There is also another system in China, chiefly inherited from the time of the Taiping rebellion, namely the erection of internal customs barriers at various important points.  This plan is still adopted with the internal trade.  But merchants dealing with the interior and sending goods to or from a Treaty Port can escape internal customs by the payment of half the duty charged under the external tariff.  As this is generally less than the internal tariff charges, this provision favours foreign produce at the expense of that of China.  Of course the system of internal customs is bad, but it is traditional, and is defended on the ground that revenue is indispensable.  China offered to abolish internal customs in return for certain uniform increases in the import and export tariff, and Great Britain, Japan, and the United States consented.  But there were ten other Powers whose consent was necessary, and not all could be induced to agree.  So the old system remains in force, not chiefly through the fault of the Chinese central government.  It should be added that internal customs are collected by the provincial authorities, who usually intercept them and use them for private armies and civil war.  At the present time, the Central Government is not strong enough to stop these abuses.

The administration of the Customs is only partially in the hands of the Chinese.  By treaty, the Inspector-General, who is at the head of the service, must be British so long as our trade with China exceeds that of any other treaty State; and the appointment of all subordinate officials is in his hands.  In 1918 (the latest year for which I have the figures) there were 7,500 persons employed in the Customs, and of these 2,000 were non-Chinese.  The first Inspector-General was Sir Robert Hart, who, by the unanimous testimony of all parties, fulfilled his duties exceedingly well.  For the time being, there is much to be said for the present system.  The Chinese have the appointment of the Inspector-General, and can therefore choose a man who is sympathetic to their country.  Chinese officials are, as a rule, corrupt and indolent, so that control by foreigners is necessary in creating a modern bureaucracy.  So long as the foreign officials are responsible to the Chinese Government, not to foreign States, they fulfil a useful educative function, and help to prepare the way for the creation of an efficient Chinese State.  The problem for China is to secure practical and intellectual training from the white nations without becoming their slaves.  In dealing with this problem, the system adopted in the Customs has much to recommend it during the early stages.[30]