134      FOEEIGN  EIGHTS  AND  INTEEESTS  IN  CHINA

Shimonoseki  treaty  in  1895  they  have  been  given  the  right  of
manufacturing  any  kind  of  goods  in  the  treaty  ports,  subject  only
to  the  same  conditions  as  the  producers  of  native  manufactured
goods  in  China.  Everywhere  they  are  withdrawn  from  Chinese
control,  and  are  placed  under  their  own  consuls.  But  their  mer-
chandise can  be  moved  only  in  accordance  with  Chinese  customs
regulations,  and  ships  must  anchor  in  accordance  with  harbor  rules
and  directions  of  the  Chinese  harbor  master.
Mr.  Morse  writes  as  follows :

He  (the  merchant)  is  privileged  to  rent  or  build  his  own
premises,  subject  only  to  the  condition  that  they  shall  be  at  one
of  the  treaty  ports  .  .  .  usually  within  a  circumscribed  area  at
those  ports.  .  ..
The  tax  (on  his  goods)  is  strictly  limited  to  the  rates,  based  on
a  uniform  five  per  cent,  levy,  specified  in  a  revenue  (non-protec-
tive) tariff,  which  forms  an  integral  part  of  the  treaty  under
which  he  lives  and  trades.  From  the  inland  taxation,  too,  which
presses  so  heavily  on  Chinese  traders  who  are  subject  to  the  levy
of  likin,  his  goods  are  exempted  by  payment  of  "  transit  dues,"  not
exceeding  a  nominal  two  and  one-half  per  cent,  ad  valorem.
No  Chinese  authority  has  a  right  to  claim  any  municipal  taxes
from  foreign  premises ;  and  within  the  "  areas  reserved  for  foreign
residence  and  trade,"  all  taxes  levied  are  solely  for  the  benefit  of
such  reserved  area.  The  foreign  resident  is  equally  free  from  the
incidence  of  benevolence,  or  from  the  necessity  of  contributing  to
public  charities  and  patriotic  funds,  or  from  inducement  to  buy
official  honours  and  titles,  to  all  of  which  the  Chinese  merchant  is
liable.
