Amount of Indemnity for Yünnan Outrage to be paid by Chinese Government.

5. The amount of indemnity to be paid on account of the families of the officers and others killed in Yünnan; on account of the expenses which the Yünnan case has occasioned; and on account of claims of British merchants arising out of the action. of officers of the Chinese Government up to the commencement of the present year, Sir Thomas Wade takes upon himself to fix at 200,000 taels, payable on demand.

Regret to be expressed by China at Yünnan occurrence.

6. When the case is closed an Imperial letter will be written, expressing regret for what has occurred in Yünnan. The Mission bearing the Imperial letter will proceed to England immediately. Sir Thomas Wade is to be informed of the constitution of this Mission, for the information of his Government. The text of the Imperial letter is also to be communicated to Sir Thomas Wade by the Tsung-li Yamên.

SECTION II.-Official Intercourse.

Under this heading are included the conditions of intercourse between high officers in the capital and the provinces, and between Consular officers and Chinese officials at the ports; also the conduct of judicial proceedings in mixed cases.

1. In the Tsung-li Yamên's Memorial of the 28th September, 1875, the Prince of Kung and the Ministers stated their object in presenting it had not been simply the transaction of business in which Chinese and foreigners might be concerned; Missions abroad and the question of diplomatic intercourse lay equally within their prayer.

Code of Etiquette to be drawn up.

To the prevention of further misunderstanding upon the subject of intercourse and correspondence, the present conditions of both having caused complaint in the capital and in the provinces, it is agreed that the Tsung-li Yamên shall address a Circular to the Legations, inviting foreign Representatives to consider with them a code of etiquette, to the end that foreign officials in China, whether at the ports or elsewhere, may be treated with the same regard as is shown them when serving abroad in other countries, and as would be shown to Chinese Agents so serving abroad.

The fact that China is about to establish Missions and Consulates abroad renders an understanding on these points essential.

Punishment of Chinese for Criminal Acts against British

Subjects.

2. The British Treaty of 1858, Article XVI, lays down that Chinese subjects who may be guilty of any criminal act towards British subjects shall be arrested and punished by Chinese authorities according to the laws of China.

Trial and Punishment of British Subjects for Crimes against Chinese.

"British subjects who may commit any crime in China shall be tried and punished by the Consul, or any other public functionary authorized thereto, according to the laws of Great Britain.

"Justice shall be equitably and impartially administered on both sides."

The words "functionary authorized thereto" are, translated in the Chinese text, "British Government."

British Supreme Court and Chinese Mixed Court
at Shanghae.

In order to the fulfilment of its Treaty obligations, the British Government has established a Supreme Court at Shanghae, with a special code of rules, which it is now about to revise. The Chinese Government has established at Shanghae a Mixed Court, but the officer presiding over it, either from lack of power or dread of unpopularity, constantly fails to enforce his judgments.

Administration of Justice at Treaty Ports.

It is now understood that the Tsung-li Yamên will write a Circular to the Legations, inviting foreign Representatives at once to consider with the Tsung-li Yamên the measures needed for the more effective administration of justice at the ports open to trade.

Crimes affecting British Subjects.

3. It is agreed that, whenever a crime is committed affecting the person or property of a British subject, whether in the interior or at the open ports, the British Minister shall be free to send officers to the spot to be present at the investigation.

To the prevention of misunderstanding on this point, Sir Thomas Wade will write a note to the above effect, to which the Tsung-li Yamên will reply, affirming that this is the course of proceeding to be adhered to for the time to come.

Judicial Proceedings in Mixed Cases.

It is further understood that so long as the laws of the two countries differ from each other, there can be but one principle to guide judicial proceedings in mixed cases in China, namely, that the case is tried by the official of the defendant's nationality, the official of the plaintiff's nationality merely attending to watch the proceedings in the interests of justice. If the officer so attending be dissatisfied with the proceedings, it will be in his power to protest against them in detail. The law administered will be the law of the nationality of the officer trying the case. This is the meaning of the words "hui t'ung," indicating combined action in judicial proceedings in Article XVI of the Treaty of Tien-tsin, and this is the course to be respectively followed by the officers of either nationality.

SECTION III.-Trade.

Areas of Foreign Concessions exempt from Li-kin.-Opening of I-ch'ang, Wuhu, Wen-Chow, and Pakhoi to trade.-Residence of British Officers at Chung King to watch British Trade.

1. With reference to the area within which, according to the Treaties in force, li-kin ought not to be collected on foreign goods at the open ports, Sir Thomas Wade agrees to move his Government to allow the ground rented by foreigners (the so-called Concessions) at the different ports to be regarded as the area of exemption from li-kin; and the Government of China will thereupon allow I-ch'ang in the Province of Hu-Pei, Wu-hu in An-Hui, Wên-Chôw in Che-Kiang, and Pei-hai (Pakhoi) in Kwang-tung, to be added to the number of ports open to trade, and to become Consular stations. The British Government will, farther, be free to send officers to reside at Ch'ung King, to watch the conditions of British trade in SsuCh'uen. British merchants will not be allowed to reside at Ch'ung King, or to open establishments or warehouses there, so long as no steamers have access to the port. When steamers have succeeded in ascending the river so far, further arrangements can be taken into consideration.

Ta-tung, Ngan-Ching, Hu-Kou, Wu-sueh, Lu-chi-K'ou and ShaShih to be Ports of Call.-Use of Native Boats.

It is farther proposed as a measure of compromise that at certain points on the shore of the Great River, namely, Ta-t'ung, and Ngan-Ching, in the Province of An-Hui: HuK'ou, in Kiang-Si; Wu-suëh, Lu-chi-kou, and Sha-shih, in HuKuang; these being all places of trade in the interior, at which, as they are not open ports, foreign merchants are not

legally authorized to land or ship goods; steamers shall be allowed to touch for the purpose of landing or shipping passengers or goods, but in all instances by means of native boats only, and subject to the regulations in force affecting native trade.

Ports of Call.-Collection of Li-kin.—Non-residence of
Foreign Merchants.

Produce accompanied by a half-duty certificate may be shipped at such points by the steamers, but may not be landed by them for sale. And at all such points, except in the case of imports accompanied by a transit-duty certificate, or exports similarly certificated, which will be severally passed free of li-kin on exhibition of such certificates, li-kin will be duly collected on all goods whatever by the native authorities. Foreign merchants will not be authorized to reside or open houses of business or warehouses at the places enumerated as ports of call.

Foreign Settlement Areas.

2. At all ports opened to trade, whether by earlier or later agreement, at which no settlement area has been previously defined, it will be the duty of the British Consul, acting in concert with his colleagues, the Consuls of other Powers, to come to an understanding with the local authorities regarding the definition of the foreign Settlement area.

Duties and Li-kin on Opium.

3.* On opium, Sir Thomas Wade will move his Government to sanction an arrangement different from that affecting other imports. British merchants, when opium is brought into port, will be obliged to have it taken cognizance of by the Customs, and deposited in bond, either in a warehouse or a receiving hulk, until such time as there is a sale for it. The importer will then pay the Tariff duty upon it, and the purchasers the li-kin, in order to the prevention of the evasion of the duty. The amount of li-kin to be collected will be decided by the different Provincial Governments, according to the circumstances of each.

Transit-duty Certificates.-Exemptions.

4. The Chinese Government agrees that transit-duty certificates shall be framed under one rule at all ports, no

* To expire on termination of Additional Article of July 18, 1885.

difference being made in the conditions set forth therein; and that, so far as imports are concerned, the nationality of the person possessing and carrying these is immaterial. Native produce carried from an inland centre to a port of shipment, if bona fide intended for shipment to a foreign port, may be, by Treaty, certificated by the British subject interested, and exempted by payment of the half-duty from all charges demanded upon it en route. If produce be not the property of a British subject, or is being carried to a port not for exportation, it is not entitled to the exemption that would be secured it by the exhibition of a transit-duty certificate. The British Minister is prepared to agree with the Tsung-li Yamên upon rules that will secure the Chinese Government against abuse of the privilege as affecting produce.

Carriage of Imports Inland and of Native Produce purchased

Inland.

The words "nei ti," inland, in the clause of Article VII of the Rules appended to the Tariff, regarding carriage of imports inland, and of native produce purchased inland, apply as much to places on the sea-coasts and river shores, as to places in the interior not open to foreign trade; the Chinese Government having the right to make arrangements for the prevention of abuses thereat.

Drawbacks on Imports.-Time Limits.

5. Article XLV of the Treaty of 1858 prescribes no limit to the term within which a drawback may be claimed upon dutypaid imports. The British Minister agrees to a term of three years, after expiry of which no drawback shall be claimed.

Import and Li-kin Duties.

6. The foregoing stipulation, that certain ports are to be opened to foreign trade, and that landing and shipping of goods at six places on the Great River is to be sanctioned, shall be given affect to within six months after receipt of the Imperial Decree approving the Memorial of the Grand Secretary Li. The date for giving the effect to the stipulations affecting exemption of imports from li-kin taxation within the foreign Settlements, and the collection of li-kin upon opium by the Customs Inspectorate at the same time as the Tariff duty upon it, will be fixed as soon as the British Government has arrived at an understanding on the subject with other foreign Governments.