Chapter 12

Revenue.Taels.42Land tax26,500,000Provincial duties1,600,000Provincial receipts (various)1,000,000Grain commutation3,100,000Salt gabelle13,500,000Li-kin16,000,000Native customs2,700,000Maritime customs:—General cargo17,000,000Foreign opium5,000,000Native opium1,800,000————Total88,200,000Expenditure.Taels.Provincial20,000,000Military and naval35,000,000Metropolitan10,000,000Bannermen (Manchu “soldiers”)1,380,000Palace1,100,000Customs3,600,000Legations1,000,000River works940,000Railways800,000Loans24,000,000Contingent reserve3,300,000————Total101,120,000

Revenue.

Expenditure.

A calculation of revenue from all sources published by the ShanghaiShen Paoin 1908, apparently derived from official sources, gave a total revenue of 105,000,000 taels, or about 15 million sterling. This sum is obviously less than the actual figures. In 1907 Mr H.B. Morse, commissioner of customs and statistical secretary in the inspectorate general of customs, drew up the following table based on the amounts presumed to be paid by the tax payer:—

Mr Morse adds that the grand total shown, taels 284,150,00043“is an obviously insufficient sum on which to maintain the fabric of government in an empire like China, but it has been reached by calculations based on a few known facts and ... is offered as throwing some light on a subject veiled in obscurity.”44

The service of the foreign debt, together with the pressure of other needs—such as the cost of education and the army—made more manifest than previously the chaos of the Chinese fiscal system. A scheme to reform the national finances was promulgated under an edict of the 11th of January 1909, but it did not appear to be of a practical character.

Sources of Revenue. I.Land Tax.—In China, as in most oriental countries, the land has from time immemorial been the mainstay of the revenue. In the early years of the present dynasty there was levied along with the land tax a poll tax on all adult males, but in 1712 the two were amalgamated, and the whole burden was thrown upon land, families not possessing land being thereafter exempted from taxation. At the same time it was decreed that the amount of the land tax as then fixed should be permanent and settled for all time coming. It would appear from the records that this promise has been kept as far as the central government has been concerned. In all its many financial difficulties it does not seem ever to have tried to increase the revenue by raising the land tax. The amount of tax leviable on each plot is entered on the title deed, and, once entered, it cannot be changed.45The tax on almost all lands is thus stated to be so much in silver and so much in rice, wheat or whatever the principal crop may be. Except in two provinces, however, the grain tax is now commuted and paid in silver. The exceptions are Kiang-su and Cheh-kiang, which still send forward their taxes in grain. The value of the grain forwarded (generally called tribute rice) is estimated at taels 6,500,000. The total collection in silver, as reported by the responsible officials, amounts in round numbers to taels 25,000,000. The total yield of the land tax, therefore, is taels 31,500,000, or say £4,725,000. It will readily be granted that for such a large country as China this is a very insignificant one. In India the land tax yields about £20,000,000, and China has undoubtedly a larger cultivated area, a larger population, and soil that is on the whole more fertile; but it is certain that this sum by no means represents the amounts actually paid by the cultivators. It is the sum which the various magistrates and collectors have to account for and remit in hard cash. But as nothing is allowed them for the costs of collection, they add on a percentage beforehand to cover the cost. This they usually do by declaring the taxes leviable not in silver, but in copper “cash”, which indeed is the only currency that circulates in country places, and by fixing the rate of exchange to suit themselves. Thus while the market rate is, say, 1500 cash to the tael, they declare by general proclamation that for tax-paying purposes cash will be received at the rate of 3500 or 4000 to the tael. Thus while the nominal land tax in silver remains the same it is in effect doubled or trebled, and, what is worse, no return is made or account required of the extra sums thus levied. Each magistrate or collector is in effect a farmer. The sum standing opposite the name of his district is the sum which he is bound to return under penalty of dismissal, but all sums which he can scrape together over and above are the perquisites of office less his necessary expenses. Custom, no doubt, sets bounds to his rapacity. If he went too far he would provoke a riot; but one may safely say there never is any reduction, what change can be effected being in the upward direction. According to the best information obtainable a moderate estimate of the sums actually paid by the cultivators would give two shillings per acre. This on an estimate of the area under cultivation should give for the eighteen provinces £19,000,000 as being actually levied, or more than four times what is returned.2.The Salt Duty.—The trade in salt is a government monopoly. Only licensed merchants are allowed to deal in it, and the import of foreign salt is forbidden by the treaties. For the purpose of salt administration China is divided into seven or eight main circuits, each of which has its own sources of production. Each circuit has carefully defined boundaries, and salt produced in one circuit is not allowed to be consigned into or sold in another. There are great differences in price between the several circuits, but the consumer is not allowed to buy in the cheapest market. He can only buy from the licensed merchants in his own circuit, who in turn are debarred from procuring supplies except at the depot to which they belong. Conveyance from one circuit to another is deemed smuggling, and subjects the article to confiscation.Duty is levied under two heads, the first being a duty proper, payable on the issue of salt from the depot, and the second being likin levied on transit or at the place of destination. The two together amount on an average to about taels 1.50 per picul of 133½ ℔ or 3s. 9d. per cwt. The total collection returned by the various salt collectorates amounts to taels 13,500,000 (£2,025,000) per annum. The total consumption of salt for all China is estimated at 25 million piculs, or nearly 1½ million tons, which is at the rate of 9 ℔ per annum per head of the population. If the above amount of taels 1.50 were uniformly levied and returned, the revenue would be 37½ million taels instead of 13½. In this calculation, however, no allowance is made for the cost of collection.3.Likin on General Merchandise.—By the term likin is meanta tax on inland trade levied while in transit from one district to another. It was originally a war tax imposed as a temporary measure to meet the military expenditure required by the T‘aip‘ing and Mahommedan rebellions of 1850-1870. It is now one of the permanent sources of income, but at the same time it is in form as objectionable as a tax can be, and is equally obnoxious to the native and to the foreign merchant. Tolls or barriers are erected at frequent intervals along all the principal routes of trade, whether by land or water, and a small levy is made at each on every conceivable article of commerce. The individual levy is small, but over a long transit it may amount to 15 or 20%. The objectionable feature is the frequent stoppages with overhauling of cargo and consequent delays. By treaty, foreign goods may commute all transit dues for a single payment of one-half the import tariff duty, but this stipulation is but indifferently observed. It must also be remembered, per contra, that dishonest foreign merchants will take out passes to covernative-ownedgoods. The difficulty in securing due observance of treaty rights lies in the fact that the likin revenue is claimed by the provincial authorities, and the transit dues when commuted belong to the central government, so that the former are interested in opposing the commutation by every means in their power. As a further means of neutralizing the commutation they have devised a new form of impost, viz. a terminal tax which is levied on the goods after the termination of the transit. The amount and frequency of likin taxation are fixed by provincial legislation—that is, by a proclamation of the governor. The levy is authorized in general terms by an imperial decree, but all details are left to the local authorities. The yield of this tax is estimated at taels 13,000,000 (£l,950,000), a sum which probably represents one-third of what is actually paid by the merchants, the balance being costs of collection.4.Imperial Maritime Customs.—The maritime customs is the one department of finance in China which is managed with probity and honesty, and this it owes to the fact that it is worked under foreign control. It collects all the duties leviable under the treaties on the foreign trade of China, and also all duties on the coasting trade so far as carried on by vessels of foreign build, whether Chinese or foreign owned. It does not control the trade in native craft, the so-called junk trade, the duties on which are still levied by the native custom-house officials. By arrangement between the British and Chinese governments the foreign customs levy at the port of entry a likin on Indian opium of taels 80 per chest, in addition to the tariff duty of taels 30. This levy frees the opium from any further duty on transit into the interior. The revenue of the maritime customs rose from taels 8,200,000 in 1865 to taels 35,111,000 in 1905.5.Native Customs,—The administration of the native customs continues to be similar to what prevailed in the maritime customs before the introduction of foreign supervision. Each collector is constituted a farmer, bound to account for a fixed minimum sum, but practically at liberty to retain all he may collect over and above. If he returns more he may claim certain honorary rewards as for extra diligence, but he generally manages to make out his accounts so as to show a small surplus, and no more. Only imperfect and fragmentary returns of the native collectorates have been published, but the total revenue accruing to the Chinese government from this source did not appear up to 1900 much to exceed two million taels (£300,000). In November 1901 native customs offices within 15 m. of a treaty port were placed under the control of the maritime customs, their revenues having been hypothecated for the service of the Boxer indemnity. The result was that the amount of the native customs collected by the commissioners of customs increased from taels 2,206,000 in 1902 to taels 3,699,000 in 1906.6.Duty on Native Opium.—The collection of the duty on opium is in the hands of the provincial officials, but they are required to rendera separate account of duty and likin collected on the drug, and to hold the sum at the disposal of the board of revenue at Peking. The annual import into China of Indian opium used to amount to about 50,000 chests, the exact amount of opium imported in 1904 being 54,750 piculs, on which the Chinese government received from duty and likin combined about 5½ million taels (£825,000). The total amount of native-grown opium was estimated in 1901 at about 400,000 chests (53,000,000 lb), and if this were taxed at taels 60 per chest, which in proportion to its price was a similar rate to that levied on Indian opium, it should give a revenue of 24 million taels. Compared with this the sums actually levied, or at least returned by the local officials as levied, were insignificant. The returns gave a total levy for all the eighteen provinces of only taels 2,200,000 (£330,000). The anti-opium smoking campaign initiated by the Chinese government in 1905 affected the revenue both by the decreased importation of the drug and the decrease in the area under poppy cultivation in China. In 1908 the opium likin revenue had fallen to taels 3,800,000.7.Miscellaneous.—Besides the main and regular sources of income, the provincial officials levy sums which must in the aggregate amount to a very large figure, but which hardly find a place in the returns. The principal are land transfer fees, pawnbrokers’ and other licences, duties on reed flats, commutation of corvée and personal services, &c. The fee on land transfers is 3%, and it could be shown, from a calculation based on the extent and value of the arable land and the probable number of sales, that this item alone ought to yield an annual return of between one and two millions sterling. Practically the whole of this is absorbed in office expenses. Under this heading should also be included certain items which though not deemed part of the regular revenue, have been so often resorted to that they cannot be left out of account. These are the sums derived from sale of office or of brevet rank, and the subscriptions and benevolences which under one plea or another the government succeeds in levying from the wealthy. Excluding these, the government is always ready to receive subscriptions, rewarding the donor with a grant of official rank entitling him to wear the appropriate “button.” The right is much sought after, and indeed there are very few Chinamen of any standing that are not thus decorated, for not only does the button confer social standing, but it gives the wearer certain very substantial advantages in case he should come into contact with the law courts. The minimum price for the lowest grade is taels 120 (£18), and more of course for higher grades. The proceeds of these sales go directly to the Peking government, and do not as a rule figure in the provincial returns. The total of the miscellaneous items accruing for the benefit of the government is estimated at taels 5,500,000.Expenditure.—In regard to expenditure a distinction has to be drawn between that portion of the revenue which is controlled by the central government, and that controlled by the several provincial authorities. As the provinces collect the revenue, and as the authorities there are held responsible for the peace, order and good government of their respective territories, it follows that the necessary expenses of the provinces form a sort of first charge on the revenue. (As the tables given show, the provinces spend the greater part of the revenue collected.) The board of revenue at Peking, which is charged with a general supervision of finance matters all over the empire, makes up at the end of the year a general estimate of the funds that will be required for imperial purposes during the ensuing year, and apportions the amount among the several provinces and the several collectorates in each province. The estimate is submitted to the emperor, and, when sanctioned, instructions are sent to all the viceroys and governors in that sense, who, in turn, pass them on to their subordinate officers. In ordinary times these demands do not materially vary from year to year, and long practice has created a sort of equilibrium between imperial and provincial demands. The remittances to the capital are, as a rule, forwarded with reasonable regularity, mostly in the form of hard cash. There is, however, a constant pull going on between Peking and the provinces—the former always asking for more, the latter resisting and pleading impecuniosity, yet generally able to find the amounts required. The expenses which the central government has to meet are:—(1) Imperial household; (2) pay of the Manchu garrison in and about Peking; (3) costs of the civil administration in the capital; (4) cost of the army so far as the expenses are not borne by the provinces; (5) naval expenses;46(6) foreign loans—interest and sinking fund. To meet all these charges the Peking government for several years up to 1900 drew on the provinces for about taels 20,000,000 (£3,000,000), including the value of the tribute rice, which goes to the support of the Manchu bannermen.47No estimates are furnished of the sums allowed under such heading. The imperial household appears to receive in silver about taels 1,500,000 (£225,000) but it draws besides large supplies in kind from the provinces,e.g.silks and satins from the imperial factories at Su-chow and Hangchow, porcelain from the Kiang-si potteries, &c., the cost of which is defrayed by the provinces. The imperial government has also at its disposal the revenue of the foreign customs. Prior to the Chino-Japanese war of 1894-95 this revenue, which, after allowing for the costs of collection, amounted to about 20,000,000 taels (£3,000,000), was nominally shared with the provinces in the proportion of four-tenths and six-tenths. The whole of the customs revenue is now pledged to foreign bondholders and absorbed by the service of the several loans. Besides supplying its own wants the imperial government has to provide for outlying portions of the empire which are unable to maintain themselves—(1) Manchuria, (2) Kan-suh and the central Asian dominion, (3) the south-western provinces of Yun-nan, Kwei-chow and Kwang-si. Manchuria, or, as it is termed, the north-east frontier defence, costs about taels 2,000,000 over and above its own resources. The central Asian territories constitute a drain on the imperial government of about taels 4,000,000 a year. This is met by subsidies from Sze-ch‘uen, Shan-si, Ho-nan and other wealthy provinces. Yun-nan, Kwei-chow and Kwang-si require aids aggregating taels 2,000,000 to keep things going.External Debt.—Prior to the war with Japan in 1894 the foreign debt of China was almost nil. A few trifling loans had been contracted at 7 and 8%, but they had been punctually paid off, and only a fraction of one remained. The expenses of the war, however, and the large indemnity of taels 230,000,000 (£34,500,000) which Japan exacted, forced China for the first time into the European market as a serious borrower. The sum of £6,635,000 was raised in 1894-1895 in four small loans at 6 or 7% interest. In 1895 aFranco-Russian loan of fr. 440,000,000 (£15,820,000) was raised in Paris. Two Anglo-German loans, each of £16,000,000 (one in 1896, the other in 1898) were raised through the Hong Kong and Shanghai Bank. The Franco-Russian loan bears 4% interest, the first Anglo-German 5%, the second 4½%. The foreign loans contracted up to 1900 amounted altogether to £54,455,000. The charges for interest and sinking fund, which amounted to over £3,000,000, were secured on the revenue of the maritime customs, and on the likin taxes of certain specified provinces. The net income from these two sources amounted to over taels 24,000,000, equivalent at existing rate of exchange to £3,400,000, which was amply sufficient.Between 1899 and 1907 (both years inclusive) £12,200,000 was raised on loan for railway purposes. The charges on the first loan—for £2,300,000—were secured on the revenue of the Imperial Northern railway, the interest being 5%. The same interest was secured on the other loans, save one for £1,000,000 in which the Hong Kong government was concerned, which bears 4% interest.The foreign debt also includes the indemnities exacted in 1901 by the powers for the Boxer outrages. These indemnities, secured on imperial revenue, are divided into five series amounting altogether to £67,500,000, the amount payable on these indemnities (at 4% interest) in 1907 being £2,824,425. The burden of meeting this amount was apportioned between the eighteen provinces—the sums allocated ranging from taels 2,500,000 for Kiang-su to taels 300,000 for Kwei-chow. In 1909 the grand total of China’s indebtedness exceeded £140,000,000 and the interest called for the payment of £7,427,450 in gold.Banks and Banking.—Native banks for purposes of inland exchange are to be found in most large cities. They are private banks using their own capital, and seldom receiving deposits from the public. The best known are the Shan-si banks, which have branches all over the empire. They work on a small capital, seldom over £50,000 each, and do a small but profitable business by selling their drafts on distant places. None of them issues notes, although they are not debarred from doing so by law. They lend money on personal security, but do not advance against shipments of goods. In some places there are small local banks, usually called cash shops, which issue paper notes for small sums and lend money out on personal security. The notes never reach more than a very limited local circulation, and pass current merely on the credit of the institution. There is no law regulating the formation of banks or the issue of notes.Pawnshopsoccupy a prominent position in the internal economy of China. They lend on deposit of personality at very high rates, 18 and 24%, and they receive deposits of money from the public, usually allowing 6 to 10%. They are the real banks of deposit of the country, and the better class enjoy good credit.Foreign Banksdo a large business at Shanghai and other treaty ports, and aGovernment Bankhas been established at Peking.Currency.—In the commercial treaty between Great Britain and China of 1902 China agreed to provide a uniform national coinage. An imperial decree of October 1908 commanded the introduction of a uniform tael currency; but another decree of May 1910 established a standard currency dollar weighing 72 candareens (a candareen is the 100th part of the tael ounce) and subsidiary coins of fixed values in decimal ratio. This decree properly enforced would introduce a much needed stability into the monetary system of China.The actual currency (1910) consists of (l)Silver, which may be either uncoined ingots passing current by weight, or imported coins, Mexican dollars and British dollars; and (2)Copper“cash,” which has no fixed relation to silver. The standard is silver, the unit being the Chinese ounce or tael, containing 565 grains. The tael is not a coin, but a weight. Its value in sterling consequently fluctuates with the value of silver; in 1870 it was worth about 6s. 8d., in 1907 it was worth 3s. 3d.48The name given in China to uncoined silver in current use is “sycee.” It is cast for convenience sake into ingots weighing one to 50 taels. Its average fineness is 916.66 per 1000. When foreign silver is imported, say into Shanghai, it can be converted into currency by a very simple process. The bars of silver are sent to a quasi-public office termed the “Kung K‘u,” or public valuers, and by them melted down and cast into ingots of the customary size. The fineness is estimated, and the premium or betterness, together with the exact weight, is marked in ink on each ingot. The whole process only occupies a few hours, and the silver is then ready to be put into use. The Kung K‘u is simply a local office appointed by the bankers of the place, and the weight and fineness are only good for that locality. The government takes no responsibility in the matter, but leaves merchants and bankers to adjust the currency as they please. For purposes of taxation and payment of duties there is a standard or treasury tael, which is about 10% heavier than the tael of commerce in use at Shanghai. Every large commercial centre has its own customary tael, the weight and therefore the value of which differ from that of every other. Silver dollars coined in Mexico, and British dollars coined in Bombay, also circulate freely at the open ports of trade and for some distance inland, passing at a little above their intrinsic value. Carolus dollars, introduced long ago and no longer coined, are retained in current use in several parts of the interior, chiefly the tea-growing districts. Being preferred by the people, and as the supply cannot be added to, they have reached a considerable premium above their intrinsic value. Provincial mints in Canton, Wuchang, and other places have issued silver coins of the same weight and touch as the Mexican dollar, but very few have gone into use. As they possess no privilege in debt-paying power over imported Mexican dollars there is no inducement for the people to take them up unless they can be had at a cheaper rate than the latter, and these are laid down at so small a cost above the intrinsic value that no profit is left to the mint. The coinage has in consequence been almost discontinued. Subsidiary coins, however, came largely into use, being issued by the local mints. One coin “the hundredth part of a dollar” proved very popular (the issue to the end of 1906 being computed at 12,500,000,000), but at rates corresponding closely to the intrinsic value of the metal in it. The only coin officially issued by the government—up to 1910—was the so-called coppercash. It is a small coin which by regulation should weigh 1/16 of a tael, and should contain 50 parts of copper, 40 of zinc, and 10 of lead or tin, and it should bear a fixed ratio to silver of 1000 cash to one tael of silver. In practice none of these conditions was observed. Being issued from a number of mints, mostly provincial, the standard was never uniform, and in many cases debased. Excessive issues lowered the value of the coins, and for many years the average exchange was 1600 or more per tael. The rise in copper led to the melting down of all the older and superior coins, and as for the same reason coining was suspended, the result was an appreciation of the “cash,” so that a tael in 1909 exchanged for about 1220 cash or about 35 to a penny English. Inasmuch as the “cash” bore no fixed relation to silver, and was, moreover, of no uniform composition, it formed a sort of mongrel standard of its own, varying with the volume in circulation.

Sources of Revenue. I.Land Tax.—In China, as in most oriental countries, the land has from time immemorial been the mainstay of the revenue. In the early years of the present dynasty there was levied along with the land tax a poll tax on all adult males, but in 1712 the two were amalgamated, and the whole burden was thrown upon land, families not possessing land being thereafter exempted from taxation. At the same time it was decreed that the amount of the land tax as then fixed should be permanent and settled for all time coming. It would appear from the records that this promise has been kept as far as the central government has been concerned. In all its many financial difficulties it does not seem ever to have tried to increase the revenue by raising the land tax. The amount of tax leviable on each plot is entered on the title deed, and, once entered, it cannot be changed.45The tax on almost all lands is thus stated to be so much in silver and so much in rice, wheat or whatever the principal crop may be. Except in two provinces, however, the grain tax is now commuted and paid in silver. The exceptions are Kiang-su and Cheh-kiang, which still send forward their taxes in grain. The value of the grain forwarded (generally called tribute rice) is estimated at taels 6,500,000. The total collection in silver, as reported by the responsible officials, amounts in round numbers to taels 25,000,000. The total yield of the land tax, therefore, is taels 31,500,000, or say £4,725,000. It will readily be granted that for such a large country as China this is a very insignificant one. In India the land tax yields about £20,000,000, and China has undoubtedly a larger cultivated area, a larger population, and soil that is on the whole more fertile; but it is certain that this sum by no means represents the amounts actually paid by the cultivators. It is the sum which the various magistrates and collectors have to account for and remit in hard cash. But as nothing is allowed them for the costs of collection, they add on a percentage beforehand to cover the cost. This they usually do by declaring the taxes leviable not in silver, but in copper “cash”, which indeed is the only currency that circulates in country places, and by fixing the rate of exchange to suit themselves. Thus while the market rate is, say, 1500 cash to the tael, they declare by general proclamation that for tax-paying purposes cash will be received at the rate of 3500 or 4000 to the tael. Thus while the nominal land tax in silver remains the same it is in effect doubled or trebled, and, what is worse, no return is made or account required of the extra sums thus levied. Each magistrate or collector is in effect a farmer. The sum standing opposite the name of his district is the sum which he is bound to return under penalty of dismissal, but all sums which he can scrape together over and above are the perquisites of office less his necessary expenses. Custom, no doubt, sets bounds to his rapacity. If he went too far he would provoke a riot; but one may safely say there never is any reduction, what change can be effected being in the upward direction. According to the best information obtainable a moderate estimate of the sums actually paid by the cultivators would give two shillings per acre. This on an estimate of the area under cultivation should give for the eighteen provinces £19,000,000 as being actually levied, or more than four times what is returned.

2.The Salt Duty.—The trade in salt is a government monopoly. Only licensed merchants are allowed to deal in it, and the import of foreign salt is forbidden by the treaties. For the purpose of salt administration China is divided into seven or eight main circuits, each of which has its own sources of production. Each circuit has carefully defined boundaries, and salt produced in one circuit is not allowed to be consigned into or sold in another. There are great differences in price between the several circuits, but the consumer is not allowed to buy in the cheapest market. He can only buy from the licensed merchants in his own circuit, who in turn are debarred from procuring supplies except at the depot to which they belong. Conveyance from one circuit to another is deemed smuggling, and subjects the article to confiscation.

Duty is levied under two heads, the first being a duty proper, payable on the issue of salt from the depot, and the second being likin levied on transit or at the place of destination. The two together amount on an average to about taels 1.50 per picul of 133½ ℔ or 3s. 9d. per cwt. The total collection returned by the various salt collectorates amounts to taels 13,500,000 (£2,025,000) per annum. The total consumption of salt for all China is estimated at 25 million piculs, or nearly 1½ million tons, which is at the rate of 9 ℔ per annum per head of the population. If the above amount of taels 1.50 were uniformly levied and returned, the revenue would be 37½ million taels instead of 13½. In this calculation, however, no allowance is made for the cost of collection.

3.Likin on General Merchandise.—By the term likin is meanta tax on inland trade levied while in transit from one district to another. It was originally a war tax imposed as a temporary measure to meet the military expenditure required by the T‘aip‘ing and Mahommedan rebellions of 1850-1870. It is now one of the permanent sources of income, but at the same time it is in form as objectionable as a tax can be, and is equally obnoxious to the native and to the foreign merchant. Tolls or barriers are erected at frequent intervals along all the principal routes of trade, whether by land or water, and a small levy is made at each on every conceivable article of commerce. The individual levy is small, but over a long transit it may amount to 15 or 20%. The objectionable feature is the frequent stoppages with overhauling of cargo and consequent delays. By treaty, foreign goods may commute all transit dues for a single payment of one-half the import tariff duty, but this stipulation is but indifferently observed. It must also be remembered, per contra, that dishonest foreign merchants will take out passes to covernative-ownedgoods. The difficulty in securing due observance of treaty rights lies in the fact that the likin revenue is claimed by the provincial authorities, and the transit dues when commuted belong to the central government, so that the former are interested in opposing the commutation by every means in their power. As a further means of neutralizing the commutation they have devised a new form of impost, viz. a terminal tax which is levied on the goods after the termination of the transit. The amount and frequency of likin taxation are fixed by provincial legislation—that is, by a proclamation of the governor. The levy is authorized in general terms by an imperial decree, but all details are left to the local authorities. The yield of this tax is estimated at taels 13,000,000 (£l,950,000), a sum which probably represents one-third of what is actually paid by the merchants, the balance being costs of collection.

4.Imperial Maritime Customs.—The maritime customs is the one department of finance in China which is managed with probity and honesty, and this it owes to the fact that it is worked under foreign control. It collects all the duties leviable under the treaties on the foreign trade of China, and also all duties on the coasting trade so far as carried on by vessels of foreign build, whether Chinese or foreign owned. It does not control the trade in native craft, the so-called junk trade, the duties on which are still levied by the native custom-house officials. By arrangement between the British and Chinese governments the foreign customs levy at the port of entry a likin on Indian opium of taels 80 per chest, in addition to the tariff duty of taels 30. This levy frees the opium from any further duty on transit into the interior. The revenue of the maritime customs rose from taels 8,200,000 in 1865 to taels 35,111,000 in 1905.

5.Native Customs,—The administration of the native customs continues to be similar to what prevailed in the maritime customs before the introduction of foreign supervision. Each collector is constituted a farmer, bound to account for a fixed minimum sum, but practically at liberty to retain all he may collect over and above. If he returns more he may claim certain honorary rewards as for extra diligence, but he generally manages to make out his accounts so as to show a small surplus, and no more. Only imperfect and fragmentary returns of the native collectorates have been published, but the total revenue accruing to the Chinese government from this source did not appear up to 1900 much to exceed two million taels (£300,000). In November 1901 native customs offices within 15 m. of a treaty port were placed under the control of the maritime customs, their revenues having been hypothecated for the service of the Boxer indemnity. The result was that the amount of the native customs collected by the commissioners of customs increased from taels 2,206,000 in 1902 to taels 3,699,000 in 1906.

6.Duty on Native Opium.—The collection of the duty on opium is in the hands of the provincial officials, but they are required to rendera separate account of duty and likin collected on the drug, and to hold the sum at the disposal of the board of revenue at Peking. The annual import into China of Indian opium used to amount to about 50,000 chests, the exact amount of opium imported in 1904 being 54,750 piculs, on which the Chinese government received from duty and likin combined about 5½ million taels (£825,000). The total amount of native-grown opium was estimated in 1901 at about 400,000 chests (53,000,000 lb), and if this were taxed at taels 60 per chest, which in proportion to its price was a similar rate to that levied on Indian opium, it should give a revenue of 24 million taels. Compared with this the sums actually levied, or at least returned by the local officials as levied, were insignificant. The returns gave a total levy for all the eighteen provinces of only taels 2,200,000 (£330,000). The anti-opium smoking campaign initiated by the Chinese government in 1905 affected the revenue both by the decreased importation of the drug and the decrease in the area under poppy cultivation in China. In 1908 the opium likin revenue had fallen to taels 3,800,000.

7.Miscellaneous.—Besides the main and regular sources of income, the provincial officials levy sums which must in the aggregate amount to a very large figure, but which hardly find a place in the returns. The principal are land transfer fees, pawnbrokers’ and other licences, duties on reed flats, commutation of corvée and personal services, &c. The fee on land transfers is 3%, and it could be shown, from a calculation based on the extent and value of the arable land and the probable number of sales, that this item alone ought to yield an annual return of between one and two millions sterling. Practically the whole of this is absorbed in office expenses. Under this heading should also be included certain items which though not deemed part of the regular revenue, have been so often resorted to that they cannot be left out of account. These are the sums derived from sale of office or of brevet rank, and the subscriptions and benevolences which under one plea or another the government succeeds in levying from the wealthy. Excluding these, the government is always ready to receive subscriptions, rewarding the donor with a grant of official rank entitling him to wear the appropriate “button.” The right is much sought after, and indeed there are very few Chinamen of any standing that are not thus decorated, for not only does the button confer social standing, but it gives the wearer certain very substantial advantages in case he should come into contact with the law courts. The minimum price for the lowest grade is taels 120 (£18), and more of course for higher grades. The proceeds of these sales go directly to the Peking government, and do not as a rule figure in the provincial returns. The total of the miscellaneous items accruing for the benefit of the government is estimated at taels 5,500,000.

Expenditure.—In regard to expenditure a distinction has to be drawn between that portion of the revenue which is controlled by the central government, and that controlled by the several provincial authorities. As the provinces collect the revenue, and as the authorities there are held responsible for the peace, order and good government of their respective territories, it follows that the necessary expenses of the provinces form a sort of first charge on the revenue. (As the tables given show, the provinces spend the greater part of the revenue collected.) The board of revenue at Peking, which is charged with a general supervision of finance matters all over the empire, makes up at the end of the year a general estimate of the funds that will be required for imperial purposes during the ensuing year, and apportions the amount among the several provinces and the several collectorates in each province. The estimate is submitted to the emperor, and, when sanctioned, instructions are sent to all the viceroys and governors in that sense, who, in turn, pass them on to their subordinate officers. In ordinary times these demands do not materially vary from year to year, and long practice has created a sort of equilibrium between imperial and provincial demands. The remittances to the capital are, as a rule, forwarded with reasonable regularity, mostly in the form of hard cash. There is, however, a constant pull going on between Peking and the provinces—the former always asking for more, the latter resisting and pleading impecuniosity, yet generally able to find the amounts required. The expenses which the central government has to meet are:—(1) Imperial household; (2) pay of the Manchu garrison in and about Peking; (3) costs of the civil administration in the capital; (4) cost of the army so far as the expenses are not borne by the provinces; (5) naval expenses;46(6) foreign loans—interest and sinking fund. To meet all these charges the Peking government for several years up to 1900 drew on the provinces for about taels 20,000,000 (£3,000,000), including the value of the tribute rice, which goes to the support of the Manchu bannermen.47No estimates are furnished of the sums allowed under such heading. The imperial household appears to receive in silver about taels 1,500,000 (£225,000) but it draws besides large supplies in kind from the provinces,e.g.silks and satins from the imperial factories at Su-chow and Hangchow, porcelain from the Kiang-si potteries, &c., the cost of which is defrayed by the provinces. The imperial government has also at its disposal the revenue of the foreign customs. Prior to the Chino-Japanese war of 1894-95 this revenue, which, after allowing for the costs of collection, amounted to about 20,000,000 taels (£3,000,000), was nominally shared with the provinces in the proportion of four-tenths and six-tenths. The whole of the customs revenue is now pledged to foreign bondholders and absorbed by the service of the several loans. Besides supplying its own wants the imperial government has to provide for outlying portions of the empire which are unable to maintain themselves—(1) Manchuria, (2) Kan-suh and the central Asian dominion, (3) the south-western provinces of Yun-nan, Kwei-chow and Kwang-si. Manchuria, or, as it is termed, the north-east frontier defence, costs about taels 2,000,000 over and above its own resources. The central Asian territories constitute a drain on the imperial government of about taels 4,000,000 a year. This is met by subsidies from Sze-ch‘uen, Shan-si, Ho-nan and other wealthy provinces. Yun-nan, Kwei-chow and Kwang-si require aids aggregating taels 2,000,000 to keep things going.

External Debt.—Prior to the war with Japan in 1894 the foreign debt of China was almost nil. A few trifling loans had been contracted at 7 and 8%, but they had been punctually paid off, and only a fraction of one remained. The expenses of the war, however, and the large indemnity of taels 230,000,000 (£34,500,000) which Japan exacted, forced China for the first time into the European market as a serious borrower. The sum of £6,635,000 was raised in 1894-1895 in four small loans at 6 or 7% interest. In 1895 aFranco-Russian loan of fr. 440,000,000 (£15,820,000) was raised in Paris. Two Anglo-German loans, each of £16,000,000 (one in 1896, the other in 1898) were raised through the Hong Kong and Shanghai Bank. The Franco-Russian loan bears 4% interest, the first Anglo-German 5%, the second 4½%. The foreign loans contracted up to 1900 amounted altogether to £54,455,000. The charges for interest and sinking fund, which amounted to over £3,000,000, were secured on the revenue of the maritime customs, and on the likin taxes of certain specified provinces. The net income from these two sources amounted to over taels 24,000,000, equivalent at existing rate of exchange to £3,400,000, which was amply sufficient.

Between 1899 and 1907 (both years inclusive) £12,200,000 was raised on loan for railway purposes. The charges on the first loan—for £2,300,000—were secured on the revenue of the Imperial Northern railway, the interest being 5%. The same interest was secured on the other loans, save one for £1,000,000 in which the Hong Kong government was concerned, which bears 4% interest.

The foreign debt also includes the indemnities exacted in 1901 by the powers for the Boxer outrages. These indemnities, secured on imperial revenue, are divided into five series amounting altogether to £67,500,000, the amount payable on these indemnities (at 4% interest) in 1907 being £2,824,425. The burden of meeting this amount was apportioned between the eighteen provinces—the sums allocated ranging from taels 2,500,000 for Kiang-su to taels 300,000 for Kwei-chow. In 1909 the grand total of China’s indebtedness exceeded £140,000,000 and the interest called for the payment of £7,427,450 in gold.

Banks and Banking.—Native banks for purposes of inland exchange are to be found in most large cities. They are private banks using their own capital, and seldom receiving deposits from the public. The best known are the Shan-si banks, which have branches all over the empire. They work on a small capital, seldom over £50,000 each, and do a small but profitable business by selling their drafts on distant places. None of them issues notes, although they are not debarred from doing so by law. They lend money on personal security, but do not advance against shipments of goods. In some places there are small local banks, usually called cash shops, which issue paper notes for small sums and lend money out on personal security. The notes never reach more than a very limited local circulation, and pass current merely on the credit of the institution. There is no law regulating the formation of banks or the issue of notes.Pawnshopsoccupy a prominent position in the internal economy of China. They lend on deposit of personality at very high rates, 18 and 24%, and they receive deposits of money from the public, usually allowing 6 to 10%. They are the real banks of deposit of the country, and the better class enjoy good credit.Foreign Banksdo a large business at Shanghai and other treaty ports, and aGovernment Bankhas been established at Peking.

Currency.—In the commercial treaty between Great Britain and China of 1902 China agreed to provide a uniform national coinage. An imperial decree of October 1908 commanded the introduction of a uniform tael currency; but another decree of May 1910 established a standard currency dollar weighing 72 candareens (a candareen is the 100th part of the tael ounce) and subsidiary coins of fixed values in decimal ratio. This decree properly enforced would introduce a much needed stability into the monetary system of China.

The actual currency (1910) consists of (l)Silver, which may be either uncoined ingots passing current by weight, or imported coins, Mexican dollars and British dollars; and (2)Copper“cash,” which has no fixed relation to silver. The standard is silver, the unit being the Chinese ounce or tael, containing 565 grains. The tael is not a coin, but a weight. Its value in sterling consequently fluctuates with the value of silver; in 1870 it was worth about 6s. 8d., in 1907 it was worth 3s. 3d.48The name given in China to uncoined silver in current use is “sycee.” It is cast for convenience sake into ingots weighing one to 50 taels. Its average fineness is 916.66 per 1000. When foreign silver is imported, say into Shanghai, it can be converted into currency by a very simple process. The bars of silver are sent to a quasi-public office termed the “Kung K‘u,” or public valuers, and by them melted down and cast into ingots of the customary size. The fineness is estimated, and the premium or betterness, together with the exact weight, is marked in ink on each ingot. The whole process only occupies a few hours, and the silver is then ready to be put into use. The Kung K‘u is simply a local office appointed by the bankers of the place, and the weight and fineness are only good for that locality. The government takes no responsibility in the matter, but leaves merchants and bankers to adjust the currency as they please. For purposes of taxation and payment of duties there is a standard or treasury tael, which is about 10% heavier than the tael of commerce in use at Shanghai. Every large commercial centre has its own customary tael, the weight and therefore the value of which differ from that of every other. Silver dollars coined in Mexico, and British dollars coined in Bombay, also circulate freely at the open ports of trade and for some distance inland, passing at a little above their intrinsic value. Carolus dollars, introduced long ago and no longer coined, are retained in current use in several parts of the interior, chiefly the tea-growing districts. Being preferred by the people, and as the supply cannot be added to, they have reached a considerable premium above their intrinsic value. Provincial mints in Canton, Wuchang, and other places have issued silver coins of the same weight and touch as the Mexican dollar, but very few have gone into use. As they possess no privilege in debt-paying power over imported Mexican dollars there is no inducement for the people to take them up unless they can be had at a cheaper rate than the latter, and these are laid down at so small a cost above the intrinsic value that no profit is left to the mint. The coinage has in consequence been almost discontinued. Subsidiary coins, however, came largely into use, being issued by the local mints. One coin “the hundredth part of a dollar” proved very popular (the issue to the end of 1906 being computed at 12,500,000,000), but at rates corresponding closely to the intrinsic value of the metal in it. The only coin officially issued by the government—up to 1910—was the so-called coppercash. It is a small coin which by regulation should weigh 1/16 of a tael, and should contain 50 parts of copper, 40 of zinc, and 10 of lead or tin, and it should bear a fixed ratio to silver of 1000 cash to one tael of silver. In practice none of these conditions was observed. Being issued from a number of mints, mostly provincial, the standard was never uniform, and in many cases debased. Excessive issues lowered the value of the coins, and for many years the average exchange was 1600 or more per tael. The rise in copper led to the melting down of all the older and superior coins, and as for the same reason coining was suspended, the result was an appreciation of the “cash,” so that a tael in 1909 exchanged for about 1220 cash or about 35 to a penny English. Inasmuch as the “cash” bore no fixed relation to silver, and was, moreover, of no uniform composition, it formed a sort of mongrel standard of its own, varying with the volume in circulation.

(G .J.; X.)

V. History

(A)—European Knowledge of China up to 1615.

China as known to the Ancients.—The spacious seat of ancient civilization which we call China has been distinguished by different appellations, according as it was reached by the southern sea-route or by the northern land-route traversing the longitude of Asia. In the former aspect the name has nearly always been some form of the nameSin, Chin, Sinoe, China. In the latter point of view the region in question was known to the ancients as the land of theSeres, to the middle ages as the empire ofCathay. The name ofChinhas been supposed (doubtfully) to be derived from the dynasty ofTs‘in, which a little more than two centuries before the Christian era enjoyed a vigorous existence, uniting all the Chinese provinces under its authority, and extending its conquests far beyond those limits to the south and the west. The mention of theChinasin ancient Sanskrit literature, both in the laws of Manu and in the Mahābhārata, has often been supposed to prove the application of the name long before the predominance of the Ts‘in dynasty. But the coupling of that name with theDaradas, still surviving as the people of Dardistan, on the Indus, suggests it as more probable that thoseChinaswere a kindred race of mountaineers, whose name asShinasin fact likewise remains applied to a branch of the Dard races. Whether theSinimof the prophet Isaiah should be interpreted of the Chinese is probably not susceptible of any decision; by the context it appears certainly to indicate a people of the extreme east or south. The name probably came to Europe through the Arabs, who made theChinaof the farther east intoSîn, and perhaps sometimes intoThîn. Hence theThînof the author of thePeriplus of the Erythraean Sea, who appears to be the first extant writer to employ the name in this form (i.e.assuming Max Müller’s view that he belongs to the 1st century); hence also theSinaeandThinaeof Ptolemy.

It has often indeed been denied that the Sinae of Ptolemy really represented the Chinese. But if we compare the statement of Marcianus of Heraclea (a mere condenser of Ptolemy), when he tells us that the “nations of the Sinae lie at the extremity of the habitable world, and adjoin the eastern Terra Incognita,” with that of Cosmas, who says, in speaking ofTzinista, a name of which no one can question the application to China, that “beyond this there is neither habitation nor navigation”—we cannot doubt the same region to be meant by both. The fundamental error of Ptolemy’s conception of the Indian Sea as a closed basin rendered itimpossiblebut that he should misplace the Chinese coast. But considering that the name ofSinhas come down among the Arabs from time immemorial as applied to the Chinese, considering that in the work of Ptolemy this name certainly represented the farthest known East, and considering how inaccurate are Ptolemy’s configurations and longitudes much nearer home, it seems almost as reasonable to deny the identity of his India with ours as to deny that his Sinae were Chinese.If we now turn to theSereswe find this name mentioned by classicauthors much more frequently and at an earlier date, for the passages of Eratosthenes (in Strabo), formerly supposed to speak of a parallel passing throughThinae—διά Θινῶν—are now known to read correctlyδι᾽Αθηνῶν. The nameSeresindeed is familiar to the Latin poets of the Augustan age, but always in a vague way, and usually with a general reference to Central Asia and the farther East. We find, however, that the first endeavours to assign more accurately the position of this people, which are those of Mela and Pliny, gravitate distinctly towards China in its northern aspect as the true ideal involved. Thus Mela describes the remotest east of Asia as occupied by the three races (proceeding from south to north), Indians, Seres and Scyths; just as in a general way we might still say that eastern Asia is occupied by the Indies, China and Tartary.Ptolemy first uses the names ofSeraandSerice, the former for the chief city, the latter for the country of the Seres, and as usual defines their position with a precision far beyond what his knowledge justified—the necessary result of his system. Yet even his definition of Serice is most consistent with the view that this name indicated the Chinese empire in its northern aspect, for he carries it eastward to the 180th degree of longitude, which is also, according to his calculation, in a lower latitude the eastern boundary of the Sinae.Ammianus Marcellinus devotes some paragraphs to a description of the Seres and their country, one passage of which is startling at first sight in its seeming allusion to the Great Wall, and in this sense it has been rashly interpreted by Lassen and by Reinaud. But Ammianus is merely converting Ptolemy’s dry tables into fine writing, and speaks only of an encircling rampart of mountains within which the spacious and happy valley of the Seres lies. It is true that Ptolemy makes his Serice extend westward to Imaus,i.e.to Pamir. But the Chinese empiredidso extend at that epoch, and we find Lieut. John Wood in 1838 speaking of “China” as lying immediately beyond Pamir, just as the Arabs of the 8th century spoke of the country beyond the Jaxartes as “Sin,” and as Ptolemy spoke of “Serice” as immediately beyond Imaus.If we fuse into one the ancient notices of the Seres and their country, omitting anomalous statements and manifest fables, the result will be somewhat as follows: “The region of the Seres is a vast and populous country, touching on the east the ocean and the limits of the habitable world, and extending west to Imaus and the confines of Bactria. The people are civilized, mild, just and frugal, eschewing collisions with their neighbours, and even shy of close intercourse, but not averse to dispose of their own products, of which raw silk is the staple, but which included also silk-stuffs, fine furs, and iron of remarkable quality.” That is manifestly a definition of the Chinese.That Greek and Roman knowledge of the true position of so remote a nation should at best have been somewhat hazy is nothing wonderful. And it is worthy of note that the view entertained by the ancient Chinese of the Roman empire and its inhabitants, under the name ofTa-thsin, had some striking points of analogy to those views of the Chinese which are indicated in the classical descriptions of the Seres. There can be no mistaking the fact that in this case also the great object was within the horizon of vision, yet the details ascribed to it are often far from being true characteristics, being only the accidents of its outer borders.

It has often indeed been denied that the Sinae of Ptolemy really represented the Chinese. But if we compare the statement of Marcianus of Heraclea (a mere condenser of Ptolemy), when he tells us that the “nations of the Sinae lie at the extremity of the habitable world, and adjoin the eastern Terra Incognita,” with that of Cosmas, who says, in speaking ofTzinista, a name of which no one can question the application to China, that “beyond this there is neither habitation nor navigation”—we cannot doubt the same region to be meant by both. The fundamental error of Ptolemy’s conception of the Indian Sea as a closed basin rendered itimpossiblebut that he should misplace the Chinese coast. But considering that the name ofSinhas come down among the Arabs from time immemorial as applied to the Chinese, considering that in the work of Ptolemy this name certainly represented the farthest known East, and considering how inaccurate are Ptolemy’s configurations and longitudes much nearer home, it seems almost as reasonable to deny the identity of his India with ours as to deny that his Sinae were Chinese.

If we now turn to theSereswe find this name mentioned by classicauthors much more frequently and at an earlier date, for the passages of Eratosthenes (in Strabo), formerly supposed to speak of a parallel passing throughThinae—διά Θινῶν—are now known to read correctlyδι᾽Αθηνῶν. The nameSeresindeed is familiar to the Latin poets of the Augustan age, but always in a vague way, and usually with a general reference to Central Asia and the farther East. We find, however, that the first endeavours to assign more accurately the position of this people, which are those of Mela and Pliny, gravitate distinctly towards China in its northern aspect as the true ideal involved. Thus Mela describes the remotest east of Asia as occupied by the three races (proceeding from south to north), Indians, Seres and Scyths; just as in a general way we might still say that eastern Asia is occupied by the Indies, China and Tartary.

Ptolemy first uses the names ofSeraandSerice, the former for the chief city, the latter for the country of the Seres, and as usual defines their position with a precision far beyond what his knowledge justified—the necessary result of his system. Yet even his definition of Serice is most consistent with the view that this name indicated the Chinese empire in its northern aspect, for he carries it eastward to the 180th degree of longitude, which is also, according to his calculation, in a lower latitude the eastern boundary of the Sinae.

Ammianus Marcellinus devotes some paragraphs to a description of the Seres and their country, one passage of which is startling at first sight in its seeming allusion to the Great Wall, and in this sense it has been rashly interpreted by Lassen and by Reinaud. But Ammianus is merely converting Ptolemy’s dry tables into fine writing, and speaks only of an encircling rampart of mountains within which the spacious and happy valley of the Seres lies. It is true that Ptolemy makes his Serice extend westward to Imaus,i.e.to Pamir. But the Chinese empiredidso extend at that epoch, and we find Lieut. John Wood in 1838 speaking of “China” as lying immediately beyond Pamir, just as the Arabs of the 8th century spoke of the country beyond the Jaxartes as “Sin,” and as Ptolemy spoke of “Serice” as immediately beyond Imaus.

If we fuse into one the ancient notices of the Seres and their country, omitting anomalous statements and manifest fables, the result will be somewhat as follows: “The region of the Seres is a vast and populous country, touching on the east the ocean and the limits of the habitable world, and extending west to Imaus and the confines of Bactria. The people are civilized, mild, just and frugal, eschewing collisions with their neighbours, and even shy of close intercourse, but not averse to dispose of their own products, of which raw silk is the staple, but which included also silk-stuffs, fine furs, and iron of remarkable quality.” That is manifestly a definition of the Chinese.

That Greek and Roman knowledge of the true position of so remote a nation should at best have been somewhat hazy is nothing wonderful. And it is worthy of note that the view entertained by the ancient Chinese of the Roman empire and its inhabitants, under the name ofTa-thsin, had some striking points of analogy to those views of the Chinese which are indicated in the classical descriptions of the Seres. There can be no mistaking the fact that in this case also the great object was within the horizon of vision, yet the details ascribed to it are often far from being true characteristics, being only the accidents of its outer borders.

The Medieval Cathay.—”Cathay” is the name by which the Chinese empire was known to medieval Europe, and it is in its original form (Kitai) that China is still known in Russia and to most of the nations of Central Asia. West of Russia this name has long ceased to be a geographical expression, but it is associated with a remarkable phase in the history of geography and commerce. The name first became known to Europe in the 13th century, when the vast conquests of Jenghiz Khan and his house drew a new and vivid attention to Asia. For some three centuries previously the northern provinces of China had been detached from indigenous rule, and subject to northern conquerors. The first of these foreign dynasties was of a race calledKhitánissuing from the basin of the Sungari river, and supposed (but doubtfully) to have been of the blood of the modern Tunguses. The rule of this race endured for two centuries and originated the application of the nameKhitâtorKhitâïto northern China. The dynasty itself, known in Chinese history asLiao, or “Iron,” disappeared from China 1123, but the name remained attached to the territory which they had ruled.

The Khitán were displaced by the Nüchih (NyûchéorChûrché) race, akin to the modern Manchus. These reigned, under the title ofKin, or “Golden,” till Jenghiz and his Mongols invaded them in turn. In 1234 the conquest of the Kin empire was completed, and the dynasty extinguished under Ogdai (Ogotai), the son and successor of Jenghiz Khan. Forty years later, in the reign of Kublai, grandson and ablest successor of Jenghiz, the Mongol rule was extended over southern China (1276), which till then had remained under a native dynasty, the Sung, holding its royal residence in a vast and splendid city, now known as Hang-chow, but then as Ling-nan, or more commonly asKing-sze,i.e.the court. The southern empire was usually called by the conquerorsMantzi(or as some of the old travellers write,Mangi), a name which western Asiatics seem to have identified withMâchîn(from the SanskritMahâchîn), one of the names by which China was known to the traders from Persian and Arabian ports.

The conquests of Jenghiz and his successors had spread not only over China and the adjoining East, but westward also over all northern Asia, Persia, Armenia, part of Asia Minor and Russia, threatening to deluge Christendom. Though the Mongol wave retired, as it seemed almost by an immediate act of Providence, when Europe lay at its feet, it had levelled or covered all political barriers from the frontier of Poland to the Yellow Sea, and when western Europe recovered from its alarm, Asia lay open, as never before or since, to the inspection of Christendom. Princes, envoys, priests—half-missionary, half-envoy—visited the court of the great khan in Mongolia; and besides these, the accidents of war, commerce or opportunity carried a variety of persons from various classes of human life into the depths of Asia. “’Tis worthy of the grateful remembrance of all Christian people,” says an able missionary friar of the next age (Ricold of Monte Croce), “that just at the time when God sent forth into the Eastern parts of the world the Tatars to slay and to be slain, He also sent into the West his faithful and blessed servants, Dominic and Francis, to enlighten, instruct and build up in the faith.” Whatever on the whole may be thought of the world’s debt to Dominic, it is to the two mendicant orders, but especially to the Franciscans, that we owe a vast amount of information about medieval Asia, and, among other things, the first mention ofCathay. Among the many strangers who reached Mongolia were (1245-1247) John de Plano Carpini and (1253) William of Rubruk (Rubruquis) in French Flanders, both Franciscan friars of high intelligence, who happily have left behind them reports of their observations.

Carpini, after mentioning the wars of Jenghiz against theKitai, goes on to speak of that people as follows: “Now theseKitaiare heathen men, and have a written character of their own... They seem, indeed, to be kindly and polished folks enough. They have no beard, and in character of countenance have a considerable resemblance to the Mongols” [areMongoloid, as our ethnologists would say], “but are not so broad in the face. They have a peculiar language. Their betters as craftsmen in every art practised by man are not to be found in the whole world. Their country is very rich in corn, in wine, in gold and silver, in silk, and in every kind of produce tending to the support of mankind.” The notice of Rubruk, shrewder and more graphic, runs thus: “Farther on is Great Cathay, which I take to be the country which was anciently called the Land of the Seres. For the best silk stuffs are still got from them... The sea lies between it and India. Those Cathayans are little fellows, speaking much through the nose, and, as is general with all those eastern people, their eyes are very narrow. They are first-rate artists in every kind, and their physicians have a thorough knowledge of the virtues of herbs, and an admirable skill in diagnosis by the pulse... The common money of Cathay consists of pieces of cotton-paper, about a palm in length and breadth, upon which certain lines are printed, resembling the seal of Mangu Khan. They do their writing with a pencil, such as painters paint with, and a single character of theirs comprehends several letters, so as to form a whole word.”Here we have not only what is probably the first European notice of paper-money, but apartialrecognition of the peculiarity of Chinese writing, and a perception that puts to shame the perverse boggling of later critics over the identity of these Cathayans with the Seres of classic fame.

Carpini, after mentioning the wars of Jenghiz against theKitai, goes on to speak of that people as follows: “Now theseKitaiare heathen men, and have a written character of their own... They seem, indeed, to be kindly and polished folks enough. They have no beard, and in character of countenance have a considerable resemblance to the Mongols” [areMongoloid, as our ethnologists would say], “but are not so broad in the face. They have a peculiar language. Their betters as craftsmen in every art practised by man are not to be found in the whole world. Their country is very rich in corn, in wine, in gold and silver, in silk, and in every kind of produce tending to the support of mankind.” The notice of Rubruk, shrewder and more graphic, runs thus: “Farther on is Great Cathay, which I take to be the country which was anciently called the Land of the Seres. For the best silk stuffs are still got from them... The sea lies between it and India. Those Cathayans are little fellows, speaking much through the nose, and, as is general with all those eastern people, their eyes are very narrow. They are first-rate artists in every kind, and their physicians have a thorough knowledge of the virtues of herbs, and an admirable skill in diagnosis by the pulse... The common money of Cathay consists of pieces of cotton-paper, about a palm in length and breadth, upon which certain lines are printed, resembling the seal of Mangu Khan. They do their writing with a pencil, such as painters paint with, and a single character of theirs comprehends several letters, so as to form a whole word.”

Here we have not only what is probably the first European notice of paper-money, but apartialrecognition of the peculiarity of Chinese writing, and a perception that puts to shame the perverse boggling of later critics over the identity of these Cathayans with the Seres of classic fame.

But though these travellers saw Cathayans in the bazaars in the great khan’s camps, the first actual visitors of Cathay itself were the Polo family, and it is to the book of Marco Polo’s recollections mainly that Cathay owed the growing familiarity of its name in Europe during the 14th and 15th centuries. It is, however, a great mistake to suppose, as has often been assumed, that the residence of the Polos in that country remained an isolated fact. They were but the pioneers of a very considerable intercourse, which endured till the decay of the Mongol dynasty in Cathay,i.e.for about half a century.

We have no evidence that either in the 13th or 14th century Cathayans,i.e.Chinese, ever reached Europe, but it is possible that some did, at least in the former century. For, during the campaigns of Hulagu in Persia (1256-1265), and the reigns of his successors, Chinese engineers were employed on the banks of the Tigris, and Chinese astrologers and physicians could be consulted at Tabriz. Many diplomatic communications passed between the Hulaguid Ilkhans and the princes of Christendom. The former, as the great khan’s liegemen, still received from him their seals of state; and two of their letters which survive in the archives of France exhibit the vermilion impressions of those seals in Chinese characters—perhaps affording the earliest specimen of that character which reached western Europe.

Just as the Polos were reaching their native city (1295), after an absence of a quarter of a century, the forerunner of a new series of travellers was entering southern China by way of the Indian seas. This was John of Monte Corvino, another Franciscan who, already some fifty years of age, was plunging single-handed into that great ocean of paganism to preach the gospel according to his lights. After years of uphill and solitary toil converts began to multiply; coadjutors joined him. The Papal See became cognizant of the harvest that was being reaped in the far East. It made Friar John archbishop in Cambaluc (or Peking), with patriarchal authority, and sent him batches of suffragan bishops and preachers of his own order. The Roman Church spread; churches and Minorite houses were established at Cambaluc, at Zayton or Tsuan-chow in Fu-kien, at Yang-chow and elsewhere; and the missions flourished under the smile of the great khan, as the Jesuit missions did for a time under the Manchu emperors three centuries and a half later. Archbishop John was followed to the grave, about 1328, by mourning multitudes of pagans and Christians alike. Several of the bishops and friars who served under him have left letters or other memoranda of their experience,e.g.Andrew, bishop of Zayton, John of Cora, afterwards archbishop of Sultania in Persia, and Odoric of Pordenone, whose fame as a pious traveller won from thevox populiat his funeral a beatification which the church was fain to seal. The only ecclesiastical narrative regarding Cathay, of which we are aware, subsequent to the time of Archbishop John, is that which has been gathered from the recollections of Giovanni de’ Marignolli, a Florentine Franciscan, who was sent by Pope Benedict XII. with a mission to the great khan, in return for one from that potentate which arrived at Avignon from Cathay in 1338, and who spent four years (1342-1346) at the court of Cambaluc as legate of the Holy See. These recollections are found dispersed incoherently over a chronicle of Bohemia which the traveller wrote by order of the emperor Charles IV., whose chaplain he was after his return.

But intercourse during the period in question was not confined to ecclesiastical channels. Commerce also grew up, and flourished for a time even along the vast line that stretches from Genoa and Florence to the marts of Cheh-kiang and Fu-kien. The record is very fragmentary and imperfect, but many circumstances and incidental notices show how frequently the remote East was reached by European traders in the first half of the 14th century—a state of things which it is very difficult to realize when we see how all those regions, when reopened to knowledge two centuries later, seemed to be discoveries as new as the empires which, about the same time, Cortes and Pizarro were conquering in the West.

This commercial intercourse probably began about 1310-1320. John of Monte Corvino, writing in 1305, says it was twelve years since he had heard any news from Europe; the only Western stranger who had arrived in all that time being a certain Lombard chirurgeon (probably one of thePatariniwho got hard measure at home in those days), who had spread the most incredible blasphemies, about the Roman Curia and the order of St Francis. Yet even on his first entrance to Cathay Friar John had been accompanied by one Master Peter of Lucolongo, whom he describes as a faithful Christian man and a great merchant, and who seems to have remained many years at Peking. The letter of Andrew, bishop of Zayton (1326), quotes the opinion of Genoese merchants at that port regarding a question of exchanges. Odoric, who was in Cathay about 1323-1327, refers for confirmation of the wonders which he related of the great city of Cansay (i.e.King-sze, or Hang-chow) to the many persons whom he had met at Venice since his return, who had themselves been witnesses of those marvels. And Marignolli, some twenty years later, found attached to one of the convents at Zayton, in Fu-kien, afondacoor factory for the accommodation of the Christian merchants.But by far the most distinct and notable evidence of the importance and frequency of European trade with Cathay, of which silk and silk goods formed the staple, is to be found in the commercial hand-book (c. 1340) of Francesco Balducci Pegolotti, a clerk and factor of the great Florentine house of the Bardi, which was brought to the ground about that time by its dealings with Edward III. of England. This book, called by its authorLibro di divisamenti di Paesi, is a sort of trade-guide, devoting successive chapters to the various ports and markets of his time, detailing the nature of imports and exports at each, the duties and exactions, the local customs of business, weights, measures and money. The first two chapters of this work contain instructions for the merchant proceeding to Cathay; and it is evident, from the terms used, that the road thither was not unfrequently travelled by European merchants, from whom Pegolotti had derived his information. The route which he describes lay by Azov, Astrakhan, Khiva, Otrar (on the Jaxartes), Almálik (Gulja in Ili), Kan-chow (in Kan-suh), and so to Hang-chow and Peking. Particulars are given as to the silver ingots which formed the currency of Tatary, and the paper-money of Cathay. That the ventures on this trade were not insignificant is plain from the example taken by the author to illustrate the question of expenses on the journey, which is that of a merchant investing in goods there to the amount of some £12,000 (i.e.in actual gold value, not as calculated by any fanciful and fallacious equation of values).Of the same remarkable phase of history that we are here considering we have also a number of notices by Mahommedan writers. The establishment of the Mongol dynasty in Persia, by which the great khan was acknowledged as lord paramount, led (as we have already noticed in part) to a good deal of intercourse. And some of the Persian historians, writing at Tabriz, under the patronage of the Mongol princes, have told us much about Cathay, especially Rashiduddin, the great minister and historian of the dynasty (died 1318). We have also in the book of the Moorish traveller Ibn Batuta, who visited China about 1347-1348, very many curious and in great part true notices, though it is not possible to give credence to the whole of this episode in his extensive travels.About the time of the traveller first named the throne of the degenerate descendants of Jenghiz began to totter to its fall, and we have no knowledge of any Frank visitor to Cathay in that age later than Marignolli; missions and merchants alike disappear from the field. We hear, indeed, once and again of ecclesiastics despatched from Avignon, but they go forth into the darkness, and are heard of no more. Islam, with all its jealousy and exclusiveness, had recovered its grasp over Central Asia; the Nestorian Christianity which once had prevailed so widely was vanishing, and the new rulers of China reverted to the old national policy, and held the foreigner at arm’s length. Night descended upon the farther East, covering Cathay with those cities of which the old travellers had told such marvels, Cambaluc and Cansay, Zayton and Chinkalan. And when the veil rose before the Portuguese and Spanish explorers of the 16th century, those names are heard no more. In their stead we have China, Peking, Hangchow, Chinchew, Canton. Not only were the old names forgotten, but the fact that those places had ever been known before was forgotten also. Gradually new missionaries went forth from Rome—Jesuits and Dominicans now; new converts were made, and new vicariates constituted; but the old Franciscan churches, and the Nestorianism with which they had battled, had alike been swallowed up in the ocean of pagan indifference. In time a wreck or two floated to the surface—a MS. Latin Bible or a piece of Catholic sculpture; and when the intelligent missionaries called Marco Polo to mind, and studied his story, one and another became convinced that Cathay and China were one.But for a long time all but a sagacious few continued to regard Cathay as a region distinct from any of the new-found Indies; whilst map-makers, well on into the 17th century, continued to represent it as a great country lying entirely to the north of China, and stretching to the Arctic Sea.It was Cathay, with its outlying island of Zipangu (Japan), that Columbus sought to reach by sailing westward, penetrated as he was by his intense conviction of the smallness of the earth, and of the vast extension of Asia eastward; and to the day of his death he was full of the imagination of the proximity of the domain of the great khan to the islands and coasts which he had discovered. And such imaginations are curiously embodied in some of the maps of the early 16th century, which intermingle on the same coast-line the new discoveries from Labrador to Brazil with the provinces and rivers of Marco Polo’s Cathay.Cathay had been the aim of the first voyage of the Cabots in 1496, and it continued to be the object of many adventurous voyages by English and Hollanders to the N.W. and N.E. till far on in the 16th century. At least one memorable land-journey also was made by Englishmen, of which the exploration of a trade-route to Cathay was a chief object—that in which Anthony Jenkinson and the two Johnsons reached Bokhara by way of Russia in 1558-1559. The country of which they collected notices at that city was still known to them only asCathay, and its great capital only asCambaluc.Cathay as a supposed separate entity may be considered to come to an end with the journey of Benedict Goës, the lay-Jesuit. This admirable person was, in 1603, despatched through Central Asia by his superiors in India with the specific object of determining whether the Cathay of old European writers and of modern Mahommedans was or was not a distinct region from that China of which parallel marvels had now for some time been recounted. Benedict, as one of his brethren pronounced his epitaph, “seeking Cathay found Heaven.” He died at Suchow, the frontier city of China, but not before he had ascertained that China and Cathay were the same. After the publication of the narrative of his journey (in theExpeditio Christiana apud Sinasof Trigault, 1615) inexcusable ignorance alone could continue to distinguish between them, but such ignorance lingered many years longer.

This commercial intercourse probably began about 1310-1320. John of Monte Corvino, writing in 1305, says it was twelve years since he had heard any news from Europe; the only Western stranger who had arrived in all that time being a certain Lombard chirurgeon (probably one of thePatariniwho got hard measure at home in those days), who had spread the most incredible blasphemies, about the Roman Curia and the order of St Francis. Yet even on his first entrance to Cathay Friar John had been accompanied by one Master Peter of Lucolongo, whom he describes as a faithful Christian man and a great merchant, and who seems to have remained many years at Peking. The letter of Andrew, bishop of Zayton (1326), quotes the opinion of Genoese merchants at that port regarding a question of exchanges. Odoric, who was in Cathay about 1323-1327, refers for confirmation of the wonders which he related of the great city of Cansay (i.e.King-sze, or Hang-chow) to the many persons whom he had met at Venice since his return, who had themselves been witnesses of those marvels. And Marignolli, some twenty years later, found attached to one of the convents at Zayton, in Fu-kien, afondacoor factory for the accommodation of the Christian merchants.

But by far the most distinct and notable evidence of the importance and frequency of European trade with Cathay, of which silk and silk goods formed the staple, is to be found in the commercial hand-book (c. 1340) of Francesco Balducci Pegolotti, a clerk and factor of the great Florentine house of the Bardi, which was brought to the ground about that time by its dealings with Edward III. of England. This book, called by its authorLibro di divisamenti di Paesi, is a sort of trade-guide, devoting successive chapters to the various ports and markets of his time, detailing the nature of imports and exports at each, the duties and exactions, the local customs of business, weights, measures and money. The first two chapters of this work contain instructions for the merchant proceeding to Cathay; and it is evident, from the terms used, that the road thither was not unfrequently travelled by European merchants, from whom Pegolotti had derived his information. The route which he describes lay by Azov, Astrakhan, Khiva, Otrar (on the Jaxartes), Almálik (Gulja in Ili), Kan-chow (in Kan-suh), and so to Hang-chow and Peking. Particulars are given as to the silver ingots which formed the currency of Tatary, and the paper-money of Cathay. That the ventures on this trade were not insignificant is plain from the example taken by the author to illustrate the question of expenses on the journey, which is that of a merchant investing in goods there to the amount of some £12,000 (i.e.in actual gold value, not as calculated by any fanciful and fallacious equation of values).

Of the same remarkable phase of history that we are here considering we have also a number of notices by Mahommedan writers. The establishment of the Mongol dynasty in Persia, by which the great khan was acknowledged as lord paramount, led (as we have already noticed in part) to a good deal of intercourse. And some of the Persian historians, writing at Tabriz, under the patronage of the Mongol princes, have told us much about Cathay, especially Rashiduddin, the great minister and historian of the dynasty (died 1318). We have also in the book of the Moorish traveller Ibn Batuta, who visited China about 1347-1348, very many curious and in great part true notices, though it is not possible to give credence to the whole of this episode in his extensive travels.

About the time of the traveller first named the throne of the degenerate descendants of Jenghiz began to totter to its fall, and we have no knowledge of any Frank visitor to Cathay in that age later than Marignolli; missions and merchants alike disappear from the field. We hear, indeed, once and again of ecclesiastics despatched from Avignon, but they go forth into the darkness, and are heard of no more. Islam, with all its jealousy and exclusiveness, had recovered its grasp over Central Asia; the Nestorian Christianity which once had prevailed so widely was vanishing, and the new rulers of China reverted to the old national policy, and held the foreigner at arm’s length. Night descended upon the farther East, covering Cathay with those cities of which the old travellers had told such marvels, Cambaluc and Cansay, Zayton and Chinkalan. And when the veil rose before the Portuguese and Spanish explorers of the 16th century, those names are heard no more. In their stead we have China, Peking, Hangchow, Chinchew, Canton. Not only were the old names forgotten, but the fact that those places had ever been known before was forgotten also. Gradually new missionaries went forth from Rome—Jesuits and Dominicans now; new converts were made, and new vicariates constituted; but the old Franciscan churches, and the Nestorianism with which they had battled, had alike been swallowed up in the ocean of pagan indifference. In time a wreck or two floated to the surface—a MS. Latin Bible or a piece of Catholic sculpture; and when the intelligent missionaries called Marco Polo to mind, and studied his story, one and another became convinced that Cathay and China were one.

But for a long time all but a sagacious few continued to regard Cathay as a region distinct from any of the new-found Indies; whilst map-makers, well on into the 17th century, continued to represent it as a great country lying entirely to the north of China, and stretching to the Arctic Sea.

It was Cathay, with its outlying island of Zipangu (Japan), that Columbus sought to reach by sailing westward, penetrated as he was by his intense conviction of the smallness of the earth, and of the vast extension of Asia eastward; and to the day of his death he was full of the imagination of the proximity of the domain of the great khan to the islands and coasts which he had discovered. And such imaginations are curiously embodied in some of the maps of the early 16th century, which intermingle on the same coast-line the new discoveries from Labrador to Brazil with the provinces and rivers of Marco Polo’s Cathay.

Cathay had been the aim of the first voyage of the Cabots in 1496, and it continued to be the object of many adventurous voyages by English and Hollanders to the N.W. and N.E. till far on in the 16th century. At least one memorable land-journey also was made by Englishmen, of which the exploration of a trade-route to Cathay was a chief object—that in which Anthony Jenkinson and the two Johnsons reached Bokhara by way of Russia in 1558-1559. The country of which they collected notices at that city was still known to them only asCathay, and its great capital only asCambaluc.

Cathay as a supposed separate entity may be considered to come to an end with the journey of Benedict Goës, the lay-Jesuit. This admirable person was, in 1603, despatched through Central Asia by his superiors in India with the specific object of determining whether the Cathay of old European writers and of modern Mahommedans was or was not a distinct region from that China of which parallel marvels had now for some time been recounted. Benedict, as one of his brethren pronounced his epitaph, “seeking Cathay found Heaven.” He died at Suchow, the frontier city of China, but not before he had ascertained that China and Cathay were the same. After the publication of the narrative of his journey (in theExpeditio Christiana apud Sinasof Trigault, 1615) inexcusable ignorance alone could continue to distinguish between them, but such ignorance lingered many years longer.

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