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and agreed to rules of trade, of which Article X provided that a uniform customs system should be enforced at every port, and that a high officer should be appointed by the Chinese government to superintend the foreign trade, and that this officer might select any British subject whom he might see fit to aid him in the administration of the customs revenue, and in a number of other matters connected with commerce and navigation. In 1914, just as the Great War was breaking, there were 1,357 foreigners in the Chinese customs service, representing twenty nationalities among a total of 7,441 employees.

"It is appropriate to observe that the present administrative system has given very great satisfaction in the matter of its efficiency and its fairness to the interests of all concerned, and in that connection I desire to say that, when the consideration of this tariff treaty was before the Subcommittee that prepared it, there was a general and I may say universal sentiment about the table from the Delegates representing the Nine Powers, that on account of the disturbed conditions in China to-day, unsettled governmental conditions, it was desirous, if it met with the approval of China, that there should be no disturbance at this time of the present administration of the customs system, and in response to that sentiment, which was discussed at the table, Dr. Koo, speaking for the Chinese Government, made a statement which I have been directed by the full committee to report to this Plenary Session, which is as follows:

"The Chinese Delegation has the honor to inform the Committee on the Far Eastern Questions of the Conference on the Limitation of Armament that the Chinese Government have no intention to effect any change which may disturb the present administration of the Chinese Maritime Customs."

"Speaking only for myself, desiring that in the not distant future China may have the opportunity when she has a parliamentary government established in China, representing her people, to exercise in every respect her full sovereignty, I hope the day may come in the not far distant future when China will regulate her own customs tariffs.

"But for the present, on account of the disturbed conditions in China, it is manifest that there must be an agreement and understanding between China and the other nations involved in her trade, and I want to say that this agreement as it is presented to the Conference as of to-day, meets the approbation and the approval of the representatives of the Chinese Government.

"Between the period of 1869 and 1901 a series of agreements were entered into which established special tariff privileges with various powers respecting movements of trade. This period culminated in a greatly involved state of affairs which led to the Boxer Revolution, out of which grew the doctrine of the Open Door.

"In 1902, in accordance with the terms of the Boxer protocol, a commission met at Shanghai to revise the traffic schedule. This revision applied only to the import duties and to the free list. Most of the duties were specific in character, and the remainder were at five per cent ad valorem. Nonenumerated goods were to pay 5 per cent ad valorem. All the duties remained subject to the restrictions of the earlier treaties, and those of the export duties which are still in force, are the specific duties contained in the schedule of 1858.

"In 1902, a treaty was concluded between China and Great Britain which laid a basis for the subsequent treaties between China and the United States and China and Japan in 1903, along similar lines. In the preamble of the British treaty, the Chinese Government undertakes to discard completely the system of levying likin and other dues on goods at the place of production, in transit and at destination.

"The British Government in turn consents to allow a surtax on foreign goods imported by British subjects, the amount of this surtax on imports not to exceed the equivalent of one and one-half times the existing import duty. The levy of this additional surtax being contingent upon the abolition of the likin has never gone into effect, but remains, nevertheless, the broad basis upon which the general schedules of Chinese tariff duties may be increased.

"It is clear from the foregoing brief summary that two measures were necessary in dealing with the Chinese customs, the first being that of the revising of the tariff schedules as they exist, so as to make them conform to the rate of five per cent effective, as provided by the treaty.

"Second, to pave the way for the abolition of the likin, which constitutes the basis of higher rates. In the meantime, however, it is recognized that the Chinese Government requires additional revenue, and in order that this may be supplied, a special conference is charged with the levying of a surtax of two and one-half per cent on ordinary duties, and surtax of five per cent on the luxuries, in addition to the established rate of five per cent effective.

"In 1896, an agreement was made between Russia and China for the construction of the Chinese Eastern Railway, and as a part of this agreement, merchandise entering China from Russia was allowed to pass the border at one-third less than the conventional customs duties. Afterwards, similar reductions were granted to France, Japan, and Great Britain, where the merchandise entered China across her land borders and not by sea.

"This discrimination was unfair to the other nations, and not the least important paragraph in the proposed treaty is the one that abolishes this discrimination entirely.

"I will not read the formal parts of the treaty, and merely read the articles that are substantive.

"The first article reads:

"article I

"The representatives of the Contracting Powers having adopted, on the fourth day of February, 1922, in the City of Washington, a Resolution, which is appended as an Annex to this Article, with respect to the revision of Chinese Customs duties, for the purpose of making such duties equivalent to an effective 5 per centum ad valorem, in accordance with existing treaties concluded by China with other nations, the Contracting Powers hereby confirm the said Resolution and undertake to accept the tariff rates fixed as a result of such revision. The said tariff rates shall become effective as soon as possible, but not earlier than two months after publication thereof.

"Then follows an Annex. It was intended originally for a separate resolution by the Conference to make the present rate effective. As I have stated, the rates of Chinese customs tariff were five per cent ad valorem, but they have been worked into specific rates, and China was not receiving under the old customs system the amount of revenue that she was entitled to under her treaty. But it was found when it was proposed to pass this merely as a resolution, that as these rates had been fixed in some of the treaties and specifically named, it was necessary to include the resolution in the treaty so that it would abolish the binding power of the treaties that had already been made and substitute this new provision in their stead. "The Annex reads as follows:

"annex

"With a view to providing additional revenue to meet the needs of the Chinese Government, the Powers represented at this Conference, namely, the United States of America, Belgium, the British Empire, China, France, Italy, Japan, The Netherlands, and Portugal agree:

"That the customs schedule of duties on imports into China adopted by the Tariff Revision Commission at Shanghai on December 19, 1918, shall forthwith be revised so that the rates of duty shall be equivalent to 5 per cent effective, as provided for in the several commercial treaties to which China is a party.

"A Revision Commission shall meet at Shanghai, at the earliest practicable date, to effect this revision forthwith and on the general lines of the last revision.

"This Commission shall be composed of representatives of the Powers above named and of representatives of any additional Powers having Governments at present recognized by the Powers represented at this Conference and who have treaties with China providing for a tariff on imports and exports not to exceed 5 per cent ad valorem and who desire to participate therein.

"The revision shall proceed as rapidly as possible with a view to its completion within four months from the date of the adoption of this Resolution by the Conference on the Limitation of Armament and Pacific and Far Eastern questions.

"The revised tariff shall become effective as soon as possible, but not earlier than two months after its publication by the Revision Commission.

"The Government of the United States, as convener of the present Conference, is requested forthwith to communicate the terms of this Resolution to the Government of Powers not represented at this Conference, but who participated in the Revision of 1918, aforesaid."

"Then the actual treaty provisions are incorporated, beginning with Article II.

"article II

"Immediate steps shall be taken, through a Special Conference, to prepare the way for the speedy abolition of likin and for the fulfillment of the other conditions laid down in Article VIII of the Treaty of September 5th, 1902, between Great Britain and China, in Articles IV and V of the Treaty of October 8, 1903, between the United States and China, and in Article I of the Supplementary Treaty of October 8, 1903, between Japan and China, with a view to levying the surtaxes provided for in those articles.

"The Special Conference shall be composed of representatives of the Signatory Powers, and of such other Powers as may desire to participate, and may adhere to the present Treaty, in accordance with the provisions of Article VIII, in sufficient time to allow their representatives to take part. It shall meet in China within three months after the coming into force of the present Treaty, on a day and at a place to be designated by the Chinese Government.

"article III

"The Special Conference provided for in Article II shall consider the interim provisions to be applied prior to the abolition of likin and the fulfillment of the other conditions laid down in the articles of the treaties mentioned in Article II; and it shall authorize the levying of a surtax on dutiable imports as from such date, for such purposes, and subject to such conditions as it may determine.

"The surtax shall be at a uniform rate of 1\ per centum ad valorem, provided, that in case of certain articles of luxury which, in the opinion of the Special Conference, can bear a greater increase without unduly impeding trade, the total surtax may be increased but may not exceed 5 per centum ad valorem.

"article IV

"Following the immediate revision of the customs schedule of duties on imports into China, mentioned in Article I, there shall be a further revision thereof to take effect at the expiration of four years following the completion of the aforesaid immediate revision, in order to ensure that the customs duties shall correspond to the ad valorem rates fixed by the Special Conference provided for in Article II.

"Following this further revision there shall be, for the same purpose, periodical revisions of the customs schedule of duties on imports into China every seven years, in lieu of the decennial revision authorized by existing treaties with China.

"In order to prevent delay, any revision made in pursuance of this article shall be effected in accordance with rules to be prescribed by the Special Conference provided for in Article II.

"article V

"In all matters relating to customs duties there shall be effective equality of treatment and of opportunity for all the Contracting Powers.

"article VI

"The principle of uniformity in the rates of customs duties levied at all the land and maritime frontiers of China is hereby recognized. The Special Conference provided for in Article II shall make arrangements to give practical effect to this principle; and it is authorized to make equitable adjustments in those cases in which a customs privilege to be abolished was granted in return for some local economic advantage.

"In the meantime, any increase in the rates of customs duties resulting from tariff revision, or any surtax hereafter imposed in pursuance of the present Treaty, shall be levied at a uniform rate ad valorem at all land and maritime frontiers of China.

"article VII

"The charge for transit passes shall be at the rate of 2\ per centum ad valorem until the arrangements provided for by Article II come into force.

"article VIII

"Powers not signatory to the present Treaty whose Governments are at present recognized by the Signatory Powers, and whose present treaties with China provide for a tariff on imports and exports not to exceed 5 per centum, ad valorem, shall be invited to adhere to the present Treaty.

"The Government of the United States undertakes to make the necessarycommunications for this purpose and to inform the Governments of the Contracting Powers of the replies received. Adherence by any Power shall become effective on receipt of notice thereof by the Government of the United States.

"article IX

"The provisions of the present Treaty shall override all stipulations of treaties between China and the respective Contracting Powers which are inconsistent therewith, other than stipulations according most-favored nation treatment."

* * *

"In conclusion, I can say that the adoption of this treaty and putting it into effect will in all probability double the existing revenues of China received from maritime and inland customs. I say in all human probability because the amount of revenue of course is governed by the amount of imports and exports coming into a country and going out of a country, and of course no one can predict with absolute certainty."

REDUCTION OF CHINESE MILITARY FORCES

In connection with the discussion of the Chinese revenue, and of the disturbed political conditions in China, the following resolution was adopted expressing the hope that the military forces of China might speedily be reduced:

"Whereas the Powers attending this Conference have been deeply impressed with the severe drain on the public revenue of China through the maintenance in various parts of the country, of military forces, excessive in number and controlled by the military chiefs of the provinces without coordination;

"And whereas the continued maintenance of these forces appears to be mainly responsible for China's present unsettled political conditions;

"And whereas it is felt that large and prompt reductions of these forces will not only advance the cause of China's political unity and economic development but will hasten her financial rehabilitation;

"Therefore, without any intention to interfere in the internal problems of China, but animated by the sincere desire to see China develop and maintain for herself an effective and stable government alike in her own interest and in the general interest of trade;

"And being inspired by the spirit of this Conference whose aim is to reduce, through the limitation of armament, the enormous disbursements which manifestly constitute the greater part of the encumbrance upon enterprise and national prosperity:

"It is resolved: That this Conference express to China the earnest hope that immediate and effective steps may be taken by the Chinese Government to reduce the aforesaid military forces and expenditures."

EXISTING COMMITMENTS

In order to insure complete information as to all commitments relating to China and also to provide in the future for suitable publicity, in regard to

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