The Sun.
London, England, 1835-05-18 00:00:00

DRAFT REPORT.

The Select Committee appointed to inquire whether it may
be expedient to establish one fixed rate of duty on all de-
scriptions of Tea imported into the United Kingdom, in-
stead of the duties imposed by Act 3 and 4, William IV., c.
101 :—Have considered the matters to them referred, and
agreed to the following Report :
In pursuing the inquiry confided to their investigation, 3our
Committee have had under their consideration—
First—The alleged impracticability of distinguishing with
certainty and facility the various kinds or qualities of tea, which,
by the Act referred to, are assessed to different rates of duty.
Second—The operation of the scale of graduated duties now
in force, as it will influence the price to consumers compared
with one uniform rate.
Third—The effect of the scale of graduated duties com-
pared with one uniform rate, in reference to the productive-
ness of the revenue.
Fourth—How far the scale of graduated duties as compared
with one uniform rate of duty, is calculated to promote the
extension of the commerce of the kingdom, in reference to the
altered character of our commercial entercourse with the
Chinese empire.
2. It appears to your Committee to be important, in order
to show the grounds on which an opinion is to be established
on the first of these objects of inquiry, to advert to the histo-
rical account of the tea trace in China ; to the gathering
and first preparation of the clop by the tea farmer; and to
its subsequent manufacture by the tea merchants; all of which
will be found in the very intelligent evidence of Mr. John
Reeves, who was for twenty years engaged as one of the East
India Company's inspectors of tea at Canton.
3. From the evidence of this gentleman, it appears that all
the varieties of tea known in the markets of Europe and Ame-

rica are the produce of but three different species of the tea
plant. One yields all the varieties of green, another all the
qualities of black, with the single exception of a coarse broad-
leaved kind, which is grown exclusively in the district of Wo
Ping in the province of Canton, but which, in consequence of
the lowness of its quality, has for many years ceased to form,
in its pure and unmixed state, any part of the East India Com-
pany's investment. The first gathering of the black tea takes
place as early in the season as the plant is in full leaf ; it is fol-
lowed by a second and third picking as soon as the new leaves
are sufficiently formed, the quality of the crops of the season
being in the order of their growth and gathering, in this
manner :

Flowery Pekoe is formed of the first shoot from the bud,
and then is covered with hair.

Black-leafed Pekoe is from the same shoot of a few days'
more growth, when the hair falls off and the leaf becomes more
expanded.
Souchong is made from young shoots, having the mere
fleshy and finer leaves.
Campoy is from the next in quality.
Congou follows, and
Fokien Bohea is from the lowest quality of the same leaf,
and though in the change which the trade in China has under-
gone in respect to the character and quality of bohea tea, that
name has been assigned to this particular kind ; it is, in fact,
pure but inferior congou.
4. The tea farmers having gathered, and in this manner
separated their crop, and given it a sufficient rough drying,
take it to the country markets, where the tea-makers select
the particular sorts which will best suit their manufacture, and
which, in their subsequent preparation, " they mix together so
much of this kind, and so much of the other, as will make the
tea up to the quality they are accustomed to make each parti-
cular chop."
Canton Bohea is a peculiar preparation ; it is made up at
Canton, by mixing congou tea, which has remained unsold at
the end of the previous season in the hands of the manufac-
turers, with Wo Ping tea; the latter first undergoes a process
of firing, after which, the two kinds being started on the floor
of a warehouse, are effectually mixed, and then form the Can-
ton bohea, as imported by the East India Company ; the qua-
lity depending upon the proportion of congou which enters into
the mixture, and which, in the East India Company's pur-
chast.7. is never less than one-half, and generally seven-tenths.
5. aptears to your Committee to be important, that this
brief history ot*:./'e growth and preparation of the various qua-
lities of black teas use in this country should be kept in
view, in order to a just ap;:_reciation of the value of any con-
flicting testimony as respects cer:.'!inty and facility, in distin-
guishing the different kinds which it is L'lnnded, by the Act of
the last session now under consideration, to assess at rates of
duty differing, as between congou and bohea, to the extent of
more than 44 per cent., and as between souchong and flowery
pekoe on the one side, and campoi and congou on the other, to
the extent of more than 35 per cent.
6. The clear and distinct manner in which Mr. Reeves has
communicated to your Committee his knowledge of the details
of the culture and preparation of tea in China, has impressed
on the minds of your Committee the conviction that his views
are reasonable and satisfactory, Is hen he states that, as there is
no other distinction between souchong and congou, or between
congou and the bohea of the English market, than such as is
referable to the varying qualities of the same leaf, influenced
in common with all vegetable productions by the variableness
of seasons, there can be no certainty in determining, amidst
the close approximations of quality, and in the absence of any
certain taste of discrimination, the particular kind which shall
constitute bohea or congou, or congou and souchong.
7. The evidence of Mr. W. A. Hunt, for more than twenty
years an inspector in London, of the East India Company's
teas, and of Mr. H. H. Goodhall, who for the last twelve
years has been the tea warehouse-keeper of the East India
Company, having been more than fifty years employed in that
department, fully confirms Mr. Reeves's testimony ; and your
Committee are induced to notice more particularly the evi-
dence of these public servants of the East India Company,
from the mass of concurring testimony furnished by all the
other witnesses, conversant, as brokers and dealers, with the
tea trade, because these public officers, besides the claim to
attention which is conferred by the respectability of their em-
ployments, and the trust reposed in them by the Company, do
not appear to your Committee to be open, even to the possibi-
lity of having imputed to them motives of self-interest, to over-
rule or pervert their judgment.
8. Your Committee are called upon, at the same time, to
state that all due weight should be given to the testimony that
has been adduced before them, which goes to maintain the
practicability of so establishing these distinctions, as to ensure
the collection of the graduated duties with certainty and faci-
lity, as now imposed, with reference to the enumerated des-
criptions of tea.
9. The only evidence which your Committee see occasion
to advert to in this part of their inquiry, is that of Mr. William
Wybrow, now an officer of the Customs, who has been selected
as the head of the tea department established under the recent
change of system, and whose employment for the last eight
years by the Excise department as registrar of the tea sales at
the India House has given him an opportunity of ascertaining
the relative value of teas in reference to the characters of each
other, and he having applied himself, fifteen months ago, to the
sampling of the whole of the teas of the East India Company,
and since continued to compare and taste them. Mr. Wybrow
states he has so confirmed his judgment as to have confidence
in deciding on the various classes of teas. With the view of
trying Mr. Wybrow's power of discrimination, your Committee
on the 24th June adjourned to the East India Company's
warehouses, where eight samples were drawn and submitted
to his inspection. They consisted, two of Canton bohea, two
of Fokien bohea, and four of congou ; and on each of these
Mr. Wybrow's judgment, was found correct, as distinguishing
between those which would have been assessed to the bohea
duty of Is. 6d. and those which would have been charged to
the congou duty of 2s. 2d. ; but in reference to the character
of one of these samples a very material discrepancy occurred
in the judgment of Mr. Wybrow and Mr. Hunt, the Company's
inspector, and which is too important not to call for the parti-
cular notice of your Committee, because it is so strongly con-
firmatory, as expressed by Mr. Reeves, of the uncertainty
which must exist of any judgment on a question which is purely
of relative quality, and not governed by any fixed or definite
standard. Mr. Wybrow said, in reference to one of these
samples, " There is one congou here, which is very low ; that
he did not know he had seen a lower, when comparing with
bohea tea, than No. 6474, and that he should think it was the
lowest congou he ever met with."
10. Mr. Hunt, on being examined, said, " It is not low
congou ; it is good congou of the souchong kind ;" that he
had " charactered" (a trade term) it " but middling congou,
with blackish leaf ;" that it formed one of twelve chests of the
same chop which he had inspected, and that the chop consisted
of 610 chests. On referring to the China invoice it was found
that the tea in No. 6474 cost 28 tales, whilst the Fokien bohea
cost 17 tales, the difference in price being more than 64 per
cent, and the qualities of these teas which most closely ap-
proached each other, as far as the same can be considered to
be established by prime cost, exceeded more than 53 per cent,
and others of them differed as much as 86 per cent, a fact
which it is important to bear in mind in any inquiry which in-
volves nice and close variations of quality, without any distinc-
tive differences of character.

11. Another examination of Mr. W3brow's proficiency was
proposed and assented to by your Committee, and which took
place on the 4th instant at the India Company's Warehouses,
under the superintendence of the Chairman and Members
named for that purpose. The object of this second inspection
was to have the examination of one chest from every break or
chop imported in the present year, and which would include as
well the Private Trade teas as those of the East India Com-
pany, in the former of which, it had been asserted, the debate-
able kinds, or those of the nearest approximating qualities,
were to be found. The Chairman has reported the result of
that examination, to the effect that the number of breaks being
found to be 897, of which 505 were Company's and 392 Pri-
vate Trade, it was impossible for the Deputation to examine a
chest of every break, as it would have taken much more time
than could have been given. Fourteen samples from the
Company's bohea and congou were submitted to Mr. Wybrow's
inspection, and he made no difficulty nor the slightest mistake
whatever, ascertaining the distinction solely by the smell
without infusion, and he afterwards correctly selected the two
lowest qualities of these teas.
12. The Deputation did not proceed to the examination of
private teas, because there was no return of their qualities, and
Mr. Hunt, the Company's Inspector, would not have been able
to point their attention to those teas which it was the object of
this inspection to examine. Mid which in consequence were not
submitted to the test of Mr. Wybrow's judgment.
13. Your Committee have only further to observe, in eluci-
dation of this branch of their inquiry, that on the side of main-
taining the impossibility of correctly discriminating the classes
of black tea, as enumerated for collecting the graduated duties,
where they closely approach each other, are to be found in the
* These fourteen samples were not consecutive in quality, but
separated from each other by considerable intervals ; and no private
trade tea at all was submitted to his inspection. There was, there-
fore, no proof afforded of his distinguishing faculties worth any-
thing.

evidence, in addition to the names of Mr. Reeves, many years
the late Inspector in China, Mr. Hunt and Mr. Goodhall, the
principal officers long employed in the same department in
London, those of Mr. E. E. Antrobus, Mr. Styan, Mr. Yarn-
ham, Mr. W. S. Fry, Mr. Thomas Binyon, dealers or brokers
well known as largely concerned in the tea trade, and as the
testimony of these latter witnesses has been represented as
being wanting in sincerity, your Committee are bound to ob-
serve, that they have not discovered any well established
grounds for supposing that either merchants, dealers, or brokers
can derive any peculiar advantage or benefit from the esta-
blishment of one uniform duty, or that they have any interest
in the decision beyond that of facilitating the fair course of
their business, and of thus promoting the general prosperity of
an important branch of the trade of the Kingdom.
14. The monopoly of the tea trade which the East India
Company so long enjoyed appears to have enabled that
body, by the extent of its concentrated dealings, so
to control the Chinese market as to establish distinctions
distinctions -of quality more marked than could have subsisted
in a free state of trade, and which it is in evidence before your
Committee are not to be found in the general market of Can-
ton; it cannot therefore be said, with any expectation that the
argument would be upheld by experience, that a sufficient and
intelligible distinctness of character is now so universally re-
cognised, as to warrant a line to be drawn for the permanent
collection of graduated duties; for it must in truth be founded
on no other basis than an undefined variation of quality, and
it would indeed be a good reply that this artificial state of con-
trol has expired with the power that created it, and that, limit-
ing for this purpose the view of future supply to this country
as issuing from the port of Canton only, the character of that
supply must bo looked for rather in the experience of the con-
dition and dealings in the open market there, which now fur-
nishes the consumption of Foreign Europe and America, than
with any reference to a course acquired and subsisting under
the powers of an extensive monopoly.
15. As respects green teas, your Committee do not find
themselves called upon to make any particular reference to
the new and instructive evidence which Mr. Reeves has fur-
nished in relation to the provision of this part of our consump-
tion ; it may be sufficient to observe that the difficulties of
distinction are considered to be comparatively light, if it should
be thought expedient to continue any classification of them
for the purposes of duty; a subject which will be more conve-
niently considered uuder the third head of this Report.
16. Your Committee cannot, however, close the present
branch without adverting to a provision of 3 and 4 Will. IV.,
c. 101, which is connected with the question of quality, as well
as of duty. The fifth section enacts, that "if different sorts
of tea mixed together be imported in the same package, the
whole shall be liable to the highest rate of duty to which any
of such sorts would be separately liable." The evidence of
Mr. Reeves has been already quoted to describe the compo-
nent parts of Canton Bohea. A reference to his answers to
the questions 23 to 26 in the printed Minutes, will more par-
ticularly explain the process which is followed in mixing Con-
gou tea with Wo Ping for the purpose of lowering the quality
of the former, as the means of providing a cheaper tea. If
this enactment continue, it seems impossible to define any
bounds for limiting the application of its principle in the way
of exception or exemption, while the repeal of it would appear
to be incompatible with the continuance of the graduated duties,
founded, as they are, on the future importations being precisely
of the same descriptions of tea as those hitherto known in this
country.

17. Your Committee proceed to the second head, under
which it is proposed to class their inquiries, viz., the ope-
ration of the scale of graduated duties, as it will influ-
ence the price to consumers, compared with one uniform
rate. As introductory to this consideration, it may be ob-
served, without entering into an exposition of the various
influences which act on prices, that a reduction of duty does
not, on all occasions, carry with it a corresponding cheapness
to the consumer, though intended to effect that purpose. Thus,
in the recent alteration in the Tea Duties, Bohea, which in
1833-4 averaged ls. 9d. 15-16, has been reduced to Is. 6d.,
but the consumer reaps no benefit from the change, because
the price of that particulrr sort of tea is governed by the next
and closely approximating quality of Congou, both these kinds
entering into the same `common consumption. Your Corn-
mittee have before them evidence which verifies this view of
the effect of the substitution of the present rated duties ; and,
while it is not desired to load this Report with unnecessary de-
tails, your Committee cannot refrain from soliciting attention
to the following brief statements :

s. d. s. d.
In 1833-4 the average sale price of
9,018,000 lbs. of the lowest qualities of
Congou was per lb 2 0
And the duty averaged

-- 3 11.666
The average sale price of 6,400,000 lbs. of
Bohea was
And the duty averaged

The 6,400,000 lbs. of Bohea tea were cheaper -- 3 8.781
than the 9,018,000 lbs. of the lowest Con-
gou by per lb
0 2.83.5
Since which, the duty on Bohea has been
reduced :
It paid
It now pays

0 3.938
And the duty on this part of the Congou con-
sumption has been raised to 2
When it paid only ... 1 11.666

---- 0 2.333
Bohea should therefore now be cheaper than
this quality of Congou, if it had the benefit
of the duties as altered in its favour, by ... 0 9.156

Instead of which, at the last India House sale
June) when low Congou sold for
And paid duty

Bohea sold for
And paid only

3 9

1 11%
1 6

3 .5%

The difference being only
Instead of

. 0 314
. 0 oi/8

Leaving -
0 5%

as the increased charge on the consumers of every pound of
Bohea tea by the operation of the new graduated duties, the
whole of which is an increase of price paid to the importer,
and an entire loss to the revenue. The fact thus exemplified
rests on a principle which no fiscal regulation can subvert,—that
of price founded on relative value in the estimation of con-
sumers, and in the forming of which consideration is not given
either to foreign price, to charges or to duties ; these may be
brought to operate, by the substitution into more extensive use
of the cheaper article, if public taste can be directed by such
comparative cheapness, and so displace the better kind. In
the meanwhile Bohea, admitted to be inferior in all its proper-
ties for consumption, is made by the action of duties (because
they are disproportionate to the relative value of the articles
taxed) in a very high degree more profitable to the importer,
or, as the case may be, to the foreign producer than the Con-
gou of the approximating qualities. Upon these grounds your
Committee adopt the conclusion, that the price to the con-
sumer of Bohea tea is not made cheaper by the reduction to
is. 6d. from the sum which it paid by the ad valorem duties
in 1833-4 ; viz 1 9.938
while the increase in the duty of the lower qualities
of Congou acts also in raising the price of the Bo-
hea, though not to the benefit of the revenue, to the
extent of

0 2.333

making the true charge to the consumer 2 0.271
18. The evil effect of the scale of graduated duties is,
upon the premises here submitted, to advance the price to the
consumer as compared with what he paid by the ad valorem
duties, to the extent of 10 per cent. on those duties, on all
the bohea, and on above nine millions of pounds of the lowest
congou ; these two kinds constituting nearly one half of the
whole consumption of the kingdom.
19. The third head under which the inquiries of your Com-
mittee are divided, relates to the effect of the scale of gra-
duated duties compared with one uniform rate, in reference
to the productiveness of the revenue. It will be useful to
notice here the following results of the ad valorem duties, as
they are exhibited by the sales which were effected in the year
1833-4.
The East India Company sold-
-6,400,000 lbs. Bohea, the duty averaging 1 9
19,447,000 lbs. Congou, ditto
944,000 lbs. Souchong ditto
4,882,000 lbs. Twankay ditto
1,050,000 lbs. Hyson ditto

32,723,000 lbs. of all kinds, averaging
The graduated duties applied to these qualities and de-
scriptions would produce
And the fixed duty, if at 2s.

Showing, in the comparison, a difference of £142,800
occasioned by the graduated duties yielding more than the one
uniform duty in the following particulars :
Bohea and Congou classed together, and then comprising
more than three-fourths of the whole consumption, viz.:-
25,847,000 lbs. out of 32,723,000 lbs £2,000
Twankay, which is as much the consumption
of the poorer classes of the community as
Bolles and Congou
Souchong
Hyson .

41,100
47,200
52,500

£142,800
20. The evidence has been already referred to by your
Committee, which establishes that the scale of graduated du-
ties carries with it no recommendation, as lightening the
weight of taxation on those who consume the lowest qualities
of tea ; the question at issue is therefore freed from any in-
ducement to uphold the scale of graduated duties in protec-
tion of the interests of the poorer classes of the community,
since it has been shown that the influence of the graduated
duties is to add 2s. Old. to the price of Bohea, and 2s. 2d. to
the prices of all qualities of Congou. A change, therefore,
which would impose one uniform duty of 2s. on all kinds of
tea imported into the United Kingdom, would, in every view,
be favourable to the consumers of each sort of tea, the worst
as well as the best.

21. When it is considered that Souchong and Hyson arc
used only by the more wealthy, and are therefore fit objects of
heavier taxation, it must also be borne in mind that the quan-
tity of these kinds is but in the proportion of less than 6 per
cent. of the whole consumption, and that the excess of revenue
realized by a higher taxation of them would be chargeable
with all the expenses which might be incurred for revenue, ma-
nagement and examination over the whole of the importations,
because this fiscal machinery would not be required, except as
the means of securing the collection of the higher duties
which might be imposed on the Souchong and flyson Teas.
22. If it be admitted, as your Committee are of opinion it

• must be, that after due consideration to the greater produc-
tiveness of the revenue on the one hand, and to the restrictions f
from which the trade would be relieved on the other, it is not
desirable to enforce the collection of a higher rate of dnry on
Souchong and Hyson than on the other kinds of tea, the case
appears to be made out for adopting one fixed ur.d.orm rate,
and the only question then remaining is, what tl:/at rate should
be; a question which, though not in precise terms referred to
the consideration of your Committee, ran hardly be omitted
from their inquiries, since, in the suitableness of that duty to
the various interests which are mired up with it, will in a great
measure depend the successful application of the principle.
Believing that no means are so influential in increasing con-
sumption, as those which are inherent in the utmost possible
freedom of trade, by means of which the wants and prefe-
rences of consumers are attended to with the greatest readi-
ness and facility, your Committee can see no reason to doubt
but that one fixed and uniform duty of 2s. per pound would
realize to the fullest extent the same amount of revenue as
that which can be looked for from the present scale of gra-
duated duties.
23. The fourth and last division of this inquiry is, how far
the scale of graduated duties, as compared with one uniform
rate, is calculated to promote the extension of the commerce
of the kingdom, in reference to the altered character which
our commercial intercourse with China may assume.
24. The commercial enterprise of this country will no doubt
be directed to every endeavour to introduce and extend the
consumption of British productions and manufactures amongst
the population of China; but however great may be the suc-
cess in opening new channels of intercourse, the attainment
of the benefits sought for to British commerce must depend
mainly upon the powers of interchange which the productions
of neighbouring districts may furnish, and looking to the
north-east coast, which appears to offer the greatest facilities
for extending commercial intercourse, tea is the article which,
being the growth of the immediate neighbourhood, must be-
come a very principle object of British merchants in any trade
which may be extended into that part of the Chinese empire.
It appears to your Committee to be of paramount importance
that the trade which may grow up in parts of China not at
this time accessible to the British flag, should have the protec-
tion and security of absolute certainty in the application of the
revenue laws of this country, since the variations in the scale
of graduated duties between any two of the enumerated
classes are sufficient on the one hand to entail ruin on any
speculation, while on the other the fair objects of trade would
be abundantly obtained. Such protection and security seems
to your Committee to be incompatible with any principle of
graduated duties made applicable to degrees of quality, which
cannot be intelligible, because they are not definable to the
parties whose interests are to be involved in the future decision.
Looking at the difficulty and uncertainty which are evidently
inseparable from any endeavour to establish a scale of gradua-
ted duties, which shall act with justice to the merchant and
with due security to the revenue, founded exclusively upon
relative and varying, yet closely approximating qualities of. the
same article ;--bearing in mind the very objectionable ten-
dency of the graduated duties now in force to raise in a high
degree the price of the lowest classes of tea without corres-
ponding increase to the revenue ; entertaining a confident
opinion that the interests of the revenue, the merchant and
the consumer will be best promoted by such fixed regulations
as shall induce the importation of the best qualities of tea,
and impose the least possible degree of restraint in conducting
the details of the trade ; and mindful of the importance of
timely and suitable enactments to protect and encourage any
extension of commercial dealings that may grow out of more
enlarged or more varied intercourse with the Chinese empire;
your committee are of opinion that it is expedient to esta-
blish one fixed rate of duty on all descriptions o tea imported
into the United Kingdom, instead of the duties imposed by
Act 3 and 4 William IV. c. 101.
18th July, 1834.