# Twentieth Century Impressions of Hongkong, Shanghai, and other Treaty Ports of China/The Lappa Customs

THE LAPPA CUSTOMS.
A Sketch of their Origin and Development.
By A. H. Wilzer, Commissioner of Customs.
The trade of the Portuguese Colony at Macao is to a large extent reflected in the statistics of the Lappa Customs. The following lines are, therefore, mainly extracts from various Customs Reports, among which, those written by Mr. Alfred E. Hippisley, Commissioner of Customs at Lappa from 1889 to 1894, have been extensively quoted.
The Commissioner of Lappa and district has under his control a number of stations for revenue and preventive purposes. Of these stations, which encircle Macao, the two principal ones are Malowchow Island, to the west of the entrance of Macao Harbour, and Ch'ienshan, termed Casa Branca by the Portuguese, at the head of the same harbour. These two principal stations in the Heungshan district, that of Macao, together with the four in the Sanon district, and that of Hongkong, constituted the six maritime stations which a quarter of a century ago formed the subject of such frequent complaint on the part of the Hongkong and Macao Governments on the ground that the procedure followed at them was of so harassing a character as to threaten the life of the junk trade of those ports.
The causes which led to the establishment of these stations were the enormous quantities of opium that were smuggled from Hongkong and Macao into China. Fleets of junks, engaged in this illicit trade were accustomed to rendezvous in both places, from which, if circumstances favoured them, they would slip away quietly with their cargo; but, if they could not do that, being well manned and heavily armed, they were not only able, but ready, to match themselves against any preventative force that could be sent to intercept them. It was estimated that duty was paid only on about one-tenth of the opium recieved from Hongkong by the towns along the North and West Rivers; and it was known that over 10,000 chests were carried annually to Macao, almost all of which was subsequently smuggled thence into the various ports on the west coast. As the efforts to suppress this contraband trade had proved unsuccessful, it was decided to put it on a legalised basis by establishing collectorates in Chinese waters at the gates of Hongkong and Macao, at which gunboats would be stationed to enforce payment of Likin on the opium passing.
The agreement between Great Britain and China signed at Chefoo on September 13, 1876, contained among its clauses the following:—"Section III.: Trade.—7. The Governor of Hongkong having long complained of the interference of the Canton Customs revenue cruisers with the junk trade of that Colony, the Chinese Government agrees to the appointment of a commission, to consist of a British Consul, an officer of the Honkong Government, and a Chinese official of equal rank, in order to the establishment of some system that shall enable the Chinese Government to protect its revenue without prejudice to the interests of the Colony;" and "8. On opium Sir Thomas Wade will move his Government to sanction an arrangement different from that affecting other imports. British merchants, when opium is brought into port, will be obliged to have it taken cognizance of by the Customs, and deposited in bond, either in a warehouse or a receiving hulk, until such time as there is a sale for it. The importer will then pay the Tariff Duty on it, and the purchaser the Likin, in order to the prevention of the evasion of the Duty. The amount of the Likin to be collected will be decided by the different provincial governments according to the circumstances of each."
Later, the Governments of Great Britain and China, considering (among other things) that the terms of clause 3, above quoted, "are not sufficiently explicit to serve as an efficient regulation for the traffic in opium, and recognizing the desirability of placing restrictions on the consumption of opium, have agreed to the present Additional Article," which was signed in London on July 18, 1885:—
"2. In lieu of the arrangement respecting opium in Clause 3 of Section III. of the Chefoo Agreement, it is agreed that foreign opium, when imported into China, shall be taken cognizance of by the Imperial Maritime Customs, and shall be deposited in bond, either in warehouses or receiving hulks which have been approved of by the Customs, and that it shall not be removed thence until there shall have been paid to the Customs the Tariff Duty of 30 Taels per chest of 100 catties, and also a sum not exceeding 80 Taels per like chest as Likin.
"3. It is agreed that the aforesaid Import and Likin Duties having been paid, the owner shall be allowed to have the opium re-packed in bond under the supervision of the Customs, and put into packages of such assorted sizes as he may select from such sizes as shall have been agreed upon by the Customs authorities and British Consul at the port of entry.
"The Customs shall then, if required, issue gratuitously to the owner a Transit Certificate for each such package, or one for any number of packages, at the option of the owner.
"Such certificate shall free the opium to which it applies from the imposition of any further tax or duty whilst in transport in the interior, provided that the package has not been opened, and that the Customs seals, marks, and numbers on the packages have not been effaced or tampered with," &c.
The assent of the Foreign Powers, other than British, interested in the trade of China having been obtained to the terms of this additional Article, a Commission was nominated in accordance with the terms of Clause 7 of Section III. of the Chefoo Convention, consisting of Mr. James Russel, Puisne Judge of Hongkong, Sir Robert Hart, K.C.M.G., Inspector-General of Customs, and Shao, Taoutai of Shanghai, Joint Commissioners for China; and Mr. Byron Brennan, His Britannic Majesty's Consul at Tientsin. On September 11, 1886, an agreement was signed, which stipulated among other things, that an office under the foreign inspectorate should be established on Chinese territory in Kowloon for the sale of Chinese opium duty certificates, and that the inspectorate should be responsible for the entire control of that office. Later, a Convention on similar lines was arranged with the Portuguese authorities with respect to Macao, the office of the foreign inspectorate to be located on Lappa. In fulfilment of this Agreement the Lappa Customs was opened on April 2, 1887, for the collection of Tariff Import Duty (Hk. Tls. 30) and Convention Likin (Hk. Tls. 80 per picul) on opium, and of Provincial Likin and Ching-fei Tax on general cargo at the rates fixed by the provincial tariffs received from the Governor-General of the Liang Kwang. It was not, however, till July 1st of the same year that the collection of native duties on general cargo at the rates fixed by the native Custom-house tariff received from the Hoppo, or Superintendent of Customs, at Canton commenced. It is gratifying to add that the régime thus introduced has worked smoothly, and has given satisfaction both to Chinese merchants and to the neighbouring Portuguese Colony of Macao. Junk masters are pleased that the duties are fixed in amount and collected according to a known tariff and are no longer supplemented by levies of uncertain amount for paper, ink, pens, &c., as was previously customary.
Macao has spoken for itself. Owing to the decline in the trade of Macao, which had made itself manifest from 1884 onwards, a Commission, consisting of two municipal councillors, the Government senior interpreter, and two prominent Chinese merchants was appointed by His Excellency the Governor to consider the causes of this decline, and to suggest the means best calculated to arrest them. In this report, which was the result of investigations extending over seven months, and was published in the Boletin da Provincia, of November 12, 1889, the Commission refers in the following words to the results of the Convention with China and of the Lappa Customs régime:—
"The causes which have led to the improvement already called attention to in the trade of Macao during the year 1888 are:—
"1. The confidence given to Chinese merchants by the conclusion of the Chino-Portuguese Treaty, which defined the political status of this Colony, and with that confidence drew hither the capital needed to increase trade.
"2. The liberal manner in which the foreign inspectorate of Chinese Customs has treated the Chinese merchants of Macao, by abolishing taxes on their trade and granting them concessions—a treatment which has given a large impetus to trade.
"It is not only the testimony of Chinese merchants of this city, but it is also the practical experience of the members of the Commission in local business, that in these two points alone is to be found the explanation of the commercial improvement which took place in 1888."
The regulations under which the native mercantile marine of this province plies were revised and codified during the viceroyalty of His Excellency Jui Lin (1865–74), and it is very seldom that papers issued prior to that date are now seen, partly because junks do ​not last many years, and partly because the papers ought to be renewed regularly.
In addition to the papers issued by the territorial authorities, trading vessels are required to take out an "arms certificate" from the Customs. This certificate, which permits the carriage of arms for self-protection alone, can be called for at any time and the entries in it and the arms carried compared; any excess discovered is liable to confiscation, but ammunition used may be made good, with the sanction of the authorities, after the reasons for its use have been reported. To require junks to take out this certificate and to comply with its terms is a measure of considerable importance to the general interests. Permission to import arms is granted by authorities, when the application is made by responsible persons. Without such official sanction import is forbidden to foreigners under the Treaties, and to Chinese under special and severe regulations. Unless, therefore, strict control is kept over junks in this respect, they would be able to sell their armament inland and to replenish it on their return to Macao, with the result that the evil-disposed would be able to supply themselves freely with arms of precision. Inquiries instituted proved that this was on frequent occasions being done. Arms also continue to be smuggled in large quantities into the interior by passengers or gangs of coolies, specially engaged for this purpose, who pack among their luggage rifles and revolvers which have been previously taken to pieces to facilitate hiding. It is impossible to search all passengers and coolies, and the handsome profits gained prompt them to run many risks. That the Government is rendered far more difficult by this cause than it otherwise would be, no one can doubt. In a memorial to the Throne, dated December 3, 1889, His Excellency Chang Chih-tung, the then Governor-General of Liang Kwang, drew a graphic picture of the difficulties of coping with brigandage in this province. His Excellency wrote : —
"In the Kwangtung province piracy has always been rife, but especially on the sea-board; and the difficulties of combating it have always been seriously increased by the changes that have taken place during the past few years on the coast, as the memorialist has had the honour to lay before His Majesty in detail on several occasions. The chief cause of difficulty is the fact that Hongkong and Macao have become refuges for the pirates and their bases of operation. In each place they have their chiefs, and in each they form themselves into organised bands, each with its special designation, and from each they send forth parties to levy blackmail. The rich merchant living in a populous hamlet or a town, the poor potter in the open country, and the agriculturist farming the land — each is victimised in turn. From this blackmail very large sums are realised, and form a fund for the bribery of the foreign police, for the purchase of arms, for the issue of compassionate allowances to the wounded and the families of the killed, the balance only being distributed among the members. The ramifications of these gangs are deep and stable, and their fraternity very numerous; and in every respect they differ altogether from pirates and desperadoes elsewhere. These only organise together when they contemplate a coup, and distribute there and then among their members any loot they may secure; while, in the case of the Hongkong and Macao pirates, if they wish to hire vessels, the Chinese authorities have no power to intervene; if they wish to purchase arms, the Chinese authorities have no power to prevent them; if they propose to act in concert, the Chinese authorities have no power to intercept them; while, favoured as they are by the extent of the open sea and the ramifications of the inland waterways, they are able, whenever a piratical attack is organised, to join their forces and mass their vessels into fleets. The sufferings caused by these gangs to the law-abiding are heart-rending, for on shore they do not hesitate to kill the proprietor they are robbing, if he defends his own, or to fire the place, or to carry off his children; and on the water they do not hesitate to kill or drown everyone on the boat they attack. Before forces can be concentrated to follow and capture them, they have already made good their escape to Hongkong and Macao, and to capture them in detail or to attack them in force is then alike impossible. In a word, relying on the security Hongkong and Macao afford them, the behaviour of these men differs in nothing from open rebellion against the Throne," &c.
"How bold and daring these pirates often are is illustrated by the capture of one of the Salt Commissioner's launches. While the launch was at anchor at a certain place two informers went on board and offered to point out some junks carrying a contraband cargo of opium, salt, and kerosene. The captain's eagerness to make a seizure caused him to fall into the trap. The launch started in pursuit of the supposed smuggling vessels and, near Motomoon, caught up with a junk which was pointed out by the informers as one of the smugglers. As soon as the launch went alongside to board, a dozen or more well-armed pirates suddenly appeared from the hold of the junk, jumped on to the launch, wounded the captain, shot the engineer, and drove the rest of the crew into the cabin, where they tied them up. They then took charge for their own purposes, and after pirating three trading junks, they steamed to the Bogue, where a small boat was in waiting, transferred their loot, and made off. A part of this gang was afterwards captured and promptly beheaded."
Temporary prohibitions to export arms and ammunition have on several occasions been made by the Governors of both Hongkong and Macao, and such prohibitions would tend to the peace and well-being not only of the mainland but of the two colonies as well, but, unless they are made permanent the disorderly in China will continue to provide themselves with the means of oppressing the law-abiding, of robbing the wealthy, and of resisting the lawful authorities. Towards the close of 1892 Companhia Metropolitana de Rio Janeiro, for the promotion of Chinese emigration to Brazil, opened an agency in Hongkong, but the legislative enactments there being unfavourable to such an enterprise, the locus operandi was removed to Macao, and the German s.s. Tetartos was chartered to convey the emigrants to their destination. The steamer was arrested in Hongkong in July, 1893, on a charge of infringing the Chinese Emigration Ordinance of 1889, but was acquitted by the jury and released. In September she came to Macao and left on October 17th for Rio with 474 "emigrants." She was reported to have reached her destination, but the actual date of arrival was variously stated. The Chinese authorities protested against this emigration and the objections to it were many and serious. A Treaty was negotiated, it is true, between China and Brazil in 1881, but no provision was made in it for emigration, and its inadequacy and the necessity for a supplementary special convention, in order to secure the labour desired, had been recognised by Brazil, by the despatch to China, for this purpose, of a special Envoy, who was then en route. Brazil had no representative in China, and China had no accredited agent in Brazil to watch the emigrants' interests. The Brazil country was in the throes of revolt, and the fact that the Company refused to await the Envoy and the conclusion by him of the negotiations its own Government acknowledged to be necessary, naturally raised suspicion of its boná fides, especially as the terms offered to the emigrants contained a most objectionable clause, transferring the emigrant and his contract to third parties. The Macao authorities virtually maintained that, as long as the emigration was conducted in conformity with Portuguese law China had no grounds of remonstrance. As a matter of fact, Portuguese law provides only for free emigration, i.e. emigration under which each emigrant pays for his own passage — an impossibility when the passage is as costly as it is to Brazil. But waiving this point and admitting that emigration to Brazil under suitable conditions might be desiratile, China would, in the circumstances detailed above, and seeing that the emigrants were not residents of Macao, but subjects of China, have failed in one of the primary duties of a self-respecting Government to its subjects had she remained silent. Her protest was ignored, but no second steamer has been despatched.
In 1895 the plague made its appearance, and raged with great violence till towards the end of the following July. It was first observed in the least sanitary and most densely populated Chinese quarters, whence the germs spread all over the place, chiefly through infected rats. The rats invaded some of the best situated and thoroughly disinfected foreign houses on the hills, where, in their hasty flight for safety, they had sought refuge, and were found dying or dead in the woodwork of the ceilings and in the roofs. In several cases observed, though disinfectants had not been spared and every care was taken, the Chinese servants removing these dead rats were attacked by the plague almost immediately, and succumbed. The appearance of the plague created a panic among the native population, which nothing could stop. During this period of nearly four months' duration, trade was greatly interfered with, and for a while was almost at a standstill. No sooner, however, had the epidemic abated, than the people came flocking back, and in a very short time all signs of the dire calamity had been effaced, and the place and the trade had resumed their normal aspect. Since then plague has been more or less endemic, and cases occur, in greater or smaller numbers, almost every year during the spring, with the beginning of the rainy season.
The volume of trade passing the Lappa Stations, though, of course, largely affected by the conditions, climatic and financial, of the neighbouring districts on the mainland, is practically measured by the degree of prosperity enjoyed by Macao as a commercial centre; and the future prospects of that trade depend in the main upon whether the influences affecting Macao tend towards the expansion or restriction of its commerce. There is probably no doubt that their tendency, at present at least, is towards the latter. The greater wealth and constantly increasing commercial importance of Hongkong cannot fail to make this port each year a more serious rival of Macao and to withdraw trade from Lappa to Kowloon. In the past, several causes have tended to obscure the effect of this competition and, ​to a certain extent, to neutralise it; but as they pass away its serious character gradually forces itself into view. As Hongkong advanced year by year into importance, the effect on Macao of the rivalry of that rising port was veiled by the lucrative coolie traffic carried on from Macao; by the contraband trade in opium, which, though shared by Hongkong, continued, as it had before the cession of that island, to make Macao its centre; by the fact that, owing chiefly to the Hoppo's procedure, Macao became the headquarters of the west coast trade; and by the enormous profits derived by Macao from the establishment of the lotteries on the result of the Chinese literary and military examinations known as the "Weising." These sources of gain have been swept away one after the other. In 1875, after an existence of a quarter of a century, during which time enormous fortunes had been amassed from the 500,000 Chinese estimated to have been sent from Macao beyond the seas, the coolie traffic was finally extinguished. In 1876 the opening of Kiungchow, followed, a year later, by the opening of Pakhoi, as Treaty ports, dealt a serious blow to the virtual monopoly previously enjoyed by Macao of the west coast traffic, and, by substituting the safe and rapid steamer for the slow and unwieldy junk, transferred a considerable portion of that trade to Hongkong. In 1885 Macao's monopoly of the Weising lottery came to an end. Though fully sensible of the serious harm, moral and financial, worked by this form of gambling to the people of this province, China had through long years steadfastly set her face, as one of the principles of her government, against any compromise with legalised gambling, whether as a source of revenue or not, and had summarily cashiered the Governor-General Ying Han when, in 1874, he sanctioned the establishment of this lottery at Canton. Experience during the following ten years showed beyond doubt, however, that so long as the headquarters of the lottery continued in Macao (that is in the province itself), prohibitions, no matter how strict, and a preventive service, no matter how numerous, were insufficient to prevent the surreptitious introduction of tickets in great numbers, and that to allow things to continue as they then were meant simply the constant drain of money from Kwangtung into Macao. In 1885, therefore, a reluctant consent was given to the establishment of the lottery in China, with the result that the sum the monopolist in Macao was willing to pay the Portuguese treasury for his privileges at once fell from $353,000 to $36,000 a year. In 1887 a heavy blow was dealt to smuggling by the Convention between China and Portugal which led to the establishment of this office; and how large an interest the smuggling of opium from Macao, was may be gathered from the fact that the Harbour Master, in his report upon the trade of that port for the year 1882 (published in the Boletin da Provincia of December 5, 1884), estimated the value of the crude opium re-shipped to China at $3,597,029, consisting of declared shipments valued at $1,633,952 (presumably by junk, but of which much, certainly, was smuggled), and secret shipments valued at $1,963,077 (representing, presumably, what was smuggled in small boats and by armed gangs overland). This Convention tended undoubtedly to the well-being of the community, by eliminating from it a most unruly and turbulent class who had derived a livelihood by systematically breaking the laws of China. On the other hand, the closing of many sources of large profit which resulted from the occurrences above-mentioned, coupled with the gradual extinction of the tea trade before the competition of Indian and Ceylon leaf, has diminished the wealth of Macao, and consequently its purchasing powers. Several other causes, such as increasing taxes, tend to the same result. At present the capital of Macao cannot bear comparison with that of Hongkong; and, as the natural tendency of trade is to gravitate to the most important centre, it will inevitably abandon Macao for Hongkong, unless the smaller cost of living gives the former an appreciable advantage over the latter. Macao has decidedly enjoyed this advantage in the past, but is now rapidly losing it, as, to meet the ever-increasing demand from Portugal, caused by her financial position, new imposts are being constantly introduced. The acquisition of Tonkin by France has deprived Macao of the trade which formerly existed with that country, and it is now centred in Hongkong, steamers having taken the place of junks.
A cause, however, which probably contributes more than any of those already enumerated to the decadence of Macao as a centre of commerce is the rapid silting of the approaches to the port, due to the large amount of detritus carried down by the waters of the Pearl and West Rivers, between the mouths of which Macao is situated. Repeated appeals have been made to the Home Government by the Macao authorities for permission to employ the funds in hand for dredging purposes, but, so far, without success. The evil, however, is rapidly increasing, and must be dealt with in the near future, if Macao is to remain a port at all. Chinese merchants aver that, owing to the annually decreasing depth of water in the outer anchorage, the trade formerly enjoyed by Macao with the Chao Chow Prefecture has been diverted to Hongkong. Finally, native traders maintain that the absence of banks which would advance on a junk's cargo as soon as it reached port militate strongly againgst Macao's trade. As soon as a junk arrives at Kongmoon banks are ready to make advances against the cargo, which enable the consignees to expedite the vessel's discharge and to purchase return cargo at once, with the result that a larger number of voyages can be made in the year and capital turned over more frequently. In consequence, a larger portion of the west coast trade tends each year to leave Macao in favour of Kongmoon.
Macao's future prospect is, therefore, not a bright one. First and foremost, if Macao is to remain a port of any importance whatever, it is necessary that Portugal should permit the Colony to undertake the dredging of the approaches to the port. The next most important step would appear to be the establishment of a bonded warehouse, in which goods could be placed on arrival under the charge of responsible persons, so that the banks might be induced to make on them advances necessary to expedite the movement of shipping. As a third step, less taxation and fewer monopolies would tend to give a healthy impetus to trade. These monopolies, such as those on kerosene, on samshu distilled from rice, on salt, &c., are managed by Chinese who pay fixed sums for the privilege and make large profits for themselves. They certainly increase the cost of living in Macao and keep down competition—the soul of trade; but they bring in necessary revenue, and as a good portion of it is spent on making improvements, such as sanitation, new roads, &c., the system has its advantages.
It has been argued that the construction of a railway from Fatshan to Macao would do much to restore the ancient glory of Macao, and, with this object in view, a concession was obtained in 1902 from the Chinese for the construction of a line connecting these two places. A convention was accordingly drawn up at Shanghai in November, 1904, providing that the shares in the concession were to be held half by Chinese and half by Portuguese subjects. Such a railway, if it were not too heavily handicapped at the outset by the large outlay of capital required to provide the bridges to cross the net-work of creeks and rivers in the delta should be successful, and would certainly prove of great advantage to the traders and travelling public in the many large towns of the district that it would traverse. It is not so clear where the benefit to Macao would come in. Until the approaches to its ports are in a condition to permit at least coasting vessels to enter and lie at anchor afloat and in safety, the Colony must be content to remain, so far as trade is concerned, a mere warehouse, subsidiary to Hongkong, and it cannot hope, under present conditions, to attract capital or to resume its ancient position as an emporium having its own import and export traffic directly with the rest of the world.
The principal foreign imports from Macao into China are: Opium, cotton goods, woollen goods, metals, raw Indian cotton, Japanese matches, kerosene oil, and rice.
The principal exports from China into Macao are: Eggs, palm-leaf fans, mats, pigs, poultry, silk piece goods, sugar, tobacco leaf, and timber.
The total tonnage—entries and clearances—of junks passing the Lappa Stations has averaged annually during the last decade 870,000 tons; and the value of this trade Hk. Tls. 16,000,000. The revenue collected on behalf of the Chinese Government during the same period amounted to about Hk. Tls. 400,000 a year.