fees  which  were  deter- 
mined by  the  district  magistrates. 


42  THE  SYSTEM  OF  TAXATION  IN  CHINA  [184 

Balance  of  Expenditures  and  Revenues 
The  financial  histoty  of  the  Tsing  Dynasty,  1644-1911, 
may  be  divided  into  two  periods  by  the  Chino- Japanese 
War,  1894-5.  The  former  period,  1644-1893,  may  be 
called  normal,  because  revenues  were  generally  sufficient  to 
meet  expenditures  in  a  systematic  manner.  Although  ex- 
penditures grew  larger  during  the  last  five  decades  of  this 
period  due  to  the  Tai^ping  Rebellion  of  18 50- 1864,  and  the 
intercourse  with  foreign  countries,  yet  they  could  be  made 
up  by  new  sources  of  revenues.  For  instance,  the  total  reve- 
nues of  1887  were  in  excess  of  the  total  expenditures  of  the 
same  year : 

Total  revenues 78,515,215  taels 

Total  expenditures 67,448,649 


Balance 11,066,566    " 

If  we  differentiate  both  the  total  revenues  and  the  total 
expenditures  into  old  and  new.  we  have  the  following  fig- 
ures: 

Old  revenues  from  land,  salt,  regular  customs  42,448,915  taels 

Old  expenditures, 

Permanent  appropriations  32,129,683^0^/6- 

Temporary  appropriations    8,733,791     "      40,863,474 


Balance 1,585.441     " 

New  revenues  from  maritime  customs  and  li-kin  duty  36,066,300  fa^/^ 
New  expenditures  for  new  army  and  navy,  cost  of  col- 
lecting new  revenues  and  redemption  of  foreign  debts  26,585,175 


Balance 9,481,125    " 

Then  we  pass  to  the  latter  period,  1894-1911,  which  is 
abnormal  in  the  sense  that  the  government  of  the  Tsing 
Dynasty  would  have  become  bankrupt  before  the  Revolu- 


185]  EXPENDITURES  AND  REVENUES  43 

tion  of  191 1  were  it  not  for  foreign  loans.^  This  condition 
was  brought  about  by  the  Chino-Japanese  War  of  1894-5, 
the  Boxer  Disturbance  of  1900  and  the  reforms  of  govern- 
ment, 1 906- 191 1.  The  growth  of  expenditures  and  reve- 
nues of  this  period  may  be  learned  from  the  first  Chinese 
budget  of  191 1.  This  budget  was  made  in  1910  by  the  De- 
partment of  Finance  based  on  the  estimates  of  expenditures 
of  the  different  ydmens  at  Peking  and  the  provinces,  and  on 
the  average  sum  of  annual  incomes  of  1908-9,  as  reported- 
by  the  investigators,  sent  to  the  provinces  by  the  Depart- 
ment of  Finance  in  1909,  and  by  other  authorities.  Al- 
though its  operation  has  been  interfered  with  by  the  Revo- 
lution of  191 1,  it  furnishes  the  most  reliable  information 
concerning  the  financial  condition  on  the  eve  of  the  Revo- 
lution. 

Public  Revenues*  for  191  i 

Land  Tax 48,101,346.273  taels 

(a)  Ordinary    46,312,355.022  taels 

(b)  Incidental    1,936,656.421     " 

Salt  Taxes  46,312,355.022    " 

Maritime  Customs  Duties 35, 139.917-965    " 

Regular  Customs  Duties  6,999,369.966    " 

(a)  Ordinary  6,990,845.925     " 

(b)  Incidental    8,524.041     " 

Miscellaneous  Taxes 26,163,842.177 

Li-kin  Duty 43,187,907.099 

Public  Industries  * 46,600,899.753 

Incidental  Contributions  5-652,333.117 

Miscellaneous  Incomes 35,244,750.650 

Internal  Debt  3,560,000.000 


Total  296,962,722.022    " 

1  For  the  amount  of  foreign  loans  see  H.  B.  Morse,  The  Trade  and 
Administration  of  the  Chinese  Empire  (New  York,  1908). 

2  Cf.  infra,  p.  44,  note  i. 

3  The  public  industries,  excluding  railways  and  telegraphs,  are  dif- 
ferent in  different  provinces.    The  most  common  one  is  the  mint. 


44  THE  SYSTEM  OF  TAXATION  IN  CHINA  [i86 

Public  Expenditures  i  for  191  i 

Foreign  intercourse   3,544,732-977  taels 

Police  administration 4,227,563.742  " 

Public  ceremonies  792,127.940  " 

Financial  administration 28,130,434.754  " 

Palace  and  imperial  household  6,144,877.170  " 

The  Council  of  State  and  other  departments  6,348,826.271  " 

Provincial  administration 19,822,730.489  " 

National  Assembly  2 786,666.666  " 

Public  debt  redemption  and  interest 56,413,576.498  " 

Public  industries  ^ 5,600,435.211  " 

Public  education   3,375,474-756  " 

Army  and  its  supplies  126,743,333.389  " 

Navy  and  its  supplies 10,503,202.794  " 

Administration  of  justice 7,716,016.765  " 

Administration  of  agriculture,  industry  and  commerce  2,040,003,373  " 

Public  works 4,515,271.832  " 

Administration  of  railways  and  telegraphs  55,141,906.832  " 

Government  of  dependencies  1,705,103.877  " 

Total  national  expenditures  338,652,295.073    " 

Local  expenditures  37,703,362,170    " 

Grand  total 376,355,657-243    " 

General  Features  of  Expenditure  and  Revenue 
The  most  striking  features  of  the  period  under  considera- 
tion may  be  classified  as  follows :  ( i )  the  general  character- 
istics throughout  the  Tsing  Dynasty,  1644-1911;  (2)  the 
special  characteristic  of  the  earlier  period,  1644-1893;  and 
(3)  the  special  characteristic  of  the  later  period,  1894- 
191 1.  The  general  characteristics  consist  of  two  points. 
One  is  the  improper  division  of  income  among  the  different 
governmental  agencies.     For  instance,  at  least  one-third  of 

1  These  tables  of  expenditures  and  revenues  are  abstracted  from  the 
original  budget  submitted  by  the  Department  of  Finance,  not  from  the 
final  budget  modified  by  the  National  Assembly.  They  represent  the 
actual  needs  of  the  government  rather  than  the  final  appropriations. 

2  The  National  Assembly  was  created  in  1910. 
^  Cf.  supra,  p.  43,  note  3. 


187]  EXPENDITURES  AND  REVENUES  45 

the  total  income  was  spent  for  military  purposes,  while  the 
total  local  expenditures  or  the  reserved  fund,  as  it  was 
called,  was  small  compared  with  the  amount  needed  for 
local  improvements.  Another  point  is  that  the  important 
forms  of  taxation  remained  unchanged  during  all  these 
years.  The  special  characteristic  of  the  earlier  period  is  the 
transportation  of  revenues,  in  the  form  of  silver  or  product, 
due  to  the  lack  of  development  of  commerce;  and  that  of 
the  later  period  is  the  development  of  numerous  forms  of 
incomes  in  the  different  provinces,  termed  the  miscellaneous 
incomes,  the  most  undesirable  forms  of  which  may  be  men- 
tioned as  follows : 

(i)  The  so-called  contribution.  This  was  simply  a 
euphonious  term  used  for  the  receipts  from  the  sale  of 
public  offices.  A  person  might  become  a  candidate  for 
an  office  by  contributing  a  certain  sum  of  money. 
The  highest  office  which  could  be  bought  in  this  way  was 
the  circuit  governorship  in  the  provinces  and  the  office  of 
a  first-class  secretary  in  the  department  at  Peking.  This 
source,  yielding  a  gross  return  of  5,652,333.117  taels  ac- 
cording to  the  budget  of  191 1,  was  found  in  Peking  and 
all  the  provinces  subject  to  the  control  of  the  Department  of 
Finance  which  issued  the  official  diplomas. 

(2)  The  gambling  tax.  In  Kwang-tung  Province  this 
tax  was  advanced  in  a  lump  sum  by  a  company  which 
had  a  monopoly  of  all  the  gambling  houses  in  Canton, 
the  capital  of  Kwang-tung.  According  to  the  budget  of 
191 1,  this  source  yielded  about  4,400,000  taels,  form- 
ing one-eighth  of  the  total  amount  of  miscellaneous 
incomes  of  the  country.  As  compared  with  the  re- 
turns of  the  other  important  sources  of  revenues  in 
the  same  province,  it  took  a  third  place.  The  re- 
ceipts ran  as  follows:  maritime  customs  duties,  6,103,610 
taels;  li-kin  duty,   5,046,256   taels;  gambling  tax,  4,400,- 


46  THE  SYSTEM  OF  TAXATION  IN  CHINA  [igg 

cxx)  taels;  salt  monopoly,  2,417,597  taels;  public  industries, 
2,372,986  taels;  and  land  tax,  1,803,637  taels. 

(3)  The  lottery  monopolies  in  Hn-peh,  Kiang-su  and 
other  provinces.  The  Hu-peh  lottery  was  a  government 
monopoly,  while  the  lotteries  in  Kiang-su  and  other  pro- 
vinces were  monopolized  by  private  companies,  each  paying 
a  franchise  tax  to  the  respective  provincial  governments. 
But  the  lottery  of  one  province  might  be  sold  in  any  other 
province.  The  income  from  this  source  amounted  to  sev- 
eral million  taels. 


CHAPTER  III 
Taxation  of  Land  ^ 

The  Revolution  of  191 1  affected  only  slightly  the  gen- 
eral system  of  taxation  in  China  and  consequently  the  fol- 
lowing description  of  conditions  as  they  existed  during  the 
Tsing  Dynasty  may  be  accepted  as  a  substantially  accurate 
account  of  the  present  situation. 

The  land  tax  has  been  playing  the  most  important  role 
among  all  the  sources  of  revenue.  It  owes  its  importance 
both  to  the  economic  condition  and  to  the  historical  devel- 
opment. In  order  to  describe  the  present  system  of  taxing 
land,  it  is  necessary  to  treat  separately  the  land  system,  the 
land  policy,  the  tax  system,  the  land  rent,  the  exemption  of 
payment,  the  rates  and  the  administrative  rules. 

The  Land  System 
The  agricultural  lands  of  the  whole  country  liable  to  pay 
a  tax  or  rent  consist  of  nine  principal  classes : 

(A)  The  People's  Lands  are  those  which  are  the  private 
property  of  the  people  and  subject  to  sale  or  purchase  at 
their  own  will. 

(B)  The  Changed-name  Lands  are  those  which  were 
owned  by  the  absent  nobles  of  the  Ming  Dynasty,  1368- 
1644,  ^^^^  transferred  with  property  rights  to  the  people  of 
the  respective  districts  in  which  they  are  situated. 

(C)  The  Soldier-cultivated  Lands  are  those  given  to  the 
soldiers  to  be  cultivated  in  vacation,  i.  e.,  in  time  when  they 
are  not  called  on  for  the  periodical  drilling,  the  capture  of 

'  For  the  Chinese  systems  of  measure  and  weight,  see  Appendix  A. 
189]  47 


48  THE  SYSTEM  OF  TAXATION  IN  CHINA  [igo 

robbers  and  the  transportation  of  grain  to  Peking  and  its 
vicinity.  Since  1650,  owing  to  the  organization  of  regular 
forces  in  the  different  provinces,  the  farming  soldiers  are 
no  longer  actual  soldiers  except  those  engaged  in  transport- 
ing grain,  and  their  lands  are  taxed  by  the  civil  authorities. 

(D)  The  Horse-breeding  Lands  are  those  which  were 
originally  enclosed  for  horse-breeding  in  Chi-li,  Sha}i-si, 
Kan-su  and  certain  cities  in  other  provinces,  but  now  in  the 
hands  of  the  people  for  cultivation. 

(E)  The  Weed-growing  Lands  are  the  marshes  found  in 
the  maritime  provinces,  such  as,  Kiang-su,  Kiang-si,  Hu- 
peh  and  Hu-nan. 

(F)  The  Villa  Lands  are  those  whose  rents,  paid  in 
product,  flow  into  the  treasury  of  the  Department  of  Palace 
Affairs.  They  are  situated  in  Chi-li  and  Feng-Hen  Pro- 
vinces. . 

(G)  The  Banner  Lands  are  those  given  to  the  soldiers 
to  be  cultivated  for  their  own  use.  They  are  generally 
found  in  Moukden  (Manchuria)  and  near  Peking,  and  are 
not  allowed  to  be  sold  or  mortgaged. 

(H)  The  Public  Lands  are  those  held  by  the  govern- 
ment. The  different  provinces  use  the  revenues  from  these 
lands  for  different  purposes. 

(I)  The  Education  Lands  are  those  whose  incomes  go 
to  the  provincial  treasuries  for  educational  expenses. 

The  Land  Policy 

Of  the  nine  classes  of  cultivated  lands,  only  the  first  was 
being  cultivated  by  the  owners  themselves  or  their  tenants 
at  the  beginning  of  the  Tsing  Dynasty,  1644-1911,  when  the 
other  eight  classes  were  public  domains.  As  the  Chinese 
land  policy  is  to  develop  agriculture  in  the  country,  the 
government  tries  to  put  every  tract  of  land  available  for 
agriculture  into  cultivation  by  a  free  disposal  of  lands  to 


igij  TAXATION  OF  LAND  49 

the  people.  As  the  result  of  this  policy  the  area  of  public 
tillable  lands  put  into  cultivation  was  calculated  in  1887  to 
be  186,495,407  mou.  Practically  all  of  these  lands,  cleared 
by  virtue  of  imperial  grants,  were  turned  into  private  prop- 
erties by  those  who  had  cleared  them.  The  total  area  of 
lands  retained  by  the  government  and  rented  to  the  tenants 
in  order  to  secure  revenues  for  specific  purposes  is  compar- 
atively small.  The  existing  public  cultivated  lands  are  now 
known  as  the  Villa  Lands,  the  Education  Lands,  the  Public 
Lands  in  general  and  the  Banner  Lands. 

Area  of  Cultivated  Lands  in  1887 
Province  Area  ^  of  Lands  in  Mou. 

Chi-li 69,254,823 

Feng-tien 26,554,229 

Ki-rin 1,429,214 

Shan-tung 125,931,405 

Ho-nan 71,675,185 

Shan-si 56,476,803 

An-hvirei  41,113,028 

Kiang-su  1 10,825,370 

Kiang-si  47,341,581 

Fu-kien    13,400,056 

Che-kiang  46,770,515 

Hu-peh  117,322,955 

Hu-nan    34,874,255 

Shen-si 30,59i,330 

Kan-su , 16,775,160 

Sze-chuen   46,415,898 

Kwang-tung  34,730,825 

Kwang-si  8,963,783 

Turkestan  11,480,101 

Total  in  the  report  of  1887 911,976,606 

Yun-nan  2  in  the  report  of  1853 9,319,360 

Kwei-chow  2  in  the  report  of  f8i2 2,765,025 

Grand  total   924,060,991 

1  The  Institutes  of  the  Tsing  Dynasty,  5th  edition,  (Shanghai,  1909), 
ch.  xvii. 

2  Yun-nan  and  Kwei-chow  sent  their  latest  reports  in  1853  and  1812 
respectively. 


50  THE  SYSTEM  OF  TAXATION  IN  CHINA  [192 

Area  of  Public  and  Private  Cultivated  Lands  in  1887,  showing  the 

Result  of  the  Land  Policy 

Province            Area  of  private  land  ^  Area  of  public  land  ^ 

Chi-li  2 68,332,031  mou  972,792  mou 

Feng-tien   5,239,889    "  21,314,340  " 

Ki-rin    1,429,214    " 

Shan-tung 123,600,758    "  2,330,647  " 

Shan-si   47,918,531     "  8,558,272  " 

Ho-nan  62,766,216    "  8,908,969  " 

Kiang-su 65,757,338    "  45,068,032  " 

An-hwei 34,063,630    "  7,049,398  " 

Kiang-si   46,176,300    "  1,165,281  " 

Fu-kien  12,601,238    "  798,818  " 

Che-kiang 44,713,511     "  2,057,004  " 

Hu-peh  2  58,102,760    "  59,220,195  " 

Hu-nan2  31,304,200    "  3,57o,o55  " 

Shen-si2  25,797,024    "  4,794,3o6  " 

Kan-su    9,196,385    "  7,578,775  " 

Sze-chuen  2    46,415,898    " 

Kwang-tung 34,193,764    "  537,o6i  " 

Kwang-si  2 8,963,783    " 

Turkestan*   11,480,191  " 

Total   726,572,470    "  185,404,136  " 

Yun-nan  3 8,394,238    "  925,122  " 

Kwei-chow3   ..      2,598,876    "  166,149  " 

Grand  total  ..  737,565,584    "  186,495,407  " 


1  By  "  Private  Land  "  is  meant  the  People's  Land  while  all  the  other 
classes  are  included  in  public  land  because  of  their  origin. 

2  It  is  often  found  in  the  provincial  reports  that  the  different  classes 
of  land  are  not  separately  calculated,  there  being  a  failure  to  dis- 
tinguish not  only  between  various  classes  of  public  lands,  but  also  be- 
tween the  private  and  public  lands,  e.  g.,  the  area  of  private  lands  in 
Chi-li,  Hu-peh  and  Sze-chuen  includes  the  Soldier-cultivated  lands; 
that  in  Hu-nan,  the  Changed-name  Lands ;  that  in  Kwang-si,  the  public 
lands;  that  in  Shen-si,  the  Education  Lands. 

3  Yun-nan  and  Kwei-chow  did  not  send  their  reports  in  1887.  The 
figures  for  the  former  are  taken  from  the  report  of  1853,  and  those 
for  the  latter,  from  the  report  of  1812. 

*  Turkestan's  figure  denotes  the  area  of  public  lands  in  a  few  cities, 
while  the  whole  territory  is  practically  uncultivated. 
5  Thousands  of  mou  of  public  cultivated  lands  are  believed  not  to  be 


193]  TAXATION  OF  LAND  5 1 

Gradual  Increase  of  Cultivated  Lands  showing  the  Result  of  the 

Land  Policy  ^ 

Year  Area  of  Land 

1661 549,357,600  mou 

1685 607,843,000 

1722 683,791,400 

1766 741,449,500 

1812 791,525,100 

1833 742,000,000 

1887 911,976,606 

1  The  figures  are  taken   from  Tang  Shou  Chien,  Inquiry  into   the 
Institutions  of  China  (Shanghai),  bk.  iii,  ch.  i. 

The  Tax  System 
(A)   The  Compound  Land  Tax. 

The  compound  land  tax  at  present  is  composed  of  five 
elements  : 

(a)  The  Regular  Land  Tax. 

(b)  The  Poll  Tax. 

(c)  The  General  Personal  Service  Money. 

(d)  The  Post  Station  Money. 

(e)  The  Compensatory  Tax. 

(a)  The  Regular  Land  Tax.  Since  594  B.  C.  the  land 
has  been  taxed  by  mott  (acreage),  i.  e.,  a  tax  has  been 
levied  on  each  mou  of  land.  From  770  to  the  present  time 
there  has  been  no  uniform  rate  proportional  to  the  amount 
of  gross  produce.  Owing  to  the  fact  that  the  old  method 
of  assessment  was  abandoned  without  the  introduction  of  a 
new  method,  the  rates  to-day  are  fixed  merely  by  tradition.^ 
The  tax  was  originally  paid  in  produce.  Since  1436  it  has 
been  paid  partly  in  silver  and  partly  in  produce.  This 
change  is  not  an  attempt  to  approximate  more  closely  the 

included  in  this  table  due  either  to  no  report  or  to  the  calculation  with 
local    standards    of    measure.     Unfortunately,    these    are    the    only 
reliable   figures.    They   are  taken    from   the   latest    (Sth)    edition   of 
The  Institutes  of  the  Tsing  Dynasty,  ch.  xvii. 
1  For  the  rates  in  force  at  present,  cf.  infra,  pp.  56-64. 


52  THE  SYSTEM  OF  TAXATION  IN  CHINA  [194 

tax-paying  ability  of  the  land-holder ;  the  amounts,  collected 
year  by  year,  have  not  increased  or  decreased  so  that  each 
person  contributes  approximately  the  same  as  before. 

(b)  The  Poll  Tax.  The  poll  tax  was  levied  during  the 
early  years  of  the  Tsing  Dynasty,  1644-1911,  upon  several 
classes  of  people,  namely,  the  urban  people,  the  country  peo- 
ple, the  rich  people,  the  tenants  and  the  immigrants  from 
other  localities.  Each  of  these  was  further  classified  under 
three  grades  according  to  their  ability  to  pay.  The  age  of 
a  person  was  also  taken  into  consideration  because  an  adult, 
i.  e.,  sixteen  years  old,  was  regarded  as  having  greater  abil- 
ity than  a  child.  A  census  was  published  every  five  years 
in  order  to  correct  the  errors  regarding  population.  This 
method  of  assessment  was  soon  found  impracticable,  due 
to  the  lack  of  accurate  reports  of  increasing  members  of  the 
individual  families.  In  1713,  Emperor  Kang-shi  ordered 
that  the  census  of  171 1  should  be  taken  as  a  standard  and 
the  increased  population  be  exempted  from  taxation. 

During  the  period  1 716-1793  the  poll  taxes  of  different 
provinces  were  amalgamated  with  the  land  taxes,  except 
m  Feng-Hen,  twenty  districts  of  Shan-si  and  the  greater 
part  of  Kwei-chow.  The  poll  tax  was  originally  levied  in 
China  on  the  assumption  of  an  equal  distribution  of  lands 
in  a  primitive  society.  With  the  increase  of  population,  the 
scarcity  of  land  and  the  unequal  distribution  of  lands 
among  the  population,  the  poll  tax  has  lost  its  value  as  a 
test  of  ability  to  pay.^  Whereas  land  is  the  dominant  source 
of  wealth  in  an  agricultural  community,  the  only  way  for 
the  Chinese  government  to  make  good  the  loss  of  revenue 
from  the  poll  tax  was  to  raise  the  rates  of  land  taxes  as  she 
did  in  the  process  of  amalgamation.  Therefore,  we  may 
consider  this  modification  of  the  tax  system  as  an  advance 
step  towards  the  goal  of  ability  to  pay  in  taxation. 

1  Tang  Shou  Chien,  Inquiry  into  the  Institutions  of  China,  bk.  iii, 
ch.  iii,  p.  3. 


195 ]  TAXATION  OF  LAND  53 

(c)  The  General  Personal-Service  Money.  All  kinds  of 
public  service  were  formerly  done  with  forced  labor.  It 
was  the  duty  of  everybody  to  serve  in  this  way  without  pay- 
ment. Later,  money  was  paid  instead  of  service,  and  with 
it  voluntary  laborers  were  employed.  This  commutation 
tax  has  been  also  amalgamated  with  the  land  tax  in  order 
to  save  the  trouble  of  collection. 

(d)  The  Post-Station  Money.  Aside  from  the  post- 
office,  China  has  been  providing  her  own  means  of  com- 
munication known  as  the  post  stations  established  through- 
out the  Empire  especially  for  military  and  other  public  pur- 
poses. The  service  was  formerly  performed  by  the  people. 
It  is  now  paid  for  out  of  the  public  treasury,  while  the  peo- 
ple are  required  to  pay  a  tax  known  as  the  Post-Station 
Money  which  is  collected  with  the  land  tax. 

(e)  The  Compensatory  Tax.  Besides  the  regular  taxes 
and  the  commutation  taxes,  there  is  a  compensatory  tax 
which  is  so  called  because  it  was  originally  an  illegal 
charge  by  the  magistrates  for  the  compensation  of  loss  of 
silver  from  melting.  At  the  beginning  of  the  Tsihg 
Dynasty,  1644-1911,  the  practice  was  strictly  prohibited  by 
the  following  laws :  ^ 

(i)  The  Imperial  Decree  of  1644  announcing  that  the 
imposition  of  "  melting  loss  "  shall  be  punished  as  bribery. 

(2)  The  Law  of  1665  permitting  the  people  to  com- 
plain of  any  sort  of  excessive  charges  before  the  courts. 

(3)  The  Law  of  1678  holding  liable  the  provincial  high 
officials  for  the  concealment  of  the  guilt  of  subordinates 
levying  the  "  melting  loss  ". 

But  the  practice  could  not  be  checked  because  the  govern- 
ment did  not  provide  adequate  revenues  for  the  districts, 
nor  sufficient  salaries  for  the  magistrates,  as  it  was  said  by 

^  Wang  Ching  Yun,  Essays  on  the  Institutions  of  the  Tsing  Dynasty 
(Shanghai,  1901),  ch.  iii. 


54  THE  SYSTEM  OF  TAXATION  IN  CHINA  [196 

Emperor  Kang  Shi  in  a  decree  of  1709.  This  decree  is  a 
reply  to  Mr.  Loo-yu,  the  governor  of  Ho-nan,  saying,  "  It 
is  impossible  for  any  magistrate  to  support  his  family  and 
to  pay  for  the  services  rendered  by  his  secretaries  and  ser- 
vants, without  charging  a  single  cash  in  excess.  A  magis- 
trate charging  ten  per  cent  in  excess  of  the  regular  taxes 
may  be  considered  as  a  good  official.  If  he  were  not  excused 
from  impeachment,  it  seems  to  me,  it  would  be  irksome  for 
you  to  inflict  the  same  penalty  on  so  many  of  your  sub- 
ordinates." Then  the  rates  of  the  compensatory  taxes 
in  the  different  provinces  were  ten  per  cent  of  the  regu- 
lar taxes  or  less,  i.  e.,  one  mace^  per  tael  of  regular  taxes; 
but  the  rates  in  Hu-nan  were  twenty  per  cent  or 
thirty  per  cent.  In  1722,  the  rates  in  Shen-si  varied 
from  twenty  per  cent  to  fifty  per  cent  of  the  regu- 
lar taxes  when  the  provincial  treasury  incurred  a  de- 
ficit. The  governor  asked  Emperor  Kang  Shi's  permis- 
sion to  take  the  collected  revenues  from  the  compensatory 
tax  out  of  the  magistrates'  pockets;  but  the  Emperor  re- 
fused, because  he  thought  his  permission  would  mean  the 
confirmation  of  the  charge  of  the  illegal  tax.  In  1724,  the 
Governor  of  Shan-si  requested  the  legalization  of  the  com- 
pensatory tax  to  meet  the  deficit  of  that  province.  Emperor 
Yung-tsing  granted  this  request  on  the  condition  that  the 
compensatory  tax  should  be  abolished  whenever  the  public 
revenues  shall  be  found  adequate.  From  that  time  on  one 
province  after  another  followed  the  precedence  of  Shan-si. 
This  source  of  revenue  is  now  appropriated  for  official  sal- 
aries and  local  purposes. 

The  Land  Rent 
As  we  have  seen  that  the  government  nominally  owns  at 
present  only  four  classes  of  public  cultivated  lands,  we  now 

1  Ten  maces  are  equal  to  one  tael. 


igy]  TAXATION  OF  LAND  55 

come  to  discuss  how  the  government  deals  with  such  lands. 
First,  the  Villa  Lands  are  leased  to  the  tenants  who  pay 
rice  to  the  Department  of  Palace  Affairs  as  rent.  In  the 
second  place,  the  Banner  Lands  are  either  given  to  the 
Tartar  soldiers  under  the  Eight  Banners  without  any  kind 
of  payment,  or  leased  to  the  Chinese  tenants  in  order  toi 
secure  rents  in  money  for  some  other  soldiers  who  have  no 
land.  These  two  classes  of  lands,  therefore,  are  not  subject 
to  the  taxing  power  of  the  Department  of  Finance.  Finally, 
the  other  two  classes  of  public  lands  which  are  under  the 
control  of  the  Department  of  Finance  are  known  as  the 
Education  Lands  for  educational  expenses,  and  the  Public 
Lands  in  general  for  other  public  purposes  of  the  provinces. 
Rates  of  rents  derived  from  these  lands  are  fixed  by  law  and 
are  not  accommodated  to  the  fluctuation  of  economic  rents. 
The  privilege  of  the  tenants  is  the  exemption  from  payment 
of  all  other  burdens,  that  is  to  say,  the  poll  tax,  the  General 
Personal  Service  Money,  the  Post-Station  Money  and  the 
Compensatory  Tax. 

The  Exemption  of  Payments 
The  following  classes  of  uncultivated  land  are  exempt 
from  the  payment  of  taxes : 

(a)  The  Forbidden  Lands  are  not  open  to  cultivation, 
because  their  low  productivity  is  supposed  to  yield  less  re- 
turn that  the  expense  of  cultivation. 

(b)  The  Scattered  Lands  are  those  scattered  in  small 
pieces.  The  exemption  is  subject  to  certain  limitations,  such 
as  fertility,  size  or  location,  i.  e.,  on  mountain  or  near  river 
bank. 

(c)  The  Exempt  Lands  are  those  which  are  used  as  sites 
for  the  buildings  or  are  rented  in  order  to  augment  the  reve- 
nues for  public  worship,  public  education  and  public  charity. 

(d)  The  Unmeasured  Lands  are  occupied  by  various 
barbarous  tribes  in  Sze-chuen,  Yun-nan  and  Kan-su  Pro- 


56  THE  SYSTEM  OF  TAXATION  IN  CHINA  [i^g 

vinces.    In  lieu  of  the  land  tax,  each  family  of  these  tribes 
pays  a  poll  tax. 

(e)  The  Hunting  Lands  are  those  used  for  hunting  game 
in  Manchuria. 

(f)  The  Nomadic  Lands  consist  of  Mongolia,  Turkestan 
and  other  districts  near  to  them,  where  the  nomadic  tribes 
wander  from  place  to  place  in  search  of  pasture  or  game. 

Existing  Rates 
The  rates  of  the  regular  land  tax  and  the  land  rent  vary 
to  a  greater  or  less  extent  in  different  provinces,  or  even  in 
different  places  of  the  same  province.  They  are  also  dif- 
ferent according  to  the  various  classes  of  land  and  the  var- 
ious kinds  of  agricultural  products.  This  differentiation  is 
based  upon  suppositions  as  to  the  productivity  of  land  and 
the  density  of  population.^  There  is  no  scientific  measure 
of  productivity  by  the  modern  method  of  valuation,  nor 
accurate  census  of  population.  But  it  must  be  known  that 
the  determination  of  land  fertility  by  the  color  of  soil  may 
be  traced  back  from  the  Hsia  Dynasty,  2205-1766  B.  C, 
when  the  available  lands  were  cultivated  earlier  or  later 
according  to  their  superiority  of  productive  power  and  the 
number  of  immobile  laborers  already  there.  On  the  other 
hand,  the  compensatory  taxes  are  levied  in  the  different 
provinces  at  certain  fixed  rates  per  tael  of  the  regular  taxes. 
In  some  cases  these  rates  are  uniform  throughout  the  whole 
province;  while  in  others  they  are  different  or  exempt  as 
determined  by  the  customary  practices  in  the  different  locali- 
ties. To  prevent  confusion  there  have  been  included,  in  the 
subjoined  tables,  only  the  minimum  and  maximum  rates  in 
the  different  provinces,  ignoring  the  variation  ^  between 
these  limits. 

1  Tang  Shou  Chien,  Inquiry  into  the  Institutions  of  China,  bk.  iii, 
ch.  i,  p.  2. 

2  The  Comprehensive  Book  of  Taxation  and  Service  of  the  Tsing 
Dynasty  (Peking)  contains  the  full  text. 


199] 


TAXATION  OF  LAND 


57 


Minimum  and  Maximum  'Rates  of  the  Regular  Tax  on  Each  Mou 

OF  THE  PeOPLE^S  LaND 


Province. 


Chi-li 

Feng-tien  . 
Ki-rin'  ... 
Shan-tung  . 
Shan- si  .  • . 
Ho-nan  .  . . 
An-hwei^  . 
Kiang-si^  . 
Fu-kien  . .  • 
Che-kiang^ 
Hu-peh  -^  . . 
Hu-nan'  . . 
Shen-si "  . . 
Kiang-su  ^ . 


Kan-su  . . 
Sze-chuen 
Kwang-tung, 
Kwang-si . . 
Yun-nan  . . 
Kwei-chow 


Silver, 


I     (.oo8i)-(.i3+) 

(.Ol)-(.024-) 

•        (.oi)-f.o3) 
I    (.oo32)-(,io9i4-) 

(.ooio7)-(.i+) 
!    (.ooi4)-(.227+) 
!     (.oi5i-(.io6+) 
;  (.001 336) -(.1 1 701 3) 
!   (.oi69)-(.i625+) 

I  (•OT503)-(-255+) 
I  (.2545)-(2.974i+) 
|(.20238)-(  1.8404+) 
!   (i.o59)-(2.773+) 
I    (.oo9).(.i4ii+) 


(.ooo2)-(.i504+) 

(.ooiS9)-(.o849i+) 

(.0081 )-(. 2232 -f) 

(.0204)-(.2I22-f  ) 

(.oo55)-(.0465  +  ) 
(.oi)-(.6s-H) 


Rice. 

Beans. 

sine 

sine 

(i)-(io+) 

(.90o8)-(4+) 

(2.o8)-(7.5+) 

(2.2).(6.6) 

•  •  •  • 

(.02)-(3.o6+) 

•  •  •  • 

(.i5)-(27+) 

•  •  •  • 

(.07).(2.2+) 

■  •  •  • 

(.2i)-(7.i+) 

(.o8)-(.9i+) 

{.i4)-(io.7205+) 

•   a    •   • 

(.oi09)-(2.47+) 

«   •   ■   • 

(.oo3)-(i9+) 

•   •   •   • 

(.ooo6)-{29.i4o8+) 

•   •   •   • 

(.0209)-(i4.69+) 

•   •   •   • 

(.oi)-(io.i6+) 

•   •   .   • 

(i.47)-(i9.26+) 

Included 

in  rice. 

(.o3)-(8.ii-f) 

•   •    .    a 

(.65)-(2.29+) 

(3.7^(5-35+) 

.... 

(i.94)-(i5+) 

.... 

(.5001) -(45+) 

1.0 

Wheat. 


sine 


(.ooi)-(.43+) 
(.05). (.08+) 


(.0002)-(.03+) 


1  In  Ki-rin  the  required  rice  may  be  paid  in  silver,  the  exchange 
rate  being  100  sine  rice  =  i  tael  silver. 

2  In  Kiang-su,  An-hwei,  Kiang-si  and  Che-kiang,  there  are  two 
sorts  of  the  People's  Land, — the  low  land,  called  '  Tien '  (field)  and  the 
high  land,  called  'Tf  (ground) — paying  different  rates  of  tax.  The 
figures  in  the  table  indicate  the  rates  on  each  mou  of  low  land.  The 
rates  on  each  mou  of  high  land  are  as  follows :  Kiang-su  .009- .3303  tael 
silver,  .73-41. 6g  sine  rice  and  bean,  .001-.08  sine  wheat;  An-hwei, 
.0089-.63  tael  silver,  .79-5.9  sine  rice,  .08-.22  sine  wheat;  Kiang-si, 
.000054-.211128  tael  silver,  .052-5.128  sine  rice;  Che-kiang,  .0024-.2132 
tael  silver,  .008-19.35  sine  rice. 

3  In  Hu-peh,  Hu-nan  and  Shen-si  only  rice  is  required  to  be  paid. 
If  the  payment  of  silver  is  preferred,  the  rates  in  the  "  silver  "  column 
of  this  table  are  the  exchange  rates  for  every  100  sine  of  rice. 


58 


THE  SYSTEM  OF  TAXATION  IN  CHINA 


[200 


Minimum  and  Maximum  Rates  of  the  Regular  Tax  on  Each  Mou 
OF  THE  Soldier-cultivated  Land 


Province 


Chi-li" 

Shan-tung  . . 
Shan-tung. . 
Shan-si  .... 
Shan-si  .... 

Ho-nan 

Kiang-su*  .. 

An-hwei 

An-hwei  . . . . 
Kiang-si "  . 
Kiang-si  *  . . 
Kiang-si »  . . 
Kiang-si  ^  .  . 
Che-kiang  .  • . 
Hu  peh  .... 
Hu-peh  *  ,. . 
Hu-nan '  . . . 
Hu-nan'  ... 

Shen-si 

Kan-su  . . . . , 
Kan-su  ^  . . . 
Sze-chuen  . . . 
Sze-chuen**  .. 
Kwang-tung 

Yun-nan 

Kwei-chow  '° 


Class' 


A 

A 
B 
A 
B 
A 
A 
A 
B 
A(   ) 

A(2) 

A(3) 

A(4) 

A 

A 

B 

A 

B 

A 

A 

B 

A 

B 

A 

A 

A 


Silver 


.00072-.0793      iael 

.01-.065  " 

.01-.0538  " 

.0023-.014  " 

.014  " 

.00 1 6-.  1 08  " 

.009-.1411  " 

.01-.06  " 

.0179-2.7229  " 

.502975 -.548384  " 

.2  " 

.04166  " 

.09C047-.114245  " 

.00  5  7  2-.  1 49  " 


Rice' 


.3-1.3166 

,001 9-.  1043 

.56 

.oo2-,c98 
.0012  .006 


.0125-.3 
.0125-.02 

.Oo8l-.22^2 


.OI4I-.234 


.897-9.072 

sine 

1.08-10.9 

<( 

I.47-I9.26 

« 

1.8-8.6 

(( 

.3-2541 

« 

3.959-27-3 

(f 

7.973-22.803 

X 

15-75-24 

<( 

1.5-9,96 

n 

1.2-18 

l< 

.38-20 

<l 

1-12.5 

« 

1-5-30 

X 

5-6 

« 

4.187 

<< 

27.27 

(( 

1.929-80 

« 

8.88 

« 

5.92-8.18 

(( 

5-35-37-33 

« 

1  Class  A  is  under  the  administration  of  civil  officials  and  class  B, 
of  military  oiificers. 

2  The  word  "  rice  "  indicates  rice  itself  or  together  virith  other  minor 
cereals. 

3  Chi-li  also  pays  .438  to  3.6  sine  beans  and  .0192  to  .0417  tael  straw 
per  mou. 

^  Kiang-su  also  pays  .002  to  .03  sine  wheat  per  mou. 

5  In  Kiang-si,  class  A(i)  indicates  low  land;  class  A (2),  high  land; 
class  A(3),  fractional  land;  and  class  A(4),  a  substitute  for  the  non- 
existence of  the  Soldier-cultivated  Land  in  Fu-kien.  Only  rice  is  re- 
quired from  class  A(i),  and  class  A (2).  If  the  silver  payment  is  pre- 
ferred, the  figures  under  the  "silver"  column  are  the  exchange  rates  for 
every  100  sine  of  rice. 

^  In  Hu-peh,  only  rice  is  required  from  class  B.    If  the  payer  pre- 


20l] 


TAXATION  OF  LAND 


59 


Minimum  and  Maximum  Rates  of  the  Regular  Tax  on  Each  Mou 

OF  THE   ChANGED-NAME  LaND 


Province           .  Silver 

Chi-li .0053  -  .1173  tael 


Shan-tung  2 

Shan-si   

Ho-nan 

Hu-peh  3    . . 
Hu-nan  ^  . . . 

Shen-si   

Kan-su  *  . . . 


.01  -  .3007 
.005  -  .14 
.011  -.129 
.466 

.3735  -  .9244 
.0069-  .0751 
.0048  -  .0171 


Ricei 


stnc 

1.8 

tt 

.07- 

20 

(t 

.449 

-6.31 

« 

.5-12 

« 

4.3s 

-14.8 

it 

,22- 

1.42 

It 

fers  to  pay  silver,  every  100  sine  of  rice  is  considered  as  equivalent  to 
the  figure  under  the  "  silver  "  column. 

'^  In  Hu-nan  class  A  pays  both  silver  and  rice  which  may  be  changed 
to  silver  (100  sine  rice  =  .1774 — 1.6531  tael  silver),  while  class  B  pays 
only  rice,  the  exchange  rate  of  100  sine  rice  being  included  in  the 
"  silver  "  column. 

8  In  Kan-su,  class  B  pays  .058  tael  straw  in  addition  to  rice. 

8  In  Sse-ehuen,  beans  are  paid  together  with  rice  and  the  figure  under 
the  "  rice  "  column  indicates  the  amount  of  both. 

^^  Kwei-ehow  pays  30  sine  beans  and  23.33  —  3I.I4  ^i^^'C  wheat  per 
mou  besides  the  payment  of  silver  and  rice. 

1  The  word  "  rice  "  indicates  rice  and  other  minor  cereals. 

2  In  Shan-tung  wheat  is  required.    The  rate  is  .32  sine  per  mou. 

3  In  Hu-peh  and  Hu-nan  only  rice  is  required  to  be  paid.  If  the 
silver  payment  is  preferred,  the  rates  in  the  "  silver "  column  of  this 
table  are  the  exchange  rates  for  every  100  sine  of  rice. 

■*  In  Kan-su  straw  is  required.    The  rate  is  .01-.092  tael  per  mou. 


6o  THE  SYSTEM  OF  TAXATION  IN  CHINA  [202 

Minimum  and  Maximum  Rates  of  the  Regular  Tax  or  the  Land 
Rent  on  Each  Mou  of  the  Special  Classes  of  Lands 

(a)  Chi-li 
Class  1  Silver 

The  Mulberry  Land .00168         tael 

The  Foliage  Crop  Land 05  -  .7251     " 

The  Weed-growing  Land  2    01  -  .06         " 

The  Sand  Deposit  Land 029  -  .2565    " 

The  Education  Land  ^   01  -  .2678     " 

(b)  Manchuria 

Province  Class*  Silver  Produce 

Feng-tien The  Re-opened  Land  * 01-.03  tael..^.-^    -10  sine  bean  * 

Feng-tien The  Illegally-cultivated  Land  ' . .   .48        "       2.65  "     rice 

Ki-rin  The  Discovered  Land  •* .08  "        .442         "      rice  * 

1  Chi-li  has  eight  kinds  of  lands  excluding  the  Banner  Land  and  the 
Villa  Land  which  are  not  under  the  administration  of  the  magistrates. 
The  rates  of  the  three  general  classes  are  found  in  the  foregoing 
tables.    Cf.  supra,  pp.  57-59. 

2  This  class  is  used  as  salt  fields. 

3  The  Education  Land  pays  6  sine  of  wheat,  corn  and  rice  per  mou 
besides  silver. 

*  In  addition  to  these  classes  both  Feng-tien  and  Ki-rin  have  the 
People's  Land  mentioned  above.    Cf.  supra,  p.  57. 

5  The  Re-opened  Land  is  that  first  enclosed  as  the  Banner  Land  and 
then  re-opened  to  the  cultivation  of  the  common  people. 

*  Of  the  amount  of  beans,  a  half  is  paid  in  kind  and  the  other  half, 
in  silver,  the  exchange  rate  being  100  sine  beans  =  .6  tael  silver. 

'  The  Illegally-cultivated  Land  is  that  cultivated  by  the  people  with- 
out the  property  right  conferred  by  the  government. 

*  The  Discovered  Land  is  that  illegally  cultivated  by  the  people  who 
evade  the  tax  until  discovered. 

^  The  rice  is  paid  in  silver.  The  exchange  rate  is :  100  sine  rice  = 
I  tael  silver. 


203]  TAXATION  OF  LAND  5 1 

(c)  Shan-tung 
Class  1  Silver 

The  Education  Land 009  -  .3         tael 

The  Stove  Land  2 .0265  -  .0441    " 

The  Changed-name  Land  under  the  miHtary  post  ^ 00107  -  .1        " 

(d)  Kiang-su 

Class  *  Silver  Rice  and  Beans        Wheat 

The  Hilly  Land -j 

The  Weed-growing  Land  ^    1 .009-.  1405  (ael 34-16.52  sine 01-.03  sine 

The  Swamp  Land ........  ) 

The  City  Ground" ^ 

The  Granary  Ground®....  I-.057-.1024   "   5.05-12.63   "     ....X)i-.02  " 

The  House  Ground  ® J 


(e)  An-hwei 
Class  '  Silver  Rice  Wheat 

The  Pond  or  Water  Land  *     .019  -  .044  tael     .47  -  .78  sine     .01  -  .02  sine 

The  Grass  Hill  » 083 

The  Mulberry  Land  ^« 032 

1  Shang-tung  has  six  classes  land.  The  three  general  classes  are 
mentioned  above.     Cf.  supra,  pp.  57-59. 

2  The  Stove  Land  also  pays  .01  -  .41  sine  wheat  and  1.8  -  2.84  sin£ 
rice  per  mou. 

2  The  former  rates  of  this  class  were  .006-. 12  tael. 

*  Kiang-sn  has  four  classes  of  lands.  The  two  general  classes  appear 
above.    Cf.  supra,  pp.  57-58. 

*  This  class  is  used  as  salt  fields. 

*  This  class  is  taxed  according  to  the  number  of  buildings.  But  it  is 
not  a  tax  on  buildings  or  house  tax. 

^  An-hwei  has  five  classes  of  lands.  We  have  given  the  two  general 
classes  above.     Cf.  supra,  pp.  57-58. 

^  The  tax  on  this  class  is  estimated  by  mou.  The  figures  indicate 
the  rate  per  mou. 

'  This  class  yielding  grass  pays  taxes  according  to  the  length  of  the 
land.  The  figure  represnts  the  rate  per  li.  Li  is  a  Chinese  standard 
measure  of  length,  equivalent  to  576  metres  in  the  Metric  System. 

*°  The  tax  on  this  class  is  computed  according  to  the  weight  of  the 
finished  goods  (silk)  of  its  produce  (mulberry).  Each  tael  of  silk 
pays  the  above-mentioned  sum,  i.  e.,  .032  tael. 


62 


THE  SYSTEM  OF  TAXATION  IN  CHINA 


[204 


(f)  Kiang-si 

Class*  Silver  Rice 

The  Hilly  Land 000005  -  .06276   tael  .017  -.1418  sine 

The  Pond  or  Water  Land .000054  -  .270677   "  .113-6.837   " 

(g)  Fu-kien 

Class  *  Silver 

The  Silver  Payment  Public  Land  * .0087  -  -4175  tael 

The  Education  Land 0643  -  .6995   " 

(h)  Che-kiang 

Class  * 

The  Hilly  Land    .00005  -  .1963  tael 

The  Weed-growing  Land 0004  ■ 

The  Pond  or  Watery  Land 0002- 

The  Lake-region  Land 0307 

The  Mulberry   Land* 0019  ■ 

The  Tea  Land  ^ 0015 

The  Stove  Land 0161  ■ 


Iver 

Rice 

-  .1963  tael 

.006-5.37  sine 

.073 

.05  -  7.5 

.1245   " 

.0007-  1.68  " 

.095 

.0056  " 

.001      " 

.07 

.1414  " 

'2,7  -  2-7 

(i)  Kan-su 
Class  ®  Silver 

The  land  under  the  military  chiefs  of  the 

barbarous  tribes  "' 075  tael 

The  Fan  tribes'  land  *   

The  Animal-breeding  Land .006   " 


Cereals 

2425  sine 
.4-3    " 


1  Kiang-si  has  four  classes  of  lands,  the  two  general  classes  having 
been  given  above.     Cf.  supra,  pp.  57-58. 

*  Fu-kien  has  only  one  general  class  of  land  as  given  above.  Cf. 
supra,  p.  57. 

*  This  class  consists  of  those  lands  left  to  the  public  by  escheat  or 
by  absence  of  property  owners.     The  payment  is  made  with  silver  only. 

*  There  are  two  general  classes  of  lands  in  Che-kiang.  Cf.  supra, 
pp.  57-58. 

*  The  rates  on  mulberry  and  tea  are  applied  to  each  tree  irrespective 
of  the  area  of  land. 

^  The  three  general  classes  of  lands  in  Kan-su  are  mentioned  above. 
Cf.  supra,  pp.  57-59. 

■^  The  barbarous  tribes  are  governed  by  their  own  military  chiefs, 
and  their  land,  administered  by  them. 

^  This  class  nominally  under  the  magistrates  pays  as  the  land  tax 
.0215  -  .03  tael  straw  together  with  the  cereals  per  mou.  In  addition 
to  this,  each  family  pays  a  poll  tax  amounting  to  .3  tael  silver  and 
10  -  25  sine  cereals. 


205] 


TAXATION  OF  LAND 


63 


(j)  Hu-nan,  Sze-chuen,  Kwang-tung  and  Yun-nan 
Province  Class '  Silver 

Hu-nan  .  - The  Mao  tribes'  land 0015-.03679  tael 

Sze-chuen The  land  under  the  military  chiefs  of  the 

barbarous  tribes 0034- .023 1    " 

Kwang-tung    ....  The  sewages  '^ .04503         " 

Kwang  tung The  pools  ^ .394  " 

Yun-nan The  Horse  Stable  land  ^ 02-.03        " 

Yun-nan The  Yi  tribes'  land i  sine  cereals 


Rice 
6.42  -  20.77  sine 
3  -  5.35 
3-74  -  5-35     " 
4.28 

24.84 


Rice 


(k)  Kwang-si 

Class  *  Silver 

The  Public  Land   

The  Yao  tribes'  Land 

The  Tung  tribes'  Land  .009  -  .0223  tael 

The  Lang  tribes'  Land 009  " 

The  Education  Land 009  " 

(1)  Kwei-chow 

Class  *  Silver 

The  land  under  the  military  chiefs 

of  the  barbarous  tribes 008-  .1      tael 

The  Public  Land  

The  Education  Land  ^ 1-4  " 

The  Rent  Land .03  -  .1         " 

The  Hilly  Land    ' .0136  -  .05    " 

The  Worship  Land  ^ i  " 

The  Famine-relief  Land  ^ 


1  The  general   classes   of   lands   in   these  provinces   may  be   found 
above.    Cf.  supra,  pp.  57-59. 

2  The  sewages  or  pools  are  taxed  according  to  their  number.    The 
figure  is  the  rate  of  tax  on  each  one  of  them. 

3  The  Horse- Stable  Land  was  originally  used  for  horse  stables  and 
later  thrown  open  to  cultivation. 

*  Kwang-si  has  only  one  general  class,  the  People's  Land,  as  men- 
tioned above.    Cf.  supra,  p.  57. 

*  Kwei-chow  has  two  general  classes  of  lands,  see  supra,  pp.  71-74. 

*  This  class  also  pays  20-  110.78  sine  rice  per  mou. 
''  This  class  also  pays  10  sine  wheat  per  mou. 

^  This  class  also  pays  10  sine  beans  per  mou. 

'  This  class  also  pays  4.13  -  125.12  sine  rice  per  mou. 


.722 

-15. 

stnc 

25- 

50 

it 

20- 

40 

it 

5 

It 

14.9 

-50 

it 

64  THE  SYSTEM  OF  TAXATION  IN  CHINA  [206 

Minimum  and  Maximum  Rates  of  the  Compensatory  Tax  added  to 
PER  Tael  of  Silver  of  the  Regular  Tax 

Province  Minimum  Rate  Maximum  Rate         Uniform  Rate 

Chi4i  1 ,  .15   tael 

Feng-tien  1 .1     tael 

Shan-tung .14     " 

Shan-si  1   1      tael  .13      " 

Ho-nan i       "  -iS     " 

Kiang-su 05     "  .1       " 

An-hwei 075    "  .1       " 

Kiang-si .1       " 

Fu-kien  1 .1       " 

Che-kiang 04     "  .09     " 

Hu-peh   .11     " 

Hu-nan  .1       " 

Shen-si  1 -iS     " 

Kan-su  ^   -iS     " 

Sze-chuen  -iS     " 

Kwang-tung  ^   .169   " 

Kwang-sii 08     "  .105    " 

Yun-nan  1  .2       " 

Kvirei-chow  ^ i       "  -iS     " 

Administrative  Rules 

The  administrative  rules  of  the  land  tax  are  very  com- 
plex. They  may  be  described  under  three  headings  as  fol- 
lows : 

(a)  The  Collector.  The  magistrate  of  a  district  is  the 
only  responsible  collector  M^ithin  his  jurisdiction.  He  may 
be  recorded,  promoted,  degraded,  or  dismissed  according 
to  the  amount  of  the  tax  assigned  to  his  district  which  he 
succeeds  in  collecting.  The  general  rule  ^  is  that  a  magis- 
trate is  recorded  when  he  has  collected  the  whole  sum  of 
one  year,  and  promoted  to  a  higher  rank  when  he  has  done 
the  same  for  three  consecutive  years.     On  the  other  hand, 

1  In  Ki-rin  and  these  ten  provinces  the  compensatory  tax  is  partly 
paid  with  rice.    But  it  is  too  insignificant  to  be  mentioned  here. 

2  See    The   Amendments   of   the   Institutes   of   the    Tsing   Dynasty 
(Shanghai,  1909),  ch-  cbPtiii. 


207]  TAXATION  OF  LAND  65 

he  is  punished  by  postponing  his  promotion  and  forfeiting 
his  annual  salary,  for  a  deferred  payment  of  less  than  ten 
per  cent  of  the  assigned  amount;  by  degrading  him  to  one, 
two,  three  or  four  grades  below  his  original  rank,  without 
removal  from  service,  according  to  whether  the  deferred 
payment  is  ten  per  cent,  twenty  per  cent,  thirty  per  cent, 
or  forty  per  cent;  or  by  dismissing  him  from  office  for  a 
deferred  payment  of  fifty  per  cent  or  more.  His  super- 
visory officials  ^  assume  the  joint  responsibility  and  are  sub- 
ject to  similar  treatment.  He,  however,  may  recover  his 
office  by  remitting  the  deferred  payment  while  he  remains 
in  service  by  permission  or  while  awaiting  his  successor. 
For  this  purpose,  there  are  numerous  limitations  concern- 
ing the  amount  of  deferred  payment  and  the  date  of  pay- 
ment. No  recovery  is  allowed,  if  a  magistrate  fails  to 
pay  to  the  public  treasury  forty  per  cent  of  the  as- 
signed tax  for  the  three  years  from  the  date  of  his 
impeachment.  In  the  case  of  deficit,^  which  is  not 
due  to  the  deferred  payment  of  the  people  but  due  to 
the  fraud,  waste,  or  deferred  payment  of  the  magistrate 
himself,  he  is  fined  by  the  confiscation  of  his  property  with 
or  without  other  punishments.  His  supervisory  officials 
share  his  fine  for  the  joint  responsibility  or  bear  it  for  the 
concealment  of  his  deficit. 

(b)  Method  of  Collection.^  The  system  of  "  single 
whip'V  began  to  be  established  in  1581  and  has  been  widely 
extended  under  the  Tsing  Dynasty,  1644-1911.  This 
system  requires  the  different  elements  of  the  compound 

1  Cf.  supra,  ch.  i,  p.  25. 

2  Cf.    The   Amendments   of   the   Institutes   of   the    Tsing  Dynasty, 
ch.  clxxv. 

3  The  existing  method  was  adopted  in  1728. 

*  By  this  phrase,  we  mean  that  all  kinds  of  imposition  are  simplified 
into  a  single  item. 


66  THE  SYSTEM  OF  TAXATION  IN  CHINA  [208 

land  tax,  laid  on  each  person,  to  be  added  together,  and  the 
amount  to  be  collected  in  ten  instalments.  The  amount  of 
the  tax,  laid  on  each  person,  is  estimated  according  to  the 
quantity  and  class  of  his  lands  as  entered  in  the  "  Surveyors' 
Book  ".  Before  the  beginning  of  every  semi-annual  col- 
lection, the  magistrate  provides  ten  detachable  receipts,  each 
with  two  duplicates,  for  each  taxpayer.  One  of  the  two 
duplicates  of  each  receipt  is  kept  by  the  magistrate,  and  the 
other  given  to  a  policeman  who  infomis  the  taxpayer,  but 
does  not  collect  the  tax.  Having  been  informed  once 
or  many  times,  the  taxpayer  is  expected  to  put  his  tax  in 
the  "collecting  box"  of  the  district  ydmen;  and  when  he 
has  done  so.  he  is  entitled  to  a  receipt.  The  process  is  re- 
peated until  ten  instalments  have  been  paid.  Every  ten 
days  the  magistrate  opens  the  box,  counts  the  total  amount, 
and  reports  it  to  his  supervisory  officials.  The  money  col- 
lected in  this  manner  has  been  wrapped  up  by  the  individual 
taxpayer;  and  if  it  is  found  less  than  the  required  amount, 
it  is  returned  to  the  original  payer  and  an  entire  repay- 
ment is  demanded  rather  than  a  supplementary  sum.  This 
is  done  in  order  to  prevent  the  fraud  of  exacting  an 
illegal  charge,  however  small.  At  the  end  of  each  semi- 
annual collection,  the  magistrate  sends  to  the  Executive 
Department  a  report  and  the  entire  collected  revenue  ex- 
cept a  certain  sum  allowed  to  be  deducted  for  the  district 
expenditures. 

(c)  Periods  of  Collection.  The  tax  is  collected  in  two 
periods  of  the  year.  This  system  was  established  in  780 
by  Yang  Yen,  a  prime  minister  in  the  Tang  Dynasty,  618- 
907,  and  is  known  as  the  "two  taxes",  or  the  "summer  and 
autumn  taxes".  It  has  the  same  object  as  the  "single 
whip "  system,  being  the  most  important  reform  in  the 
taxation  system  from  Yang  Yen's  time  to  the  present  day. 
The  summer  tax  is  now  collected  from  the  second  to  the 


209]  TAXATION  OF  LAND  (^y 

fifth  month;  and  the  autumn  tax,  from  the  eighth  to  the 
eleventh  month.  These  periods  are  universal  to  all  except 
five  provinces.  The  periods  of  Kwang-tmvg  are  froiyi  the 
seventh  to  the  eighth  month  of  a  year,  and  from  the  twelfth 
to  the  first  month  of  the  next  year.  Yun-itan  and  Kwei- 
chow  are  permitted  to  collect  taxes  from  the  ninth  to  the 
twelfth  month  of  a  year  and  from  the  first  to  the  third 
month  of  the  next  year,  while  Shen-si  and  Sse-chuen  have 
their  own  periods  in  the  year,  namely,  from  the  second  to 
the  seventh  month  and  from  the  eighth  to  the  twelfth 
month.  These  changes  of  periods  are  due  to  the  differences 
of  climate  necessary  for  the  staple  products  of  those  pro- 
vinces. 

(d)  The  Auditing  of  Accounts.  With  the  exception  of 
a  sum  reserved  for  local  purposes,  the  collected  revenues 
are  transported  to  the  provincial  treasury  immediately  after 
the  close  of  each  collecting  period.  At  the  end  of  a  year, 
the  circuit  governor  and  the  prefect  are  ordered  to  audit 
the  accounts  of  their  subordinate  magistrates,  such  as  the 
reserved  fund,  the  transporting  fund,  the  collected  fund 
and  the  amount  of  deferred  pa)mient,  and  to  report  the  re- 
sult of  investigation  to  the  governor.  Next  year  two  copies 
of  the  provincial  accounts  of  these  items  are  sent  to  Peking, 
one  to  the  Department  of  Finance  to  be  audited,  and  the 
other  to  the  Emperor.  These  reports  must  reach  Peking 
before  the  fourth,  fifth  or  sixth  month  according  to  the  dis- 
tance of  the  respective  provinces  from  Peking. 

General  Features  of  the  Land  Tax 

The  general  features  of  the  land  tax  which  are  worthy 
of  observation  are : 

( I )  The  considerable  amount  contributed  by  this  source 
to  the  annual  revenues.  Before  the  creation  of  the  mari- 
time customs  duties  and  the  li-kin  duties  in  the  middle  of 


68  THE  SYSTEM  OF  TAXATION  IN  CHINA  [210 

j  the  nineteenth  century,  when  the  amount  of  the  annual 
revenues  was  less  than  five  million  taels,  the  land  tax  formed 
two-thirds  or  more  of  the  whole,  while  in  the  last  few 
years  before  the  Chino- Japanese  War,  1894,  it  supplied 
about  three-eighths  of  the  total  annual  return  of  about 
eighty  million  taels}  In  recent  years  it  has  constituted  one- 
fourth  of  the  annual  tax  revenue  of  a  little  over  two  hun- 
dred million  taels.^ 

(2)  This  important  part  of  the  revenue  is  inelastic.  For 
centuries,  the  amount  apportioned  has  not  been  changed, 
and  to  do  so  would  be  extremely  difficult.  Nevertheless, 
this  method  has  the  advantage  of  securing  a  total  fixed 
sum. 

(3)  The  land  tax  is  levied  on  the  land  without  allow- 
ances for  indebtedness. 

(4)  As  the  land  tax  has  existed  for  centuries,  the  process 
of  capitalization  has  proceeded  to  the  point  where  the  greater 
part  of  the  burden  has  been  eliminated.  The  persons  who 
have  lost  by  its  establishment  are  not  the  same  as  those 
who  own  the  lands  at  present.  For  the  same  reason,  the 
question  of  equality  and  that  of  certainty  are  not  of  par- 
ticular moment. 

(5)  Although  the  greater  part  of  the  land  tax  has  been 
capitalized,  yet  there  are  some  few  uncertain  elements 
which  cannot  be  included  in  the  calculations.  Prominent 
among  such  elements  is  the  depreciation  of  copper  coins. 
As  the  tax  is  collected  in  terms  of  silver  which  is  always 
scarce,  the  taxpayer  must  pay  more  copper  coins  for  the 
same  weight  of  silver  owing  to  the  depreciation.  This 
means  in  effect  an  additional  tax.     This  new  element  is 

1  During  the   19th   century  the  legal  amount  of  land   tax  is   over 
31,000,000  taels.    Annual  variations  are  not  great. 

2  According  to  the  budget  of  1911,  the  land  tax  revenue  is  48,101,346 
taels. 


21 1  ]  TAXATION  OF  LAND  69 

borne  by  the  immediate  taxpayer,  so  far  as  any  portion  of 
pure  economic  rent  is  held  by  him,  when  the  action  of  com- 
petition is  not  found  in  full  force,  otherwise  the  burden  is 
passed  to  the  landlord.  For  this  reason,  the  taxpayer  always 
prefers  to  pay  produce,^  and  the  object  of  commuting 
produce  to  silver  is  hardly  attained.  Nevertheless,  the 
method  of  commutation  is  now  carried  out  in  an  irksome 
manner,  because  the  magistrate  is  required  to  sell  the 
produce  on  his  own  account,  and  to  pay  the  required  amount 
of  silver  to  the  government.  It  is  evident  that  the  magis- 
trate suffers  for  the  people.  But  the  shrewd  magistrates 
often  escape  the  requirement  or  compensate  themselves  in 
other  ways.  One  of  the  most  important  causes  of  discon- 
tent in  recent  years  is  the  practice,  indulged  in  by  many 
governors,  of  coining  as  many  copper  coins  as  possible  and 
circulating  them  in  the  whole  country  for  the  purpose  of 
securing  seigniorage. 

(6)  The  cost  of  collection  is  very  low,  because  the  ad- 
ministration is  vested  in  the  district  magistrates.  More- 
over, the  method  of  collection  is  rather  convenient. 

1  It  will  be  recalled  that  a  part  of  the  land  tax  may  be  paid  in 
produce  or  silver,  but  the  other  part  must  be  paid  in  silver. 


CHAPTER  IV 

Taxation  of  Salt  ^ 
Production  of  Salt 

(i)  General  considerations.  Salt  is  one  of  the  most 
valuable  products  of  China.  It  may  be  classified  into  three 
kinds,  namely,  sea  salt,  lake  salt,  and  well  salt.  The  first 
is  produced  in  Feng-tien,  Chi-li,  Shan-tung,  Kiang-su,  Che- 
kiang,  Fu-kien  and  Kzuang-timg  Provinces;  the  second,  in 
Shan-si,  Shen-si  and  Kan-su  Provinces;  and  the  third,  in 
Sze-chuen  and  Yun-nan  Provinces. 

There  are  three  methods  of  production,  knovi^n  as  "field- 
drying  ",  "  board-drying  "  and  "  pan-drying,"  The  field- 
drying  means  that  the  salt  water  on  the  fields  is  allowed  tO' 
become  dry  on  exposure  to  the  sun,  as  in  Feng-tien,  Chi-li, 
Shan-tung,  Fu-kien,  Kwang-timg,  Shan-si,  Shen-si,  Kan-su 
and  that  part  of  Kiang-su  north  of  the  Hwai  River.  The 
board-drying  means  to  let  the  salt  water  evaporate  on  the 
boards  exposed  to  the  sun.  This  is  used  in  Che-kiang  and 
that  part  of  Kiang-su  which  lies  south  of  the  Hwai  River. 
The  pan-drying  means  to  heat  the  salt  water  in  pans  with 
fire,  as  in  Sze-chuen,  Yun-nan,  Che-kiang  and  that  part  of 
Kiang-su,  south  of  the  Hwai  River. 

The  quality  of  the  salts  so  produced  differs  greatly.  The 
field-dried  salt  is  the  best  and  is  most  in  demand.  Of  the 
other  two,  the  pan-dried  salt  is  better  than  the  board-dried 
salt.    Some  of  the  Sze-chuen  salt,  but  not  all,  is  exceedingly 

1  For  the  Chinese  systems  of  measure  and  weight,  cf.  appendix  A. 
70  [212 


213]  TAXATION  OF  SALT  yi 

white  and  pure,  while  the  lake  salt  in  Shan-si,  Shen-si  and 
Kan-su  generally  has  a  green  color  and  an  unpleasant  taste. 

The  cost  of  production  varies  with  the  production 
methods.  The  field-dried  salt  is  the  cheapest.  One  catty 
of  salt  costs  less  than  one-tenth  of  one  cent  in  time  of 
plenty,  like  May  and  June.  Even  in  other  months  of  the  year, 
one  catty  of  salt  is  sold  for  not  more  than  three-tenths  of 
one  cent.  The  cost  of  both  the  pan-dried  salt  and  the  board- 
dried  salt  is  higher.  It  varies  from  four-tenths  or  five- 
tenths  of  one  cent  to  one  cent  for  one  catty.  The  best  of 
the  Sse-chuen  salt  (pan-dried)  costs  even  more  than  one 
cent  for  one  catty.  The  average  cost  for  one  catty  of  salt, 
however,  is  less  than  five-tenths  of  one  cent  because  more 
than  half  of  the  total  annual  product  is  made  up  of  field- 
dried  salt. 

(2)  The  quantity  of  product.  The  quantity  of  product 
is  fixed  by  law  on  the  assumption  that  each  person  consumes 
.3  tael  of  salt  every  day.  Owing  to  the  lack  of  reliable  sta- 
tistics of  population,  the  legal  determination  of  the  quan- 
tity of  salt  is  entirely  arbitrary.^  The  latest  report  (1911) 
of  the  Department  of  Finance  on  the  quantity  of  product 
in  recent  years  gives  the  following  information : 

(a)  Manchuria.  There  are  eight  salt  fields  in  Feng-tien 
Province.  The  total  annual  output  is  700,000  shi,  each  of 
which  is  equal  to  600  catties  in  weight.  Hei-lung-kiang 
Province,  having  a  salt  lake,  produces  about  7,000,000 
catties  of  lake  salt. 

(b)  Chi-li.  This  province  has  eight  salt  fields,  called 
Tsang-lo  or  Long  weed.  They  annually  produce  about 
800,000  packages.    Each  package  weighs  450  or  460  catties. 

(c)  Shan-tung.  Seven  salt  fields  are  found  in  Shmir-tung 
Province.    Three  of  them  produce  1,068,000  packages  every 

1  Cf.  infra,  p.  73. 


72  THE  SYSTEM  OF  TAXATION  IN  CHINA  [214 

year,  each  package  being  equal  to  390  catties.  The  quan- 
tity of  production  of  the  other  four  fields  is  unknown,  be- 
cause those  fields  are  not  subject  to  the  government  regu- 
lations. 

(d)  Shan-si.  This  province  has  a  great  salt  lake,  near 
v^hich  are  situated  three  salt  fields  which  are  collectively 
called  Ho-timg  or  River's  ^  East.  During  the  last  five  years, 
the  annual  product  exceeded  6,000  ming.  Each  ming  is 
equal  to  120  yin,  and  each  yin  is  composed  of  250  catties. 
Therefore  6,000  ming  are  equal  to  (6,000  X  120  X  250) 
or  180,000,000  catties. 

(e)  Kiang-su.  In  Kiang-su  Province  there  are  twenty- 
three  salt  fields,  of  which  twenty  are  situated  on  the  south 
bank  of  the  Hwai  River,  and  three,  on  the  north  of  it.  The 
annual  product  of  the  South  Hwai  fields  is  508,385  yin,  each 
of  which  contains  600  catties,  and  that  of  the  North  Hwai 
fields  is  502,540  yin,  each  having  400  catties. 

(f)  Che-kiang.  The  Che-kiang  salt  fields  are  those  situ- 
ated on  the  east  and  the  west  banks  of  the  Che-kiang  River. 
There  are  thirty-two  in  all,  of  which  twenty-five  are  found 
in  the  Che-kiang  Province,  and  the  remainder  in  the 
Kiang-su  Province.  The  quantity  of  production  is  uncer- 
tain. 

(g)  Fu-kien.  Fu-kien  Province  has  thirteen  salt  fields 
which  turned  out  244,000,000  catties  in  1887.  The  increase 
of  consumption  shows  the  growth  of  production,  although 
there  is  no  information  about  the  annual  product  of  the 
last  twenty-five  years. 

(h)  Kwang-tung.  We  find  twenty  salt  fields  ^  in  this 
province  with  an  annual  product  of  1,628,914  packages, 
each  containing  205  catties.    In  recent  years  two  new  fields 

1  The  word  "  river  "  means  the  Yellow  River. 

2  In  addition  to  these,  Kwang-tung  has  one  field  for  storage  only. 


215]  TAXATION  OF  SALT  73 

have  been  developed,  but  the  quantity  of  their  products  has 
not  yet  been  ascertained. 

(i)  Sze-chuen.  This  province  has  100,814  salt  wells. 
The  annual  product  of  these  wells  is  unknown. 

(j)  Yun-nan.  Among  the  twenty-four  salt  wells  in 
Yun-nan  Province,  the  Black  Well  and  the  White  Well 
produce  over  half  of  the  annual  output  which  is  less  than 
40,000,000  catties. 

The  Legal  Production  of  Salt  1 


Province  ^ 


Sze-chuen 

Kiang-su   \ 

Chi-li 

Manchuria 

Shan-tung      

Kwang-tung 

Che-kiang 

Shan-si 

Fu-kien 

Yun-nan  ^ 

Kan-su ' 


Legally  fixed  number 

of  introductory 

certificates 


(576,158) 
(360,000) 
662,497 
6oo,coo 
654,920 
814,509 

425,155 
635,760 

534,414 


{ 


Number  of 

catties 

per  certificate 


(600) 
(400) 

600 

640 

320 

240 

400  (average) 

250 
(100^ 
(600) 


Total  Number  of 

catties  produced 

in  the  year 


345,688,800 
144,000,000 
397,498,200 
384,000,000 
209,574,400 
195,482,100 
1 70,062,000 
158,940,000 


Forms  of  Business  Enterprise  in  Salt  Production 
The  production  of  salt  is  an  inherited  occupation;  and 
the  producers,  constituting  a  special  class  of  the  society, 
known  as  the  Stove  Men,*  may  be  dependent  undertakers, 

^This  table  is  prepared  on  the  basis  of  an  official  report  in  191 1  by 
the  Department  of  Finance. 

2  Mongolia  annually  consumes  about  40,000,000  catties  of  salt. 

3  In  Sse-chuen,  Yun-nan  and  Kan-su,  the  quantity  is  not  counted  by 
certificates.     Cf.  infra,  p.  76. 

*  This  name  is  derived  from  the  process  of  manufacturing  salt  with 
stoves. 


74  THE  SYSTEM  OF  TAXATION  IN  CHINA  [216 

small  independent  enterprisers  or  merely  laborers  accord- 
ing to  the  method  by  which  capital  is  provided.  These 
methods  may  be  summarized  as  follows : 

(a)  The  field  monopolists/  In  Kiang-su,  Shan-si  and 
Sze-chuen  Provnices,  where  this  type  is  used,  the  salt 
fields  together  with  the  necessary  equipment  are  owned 
by  the  capitalists,  known  as  the  monopolistic  field  mer- 
chants, or,  in  short,  the  field  monopolists.  The  relation  of 
the  producers,  i.  e.,  the  Stove  Men,  to  their  respective  field 
monopolists  are  like  that  of  the  tenants  to  their  landlords. 
The  Stove  Men  in  this  case  produce  the  salt  independently, 
but  they  are  dependent  on  the  field  monopolists  for  a 
market,  the  law  requiring  that  the  salt  be  sold  only  to  them. 
The  government,  the  monopolistic  distributors  ^  or  other 
purchasers  must  buy  salt  from  the  field  monopolists  at  the 
fields.  Therefore,  the  producers  of  this  type  may  be  de- 
scribed as  dependent  undertakers. 

(b)  The  monopolistic  distributors.  This  is  a  combina- 
tion of  the  field  monopoly  and  the  monopoly  of  distribution, 
or  in  other  words,  the  monopolistic  distributors  are  at  the 
same  time  the  field  monopolists.  The  monopolistic  dis- 
tributors are  related  to  the  producers  (Stove  Men)  in  like 
manner  as  the  field  monopolists.  But  instead  of  selling  the 
salt  at  the  fields,  they  distribute  it  themselves.  This  type  is 
found  in  Che-kiang  Province. 

(c)  The  independent  enterprisers.  In  this  case  the  pro- 
ducers (Stove  Men)  provide  and  own  the  necessary  means 
of  production.  Their  product  is  directly  sold  to  the  mon- 
opolistic distributors  or  other  buyers.  This  type  prevails 
in  Feng-Hen,  Fu-kien  and  Yun-nan  Provinces. 

1  The   monopolists   in    Sze-chuen   where   weU    salt   is   produced   are 
called  the  Well  Monopolists.    The  type  of  enterprise  is  the  same. 

2  Cf.  infra,  p.  jy. 


217]  TAXATION  OF  SALT  75 

(d)  The  mixed  type.  The  Kwang-tung  Province  adopts 
the  third  type.  In  recent  years,  the  second  type  has  been 
introduced  to  certain  places.  The  third  type  prevails  in 
Chi-li  Province,  but  the  producers  (Stove  Men)  may  bor- 
row capital  from  the  monopolistic  distributors  through  the 
mediation  of  the  salt  administrators  on  the  condition  that 
their  product  shall  be  sold  to  the  creditors.  Capital  is  de- 
rived in  Shan-tung  Province  from  five  sources,  namely,  the 
Bureau  of  Transportation  in  the  case  of  government  trans- 
portation, the  monopolistic  distributors  as  enterprisers,  the 
monopolistic  distributors  as  creditors,  the  partnerships  of 
the  producers  and  the  individual  producers.  In  the  first  two 
cases  the  producers  are  merely  wage-earners,  while,  in  the 
other  cases,  they  are  independent  enterprisers. 

Consumption  of.  Salt 

As  we  have  seen,  the  supply  of  salt  is  legally  limited  in 
order  to  secure  profits  as  public  revenues.  If  the  salt  is 
not  properly  distributed,  the  consumers  in  some  places 
would  enjoy  cheap  salt  at  the  expense  of  the  consumers  of 
other  places,  and  the  profits  from  salt  would  be  small.  In 
order  to  fulfil  both  the  social  and  the  fiscal  purposes,  a 
plan  known  as  the  division  of  markets  (Yin  Ti)  is  devised. 
According  to  this  plan,  the  country  is  divided  into  a  number 
of  salt-consuming  territories  ^  corresponding  to  the  num- 
ber of  salt-producing  provinces.^  As  the  salt  of  each  salt- 
producing  province  is  forbidden  to  be  sold  in  any  salt-con- 
suming territories  except  that  legally  assigned  as  its  market. 
The  assignment  of  salt-consuming  territories  is  determined 
by  the  following  three  conditions :  ( i )  the  number  of  con- 

1  Each   salt-consuming  territory   consists   of   a  number   of   districts 
under  the  control  of  several  provinces. 

2  The  salt-producing  provinces  are  at  the  same  time  parts  of  the  salt- 
consuming  territories,  because  they  have  consumers  too. 


^6  THE  SYSTEM  OF  TAXATION  IN  CHINA  [218 

sumers  in  the  territories;  (2)  the  productive  power  of  the 
salt-producing  provinces;  and  (3)  the  facilities  of  commu- 
nication between  the  salt-producing  provinces  and  the  salt- 
consuming  territories. 

The  assignment  having  been  made,  each  district  of  the 
salt-consuming  territories  is  expected  to  demand  a  certain 
quantity  of  salt.  To  meet  the  demand,  a  district  may  be 
supplied  by  several  monopolistic  distributors  or  several  dis- 
tricts constitute  the  market  of  a  single  monopolistic  dis- 
tributor. The  subdivision  of  markets  within  a  territory  is 
subject  to  change  from  time  to  time  to  bring  it  into  accord 
with  the  amount  of  invested  capital  of  the  different  monopo- 
listic distributors.  But  the  subdivision  of  markets  is  some- 
times not  followed  in  certain  salt-consuming  territories  or 
parts  of  the  salt-consuming  territories  which  are  open  tO' 
the  free  competition  of  the  common  distributors. 

The  Feng-tien  salt  is  supplied  to  the  three  provinces  of 
Manchuria,  viz.,  Feng-tien,  Ki-rin  and  Hei-lung-kiang,  and 
a  part  of  Mongolia  adjacent  to  them.  The  consuming  ter- 
ritories of  the  other  kinds  of  salt  may  be  found  in  Ap- 
pendix B. 

The  Total  Annual  Consumption  of  Salt  at  Present  1 
Kind  of  Salt                                                   Number  of  catties 

Sze-chuen 550,860,000 

Kiang-su 489,688,800 

Chi-li  397,498,200 

Manchuria  384,000,000 

Shan-tung 209,574,400 

Kwang-tung 195,482,100 

Che-kiang 170,062,000 

Shan-si   158,940,000 

Fu-kien 77,200,000 

Yun-nan  51,230,000 

Kan-su 2,258,100 

Total  2,686,793,600 

1  Report  of  the  Department  of  Finance,  191 1.    Cf.  supra,  p.  73. 


219]  TAXATION  OF  SALT  yy 

Distribution  of  Salt 

By  the  phrase  "  the  distribution  of  salt ",  is  meant  the 
manner  in  which  salt  is  bought  at  the  fields  and  transported 
to  the  chief  cities  of  the  salt-consuming  territories,  ready 
to  be  sold  to  the  retail  traders.  Here  are  three  chief 
methods  of  distribution. 

(i)  The  private  monopoly.  According  to  this  method, 
Yin  Piao,  literally  translated  "  introductory  certificates  ", 
are  issued  by  the  Department  of  Finance  to  confer  on 
the  holders  the  exclusive  right  to  buy  salt  at  certain  or 
all  fields  in  a  certain  salt-producing  province,  and  to  trans- 
port the  same  product  to  its  consuming  territory  for  sale. 
The  sale  of  product  may  be  carried  on  by  their  own  shops 
or  by  other  retailers.  This  method  is  further  differentiated 
into  two  types  according  as  the  introductory  certificates  of 
a  certain  salt-producing  province  are  held  by  a  holding  part- 
nership which  is  a  combination  of  several  partnerships,  or 
a  number  of  separate  partnerships  or  individuals.  When 
the  right  of  distribution  is  monopolized  by  a  holding  part- 
nership, the  subdivision  of  markets  within  the  consuming 
territory  is  arranged  by  the  partnerships,  otherwise  it  is 
determined  according  to  the  number  of  certificates.  These 
monopolistic  distributors,  whether  they  are  partnerships  or 
individuals,  may  hold  their  privileges  so  long  as  they  pay 
their  royalties  according  to  the  agreements,  and  fulfil  any 
further  requirements  laid  down  by  the  government. 

(2)  The  public  monopoly.  In  the  salt-consuming  terri- 
tory where  this  method  is  adopted,  the  introductory  certifi- 
cates are  held  by  the  Bureau  of  Transportation.^  The  work 
done  by  the  public  salt  monopoly  may  be  divided  into  two 
types.  One  type  consists  of  the  purchase  of  salt,  its  trans- 
portation and  the  retail  trade.  The  other  type  does  not  in- 
clude the  retail  trade. 

1  Cf.  infra,  p.  84. 


78  THE  SYSTEM  OF  TAXATION  IN  CHINA  [220 

(3)  The  competitive  trade.  Whenever  the  whole  or  a 
part  of  a  certain  salt-consuming  territory  is  open  to  free 
competition  owing  to  lack  of  applications  for  the  monopoly, 
a  special  certificate  called  Piao  is  issued  to  confer  the  hold- 
ers with  right  to  buy  and  sell  salt.  This  method  has  two 
characteristics  which  distinguish  it  from  the  private  or  pub- 
lic monopoly,  vis.,  that  any  person  may  apply  for  one  or 
more  certificates  and  that  wherever  the  method  prevails, 
there  is  no  division  of  markets. 

From  the  fiscal  point  of  view,  the  government  always 
tries  to  adopt  the  method  of  private  monopoly,  if  possible, 
because  the  monopolistic  distributors  pay  or  promise  to  pay 
in  advance  a  fixed  amount  of  revenue  proportional  to  the 
number  of  introductory  certificates  issued  to  them,  irre- 
spective of  the  amount  of  sale.  By  this  means,  the  govern- 
ment may  raise  revenues  without  the  investment  of  public 
funds  as  capital  and  the  assumption  of  business  risk.  But 
sometimes  no  capitalist  applies  for  the  monopoly  and  some- 
times the  monopolistic  distributors  surrender  their  rights, 
owing  to  the  presence  of  one  or  more  of  the  following  con- 
ditions which  make  the  monopoly  unprofitable : 

(A)  The  decrease  of  demand  for  government  salt.  This 
may  be  caused  by  the  heavy  burden  of  taxation,  the  competi- 
tion of  smuggled  salt  or  economic  depression. 

(B)  The  difficulty  of  land  transportation.  Where  there 
are  no  railways  the  cost  of  distribution  sometimes  lessens 
the  monopoly  profits. 

(C)  The  situation  of  some  districts  near  the  salt  fields. 
This  offers  a  good  opportunity  to  the  smugglers. 

(D)  The  absence  of  commercial  development.  Of  these 
four  conditions,  the  first  three  are  met  either  by  the  public 
monopoly  or  by  the  competitive  trade,  while  only  the  public 
monopoly  is  resorted  to  as  the  remedy  of  the  fourth  condi- 
tion. 


22 1 ]  TAXATION  OF  SALT  79 

The  methods  of  distribution  in  use  at  present  are  given 
in  the  following  table: 

Qassification  of  salt  by  its  Methods  of  distribution 

producing  provinces 

f  Private  monopoly 
Feng-tien j  Pu^Hc  monopoly 

Chi-li Private  monopoly 

/  Private  monopoly 
Shan-tung j  Competitive  trade 

„,         .  J  Competitive  trade 

^°^""®' t  Public  monopoly 

TT-  i  Private  monopoly 

^'^^S-s^ i  Competitive  trade 

Che-kiang Private  monopoly 

„    ,  .  f  Competitive  trade 

^^■^'^^ 1  Public  monopoly 

Kwang-tung Private  monopoly 

f,        ,  f  Public  monopoly 

Sze-chuen..... j  Competitive  trade 

Yun-nan Competitive  trade 

Taxation  of  Salt 

Kuan  Tsi,  a  prime  minister  of  the  State  of  Tsi,^  in  the 
Eastern  Chou  Dynasty,  770-249  B.  C,  thought  that  the 
natural  resources  of  a  country  should  be  owned  by  the 
state,  and  created  the  government  monopolies  of  salt,  iron, 
timber  and  other  minerals  as  the  only  source  of  public  reve- 
nue, because  he  disapproved  taxation  as  a  means  of  raising 
public  revenues  on  the  following  grounds:^  (A)  because 
the  productive  capital  of  a  country  would  be  lessened  by 
taxation;  (B)  because  any  kind  of  private  properties  sub- 
ject to  taxation  would  depreciate  in  value;  and  (C)  because 
taxation  cannot  be  disguised. 

As  these  monopolies  yielded  adequate  revenues  the  State 
of  Tsi  became  the  richest  and  most  powerful  of  all  the 
rival  states.  Consequently,  the  salt  monopoly  continues  to 
be  one  of  the  most  important  sources  of  public  revenue. 
Salt  is  now  taxed  in  five  ways.    First,  the  stove  tax  is  a  tax 

1  This  state  corresponds  to  the  Province  of  Shan-tung. 

2  See  Works  of  Kuan  Tsi. 


So  THE  SYSTEM  OF  TAXATION  IN  CHINA  [222 

on  land  used  for  salt  production.  Secondly,  the  certificate 
royalty  is  a  tax  on  the  finished  product,  justified  on  the 
ground  that  the  state  is  the  owner  of  the  raw  product  (salt 
water).  The  royalty  is  levied  according  to  the  number  of 
certificates,  each  of  which  represents  a  certain  quantity  of 
finished  product.  Wherever  the  imposition  of  a  certificate 
royalty  is  not  adaptable,  a  lump-sum  royalty  is  substituted. 
Thirdly,  there  are  various  kinds  of  receipts  such  as  fees 
from  different  sorts  of  public  services,  rents  of  public  store- 
houses and  other  properties,  interest  on  loans  of  public 
money,  income  from  surplus  salt,  profit  from  money  ex- 
change, fines,  etc.,  etc.,  which  are  described  by  the  Depart- 
ment of  Finance  as  miscellaneous  revenues.  Fourthly,  the 
"  dropping  to  ground  "  ^  duty  is  a  sort  of  excise  duty  levied 
by  a  salt-consuming  province  on  the  salt  of  a  producing 
province.  Such  a  duty  is  imposed  on  the  Kzvang-tung  salt 
by  Kwang-si,  and  on  the  Sse-chuen  salt  and  the  Kiang-su 
salt  by  Kwei-chow.  This  is  permitted  in  order  to  compen- 
sate these  two  poor  provinces  which  have  very  few  sources 
of  revenue.  Finally,  there  is  an  additional  price  for  special 
purposes.  The  foregoing  forms  of  taxation  are  considered 
the  regular  taxes.  They  are  supplemented  by  the  exaction 
of  provincial  governments.  For  instance,  most  of  the 
provinces  treat  salt  as  any  other  commodity,  and  lay  a 
li-kin  duty  ^  on  it.  Moreover,  a  compulsory  contribution  is 
sometimes  paid  once  and  for  all  by  the  body  of  monopolistic 
distributors  in  some  provinces  when  the  governors  are 
called  on  to  support  the  imperial  government,  while,  in 
other  provinces,  different  sorts  of  special  tax  are  levied  for 
different  purposes,  e.  g.,  public  education,  orphan  asylums, 
poor  relief,  etc.    The  rates  of  these  taxes  differ  from  prov- 

1  By  the  phrase  "  dropping  to  ground  "  is  meant  the  place  of  con- 
sumption. 

2  See  infra,  pp.  103-105. 


223]  TAXATION  OF  SALT  8 1 

ince  to  province.     Mr.   Chang  Chien  ^  estimates  the  real 
burden  of  each  catty  of  salt  in  the  following  figures : 

Classification  of  Salt  by 
its  producing  provinces  Composite  Rates  of  the  Various  Taxes 

Kiang-su  over  .033  tael  silver 

Kwang-tung .024  -  .025  tael  silver 

Yun-nan "    .033  tael  silver 

Chi-li .02      " 

Shan-si  .017  -  .018  tael  silver 

Sze-chuen   "        "       " 

Che-kiang  .015  -  .016    " 

Shang-tung "        "      " 

Fu-kien under  .01             " 

Manchuria 

Average 018  tael  or  $.027  silver. 

Smuggling  of  Salt 

As  we  have  seen,  the  distribution  of  salt  is  legally  re- 
stricted, competition  is  allowed  only  in  Shen-si,  northwest- 
ern Kan-su  and  the  frontier  districts  of  North  Chi-li  and 
North  Shan-si  where  the  Mongolian  salt  is  consumed.  But 
illegal  competition  is  found  practically  everywhere.  Such 
is  (a)  the  competition  between  private  salt  and  govern- 
ment salt;  (b)  the  competition  between  different  salt-pro- 
ducing provinces  whose  distributors  try  to  sell  their  salt 
beyond  their  respective  consuming  territories;  and  (c)  the 
competition  between  different  monopolistic  distributors  in 

^  Mr.  Chang  Chien,  now  about  70  years  of  age,  is  one  of  China's 
most  learned  scholars  as  well  as  one  of  its  greatest  practical  men. 
He  never  accepted  an  appointment  from  the  Manchu  government. 
He  devoted  his  time  to  industry,  commerce,  education  and  various 
social  activities,  and  has  become  the  most  influential  and  popular 
man  in  South  China.  He  is  a  native  of  Kiang-su,  the  greatest  salt- 
producing  province,  and  is  the  greatest  living  authority  on  the  salt 
industry.  President  Yuen  Shi  Kai,  who  holds  him  in  the  greatest  re- 
spect, has  appointed  him  President  of  the  Department  of  Agriculture, 
Industries  and  Commerce.     Mr.  Chang  has  accepted  this  post. 


82  THE  SYSTEM  OF  TAXATION  IN  CHINA  [224 

the  same  province  who  try  to  sell  salt  beyond  their  as- 
signed markets.  Any  competitor  other  than  the  monopolist 
of  a  certain  market  is  regarded  as  a  smuggler  ^  of  that 
market,  and  his  salt,  as  smuggled  goods.  Therefore,  a 
smuggler  may  be  a  tax-evader  or  a  monopolist,  sometimes 
even  government  salt  being  regarded  as  smuggled  goods. 

The  smugglers  take  advantage  of  the  following  condi- 
tions: (i)  the  contact  of  markets  with  one  another;  (2) 
the  evasion  of  taxation;  (3)  the  different  tax  rates  in  the 
different  provinces;  (4)  the  difference  in  the  cost  of  pro- 
duction in  the  different  provinces ;  ( 5  )  the  difference  in  the 
cost  of  transportation;  (6)  the  pressure  of  the  field  monopo- 
lists on  the  producers  (Stove  Men),  i.  e.,  low  stove  price;  ^ 
(7)  the  pressure  of  the  monopolistic  distributors  on  the 
consumers,  i.  e.,  high  market  price;  ^  (8)  the  pressure  of 
the  monopolistic  distributors  on  the  field  monopolists,  i.  e., 
low  buying  price;  (9)  the  secret  reduction  of  tax  rates  on 
the  part  of  some  administrators  in  the  hope  of  making  up 
the  legal  amount  of  revenue  by  permitting  the  producers  to 
make  large  sales  at  low  rates  when  difficulty  is  experienced 
in  selling  the  proper  amounts  at  the  legal  rates;  (10)  the 
dishonesty  of  the  administrators  and  detectives;  and  (11) 
the  inefficiency  of  the  administrators.  So  long  as  one  or 
more  of  these  conditions  exist,  it  is  impossible  for  the  gov- 
ernment to  check  the  smuggling  of  salt  even  by  inflicting 
heavy  penalties  on  the  smugglers.* 

1  Any  poor  person  over  sixty  or  under  fifteen  years  old  has  the 
right  to  buy  and  sell  not  more  than  forty  catties  every  day  without 
being  treated  as  a  smuggler. 

2  Cf.  infra,  pp.  87-88. 

3  Ihid. 

*  According  to  the  Penal  Code  of  the  Tsing  Dynasty,  no  penalty 
can  be  inflicted  on  a  person  unless  the  person  himself  and  his  salt 
are  both  taken  as  the  evidence  of  smuggling. 


225]  TAXATION  OF  SALT  83 

Administration  of  the  Salt  Monopoly 
( I )   The  administrators.    At  the  beginning  of  the  Tsing 
Dynasty,  commissioners  were  annually  appointed  by  the 
Emperor  to  all  the  salt-producing  provinces  except  Sse- 
chuen  and  Yun-nan.     All  the  administrative  officials  con- 
nected with  the  salt  monopoly  were  under  the  direction 
and  supervision  of  their  respective  commissioners,  leaving 
those  in  Sze-chuen,  Yun-nan  and  Kwei-chow  to  be  con- 
trolled by  their  own  governors.     Somewhat  later  it  was 
found  that  the  commissioner  in  a  province  was  neither  so 
efficient  in  controling  administrative  officials  nor  so  familiar 
with  the  local  conditions  as  the  governor  and  that  it  was 
difficult  for  the  commissioner  to  discharge  his  duties  satis- 
factorily.     During  the   period    16601860   the   governors 
superseded   the  commissioners   one  after   another  as  the 
supervisors  of  the  salt  monopoly.     The  changes  came  in 
1660    (Kwang-tung) ,    ^72,2,    (Fu-kien),    1778    (Shan-si), 
1 82 1  {Che-kiang,  S hen-si,  Kan-su),  1837  {Kiang-su,  Shan- 
tung), and  i860  (Chi-li).    Under  the  governor  is  the  Presi- 
dent of  the   Salt  Department.     The  latter  is  the  active 
administrator    controling    a    number   of    salt    administra- 
tors and  the  district  magistrates  who  participate  the  ad- 
ministration of  the  salt  monopoly.    The  salt  administrators 
who  are  specially  appointed  for  this  function,  consist  of 
two  classes,  the  departmental  secretaries  and  the  field  (or 
well)   administrators.     The  departmental  secretaries  help 
the  president  to  discharge  his  duties,  while  the  field  adminis- 
trators enforce  the  regulations  governing  the  production 
and  sale  of  salt  at  the  fields  and  collect  all  the  taxes  on  salt. 
In  addition  to  these  two  classes,  the  salt  departments  of  a 
few  provinces,  like  Kiang-Su,  have  one  or  more  vice-presi- 
dents  and   a   few   inspectors.      Each   vice-president  takes 
charge  of  a  number  of  fields  in  the  province  and  the  duty  of 
the  inspectors  is  to  see  whether  the  actual  quantity  of  salt 


84  THE  SYSTEM  OF  TAXATION  IN  CHINA  [226 

passing  by  their  bureau,  situated  near  the  fields,  corresponds 
to  the  amount  of  purchase  as  written  in  the  "  bill  of  draw- 
ing salt  "/  On  the  other  hand,  the  district  magistrates  are 
responsible  for  the  amount  of  sale  assigned  to  their  re- 
spective districts,  and  for  the  capture  of  smugglers.  As  the 
President  of  the  Executive  Department,  the  circuit  gover- 
nors, the  prefects  and  the  superior  magistrates  are  the 
superior  officials  of  the  magistrates,  they  assume  joint  re- 
sponsibility with  respect  to  the  duties  of  the  magistrates. 
It  is  evident  that  the  governor  and  practically  all  of  the 
officials  under  the  Executive  Department  and  the  Salt  De- 
partment of  a  province  are  directly  or  jointly  responsible 
for  the  administration  of  the  salt  monopoly.  For  a  deficit 
of  the  legally  fixed  amount  of  revenue,  they  are  subject  to 
forfeiture  of  salary,  degradation,  removal  from  office  or 
confiscation  of  property,  the  penalty  varying  according  to 
the  amount  and  term  of  deferred  payment,  as  well  as  the 
direct  or  joint  responsibility  which  the  different  ranks  of 
officials  assume.  Again,  the  officials  may  be  promoted  or 
recorded  for  promotion,  whenever  they  are  able,  by  an  in- 
crease of  demand  for  salt,  to  secure  more  than  the  legally 
fixed  amount  of  revenue. 

(2)  The  administrative  machinery  of  public  monopoly. 
Whenever  the  public  monopoly  of  distribution  prevails,  two 
types  of  bureau  are  especially  established,  besides  the  gov- 
ernment storehouses.  The  first  is  called  the  Bureau  of 
Transportation,  and  the  second,  the  Bureau  of  Wholesale. 
The  bureaus  of  transportation,  of  which  there  may  be  one 
or  two  in  a  province,  are  established  in  a  salt-producing 
province.  The  bureaus  of  wholesale  are  established  in  the 
principal  cities  of  the  consuming  provinces.  Both  types  of 
bureau  generally  have  a  few  branches.    Candidates  for  cir- 

1  Cf.  infra,  pp.  85-86. 


227]  TAXATION  OF  SALT  85 

cuit  governorships  are  appointed  by  the  governor  of  a  salt- 
producing  province  to  be  the  presidents  of  these  head  bu- 
reaus, while  candidates  of  district  magistrates  are  appointed 
presidents  of  branch  bureaus.  As  their  ranks  are  almost  or 
exactly  equal,  the  presidents  of  the  Salt  Department,  the 
Bureau  of  Transportation  and  the  Bureau  of  Wholesale  are 
unwilling  to  be  subject  to  one  another.  As  a  result  there  is 
no  co-operation  and  the  management  of  public  monopoly  is 
generally  inefficient.  When  the  Bureau  of  Wholesale  is  not 
required  to  sell  its  salt  to  the  merchants,  the  magistrates  are 
its  selling  agents.  So  each  magistrate  has  to  carry  a  certain 
quantity  of  salt  to  his  district,  and  to  open  a  few  govern- 
ment salt  shops. 

(3)  The  regulation  of  transportation.  In  those  prov- 
inces where  the  private  monopoly  of  distribution  is  adopted, 
two  schemes  are  devised  to  prevent  smuggling.  One  is  to 
inspect  the  amount  of  purchase  near  the  fields,  and  another, 
to  prescribe  the  waterways  of  transportation.  For  these 
purposes,  "  introductory  certificates  ",  "  bills  of  drawing 
salt "  and  "  waterway  tickets  "  are  provided.  The  intro- 
ductory certificates  issued  by  the  Department  of  Finance, 
were  formerly  brought  by  the  commissioners  to  the  prov- 
inces. Since  1748  the  governor  of  each  salt-producing 
province  has  sent  an  official  to  Peking  to  apply  for  the  re- 
quired number  of  certificates  for  his  province.  On  each 
certificate  the  following  articles  are  written : 

(a)  The  certificate  represents  the  quantity  of  salt  thereon 
stated. 

(b)  Salt  carried  with  an  old  certificate  is  considered  as 
smuggled  goods. 

(c)  Salt  carried  without  the  certificate  is  considered  as 
smuggled  goods. 

(d)  Any  one  who  counterfeits  the  certificate  is  put  to 
death. 


86  THE  SYSTEM  OF  TAXATION  IN  CHINA  [228 

(e)  Any  merchant  who  keeps  the  certificates  over  ten 
days  after  the  sale  of  salt  is  beaten  forty  blows. 

(f)  The  name  of  an  assigned  market. 

The  certificates  are  distributed  among  the  monopolistic 
distributors  by  the  President  of  the  Salt  Department  in  a 
province.  Then  the  distributor  may  take  his  certificate  (or 
•certificates)  to  the  inspector  whose  duty  it  is  to  clip  the  cer- 
tificate at  one  corner  and  to  hand  it  to  the  President  of  the 
Salt  Department  for  stamping  seal.  The  latter,  then,  issues 
a  bill  of  drawing  salt  to  the  distributor.  This  bill  is  written 
that  a  certain  quantity  of  salt  may  be  bought  by  Mr. 
So-and-so  at  a  certain  field  during  a  certain  period.  The 
quantity  of  salt  bought  with  this  bill  must  be  inspected  by 
an  inspector  of  the  Bureau  of  Inspection  near  the  field. 
This  bill,  together  with  the  inspector's  report,  having  been 
submitted  to  the  President  of  the  Salt  Department  for  ap- 
proval, is  kept  in  the  bureau,  while  the  introductory  cer- 
tificate is  returned  to  the  distributor.  Whenever  the  salt  is 
ready  to  be  transported  to  an  assigned  market,  a  waterway 
ticket  is  given  to  the  distributor  permitting  the  salt  to  be 
carried  unmolested  from  place  to  place,  provided  that  it  is 
carried  by  the  prescribed  waterway  and  to  the  destination, 
as  written  on  the  ticket.  But  the  waterway  ticket  and  the 
introductory  certificate  are  subject  to  examination  by  the 
district  magistrates  on  the  voyage,  and  must  be  returned 
to  the  Salt  Department  through  the  magistrate  of  the  con- 
suming district  within  ten  days  after  the  salt  has  been  sold. 
If  either  of  these  documents  were  not  carried  with  the  salt, 
or  any  article  of  the  regulations  stated  on  them  were  vio- 
lated, the  salt  would  be  seized  as  smuggled  salt. 

The  method  of  competitive  trade  may  be  illustrated  by  the 
practice  in  the  North  Hwai  fields  of  Kiang-su  Province.  In 
each  field  there  is  a  government  shop,  at  which  any  person 
is  allowed  to  buy  salt.     When  the  salt  is  being  carried 


22g]  TAXATION  OF  SALT  87 

through  the  exit  of  the  field,  the  carrier  must  pay  to  the 
Bureau  of  Taxation  there  the  required  amount  of  tax  on 
the  quantity  of  salt  he  has  bought.  In  return  for  the  pay- 
ment, a  certificate  stating  the  carrier's  name  and  native 
place,  the  quantity  of  salt,  and  the  name  of  the  consuming 
district  is  given  to  the  carrier.  He  is  allowed  to  sell  the 
salt  in  another  district  with  the  permission  of  the  magis- 
trate of  the  district  which  he  first  intends  to  supply.  But 
he  is  forbidden  to  sell  the  salt  beyond  the  territory  which 
adopts  the  method  of  competitive  trade,  and  to  carry  it 
without  the  certificate.  The  certificate  must  be  returned, 
after  the  sale,  to  the  Salt  Department  through  the  magis- 
trate of  the  consuming  district. 

(4)  The  regulation  of  price.  There  are  two  kinds  of 
legal  price,  namely,  the  stove  price  and  the  market  price.  ^ 
The  stove  price  is  the  purchasing  price  from  the  producers 
known  as  the  stove  men.  It  is  fixed  according  to  the  cost 
of  production  and  the  quality  of  the  product.  The  cost  of 
production  in  the  different  provinces  depends  chiefly  on  the 
cost  of  living  of  the  stove  men,  and  the  method  of  produc- 
tion. Secondly,  the  market  price  is  the  selling  price  to  the 
retail  traders.  This  is  based  on  the  purchasing  price,  the  cost 
of  management  and  transportation  and  the  taxes.  In  gen- 
eral, the  farther  the  market  is  from  the  salt  fields,  the  more 
its  consumers  must  pay  for  the  salt.  Theoretically,  the  ob- 
ject of  legalizing  these  prices  is  to  protect,  on  the  one  hand, 
the  producers  against  the  field  monopolists  and  the  monopo- 
listic distributors  and,  on  the  other  hand,  the  consumers 
against  the  monopolistic  distributors.  In  practice,  however, 
the  terms  are  favorable  to  the  monopolists.  But  the  regu- 
lation has  not  been  renewed  since  the  reign  of  Emperor  Tao 

1  The  term  "  market  price "  is  used  parallel  with  "  stove  price "  to 
indicate  the  legal  price  of  salt  put  in  market  instead  of  the  economic 
price  determined  by  the  laws  of  supply  and  demand. 


88  THE  SYSTEM  OF  TAXATION  IN  CHINA  [230 

Kwang,  1821-1850.  Therefore,  for  more  than  a  half-cen- 
tury, the  producers  and  the  consumers  have  been  entirely 
at  the  mercy  of  the  monopolists. 

General  Features  of  the  Salt  Monopoly 

The  foregoing  discussion  should  be  supplemented  by 
some  general  considerations.  Especially  worthy  of  notice 
is  the  relation  of  the  monopoly  to  the  public  welfare,  the 
defects  of  the  taxation  system,  and  the  present  status  of 
the  monopoly. 

(i)  The  pressure  of  the  monopolistic  distributors  upon 
the  actual  producers  (Stove  Men)  is  of  three  kinds.  The 
first  is  that  the  purchasing  price  is  fixed  by  the  administra- 
tors at  the  expense  of  the  actual  producers.  Then  extra 
large  tubs  or  baskets  are  used,  when  the  price  is  fixed  in 
terms  of  a  tub  or  basket.  The  third  method  is  to  raise  the 
value  of  money.  Where  the  fields  are  monopolized  by  the 
field  monopolists  who  are  subject  to  the  pressure  of  the 
monopolistic  distributors  too,  the  actual  producers  suffer 
both  directly  from  the  field  monopolists  and  indirectly  from 
the  monopolistic  distributors.  The  actual  producers  can- 
not escape  the  pressure,  because  they  are  compelled  by  law 
to  continue  their  pursuit  and  because  they  are  not  acquainted 
with  the  agricultural  arts  or  with  other  pursuits. 

(2)  The  pressure  upon  the  consumers  is  as  great  as  that 
upon  the  actual  producers.  Take  the  Kiang-su  salt  for  ex- 
ample. As  means  of  transportation  are  very  good  within 
the  consuming  territory  of  this  salt,  the  price  should  be  low. 
On  the  contrary,  the  retail  price  is  from  sixteen  to  twenty 
times  the  cost  of  production  (the  purchasing  price  from  the 
actual  producers).  According  to  Mr.  Chang  Chien's^ 
record  which  appeared  in  the  Eastern  Times,  Shanghai, 

1  Cf.  supra,  p.  81,  note  i. 


231]  TAXATION  OF  SALT  89 

January  4th,  191 3,  the  retail  price  of  this  salt  is  thirty  cash  ^ 
in  the  producing  districts ;  fifty  to  sixty  cash  in  the  farther 
districts  in  Kiang-sii  Province;  over  one  hundred  cash  in 
An-hwei  Province;  over  one  hundred  and  ten  cash  in 
Kiang-si  Province;  and  over  one  hundred  and  twenty  cash 
in  Hu-peh  Province.  At  first,  the  pressure  falls  on  the  con- 
sumers by  raising  the  cost  of  living.  Ultimately,  the  pres- 
sure must  also  be  felt  by  the  landlords  and  the  enterprisers. 
But  as  the  rise  of  wages  is  always  slower  than  the  increase 
of  salt  price,  the  laborers  suffer  the  most,  though  the  in- 
evitable effect  of  dear  salt  is  the  retardation  of  the  progress 
of  the  whole  community. 

(3)  The  treatment  of  tax-evaders  is  very  unjust.  The 
poor  people  who  smuggle  salt  are  sentenced  to  imprisonment 
or  death.  But  the  administrators,  the  monopolists,  and  the 
carriers  have  a  right  to  evade  taxation  without  punishment. 
For  instance,  the  monopolists  of  the  South  Hwai  fields  in 
Kiang-su  Province  in  practice  sell  over  seven  hundred 
catties  of  salt  for  each  six  hundred  catty  certificate.  In  the 
second  place,  each  vessel  or  wagon  always  carries  a  certain 
quantity  of  untaxed  salt,  known  as  the  "  extra  salt ".  The 
administrators  en  route  often  take  a  certain  quantity  of  the 
"  extra  salt "  called  the  "  merit  salt "  without  paying  the 
price. 

(4)  The  salt  monopoly  is  very  productive.  It  yields 
almost  one-fourth  of  the  annual  tax  revenue.^  But  the  pos- 
sibility of  increasing  the  productivity  of  the  tax  is  very 
slight.  For,  to  increase  the  rate,  keeping  the  production 
quota  at  the  same  figure,  would  be  to  induce  more  smug- 

1  The  legal  rate  of  exchange  is  that  one  thousand  cash  is  equal  to 

one  tael  of  silver.  But  the  market  rate  of  exchange  fluctuates  greatly 
at  different  times  and  places. 

2  According  to  the  budget  of  191 1,  the  amount  is  about  46,312,355 
taels. 


go  THE  SYSTEM  OF  TAXATION  IN  CHINA  [232 

gling.  On  the  other  hand,  it  is  impossible  to  increase  the 
production  quota,  for  the  additional  salt  could  not  be  dis- 
posed of  because  of  the  competition  of  the  smugglers.  The 
administration  of  the  monopoly  is  uneconomical;  in  1909 
and  1 9 10  it  consumed  about  twelve  per  cent  of  the  average 
annual  return.  Further,  the  tax  rates  are  different  in  dif- 
ferent provinces  and  at  different  times ;  and  so  this  form  of 
taxation  is  very  unjust  and  uncertain.  In  the  last  place, 
the  lack  of  uniformity  in  the  process  of  collection  and  the 
varieties  of  supplementary  charges  in  the  different  provinces 
make  the  system  very  bad.  Mr.  Chang  Chien  ^  says,  "  I 
cannot  see  into  the  complications,  though  I  have  investi- 
gated these  intricate  methods  of  collection  for  twenty  years. 
But  it  seems  to  me  that  such  local  practices  are  not  worthy 
of  existence." 

(5)  The  method  of  large-scale  production  has  never  been 
adopted  in  any  salt-producing  province.  Everywhere  salt 
is  produced  by  the  actual  producers  (stove  men)  using 
primitive  methods.  The  so-called  field  monopolists  are  in- 
terested only  in  securing  a  share  of  the  monopoly  profit  of 
the  monopolistic  distributors  and  do  nothing  toward  the 
improvement  of  production  methods.  The  lack  of  modern 
methods  is  responsible  for  the  high  cost  of  production  such 
as  that  found  particularly  in  the  South  Hwai  fields  in 
Kiang-su  Province,  the  bad  quality  of  salt  as  in  Shan-si, 
Shen-si  or  Kan-su  Provinces  and  the  decentralization  of 
fields  as  in  Fu-kien  Province.  A  still  more  important  effect 
of  the  present  system  is  the  inability  of  the  government  to 
control  the  smugglers  whose  existence  strikes  at  the  very 
heart  of  the  whole  system. 

(6)  The  assignment  of  a  particular  salt-consuming  terri- 
tory to  a  particular  salt-producing  province  inevitably  raises 

.  1  Cf.  supra,  p.  8r,  note  i. 


233]  TAXATION  OF  SALT  9I 

two  intricate  problems.  First,  the  equilibrium  of  demand 
and  supply  of  the  different  salts  cannot  be  preserved.  For 
instance,  the  salt  of  the  South  Hwai  fields  in  Kiang-su 
Province  has  a  demand  greater  than  the  supply,  while  there 
is  an  oversupply  of  salt  of  the  North  Hwai  fields  in  the 
same  province.  Assuming  the  absence  of  smuggling,  the 
consumers  must  decrease  consumption  and  pay  higher  prices 
in  the  former  case,  while  the  monopolists  who  look  for 
maximum  profits  would  prefer  to  waste  the  surplus  products 
rather  than  to  sell  all  their  products  too  cheaply  in  the 
latter  case.  In  both  cases  the  waste  is  due  to  the  legal  re- 
striction of  markets.  Fortunately,  the  problem  is  solved 
by  the  smugglers.  In  the  second  place,  the  demand  and 
supply  in  particular  places  cannot  be  adjusted  even  under 
the  protection  of  private  monopoly.  Two  extreme  cases 
may  be  cited.  The  protected  markets  in  a  territory  which 
is  situated  far  from  any  salt  field,  and  where  the  means  of 
transportation  is  very  difficult,  have  never  been  sup- 
plied by  the  monopolistic  distributors.  On  the  other 
hand,  those  markets  within  a  short  distance  from  any 
salt  field  are  oversupplied  due  to  the  competition  of  smug- 
gled salt.  In  both  cases  the  government  is  obliged  to  take 
up  the  work  of  distribution.  Thus  the  monopolistic 
distributors  are  induced  to  supply  only  those  places  which 
are  neither  too  far  from,  nor  too  near  to  the  salt  fields,  and 
where  the  means  of  transportation  are  fairly  convenient.  In 
a  few  years  the  salt  fields  will  be  easily  accessible  to  all  sec- 
tions of  the  country,  for  the  resources  of  salt  are  well  dis- 
tributed by  nature  and  railway  development  is  rapidly  pro- 
ceeding. Of  course,  railway  rates  will  have  to  be  properly 
adjusted.  Under  these  new  economic  conditions,  the 
monopolistic  distributors  will  be  subjected  to  severe  compe- 
tition, which  they  may  not  be  able  to  survive.  But  this  does 
not  mean  that  the  salt  monopoly  is  doomed.     A  combined 


92  THE  SYSTEM  OF  TAXATION  IN  CHINA  [234 

monopoly  of  both  production  and  distribution  might  be  very 
successful  and  might  prove  to  be  a  highly  desirable  institu- 
tion in  a  transition  period  in  the  industrial  development  of 
China. 


CHAPTER  V 

Taxation  of  Commodities 

The  Regular  Customs 

(i)  General  considerations.  The  customs  duty  is  a 
general  excise  tax  on  merchandise.  It  finds  its  origin  as 
far  back  as  the  Western  Chou  Dynasty  (i  12-771  B.  C.) 
It  was  originally  levied  not  for  a  fiscal,  but  for  a  regu- 
lative purpose,  vis.,  in  order  to  check  the  progress  of 
commerce  in  favor  of  agriculture.  This  is  because  both 
economists  and  statesmen  at  the  time  thought  that  agricul- 
ture was  more  fundamental  and  important  than  other  pur- 
suits. But,  at  the  beginning  of  the  Western  Han  Dynasty 
(206  B.  C.-6  A.  D.),  it  was  realized  that,  in  spite  of  the 
tax,  commerce  had  progressed.  Nevertheless  the  customs 
duty  was  retained,  so  that,  for  centuries,  the  revenue  pur- 
pose has  been  primary.  At  present,  custom-houses  have  been 
established  on  the  seaboard,  on  rivers,  inland  water-ways, 
land  routes  and  land  frontiers.  They  are  called  the  Regu- 
lar Customs  in  order  to  distinguish  them  from  the  Mari- 
time Customs.  The  jurisdictions  of  the  two  systems  some- 
times seem  to  conflict.  Thus  commodities  carried  by  sailing 
ships  are  taxed  by  the  Regular  Customs,  while  commodities 
carried  by  steamers  pay  their  duties  to  the  Maritime  Cus- 
toms. Formerly,  there  were  thirty-four  customs-houses 
(branches  not  included)  under  the  control  of  the  Depart- 
ment of  Finance.  Besides  these,  a  number  of  customs- 
houses  which  was  formerly  under  the  control  of  the  Depart- 
235]  93 


94  THE  SYSTEM  OF  TAXATION  IN  CHINA  [236 

ment  of  Public  Works  has  been  turned  over  to  the  Depart- 
ment of  Finance  in  recent  years.  At  present,  there  are 
about  twenty-seven  important  customs-houses  as  given  in 
the  subjoined  table. 

Location  of  Custom  Houses 

Name  Location 

Tsung-wen  Gate Peking 

Newchwang Feng-tien  Province 

Tientsin Chi-li               " 

Chin-wang-tao "                  " 

Kalgan 

Che-foo Shan-tung       " 

Kiao-chow   

Lin-ching   "                  " 

Kwei-hwa-ching Shan-si            " 

Sha-fu-kou  

Shanghai Kiang-su         " 

Hwai-an   

Yang-chow 

Feng-yang An-hwei          " 

Wuhu  

Kiukiang Kiang-si          " 

Gung 

Foo-chow  Fu-kien           " 

Hang-chow Che-kiang       " 

Wen-chow   " 

Han-yang   Hu-peh           " 

Wu-chang 

King-cho  n  

Sun-chow  Hu-nan           " 

Chungking Sze-chuen       " 

Canton  . ; ! Kwang-tung   " 

Tai-ping Kwang-si        " 

(2)  Subjects  of  taxation.  Almost  all  of  the  regular  cus- 
toms levy  duties  on  merchandise  which  is  classified  into 
four  classes,  namely,  clothes,  food-stufifs,  articles  of  com- 
mon use  and  sundry  goods.  This  does  not  include  the  tax- 
ation, as  laid  by  certain  customs,  on  carts,  cattle,  brokers, 


237]  TAXATION  OF  COMMODITIES  95 

conveyance  of  real  estate,  oil  shops,  wine  shops,  salt,  bam- 
boo, timber  and  tea.  Most  of  the  customs  on  the  seaboard 
or  on  inland  waterways  also  levy  port  dues  (Chuan  Liao) 
on  junks.  At  some  customs,  the  following  exemptions  are 
made: 

(A)  In  the  case  of  junks. 

(a)  Junks  carrying  government  rice  or  other  pro- 
ducts. 

(b)  Junks  carrying  rice,  bought  for  famine  relief 
and  soldiers'  pay  (exempt  only  in  Kiang-su 
Province) . 

(c)  Junks  carrying  rice  or  wheat  (at  certain  cus- 
toms). 

(d)  Fishing  boats  sailing  along  the  sea  coast. 

(e)  Small  boats  less  than  five  feet  wide. 

(B)  In  the  case  of  goods. 

(a)  Copper,  lead,  tin  and  other  articles  bought  for 
government  use. 

(b)  Rice  and  other  cereals  bought  for  famine  relief. 

(c)  Rice  and  other  commodities  going  out  of  Peking 
through  the  Tsimg-wen  Gate. 

(d)  Rice  or  wheat  (at  certain  customs). 

(e)  Rice  for  local  consumption,  passing  by  the  Yang- 
chow  customs,  Kiang-su  Province. 

(f)  Pearls  and  precious  metals  passing  by  the  Can^ 
ton  Customs. 

(g)  Food  products  and  other  articles  necessary  for 
the  use  of  sailors  on  any  vessel. 

(h)   Any  article  borne  by  a  person  over  his  (or  her) 

shoulder  or  on  his  (or  her)  back, 
(i)    A  certain  quantity  of  native  produce  of  North 

China,   brought   southward   in   the  government 

rice  junks. 


C)6  THE  SYSTEM  OF  TAXATION  IN  CHINA  [238 

(j)    Tribute  from  the  nobles  and  lamas  of  Monoglia, 

Thibet,  etc. 
(k)   Imperial  presents  to  the  nobles  and  lamas  of 

Mongolia,  Thibet,  etc. 

(3)  Rates  and  revenues.  The  rates  on  both  junks  and 
merchandise  are  specific.  In  the  case  of  junks,  the  number 
of  masts,  the  number  of  stores  or  the  width  of  the  junks  is 
taken  as  the  basis  of  rate-making.  At  a  given  customs, 
rates  vary  not  only  as  the  different  classes  of  junks,  but  also 
as  the  different  size  of  the  same  class.  Furthermore,  junks 
of  the  same  class  and  of  uniform  size  pay  different  amounts 
of  port  dues  at  different  customs.  In  the  case  of  merchan- 
dise the  determination  of  the  rate  is  based  on  four  condi- 
tions, namely,  the  place  of  production,  the  degree  of  utility, 
its  market  price,  and  the  distance  of  transportation.  These 
are  taken  into  consideration  for  the  following  reasons :  ( i ) 
the  quality  of  an  article  differs  with  the  different  places  of 
production;  (2)  the  utility  of  an  article  is  more  or  less 
adapted  to  the  habits  of  the  consumers  in  different  places ; 
and  (3)  the  cost  of  transportation  is  directly  proportional 
to  the  distance. 

It  is  evident  that  a  higher  rate  should  be  charged  on  an 
article  of  better  quality,  more  adaptable  to  the  habits  of  con- 
sumers in  a  certain  locality,  paying  cheaper  cost  of  trans- 
fK)rtation.  With  this  end  in  mind,  rates  are  calculated  on 
different  units — weight,  length,  piece,  roll,  sheet,  suit,  pair, 
volume,  head,  basket,  jar,  etc. — according  to  the  nature  of 
goods  subject  to  taxation.  At  some  customs,  a  lump  sum  is 
levied  according  to  the  quantity  of  goods,  measured  either 
by  the  volume  of  the  junk  or  by  the  size  of  the  cart  as  the 
case  may  be.  The  rates  as  such  are  fixed  by  the  Department 
of  Finance  and  are  subject  to  change  from  time  to  time  by 
the  department.     In  addition  to  the  regular  duty,  a  sup- 


239]  TAXATION  OF  COMMODITIES  97 

plementary  duty  of  ten  per  cent  of  the  regular  one  is  levied 
by  almost  all  of  the  customs  under  the  name  of  meltage 
fee/  transportation  fee,^  and  others. 

The  amount  of  revenues  drawn  from  the  different  cus- 
toms is  composed  of  two  parts,  the  regular  revenues  and 
the  surplus  revenues.  Both  parts  are  fixed  by  law.  The 
whole  of  the  regular  revenues  and  at  least  sixty  per  cent  of 
the  surplus  revenues  must  be  paid  to  the  Department  of 
Finance,  It  is  required  that  deficits  shall  be  made  up  by  the 
administrators  out  of  their  private  purses  as  a  penalty  for 
their  inefficient  administration.  But  if  there  is  any  surplus, 
the  total  sum  collected  must  be  sent  to  the  treasury  of  the 
Department  of  Finance. 

(4)  Mode  of  levying  duties  on  goods.  The  first  step 
taken  by  the  customs  officials  in  levying  duties  is  to  post  the 
existing  rates  of  dutiable  goods  on  the  boards  erected  at  the 
markets,  and  to  request  the  local  authorities  to  print  the 
same  rates  in  pamphlets  for  the  use  of  shopkeepers.  As 
soon  as  any  merchant  hands  in  a  report  of  his  goods,  the 
customs  officials  must  examine  the  goods  and  calculate  the 
amount  of  duty.  The  merchant  has  the  right  to  put  the 
money  into  the  "  collection  box  "  himself  without  any  re- 
straint or  interference  by  any  customs  inspector  or  watch- 
man. One  shopkeeper  is  not  allowed  to  pay  tax  for  others, 
except  at  the  Tsung-wen  Gate  of  Peking,  when  the  goods 
arrive  earlier  than  the  owner.  In  return  for  his  payment, 
the  merchant  is  entitled  to  a  red  receipt,  of  which  a  duplicate 
is  sent  to  the  Department  of  Finance  for  investigation. 
This  receipt  is  clipped  at  its  corner,  and  stamped  on  its  face 
with  a  written  time  and  date  of  passing,  when  it  is  ex- 
hibited as  the  right  to  pass  the  customs  lines.     Duty-paid 

1  This  fee  is  charged  for  the  los'S  of  silver  in  melting. 

2  This  fee  is  charged  because  the  collected  revenues  must  be  trans- 
ported. 


gg  THE  SYSTEM  OF  TAXATION  IN  CHINA  [240 

goods  are  allowed  to  pass  twice  a  day.  It  is  further  required 
that  produce  from  certain  localities  pay  duties  at  particular 
customs-houses.  For  example,  any  merchant  carrying 
oxen,  sheep  or  goats,  camels,  horses,  or  skins  overland 
from  Kiata,  Ku-lon,  etc.  (Mongolia),  to  the  interior  must 
pay  duties  at  Chan-tsia-kou  rather  than  at  Ku-pei-kou. 
Secondly,  any  person  carrying  goods,  along  the  Yang-tse 
River,  from  North  Kiang-su  or  An^hzvei  Provinces  to  the 
City  of  Soo-chow  (South  Kiang-su  Province)  or  the  City  of 
Hang-chow  (Che-kiang  Province)  must  pay  duties  at  the 
Wu-sile  Customs,^  instead  of  any  customs  on  the  seaboard. 
Thirdly,  produce  from  Fu-kien,  Che-kiang,  Feng-tien,  and 
Shan-tung  Provinces,  transported  along  the  seacoast  to 
Shanghai  is  taxed  by  the  Shanghai  Customs.  Fourthly, 
produce  carried  from  Fu-kien,  Kwang-tung  or  Kiang-si 
Provinces  to  the  City  of  Soo-chozv  or  the  City  of  Sung- 
kiang  ( South  Kiang-su  Province) ,  by  the  Che-kiang  River, 
is  taxed  at  the  Pei-sin  Customs,^  while  that  from  the  latter 
cities  to  the  former  provinces,  at  the  Che-hai  or  the  Pei-sin 
Customs.  Whenever  any  attempt  to  conceal  the  goods,  or 
to  make  an  incorrect  report  or  to  escape  payment  by  taking 
another  route  is  found,  it  is  treated  as  an  act  of  evasion. 
Such  an  act  is  punished  by  a  confiscation  of  half  the  quan- 
tity of  goods  and  a  punishment  of  the  merchant  according 
to  the  civil  code,  unless  the  amount  of  duty  evaded  is  very 
insignificant  (only  a  few  taels),  when  an  additional  duty  of 
from  two  to  five  times  the  regular  duty  is  imposed  as  a  fine. 
(5)  The  administration  of  the  regular  customs.^  Every 
customs,  together  with  its  branches,  is  superintended  by  an 
official,  called  the  Superintendent  of  Customs.  The  super- 
intendent may  be 

1  Cf,  infra,  p.  99. 

2  Since   1901    many   regular  customs   are  under  the  control   of  the 
Inspector  General  of  the  Maritime  Customs. 


241  ]  TAXATION  OF  COMMODITIES  99 

(A)  An  Imperial  High  Commissioner  of  Customs,  as 
the  Superintendent  of  the  Tsung-wen  Gate  (Peking),  that 
of  the  Left-Wing  (Peking),  or  that  of  the  Right-Wing 
(Peking). 

(B)  A  Manchu  general,  as  the  Superintendent  of  the 
Foo-chow  Customs. 

(C)  An  Imperial  Commissioner  of  Silk-manufactures, 
as  the  Superintendent  of  the  Si-sin  Customs  (Nan-king), 
that  of  the  Wu-sue  Customs  (Chin-kiang),  or  that  of  the 
Pei-sin  Customs  {Hang-chow). 

(D)  A  Commissioner  of  Customs,  appointed  by  the  Em- 
peror upon  the  nomination  of  the  Department  of  Fin- 
ance, as  the  Superintendent  of  the  Hwai-an  Customs 
(Hwai-an)  ,^  that  of  the  Canton  Customs,  that  of  the  Tien- 
tsin Customs,  that  of  the  Tsau-liang-ting  Customs  {Tung- 
chow),^  that  of  the  Chang-tsia^kou  Customs  {Kalgan),  or 
that  of  the  Sha-fu-kou  Customs  (a  boundary  town  between 
Shan-si  and  Mongolia). 

(E)  A  Circuit  governor  (or  lower  local  authority),  as 
the  superintendents  of  all  the  customs,  except  thpse  men- 
tioned above,  and  the  Pei-hai  Customs  ^  ( superintended  by 
the  Superintendent  of  the  Canton  Customs). 

The  chief  duties  discharged  by  the  superintendent  are  as 
follows : 

(A)  To  collect  the  duties  mentioned  in  the  preceding 
section. 

(B)  To  keep  an  "  entry  book  ",  a  "  collection  account  " 
and  a  "  total  receipt  account  ".  An  entry  book  is  a  book  in 
which  the  merchants  enter  their  goods  themselves.  A  col- 
lection account  is  a  record  of  payments  from  goods  as  en- 

1  Hwai-an  is  a  prefecture  in  Kiang-su  Province. 

2  Tung-chow  is  a  river  port  of  Peking. 

3  A  port  on  the  Canton  River. 


100  THE  SYSTEM  OF  TAXATION  IN  CHINA  [242 

tered  in  the  entry  book.  Duplicate  copies  of  the  collection 
account  and  the  total  receipt  account  are  kept  in  the  customs 
and  in  the  superintendent's  residence. 

(C)  To  deliver  the  collected  revenues  to  the  Department 
of  Finance  once  every  season  (at  some  customs),  or  once 
every  half-year  (at  other  customs),  or  once  a  year  (at  still 
other  customs). 

(D)  To  prohibit  the  trade  of  the  following  contraband 
goods :  gambling  instruments,  salt,  tea,  opium,  saltpetre,  cast 
iron  and  other  munitions  of  war. 

(E)  To  issue  licenses  to  junks  trading  along  the  sea- 
coast  or  with  foreign  countries,  and  to  cancel  the  same  upon 
the  return  of  the  junks. 

(F)  To  restrict  the  exportation  of  rice,  raw  silk,  satin 
and  cast  iron  necessary  for  home  use.  With  respect 
to  rice  and  cast  iron,  each  junk  is  allowed  to  carry  an 
iron  pan  for  cooking  rice,  an  iron  axe  and  a  necessary 
amount  of  rice  corresponding  to  the  number  of  sailors.  Of 
silk,  satin  or  coarse  raw  silk,  each  vessel  may  carry  a  cer- 
tain quantity  according  to  its  destination  to  use  in  exchange 
for  foreign  goods ;  the  exportation  of  fine  raw  silk  is  abso- 
lutely prohibited.  The  maximum  quantity  to  be  carried  an- 
nually by  each  vessel  is  as  follows :  (a)  From  Kiang-su  or 
Che-kiang  Provinces  to  Japan,  3,960  catties  (33  rolls)  satin, 
for  1,200  catties  or  less  of  which  may  be  substituted  coarse 
raw  silk,  (b)  From  Fu-kien  or  Kwang-tung  Provinces  to 
Annan  300  catties  coarse  raw  silk,  (c)  From  Che-kiang 
Province  to  the  Straits  Settlements,  2,000  catties  coarse 
raw  silk,  (d)  From  Kwang-tung  Province  to  Sweden, 
10,000  catties  coarse  raw  silk,  (e)  From  Fu-kien  Province 
to  any  place  abroad,  2,000  catties  coarse  raw  silk. 

(G)  To  prevent  unlawful  acts  of  the  inspectors  or  watch- 
men. 

For  these  duties,  especially  the  first  three,  the  superin- 


243]  TAXATION  OF  COMMODITIES  iqi 

tendent  is  responsible  to  the  Department  of  Finance.  There- 
fore, the  entry  books  and  accounts  of  every  customs  must  be 
submitted  to  the  department  to  be  audited  once  a  year.  If 
the  superintendent  is  a  commissioner  whose  term  is  one  year, 
he  must  return  to  the  department  with  the  "  entry  books  " 
and  accounts  within  a  fixed  period,  after  the  expiration  of 
his  term,  the  time  being  arranged  according  to  the  distance 
of  the  customs  from  Peking.  If  the  superintendent  is  a 
local  authority,  the  "  entry  books  "  and  accounts  must  be 
submitted  through  the  governor  or  governor-general,  once 
a  year,  although  his  term  is  not  limited  to  one  year.  If  the 
"  entry  book  "  or  the  "  red  receipt  duplicates  "  are  not  sent 
to  the  department  at  the  right  time,  the  superintendent  is 
fined  a  half-year's  salary.  If  any  merchant  is  excluded  from 
the  right  to  enter  his  goods  in  the  "  entry  books  "  himself, 
or  to  receive  a  red  receipt,  the  superintendent  is  fined  one 
year's  salary.  In  the  case  of  a  deficit  in  the  revenues  the 
superintendent  is  punished  by  a  forfeiture  of  one  year's  sal- 
ary, if  the  deficit  is  less  than  five  per  cent  of  the  legal 
amount;  by  degradation  to  lower  and  lower  rank  suc- 
cessively, if  over  five  per  cent,  ten  per  cent,  twenty  per  cent, 
thirty  per  cent,  or  forty  per  cent;  and  by  dismissal  if  over 
fifty  per  cent.  To  cover  the  cost  of  collection  he  is  per- 
mitted to  retain  the  supplementary  duty  or,  if  a  supple- 
mentary duty  is  not  levied,  to  deduct  ten  per  cent  out  of  the 
surplus  revenues. 

(6)  General  features  of  the  regular  customs  duties.  The 
most  interesting  feature  is  the  fee  system.  According  to 
the  report  of  the  Investigation  Committee  sent  by  the  De- 
partment of  Finance  in  1906  to  investigate  the  actual  admin- 
istration of  the  regular  customs,  the  rates  of  fees  are  greater 
than  the  rate  of  the  regular  duty  in  all  the  customs.  For 
example,  three  or  four  taels  of  fees  are  added  to  every  one 
tael  of  duty  in  the  Hwai-an  Customs  {Kiang-su  Province),. 


I02  THE  SYSTEM  OF  TAXATION  IN  CHINA  [244 

the  Feng-yang  Customs  and  the  Wu-hu  Customs  (An-hwei 
Province) ;  and  the  amount  of  fees  charged  by  the  Hwai-an 
Customs  on  timber  is  ten-fold  the  amount  of  duty.    As  the 
total  sum  of  fees  and  duty  is  sometimes  too  great  to  be 
borne,  the  corrupt  administrators  often  reduce  the  regular 
duty  in  order  to  get  the  sufficient  amount  of  fees  for  their 
own  account.     This  necessarily  involves  five  grave  defects, 
namely,  unproductiveness  owing  to  the  secret  reduction  of 
duty ;  various  losses  due  to  interference  with  trade ;  and  in- 
justice, uncertainty  and  inconvenience  because  of  the  dis- 
crimination involved  in  the  bargain  between  the  administra- 
tors and  the  merchants.     x\nother  corrupt  practice  is  the 
over-supply  of  clerks  and  servants.    Each  customs  has  two 
or  three  thousands  of  these  persons.   They  are  simply  para- 
sites receiving  very  low  wages  and  trying  to  take  advantage 
of  the  merchants.    In  regard  to  the  regular  duty,  four  points 
are  worthy  of  mention.     First,  it  should  be  more  produc- 
tive, as  it  yields  only  6,990,845.925  taels  according  to  the 
budget  of  191 1.     Secondly,  it  checks  the  development  of  in- 
ternal commerce,  because  commodities  carried  by  the  sailing 
ships — and  most  of  the  internal  commerce  is  conducted  in 
this  manner — are  subject  to  the  repeated  taxation  of  sev- 
eral successive  customs.     Goods  carried  by  steamers  pay 
duty  to  the  maritime  customs  once  and  for  all.    Thirdly,  the 
burden  on  those  goods  carried  by  sailing  ships  is  by  no 
means  equal.    This  is  due  partly  to  the  difference  of  trade 
routes  and  partly  to  the  lack  of  uniformity  regarding  to 
the  articles  taxed.     On  the  one  hand,  some  goods  pass 
more  and  the  others  fewer  customs.     On  the  other  hand, 
some  customs  restrict  themselves  to  a  levy  of  either  port 
dues  or  customs  duties,  while  the  others  collect  both  of 
them.    Further,  the  taxation  of  food-stuffs  as  well  as  articles 
of  enjoyment  and  the  difference  of  tax  rates  and  regula- 
tions oppress  the  people  with  different  degrees  of  severity. 


245]  TAXATION  OF  COMMODITIES  103 

Finally,  the  pre-determination  of  the  annual  return  leads 
to  the  concealment  of  revenue.  This  is  done  in  three  ways. 
One  way  is  to  report  less  than  the  collected  amount  in 
order  to  save  the  remainder  to  remit  as  part  of  the  defi- 
ciency amount  required  to  be  paid  to  the  Department  of 
Finance.  Another  way  is  to  create  a  sinking  fund  for 
a  year  of  deficit.  The  third  is  to  keep  the  surplus  revenue 
for  provincial  purposes,  lest  the  Department  of  Finance 
should  know  the  growth  of  revenue,  and  increase  the  fixed 
amount. 

The  Li-kin  Duty  ^ 

(i)  General  considerations.  The  Tai^ping  Rebellion 
broke  out  in  1850;  and  from  that  time  one  city  after  an- 
other fell  into  the  hands  of  the  rebels.  Owing  to  the  fall 
of  Nanking  and  Soo-chozv,  the  two  most  important  cities 
in  Kiang-su  Province,  in  1853,  the  government  could  not 
levy  the  land  tax  in  Kiang-su,  the  most  productive  of  the 
provinces.  The  only  source  of  revenue  available  for  mili- 
tary expenses  was  the  customs  duties  collected  by  the  Im- 
perial Maritime  Customs  at  Shanghai.  This  drove  the  au- 
thorities to  devise  new  forms  of  taxation.  Mr.  Lay  Yi  Hien, 
then  leading  a  military  force  in  the  Prefecture  of  Yang- 
chow,  Kiang-su  Province,  introduced  the  "  li-kin  contri- 
bution "  with  a  collection  bureau  at  Siit-nii  Tsin,  a  com- 
mercial town  of  Yang-chow;  and  a  collection  bureau  was 
soon  established  at  Shanghai.  The  so-called  "  li-kin  con- 
tribution "  is  a  contribution  of  one-thousandth  of  one  tael 
of  silver  charged  as  a  transit  duty  on  the  value  of  goods. 
The  government  thought  that  this  compulsory  contribu- 
tion, or  duty,  would  yield  a  reliable  income;  and,  in  1854, 
instructed  the  governor  of  Kiang-su  tO'  apply  it  to  the  whole 

1  The  general  features  of  this  duty  are  similar  to  those  of  the  regular 
customs  duties. 


I04  THE  SYSTEM  OF  TAXATION  IN  CHINA  [246 

province,  if  possible.  During  the  period  1854-1874,  it  was 
adopted  by  the  eighteen  provinces  of  China  Proper,  and 
Feng-tien  and  Kir-rin  in  Manchuria. 

(2)  Rate  and  revenue.  As  we  have  seen  that  the  li-kin 
duty  means  a  compulsory  contribution  of  one-thousandth 
of  one  tael  of  silver,  charged  as  a  transit  duty  on  the  value 
of  goods,  it  may  be  called,  in  other  words,  an  ad-valorem 
duty  of  one-tenth  of  one  per  cent.  But,  in  practice,  the 
imperial  government  has  never  enforced  this  legal  rate 
because  of  the  necessity  for  greater  revenue  than  it  pro- 
duced to  defray  military  expenses  during  the  Rebellion 
and  to  carry  out  local  improvements  afterward.  Rates 
are  different  from  province  to  province  and  from  time  to 
time.  Nor  are  they  uniform  in  regard  to  different  classes 
of  goods,  which  are  classified,  for  taxation  purposes,  intO' 
merchandise  in  general,  salt,  tea,  opium  and  other  staple 
produce.  According  to  the  Institutes  of  the  Tsing  Dynasty, 
the  legal  rates  in  the  different  provinces  are  one  per  cent, 
two  per  cent,  five  per  cent  or  nine  per  cent.  But  they  vary 
widely  in  practice.  Furthermore,  the  burden  of  this  tax 
cannot  be  measured  by  the  rate  alone  on  a  given  class  of 
goods,  in  a  given  province,  at  a  given  time;  in  addition  the 
number  of  li-kin  stations  or  barriers  en  route,  which  varies 
with  place  and  time,  must  be  taken  into  consideration. 

With  respect  to  revenues,  there  are  no  legal  amounts  to 
be  delivered  to  the  Department  of  Finance.  But  this  does 
not  exclude  it  from  the  right  to  get  a  share  of  revenue  by 
a  negotiation  with  the  governors.  In  order  to  avoid  the 
great  demand  and  possible  interference  of  the  department, 
the  governors  keep  secret  the  actual  amounts  of  collected 
revenues  to  meet  the  growing  expenditures  of  their  re- 
spective provinces.  Therefore,  the  amount  of  collected 
revenue  reported  to  the  Department  of  Finance  is  recog- 
nized by  almost  every  well-informed  Chinese  to  be  false. 


247]  TAXATION  OF  COMMODITIES  105 

(3)  The  administration.  Since  the  li-kin  duty  was 
created  for  military  expenses  during  the  Tai-ping  Rebel- 
lion, it  was  subject  to  the  absolute  control  of  the  gover- 
nors who  were  in  command  of  government  forces  as  well 
as  in  charge  of  war  revenues.  The  practice  still  exists,  be- 
cause the  tax  has  remained  after  the  rebellion  as  a  local 
rate  levied  for  the  purposes  of  local  improvements. 
For  administrative  purposes,  each  province  establishes  a 
chief  collection  bureau  at  its  capital,  a  number  of  branch 
bureaus  at  the  principal  cities,  and  a  number  of  stations. 
These  stations  are  situated  not  far  apart,  along  the  different 
trade  routes  within  the  province  for  taxation  and  inspection 
purposes.  The  administrators  are  selected  by  the  governor 
from  the  candidates  for  circuit  governor,  prefect,  magis- 
trate, etc.  An  administrator  is  recorded  as  efficient  or  in- 
efficient by  comparing  the  amount  of  collected  revenue. 
He  is  not  allowed  to  report  a  less  amount  than  what  he  has 
collected,  or  to  report  paid-up  duty  as  deferred  payment. 
Whenever  he  does  either  of  these  things,  he  is  punished  for 
fraud  on  revenue  by  removing  him  from  office  and  rank, 
and  by  compelling  him  to  make  up  the  deficit,  no  matter 
whether  the  sum  is  large  or  small.  But  he  may  deduct  ten 
per  cent  from  the  collected  revenue  as  the  cost  of  collection. 


CONCLUSION 

Regarded  from  a  theoretical  standpoint,  the  Chinese 
government  is  centralized,  the  several  governors  being 
simply  the  agents  of  the  Emperor.  In  fact,  however,  the 
administration  is  decentralized,  because  the  governors 
within  their  respective  provinces  are  almost  independent 
in  the  exercise  of  their  powers.  For  the  sake  of  efficiency 
and  economy,  the  administration  of  finance  naturally  falls 
in  the  hands  of  the  governors.  As  each  governor  is  re- 
sponsible to  the  Emperor  for  his  province,  he  tries  his  best 
to  develop  its  financial  productiveness  by  using  all  the  reve- 
nues at  his  disposal.  From  the  individual  point  of  view, 
the  governor  is  loyal  to  the  Emperor.  From  the  national 
point  of  view,  however,  he  can  be  blamed  for  the  neglect 
of  his  neighbors.  In  order  to  prevent  such  provincial  an- 
tagonism, the  power  of  financial  control  is  vested  in  the 
legislative  departments,  especially  the  Department  of  Fin- 
ance. Unfortunately,  this  check  has  two  undesirable 
effects.  One  of  these  is  the  scrambling  of  revenues.  Thus 
deficient  provincial  governments  eagerly  request  the  sup- 
port of  the  Department  of  Finance,  which,  in  turn,  must 
depend  entirely  upon  the  aid  furnished  by  the  richer  pro- 
vincial governments.  Sometimes  other  departments  also 
ask  for  support  from  the  richer  provinces.  In  all  cases, 
the  success  in  securing  additional  revenue  depends  entirely 
upon  the  personal  influence  of  the  heads  of  the  different 
departments.  Secondly,  there  is  a  concealment  of  revenues 
which  arises  from  the  fact  that  the  governors  of  the  richer 
provinces  are  unwilling  to  share  their  revenues  with  the 
io6  [248 


249]  CONCLUSION  107 

Department  of  Finance.  Such  concealment  is  possible  be- 
cause the  department  is  ignorant  of  the  local  conditions. 
Therefore,  the  department's  powers  of  appropriation  and 
supervision  are  merely  nominal.  If  we  desire  to  solve  the 
financial  problem,  we  are  first  confronted  with  the  question 
of  centralizing  the  administrative  powers.  But  such  a 
question  of  reorganization  will  not  be  solved  until  the  full 
development  of  the  means  of  communication. 

The  development  of  railways  will  have  an  enormous  in- 
fluence upon  the  tax  system.  As  we  have  seen,  the  monop- 
oly in  the  distribution  of  salt  owes  its  existence  to  the  dififi- 
culty  of  transportation.  Furthermore,  the  change  of  trade 
routes  due  to  the  development  of  railways  greatly  affects 
the  productivity  of  the  inland  regular  customs.  A  new  plan 
of  levying  the  excise  tax,  better  adjusted  to  the  new  eco- 
nomic conditions,  must  soon  be  devised.  Finally,  the  rail- 
ways will  alter  land  values,  to  which  the  land  tax  must  be  ad- 
justed in  the  future.  A  general  re-assessment  will,  there 
fore,  be  necessary.  Thus  it  is  evident  that  the  political  or- 
ganization and  the  taxation  system  now  in  force  in  China 
are  fit  to  survive  only  so  long  as  backward  conditions  con- 
tinue. But  it  must  be  remembered  that  such  conditions 
still  exist  in  most  sections  of  China  and  that  they  will  be 
slow  to  disappear.  Radical  changes  will,  therefore,  come 
much  more  slowly  than  some  may  expect. 


APPENDIX  A 

The  units  of  measure  and  weight  of  the  Chinese  system, 
used  in  this  work,  may  be  expressed  in  terms  of  those  of 
the  metric  system  as  follows : 

One  mou  is  equal  to  6TWTr  ares. 
One  sine  is  equal  to  ItII^tt  litres. 
One  catty  is  equal  to  596tVA  grammes. 
One  tael  is  equal  to  37Tm  grammes. 

io8  [250 


APPENDIX  B 
The  Consuming  Territory  ^  of  the  Chi-li  Salt 


Number  of 

Number  of 

Names  and  location  of  the  prefectures 

prefectures  in 

direct  districts 

and  direct  districts  with  or  without 

the  province 

in  the  province 

the  Chi-li  salt 

Province 

With 

With 

Total » 

Chi-li 
salt 

TotaP 

Chi-li 
salt 

Names ' 

Location 

Chi-li*.. 

II 

9 

ID 

i 
1 

6     ,Cheng-ta  Fu 

North  of  the  Great  Wall 

(without) 

Chao-yang  Fu 

«        «            « 

(without) 

Tsi-fcng  Chow 

«        «            (( 

(without) 

Chang  -  tsa  -  kau 

((        «            « 

Ting  (without) 

Tu-shi-kau  Ting 

«        «            « 

(without) 

Ta-lun-nor  Ting 

«        «            (( 

(without) 

Ho-nan  * 

9 

5 

5 

2 

Chang-ta  Fu 

(with) 
Wei-fay  Fu 

(with) 
Hwai-ching  Fu 

(with) 
Kai-feng  Fu 

(with) 
Chen-chow  Fu 

(with) 
Shii  Chow 

(with) 
Chen  Chow 

(with) 

North  of  the  Yellow  River 
«        <i            « 

«        «            « 
Eastern  Ho-nan 

«                       K 
«                       « 
<l                       « 

1  For  markets  of  different  salt-producing  provinces  see  Amendments 
of  the  Institutes  of  the  Tsing  Dynasty,  chaps,  ccxxi-ccxxix. 

2  The  total  number  of  prefectures  and  direct  districts  in  this  and  the 
following  tables  is  taken  from  Geography  of  the  Chinese  Empire 
(Shanghai,  iQii),  by  Professor  Tu  Chi  of  the  Imperial  University  of 
Peking. 

*  When  the  names  of  places  without  the  Chi-li  salt  are  given  it  is 
251]  109 


no  APPENDIX  B  [252 

The  Consuming  Territory  of  the  Shan-tung  Salt 


Province 

Number     of 
prefectures 
in  the  prov- 
ince 

Number     of 
direct     dis- 
tricts in  the 
province 

Names  and  location  of   the   prefectures 
and   direct  districts  with    the   Shan- 
tung salt  1 

Total 

With 
Shan- 
tung 
salt 

Total 

With 

Shan- 

tung 

salt 

Names  ^ 

Location 

Shan-tung . 
Ho-nan.  .. 
Kiang-su  ^. 

10 

9 
8 

10 
I 

I 

3 
5 
3 

3 

•  • 

•  • 

Shang-tung  Province 

( with ) 
Kwei-ta  Fu 

(with) 
Shii-chow  Fu 

(with) 

Northeastern  cor- 
ner of  Ho-nan 

Northwestern  cor- 
ner of  Kiang-su 

understood    that   the   other   places    are   supplied   with    this    salt,   and 
vice  versa. 

*  All  places  outlying  north  of  the  Great  Wall  are  supplied  with  the 
Mongolian  salt. 

^  Siang-ching,  a  subordinate  district  of  Shii  Chow  is  not  the  con- 
sumer of  the  Chi-li  salt.  Wu-yang,  a  subordinate  district  of  Nan-yang 
Fu  in  southwestern  Ho-nan  is  supplied  with  the  Chi-li  salt. 

1  Su-chow,  a  subordinate  district  of  Feng-yang  Fu,  in  An-hwei  Pro- 
vince is  near  to  Shii-chow  Fu  and  supplied  with  the  Shan-tung  salt. 

2  When  the  names  of  places  with  the  Shan-tung  salt  are  given,  it 
is  understood  that  the  other  places  are  not  supplied  with  this  salt. 

3  Three  of  the  eight  subordinate  districts  in  Shii-chow  Fu  are  not 
supplied  with  the  Shan-tung  salt. 


253]  APPENDIX  B 

The  Consuming  Territory  of  the  Shan-si  Salt 


III 


. 

Number  of 

Number  of 

Names  and  location  of  the  prefectures 

prefectures  in 

direct  districts 

and  direct  districts  with  or 

the  province 

in  the 

province 

without  the  Shan-si  salt 

ProTince 

With 

With 

Total 

Shan-si 
salt 

Total 

Shan-si 
salt 

Names ' 

Location 

Shan-si* 

9 

7 

10 

10 

Ta-tung  Fu 
(without) 

Shau-ping  Fu 
(without) 

Surrounded    by    the 
Great  Wall 

K                 « 

Shen-si  . 

7 

3 

5 

3 

Si-an  Fu 

(with) 
Chien  Chow 

(with) 
Pin  Chow 

(with) 
Tung-an  Fu 

(with) 
Shing-an  Fu 

(with) 
Siang  Chow 

(with) 

Middle   part   of 

Shen-si 

«        « 

«          u 

«        « 

Southern  frontier  of 

Shen-si 
Southeastern   corner 

of  Shen-si 

Ho-nan' 

9 

2 

5 

2 

Ho-nan  Fu 

(with) 

Shen  Chow 

(with) 
Yii  Chow 

(with) 
Nan-yang  Fu 

(with) 

South  of  the  Yellow 
River    &    western 
part  of  Ho-nan 

<(        « 
«        (( 
«        « 

1  When  the  names  of  places  without  the  Shan-si  salt  are  given,  it  is 
understood  that  the  other  places  are  supplied  with  this  salt,  and 
vice  versa. 

2  According  to  the  Institutes  of  the  Tsing  Dynasty,  Ta-tung  Fu  and 
Shau-ping  Fu  are  markets  of  the  Shan-si  salt. 

*  Siang-ching,  a  subordinate  district  of  Shil  Chow  in  Ho-nan  Province 
is  supplied  with  the  Shan-si  salt.    Cf.  supra,  p.  1 10,  note  5. 


112  APPENDIX  B  [254 

The  Consuming  Territory  of  the  Shen-si  or  Kan-su  Salt 


Number  of  pre- 

Number of  direct 

Names  and  location  of  the  prefec- 

fectures in  the 

districts  in  the 

tures  and    direct   districts,   with 

province 

province 

the  Shen-si  or  Kan-su  salt 

Province 

With 
Shen-si  or 

With 
Shen-si  or 

Total 

Kan-su 
salt 

Total 

Kan-su 
salt 

Names  ^ 

Location 

Shen-si ' 

7 

2  (Shen-si) 
I  (Kan-su) 

5 

I  (Shen-si) 

Hanchung  Fu. 

(Shen-si) 
Yen-an  Fu  .... 

(Shen-si) 

Lu  Chow 

(Shen-si) 
Fung-tsiang  Fu. 

(Kan-su) 

Southwestern  cor- 
ner of  Shen-si 

Middle  section  of 
northern  corner 
of  Shen-si 

Northern  corner  of 
Shen-si 

Western  corner  of 
Shen-si 

Kan-su ' 

8 

5  (Kan-su) 

6 

2  (Kan-su) 

Ping-liang  Fu*. 

(Kan-su) 
Ching-Yang  Fu* 

(Kan-su) 
Ning-sha  Fu*.. 

(Kan-su) 
Lan-chow  Fuf . 

(Kan-su) 

Gung-chang  Fuf 

(Kan-su) 
Chin  Chow  f  . . 

(Kan-su) 
Tsia  Chow  t  . . . 

(Kan-su) 

Eastern   corner    of 

Kan-su 

«             « 

Northern  corner  of 

Kan-su 
Northwestern    part 

of  the  interior  of 

Kan-su 

Southern    part    of 

Kan-su 

«            (( 

Southern  corner  of 
Kan-su 

1  Those  places  in  Shen-si  and  Kan-su,  whose  names  are  not  given 
here  are  supplied  with  the  Mongolian  salt. 

2  The  Shen-si  salt  is  derived  from  the  Large  Piebald-Horse  Lake  in 
Ting-bien  Hsien,  a  subordinate  district  of  Yen-an  Fu.  Ching-tsien 
Hsien,  a  district  northeast  of  Yen-an  Fu  also  takes  the  Shen-si  salt. 

s  There  are  two  kinds  of  salt  in  Kan-su,  one  being  lake  salt  from  the 
Small  Fiebald-Horse  Lake  in  Ling-chow,  a  subordinate  district  of 
Ning-sha  Fu,  another  being  well  salt  from  salt  wells  in  Chang  Hsien 
(now  a  part  of  Lung-si  Hsien)  and  Si-ho  Hsien,  which  are  subordinate 
districts  of  Gung-chang  Fu.  Those  places  marked  with  (*)  are  supplied 
with  lake  salt,  while  the  others  indicated  by  (t),  with  well  salt. 


255]  APPENDIX  B 

The  Consuming  Territory  of  the  Kiang-su  Salt 


113 


Number  of 
prefectures  in 
the  province 

Number  of 
direct  districts 
in  the  province 

Names  and  location  of  the  prefectures 
with  or  without  the  Kiang-su  salt 

Province 

With 

With 

Total 

Kiang-su 
salt 

Total 
3 

Kiang-su 
salt 

Names  ^ 

Location 

Kiang-su  * 

8 

4 

2 

Kiang-ning  Fu 

Southwestern  Kiang-su 

(with) 

Hwai-an  Fu 

North  of  the  Yang-tze 

(with) 

River 

Yang-chow  Fu 

«                « 

(with) 

Tung  Chow 

«                « 

(with) 

Hai  Chow 

<<                 (1 

(with) 

Shii-chow  Fu 

«                « 

(with) 

An-hwei  . . 

8 

7 

5 

4 

Hwei-chow  Fu 

(without) 
Kwang-ta  Chow 

(without) 

Southeastern  frontier  of 

An-hwei 
Eastern  frontier  of  An-hwei 

Hu-peh  ^•. 

ID 

9 

I 

I 

Sze-nan  Fu 
(without) 

Southwestern  corner  of 
Hu-peh 

Hu-nan  . . . 

9 

9 

4 

2 

Pin  Chow 

(without) 
Kwei-yangChow 

(without) 

Southeastern  frontier  of 

Hu-nan 
(t                     (( 

Kiang-si  .. 

13 

10 

I 

Kwang-sin  Fu 

(without) 
Nan -an  Fu 

(without) 
Gung-chow  Fu 

(without) 
Ning-tu  Chow 

(without) 

Northeastern  corner  of 

Kiang-si 
Southern  Kiang-si 

Ho-nan  . . . 

9 

9 

S 

I 

Yii-ning  Fu 

(with) 
Kwang  Chow 

(with) 

Southern  frontier  of  Ho-nan 

Southeastern  corner  of 
Ho-nan 

Kwei-chow. 

12 

4 

I 

Tung-yin  Fu 

(with) 
Sze-chow  Fu 

(with) 
Chin-yuen  Fu 

(with) 
Li -ping  Fu 

(with) 

Eastern  frontier  of 

Kwei-chow 
«            « 

X                          « 

«              (( 

1  When  the  names  of  places  with  the  Kiang-au  salt  are  given,  it  is 


114 


APPENDIX  B  [256 

The  Consuming  Territory  of  the  Che-kiang  Salt 


Number  of  pre- 
fectures in  the 
province 

Number   of   di- 
rect districts  in 
the  province 

Names  and  locations  of  the  prefec- 
tures   and    direct    districts    with 
the  Che-kiang  salt 

Province 

Total 

With 
Che- 
kiang 
salt 

Total 

With 
Che- 
kiang 
salt 

Names 

Location 

Che-kiang. 
Kiang-su . . 

An-hwei  .. 
Kiang-si  .. 

II 

8 

8 
13 

II 

4 

I 
I 

•  •  >  • 

3 

5 
I 

•  •  •  • 

I 
I 

Che-kiang  Province 
Soo-chow  Fu 

Sung-kiang  Fu  .  • . 

Shiang-chow  Fu... 

Chin-kiang  Fu . . . . 

Tai-chwang  Chow. 

Hwei-chow  Fu  .  .  • 

Kwang-ta  Chow  . . 

Kwang-sin  Fu.... 

South     of     the 

Yang-tze  River 
((         « 

((         it 

ii         « 

li         ii 

South  corner  of 

An-hwei 
East    corner    of 

An-hwei 
Northeastern 
corner  of 
Kiang-si 

understood  that  the  other  places  are  not  the  markets  of  this  salt,  and 
vice  versa. 

2  Shii-chozv  Fu   represents   only  three   of   its   subordinate   districts, 
namely.  Pi-chow,  Su-chien  and  Tsui-ning.     Cf.  supra,  p.  no,  note  3. 

3  Hoc-feng  chow  and  Chang-lau-hsien,  two  districts  near  to  Sze-nan 
Fu  are  not  the  Kiang-su  salt  markets. 


257]  APPENDIX  B 

The  Consuming  Territory  of  the  Sze-chuen  Salt 


lis 


Number  of 
prefectures  in 
the  province 

Number  of 
direct  districts 
in  the  province 

Names  and  location  of  the  prefectures 
and  direct  districts  with  or  without 
the  Sze-chuen  salt 

Province 

Total 

With 
Sze- 
chuen 
salt 

Total 

With 
Sze- 
chuen 
salt 

Names  * 

Location 

Sze-chuen  . 
Hu-peh  ^. 
Yun-nan*  . 

Kwei-chow 

12 
10 
14 

12 

12 

I 
2 

8 

8 
I 

3 

I 

8 

I 

Sze-chuen  Province 

(with) 
Sze-nan  Fu 

(with) 
Tung-chuen  Fu 

(with) 
Chao-tung  Fu 

(with) 
Tung-yin  Fu 

(without) 
Sze-chow  Fu 

(without) 
Chin-yuen  Fu 

(without) 
Li-ping  Fu 

(without) 

Southwestern  cor- 
ner of  Hu-peh 

Northeastern  cor- 
ner of  Yun-nan 

(1                     M 

Eastern  frontier 
of  Kwei-chow 
«        << 

«        « 

«        « 

1  When  the  names  of  places  v^rith  the  Sze-chuen  salt  are  given,  it  is 
understood  that  the  other  places  have  not  this  salt,  and  vice  versa. 

2  Hoc-feng-chow  and  Chang-lau-hsien,  two  districts  near  to  Sze-nan 
Fu  are  also  supplied  with  the  Sse-chuen  salt. 

'  Tsien-yih-chow,  Nan-ning-hsien  and  Ping-yi-lisien,  three  districts 
south  of  Tung-chuen  Fu  are  also  supplied  with  the  Sze-chuen  salt. 


Il6  APPENDIX  B  [258 

The  Consuming  Territory  of  the  Kwang-tung  Salt 


Number  of 

Number  of 

Names  and  location  of    prefectures 

prefectures  in 

direct  districts 

and  direct  districts  with  the  Kwang- 

the  province 

in  the 

provmce 

tung  salt 

Province 

With 

With 

Total 

Kwang- 
tung  salt 

Total 

Kwang- 
tung  salt 

Names  ^ 

Location 

Kwang-tung. 

9 

9 

7 

7 

Kwang-tung 
Province 

Kwang-si  •  • . 

II 

II 

2 

/> 

Kwang-si 
Province 

Kiang-si  .... 

n 

2 

I 

I 

Nan-an  Fu 

Gung-chow  Fu   . . 
Ning-tu  Chow   . . . 

Southern  Kiang-si 
«            « 

Fu-kien 

9 

I 

2 

.... 

Ting-chow  Fu 

Western  frontier  of 
Fu-kien 

Hu-nan 

9 

•   •   •  • 

4 

2 

Pin  Chow 

Kwei-yang  Chow 

Southeastern  fron- 
tier of  Hu-nan 
«            (( 

Yun-nan  .  •  • . 

H 

2 

3 

•   •   •   • 

Kwang-nan  Fu  . . 
Kai-hwaFu 

Southeastern    cor- 
ner of  Yun-nan 
«            It 

1  Ku-chow-ting,  a  subordinate  district  of  Li-ping  Fu,  eastern  frontier 
of  Kwei-chow  Province  is  also  supplied  with  Kwang-tung  salt. 


259]  APPENDIX  B  II y 

The  Consuming  Territory  of  the  Fu-kien  or  Yun-nan  Salt 


Number  of  pre- 

Number of  direct  Names  and  location  of  prefectures 

fectures  in  the 

districts  in  the 

and    direct    districts   without    the 

province 

province 

Fu-kien  or  Yun-nan  salt 

Province 

With 
Fu-kien  or 

With 
Fu-kien  or 

Total 

Yun-nan 

Total !  Yun-nan 

Names 

Location 

salt 

salt 

Fu-kien. 

9     i         8 

2 

2 

Ting-chow  Fu  f 

Western      frontier 

(Fu-kien) 

( Fu-kien) 

(Fu-kien) 

of  Fu-kien 

Yun-nan 

14              10 

3 

3 

Kwang-nan  Fu  f 

Southeastern    cor- 

(Yun-nan) 

(Yun-nan) 

(Yun-nan) 
Kai-hwa  Fu  f 

(Yun-nan) 
Tung-chuen  Fu* 

(Yun-nan) 
Chao-tung  Fu  * 

(Yun-nan) 

ner  of  Yun-nan 
<(             <( 

Northeastern    cor- 
ner of  Yun-nan 
«             « 

1  Those  prefectures  marked  with  (f)  are  the  Kwang-tung  salt 
markets.  Those  indicated  by  (*),  together  with  three  neighbor  dis- 
tricts, are  supplied  with  the  Sse-chuen  salt.    Cf.  supra,  p.  115,  note  3. 


A  LIST  OF  SELECTED  REFERENCES  IN  CHINESE 

Institutes  of  tlie  Tsing  Dynasty  (Shanghai;  5th  ed.,  1909) — Called,  in 
Chinese,  Ta  Tsing  Hui  Tien  and  edited  by  a  board  of  editors  ap- 
pointed by  the  government. 

Amendments  of  the  Institutes  of  the  Tsing  Dynasty  (Shanghai;  5th 
ed.,  1909) — 'Called,  in  Chinese,  Ta  Tsing  Hui  Tien  Shih  Li  and 
edited  by  a  board  of  editors  appointed  by  the  government. 

Inquiry  into  the  Institutions  of  China  (Shanghai,  several  editions) — 
The  most  complete  history  of  institutions  of  the  different  dynasties, 
being  called,  in  Chinese,  Wen  Hsien  Tung  Kao  or  San  Tung  Kao. 

Essays  on  the  Institutions  of  the  Tsing  Dynasty  (Shanghai,  1901) — 
Comprises  a  number  of  essays  written  by  Mr.  Wang  Ching-Yun, 
sometime  president  of  the  Department  of  Public  Works.  This 
work  is  called,  in  Chinese,  Shi  Chao  Tsi  Tseng. 

Works  of  Kuan  Tsi  (Shanghai,  several  editions) — Published  as  a 
special  treatise  or  as  a  part  of  the  works  of  Chinese  philosophers. 

Governmental  System  of  the  Chou  Dynasty,  1122-249  B.  C.  (Shanghai) 
— ^Serves  as  a  model  of  the  governmental  system  in  the  different 
dynasties,  being  called,  in  Chinese,  Chou  Kuan  or  Chou  Li. 

Memorials  in  the  Reign  of  Emperor  Kwang  Shii,  1875-1908. 

Memorials  in  the  Reign  of  Emperor  Shiian  Tung,  1909- 191 1. 

118  [260 


VITA 

Shao-Kwan  Chen  was  born  in  Canton,  China,  Decem- 
ber 21,  1886.  When  he  was  a  boy,  he  studied  English, 
general  European  history,  elementary  mathematics  and 
general  geography  in  addition  to  his  major  subject,  the 
Chinese  learning.  In  1903,  he  passed  the  civil  service  ex- 
amination of  the  29th  year  of  the  Reign  of  Emperor 
Kwang  Shii,  held  at  Canton,  on  Chinese  history,  philoso- 
phy, classics  and  current  political  problems,  receiving  the 
degree  of  Chii  Yin  ( Recommendable  Man),  together 
with  the  candidacy  for  a  magistracy.  In  1 904-1 908, 
he  studied  arts  and  sciences  under  the  College  Fac- 
ulty of  the  Chinese  Imperial  University  in  Peking;  and 
was  graduated  in  1908  with  a  degree  equivalent  to  the 
Bachelor  of  Science  conferred  by  the  American  institu- 
tions. In  1909,  he  was  appointed  to  be  a  candidate  for 
assistant  prefect.  From  1910  to  1914,  he  has  been 
a  graduate  student  at  Columbia  University,  receiving 
the  degree  of  Master  of  Arts  in  191 1.  He  has  taken 
courses  under  the  members  of  the  Faculty  of  Political  Sci- 
ence of  Columbia  University,  under  Professor  D.  R. 
Dewey,  of  Massachusetts  Institute  of  Technology,  and  under 
Professors  F.  A.  Fetter  and  W.  M.  Daniels,  of  Princeton 
University.  He  has  attended  the  seminars  conducted  by 
Professors  E.  R.  A.  Seligman,  H.  R.  Seager,  F.  A.  Fetter, 

V.  G.  Simkhovitch  and  H.  R.  Mussey. 

119 


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eii 


cp 


3^ 


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