19 DECEMBER 1846, Page 9

TbIE DUTIES ON TEA.

TO THE EDITOR OF THE SPECTATOR.

Liverpool, 10th December 1846.

Sut—The article on the duties on tea in your paper requires a reply, because the authorities quoted carry weight with the public, deservedly on all those sub- jects to which they have given sufficient attention: in the present instance, the recent development of the facts of the case may account for their not having thenx entirely before them. I believe I can meet the assumptions on which the reason- ings of" Economist" are founded. I would first, however, reply to the quota- tion from Mr. Senior- who, after speaking of a repeal of taxation on tea, says- " The price in China might possibly double, it probably would rise one-half. The rise would have a tendency to raise the rent of land and wages of labour in the tea- growing districts of China. It must be admitted, therefore, that both are kept down by the existence of the tax and that a portion of our duty on tea is in fact paid by the inhabitants of the tea-growing districts of China." I believe it would be admitted by Mr. Senior, and all political economists, that the wealth of nations is best promoted by the application of their labour and capital to those commodi- ties for the production of which they have the greatest advantages. Tea and long-cloths are both manufactured articles, in the cost of which labour is the principal item, and Chins and England countries so fully populated that it is only in each articles they can profitably trade. For the year ending the 30th Jane 1845, the deliveries of raw East India cot- ton at Canton averaged 30,000 bales per month; for last ,ear, ending 30th Julie 1846, they only averaged 21,500 bales per month; the diminution being accounted for by the low price and increased deliveries of manufactured goods; which con- firms the assertion of the Chinese, that the population employed in manufacturing were distressed by the low prices of our goods. The labour thus set at liberty would tend to prevent the Hie in its price, as the manufacture of tea would be thus substituted for that of cotton goods, because more suitable for the Chinese. The assertion that tea is only grown in one district of China is contrary to the best information obtainable. The different descriptions of tea are said to come from different districts; they come down at different times of the year. The price of some has been much more reduced than that of others, by the opening of the new ports, supposed to be near some of the districts; and whenever any description of tea has ruled at high prices from being ran upon, the supply of that description has always greatly increased, without any corresponding diminution in supply, or rise in price, of the other descriptions. In all the reasoning of " Economist," he loses sight of the fact that the Chinese are themselves large consumers of tea; and as it is the principal drink of all classes, with their enormous population, and the low prices it costs them, it may fairly be inferred that our consumption, under a heavy duty, is a very small proportion of the production.

" Economist" states that tea differs from coffee, because, simultaneously with the reduction of duty, the cost of production of the latter was reduced. He does not seem aware that tea is similarly circumstanced as regards its cost to the foreign buyer, owing to the abolition of the Hong moncpoly and the opening of the new ports. The effect of the latter on the prices in China cannot be stated, owing to the variety of qualities and absence of specific quotations of tea in China; but the study of an English tea-circular would show how much tea is lower than it was; and the statistics of silk, which are more simple, show the difference in circumstances clearly. For several years before the opening of Shanghai, the exports of silk from China only averaged 3,000 bales per annum, at prices equal to above 21s. per pound for fair quality, laid down here: they sprang up the first year after the opening to 12,000 bales, the second to 18,000 bales, and are esti- mated this year to be 16,000 bales; while the prices required by the Chinese were only equal to 16s. per pound laid down here for similar quality. "Economist" asks, if there was an increased demand for tea in China, "how much of the soil of China adapted to its culture could be withdrawn in that densely-populated country from the production of the first necessaries of life?" Is he aware that

China is surrounded by countries better calculated than she is for the production of articles of food requiring little labour and much land ? From those countries she already receives large supplies; and can any one believe that, under such circum- stances, if there is a profitable market for tea, the cultivation of provisions can, in a "densely-populated country," compete with an article of great comparative 'value from the quantity of labour it requires?

The comparison of an article like tea with the fancy vintages of the Continent

is almost too obviously unfair to deserve notice. Can any one doubt, that if the duty on common European wines were reduced so as to bring them within the reach of our labouring classes, and that their tastes were for such, a considerable supply might be obtained, without any permanent exorbitant rise in price? Yet even this would not be a fair comparison; the wine-growing districts of Europe bearing no proportion to those over which the tea-cultivation is supposed to extend in China.

Had " Economist " made himself master of the state of the trade with

China, he might have spared the imputation of "want of acquaintance with the science of international exchange." We have "supplied the Chinese with wrought goods at lower prices than they could supply themselves "—from "the abstraction of the precious metals" the commerce of the two countries has been "brought to a trade of barter "—prices have "fallen in China '—"an increased exportation of Chinese productions to England" has taken place: but the proportionate re- duction in the price of tea to the British consumer, and its natural consequence in increased consumption, has been interfered with by the exorbitant duty; and all that the merchants and manufacturers ask is a reduction in the duty propor- tionate to the reduction that has already taken place in the bonded price; being fully convinced that it has been proved as fallacious to suppose that we could "obtain a greater share than China of the increased productiveness of labour, caused by the international divisions of employment," as they would consider the attempt dishonourable, after having partly forced, partly persuaded the Chinese to adopt slow scale of duties, on the representation that it was for their advantage to do so. In reply to the distinction drawn by your correspondent between " traders " and "thinkers," I would merely remark, that a practical knowledge of facts may be no bad foundation for sound thinking, and may sometimes prevent parties from falling into such fallacies as the latter part of Economist's let- ter seems to me to contain; and which, I believe, Mr. Senior and Mr. Mill would be the last men to countenance.

The style of the above remarks will betray that I am less accustomed to com- position than to observation of the practical and economical bearings of the subject.

A MERCEI.ANT AND ECONOMIST.