An Analysis of Salt Policy Reform and Central Fiscal Crisis in Late Qing Dynasty〔*〕

Li Lixia

(School of History and Culture Henan Normal University，Xinxiang Henan 453007)

Academic circles have made many research achievements about the review of salt problems in Qing Dynasty.The present researches mainly concentrate in the early，middle and late Qing Dynasty，the research concerned with the end of the Qing Dynasty is less.The researches mainly discussed the organization，system construction and some other aspects，which were difficult to answer the following questions:how did the central government at the end of Qing Dynasty adjust and control in the actual operation?How about the effects of its salt policy，minister of salt and its branches in fiscal activities?Obviously we can not solve the above problems only through the a-nalysis of“text”.It is needed to investigate the actual financial crisis in Qing Dynasty.So the thesis takes the Qing salt reform as the object of study，discussing its performance and functions in actual response to fiscal crisis with the view of how the central government and its branches at the end of Qing Dynasty responding to fiscal crisis and dealing with the relation between central government and local finance.

Ⅰ.Fiscal plight and financial power decentralization in late Qing Dynasty

The late Qing government was faced with severe financial difficulties.With the swelling of various reparations and exceptional expenditures，the financial power decentralized gradually.The changes of world gold and silver price ratio objectively aggravated the difficulties of the government.In response to the fiscal crisis，coupled with the adverse measures of imposing stamp tax，the government decided to overcome the present difficulties and regain its control of financial power starting with the salt policy reform.

1.Fiscal plight

The principle of balance of payments in Qing Dynasty was that“The national revenue and expenditure are to be budgeted according to “Jing”and “Zhi”.〔1〕“Jing”and“Zhi”means that the national revenue and expenditure are budgeted according to the fixed sum and scale.The defects of this principle lied in the lack of flexibility，with the revenue“exhibiting distinct characteristics of quota”，〔2〕with wartime military spending，social relief and other important items excluded in fiscal expenditure，and with relatively fixed revenue unable to cope with the very spending under special circumstances.〔3〕In late Qing Dynasty，apart from the expenditures like the royal family funds，soldier’s pay and provision，officials’salary，there are other exceptional expenditures such as wartime munitions，war reparations and foreign debt increasing gradually，with a huge amount of fiscal expenditure.According to the statistics，the fiscal expenditure of the 29th year(1903)and the 34th year(1908)during the reign of Guangxu emperor was 134.92 million taels and 237.00 million taels respectively;the fiscal expenditure of the 3rd year(1911)during the reign of Xuantong emperor was 338.65 million taels，〔4〕with rapid growth.While the revenue still mainly included feudal land tax，salt tax，tariff，miscellaneous levies，etc.The revenue of the 29th year(1903)and 34th year(1908)during the reign of Guangxu emperor was 104.92 and 234.80 million taels respectively;the revenue of the 3rd year(1911)during the reign of Xuantong emperor was 296.96 million taels.There seemed to be rapid growth in fiscal expenditure，while as a matter of fact，it could not make both ends meet，with an annual deficit of 41 million taels in the 3rd year(1911)during the reign of Xuantong emperor.〔5〕

With regard to this，means of raising taxes，imposing likin taxation，borrowing government bonds were taken to make up the deficiency in recurring revenue in order to make ends meet.But these measures were ineffective，which，by the end of the Qing Dynasty，the government had reached a stage of“complete emptiness in national fiscal reserve”.〔6〕As a consequence，the national fiscal policy shifted from“basing expenditures upon the revenue”to“budgeting the revenue according to expenditures”，〔7〕the reason of which not only included the increasing expenditures，but also had a lot to do with the delinquent remittance account of each province.〔8〕In late Qing Dynasty，the Remittance System was coerced to change into Apportion System.Before the year of Jiawu，the quota for each province was about 10 million taels，but thereafter，till the years during the reign of Xuantong emperor，50 million taels more were increased，which was 60 million taels in total，six times more than the former times，with the total sum of quota rising from three or four times(like Shandong province，Fujin province，Shanxi province and Hunan province)to ten times or more(Zhili province).〔9〕Each province expanded its financial power by taking advantage of this opportunity such as withholding national taxes，raising salt price arbitrarily，etc.on the pretence of raising fund，which resulted in financial disorder and a severe deficit in national treasury.In order to solve the financial difficulties，the government decided to carry out a reform commencing from the bulk revenue of salt tax in the hope of regaining the centralized fiscal power ownership.

In late Qing Dynasty，the world gold and silver price ratio fluctuated distinctly，with 30.5423 in the 32nd year during the reign of Guangxu emperor(1906)and 40.2281 in the first year during the reign of Xuantong emperor(1909)，〔10〕which stimulated Chinese silver outflow，with 18，677，868 taels，31，208，130 taels and 12，266，916 taels outflow in the 32nd(1906)，33rd(1907)and 34th year(1908)respectively during the reign of Guangxu emperor.〔11〕The inflow of foreign money and outflow of Chinese silver was tantamount to exchanging ebbing foreign money into pure Chinese silver，which objectively aggravated the financial plight of the late Qing government.

2.The financial power decentralization

“Salt tax accounts for the bulk part of national annual revenue，which is incomparable except Diding tax(apportioning the poll tax to feudal land tax)and tariff.”〔12〕According to George Jamieson，in the 19th year during the reign of Guangxu emperor(1893)，the total sum of the Qing government’s annual revenue was 88.979 million taels，among which the salt tax and salt Likin tax was 13.659 million taels，second to Diding tax(25.088 million taels)and tariff(22.989 million taels)，accounting for 15.35%of the government’s revenue.〔13〕Before the New Deal，the late Qing government had an annual revenue of 88.20 million taels，of which salt tax and salt Likin tax was 13.50 million taels，still remaining second to Diding tax(26.50 million taels)and tariff(with 23.80 million taels in customs tariff and 2.70 million taels in inland transit tax)as the bulk tax，making up 15.3%of the government’s annual revenue，〔14〕with the proportion of salt tax remaining stable.

But in late Qing Dynasty，the real power of salt administration was in the hands of the local governors，“the government depended on the local governors to collect taxes，which was long held by each dynasty，as with Qing Dynasty following the system of Ming...The sale of salt was done by using certificates for transporting taxed salts，and the people fed on the salt sold.Therefore，the local officials were appointed to be in charge of the sale of salt.〔15〕

As for this，Zeng Yangfeng also had the description that“although the Ministry of Revenue of Qing Dynasty was in charge of the salt administration，the real administrative power went into the hands of the ministers of each province.There were generally three main changes in the final settlement of establishing who was to hold the salt administrative power;first a sensor was dispatched specially to inspect the salt affairs，later a civil and military governor was to supervise concurrently，finally an institute for salt affairs was set，with a position established for a minister to govern.This is the growth and decline of political power between central and local authorities，caused by the current situation.Salt comptroller was also set up or cancelled according to the current situation till the establishment of an institute for salt affairs，after which came the discussion on whether to set up a salt governor but with no implementation at last.At that time，preparation of Constitutionalism began with regulating finance，which is the most important;adding that the salt affairs of each province previously varied from each other，therefore，an administrative outline was issued via the constitutional Compilation Bureau，saying that the salt administrative system concurrently being in the charge of Civil and Military governor of each province should be abolished and turned into the policy of direct jurisdiction;furthermore，it was regulated that salt officers should be compiled separately，being directly under the jurisdiction of the central government instead of being subordinate to Civil and Military governors;in addition，there should be direct administrative bodies to handle the salt affairs，that’s where the establishment of Supervision Salt Administrative Department stemmed from.Since the former central government had only the right to audit but administrative power，the so-called auditors did perfunctory work merely depending on the tax roll of each province presented.Such being the case with the salt policy，the central government had no choice but change.”〔16〕

From the 27th year(in 1901)to 32nd year(1906)during the reign of Guangxu emperor，the central government apportioned the mission of budgeting fiscal revenue and expenditure to the local authorities in order to expand the financial power in disguise.After the failure of Gangyi’s fiscal consolidation，the central government had to shift gears to take some more immediate measures，that is，imposing quota of the bulk expenditures beyond budget like reparations and foreign debts to the local governmen-ts，or apportioning increasing taxes to each province，which was a bold attempt to regain and reallocate the financial power.〔17〕

In the 32nd year(in 1906)during the reign of Guangxu emperor，the Ministry of Revenue proposed a decree on expanding its own budgetary authority and imposing restrictions on the force of the local fiscal institutions:“after that where there is the need of appropriation，the Ministry of Treasury is to be consulted to check whether there are any obstacles or not;before the appropriation，auditing should be done till a reply is got from the Ministry of Treasury.If not，not only should the appropriation be returned in the same amount，but the officials will be impeached by the Ministry of Treasury in real names so as to stress the importance of the national treasury reserve.”〔18〕

It was precisely because that salt tax was the bulk revenue of the government，adding“the malpractice of private smuggling is much severer than that of private trafficking.If the smugglers and patrolling soldiers colluded with each other，the amount of tax evasion and dodging will be countless.”〔19〕what’s more，the power of salt administration was decentralized.Therefore，the actions of regaining financial power started from reforming the salt policy.

Ⅱ.The reform measures and the controversy over the centralization of powers

1.The reform measures

The salt tax，one of the three most important pillars of the late Qing Dynasty’s fiscal revenue，levied for a huge amount but embezzled a large portion for a very long time，was the starting point of the fiscal consolidation in Late Qing Dynasty.In 26th April，the 25th year of the reign of the Guangxu Emperor(in 1899)，the cabinet published the guiding principle of the coming financial reform，“abolish obsoleted regulations;put an end to embezzlement;accurately account the land tax，salt tax，tariff and the inland transit tax.”〔20〕Sault tax is one of the most important rectification actions.Meanwhile when he was sent to the south for an inspection tour，he only went to the Jiangsu and Guangdong provinces，from which he only withdrew a little more than two million yuan to give back to the central financial government.〔21〕While the money that was corrupted was hardly touched，which show that there still exists a large amount of money that can be taken back from the local financial government.The purpose of the rectification actions in Guangxu twenty-five years(in 1899)is actually the rectification of the local financial government;which is an important step for the central government of the Qing Dynasty to take back financial powers of the local financial government and to solve the economic crisis.

In Guangxu thirty-two years(in 1906)in November，the censor Binglin Zhao made a request to formulate the budget and final accounts to consolidate fiscal finance.In Guangxu thirty-four years(1908)in July，all members of the advisory council of the constitutional compilation house suggested that the establishment of the constitution should be carried out year by year.And they set the procedure of clearing up finance:in the first year(in Guangxu thirty-four years)to promulgate the charter of clearing up finance;in the second year and to investigate the total financial expenses number and receipts of each province within a year;in the third year，check the total financial expenses number and receipts of each province within a year again to determine the charter of local tax and try to use the charter as a criteria for the budget and the final accounts.〔22〕Considering this，the government adds another minister of supervising the salt affairs to rectify the salt administration，with ZaiZe，the officer of weights and measures department to assist.ZaiZe’s opinions are as follows:he thought that the salt affairs accounts for a large proportion of national income.The conventional laws have been abolished in recent years，which end in a negative influence upon people at that time.While now I was in charge of the salt administration，I would abide strictly to the laws made by the Emperor，and take the need of people into consideration.〔23〕Besides，I would handle the matters and problems with the same standard.I would make the laws and rules clear and arrange it well on an overall level in order to carry it out thoroughly so that it could achieve a superb result.And I would cooperate with the officers of the weights and measures department，the division of labor is as follows:the check of the salt tax is up to the officers of the weights and measures department;〔24〕the personnel and administrational matters are charged by the Dean of the salt administration department;and the document matters are up to the supervision office.〔25〕If any bureau wants to launch a reformation should submit the related document to the supervision office to ask for approval.The settings of the salt administration are:controller，the assisted controller，secretary.〔26〕

In January 26th in the second year of the reign of the Xuantong Emperor，Statute in Supervise Salt policy enacted consisted of General Provisions，Division of powers，Duties of salt officials，Officials assessment，Reimbursement and Appropriations and Annex.〔27〕According to the statute，Salt Administration Minister governed the Salt Affairs nationwide，obviously intended to withdraw the local financial authority.

In the Statute，from Article fourth to Article ninth，the jurisdiction to grant appropriations，filing the salt tax revenue，appoint officials，deal with salt affairs，suppress corruption were clearly stipulated.〔28〕The purpose was to take back the decision of the personnel arrangements and financial powers to the Central Government.

The Salt Transportation Bureau was authorized to manage the production，transportation and sales of salt，the salt tax collection and the treasury business.All the activities that the Salt Transportation Bureau did were required to compile an annual report to be sent to the governor.〔29〕

The statute also stipulated the appointment of the officials，that the Director of the Salt Transportation Bureau should be selected by the salt affairs governor in the central government，which should be recorded by the Grand Council，〔30〕intended to ensure the loyalty of the officials.

The report of the salt tax revenue and the official’s assessment was organized as usual besides it is necessary to make two reports，one would be checked by the local governors and the other would be submitted to the salt affairs governor of the central government and the board of finance to be checked，〔31〕objectively strengthened the central government’s control over the local salt business.

All the salt affairs appropriation should be checked by the salt affairs governor before the Grand Council sent down to prevent the local government’s application without permission，〔32〕intending to control the local salt tax revenue expenditure.

Shen Daily said，“The Grand Council administrated the salt tax revenue，the appropriation，the submission，the assessment.The Grand Council and the salt affairs governor in the central government hold the power of official appointment，and must be asked for permissions for almost all the local reformation of the salt affairs by the local governors.”〔33〕

Statute in Supervise Salt policy stipulated the director of the Salt Transportation Bureau took directly responsibilities for the local salt affairs，who took orders to the salt affairs governor obeyed orders from the Grand Council.The step by step systems of administration strengthened the Centre Government’s control the salt tax authority.

2.The scramble for the leading power

In the late Qing Dynasty，the salt tax，an important part of fiscal revenue，was levied on not merely the regional sale but the cross-regional sale in most provinces.The latter part was left behind local for emergency needs.The Grand Council administrated the salt tax revenue，the appropriation，the submission，the assessment，which arouse strong opposition of the local governors and they submitted memorials to the Throne together.“The local governors were not satisfied with the Statute for it excessively weaken the local government’s control of the salt tax revenue，especially the flowing item，10，19，21，24，27.They，including the Dongsansheng governors Xiliang，the Zhili governor Kuilong Chen，the Liangguang governor Shuxun Yuan，the Yungui governor Jingxi Li，the Liangjiang governor Renjun Zhang，the Sichuan governor Erxun Zhao，the Shandong provincial governor Baoqi Sun，the Shanxi provincial governor Baoshuan Ding，the Fengtian provincial governor Dequan Cheng，the Zhejiang provincial Zengwen，communicated with each other and asked for the Political Affairs Bureau to submit a memorial to the emperor on 24th，hoping for the central government to reconsider the Statute.”〔34〕

After that，the local governor continued to submit memorials to the emperor op-posing the statute.The electric report opposing the statute arrived，“the Nanyang minister and Liangjiang governor Renjun Zhang head the list.”〔35〕Thus we can descry the local governors’opposed attitude against the statute.

Ⅲ.Development of government functions in the late Qing Dynasty

The salt policy reform in the late Qing Dynasty is the response of the government to the large-scale fiscal crisis;it aims to reflect the performance of the Qing government in the actual financial operation after new deal through a review of the process.Superficially，the various departments and organs of Qing government is the dominant players in the salt policy reform and during coping with the crisis，in fact，each provincial governor is the key factor in the salt tax reform，their attitude directly or indirectly determines the direction of the development of salt policy in the late Qing dynasty.

Facing the serious financial crisis of the late Qing Dynasty，the staple sources of government revenue—DeDing taxes and miscellaneous levies—has reached a proportion of about 40%，〔36〕plus the government has been discreet in tax increase，the Qing government did not dare to increase taxes any longer.Although tariff is second source of government revenue，but since the huge indemnities in year Jia Wu and Geng Chen，the Qing government began to borrow heavily abroad，and tariffs are used as a guarantee，the management power has fallen into the hands of foreigners.The Qing government hopes to resolve the crisis through tax reform，and enhance the control ability on economic matters.

The issue of salt tax has been a problem for a long time，the salt policy reform in the late Qing Dynasty directly affected the interests of local governors，naturally leding to their opposition，but because of the central fiscal dysfunction and devolution，they can do nothing in the face of the central and local fiscal mess“the state collecting taxes have been a long history，the current dynasty follows the system of Ming dynasty…According to lead sales，points to buy，that is the magistrate took charge.Although a salt road transport to the officials，they are set to be prior to the local governors.Now the state set the salt administrative office，which is led by the minister of Ze Gong，governors of each provinces have a refutation about this.Recently pleaded by the censor Hu Sijing，all say this matter invade governors’jurisdiction too much，as a result，ministry Ze intended to resign one day.Supervision of the country comfort and retain him，we are servants，and how can elder brother walk away，or still carefully handle things as before.So it seems that，the state will treat salt affairs carefully，since then，we people don’t have to be surprised and bewildered about salt reform and regulations made，but should just know this is a big end of the centralization of authority.”〔37〕

The salt harm is root，Ming salt attack due to heel，causing the businessman designed bank，a fraud without harm，not only controls have been poor.Plus private pin serious，long-standing abuse for a long time，“salt classes，the disadvantages of private pin mountain in the smugglers，and by the name of thought of anti smuggling conniving，gauge the disadvantages of official not investigate，to cover the profiteers heavy bag entrainment，smuggler clique swarms，can try to check，sent Yong dragoon，if the smuggler and watch each other word pass，profiteers relies on inferior to shield function，then Li class evasion will countless.”〔38〕After the government to set up the Salt Policy Institute，the administrative organ，the solid is independent，but in the reform policies，there is no planning.Only the governor with human rights，under the Beijing hospital，union financial power in the central，such as salt Department Charter of the cloud，the provinces are complex salt，both new and old，all monies，shall be borne by the salt minister nuclear Ming，advisory report degrees branch Hou dial，the provinces shall not tamper reform aim，that is to pay attention to this point.“Since November the establishment of Xuantong Salt Department，within to Xuantong two years November the abolition of salt hospital check，two years，in addition to change personnel，Wei nearly missing，there is no white salt for finishing.Although the rotating rotary waste，no results，but the early years of the Republic，the creation of the audit，and chief financial supervision to salt，also according to this.”〔39〕

In the late Qing Dynasty salt policy reform，the government function gradually expanded，its focus is no longer limited to political stability，and further to the local financial activities，to regulate and stabilize economy，and to centralized central financial power.In the process of its function expansion，the central financial institutions and traditional governors are two systems that run parallel，they scrambled in stabilizing the financial order and saving the economic crisis，and played different roles，but the central government failed in the contention for leadership and the response to financial crisis in the end.

〔1〕Cheng Hanzhang，Qing on finance book，south of the Five Ridges set，see He Changling，Collected Essays on Statecraft of Qing Dynasty，volume twenty-six，household registration one，twelfth year of Guangxu Emperor，proofread version by Si Bulou，p.656.

〔2〕He Ping，Study of the Tax Policy in Qing Dynasty:1644-1840，Beijing:China Social Sciences Press，1998，p.108.

〔3〕Shen Xuefeng，A Discourse of Changes in Scale and Structure of the Qing Dynasty Financial Revenue，Beijing Social Sciences，2002，issue 1，p.86.

〔4〕Li Lixia，Change in Salt Markup and Property Right Relations in Late Qing Dynasty，The Teaching of History(second half)，2005，issue 1，p.59.

〔5〕According to the income and expenditure figures of Xuantong emperor the third year.

〔6〕〔19〕〔Qing〕Zhu Shoupeng，Successive Record of East-China History(Guangxu)，Guangxu one hundred and eighty-four，the first year of Xuantong，Shanghai Integrated Books Inc，printing copy，pp.4819，3134-3135.

〔7〕〔8〕Chen Feng，The Policy and Structure Changes of the Qing Dynasty Government Expenditures，Jianghan Forum，2000，issue 5，pp.60，64.

〔9〕Peng Yuxin，the Central and Provincial Financial Relationship in Late Qing Dynasty，Journal of Social Sciences(Beijing)，1937，Vol 9，issue 1，pp.91-92.

〔10〕〔11〕Yang Duanliu，Monetary and Financial History of Qing Dynasty，Wuhan:Wuhan University press，2007，pp.281，248.

〔12〕The Reform of Salt Policy on China Today，The Eastern Miscellany，1905，Vol 2，issue 9，p.188.

〔13〕Translated by Lin Lezhi，Zhe Meisen，A Textual Research of China’s Revenue and Expenditures，23rd year of Guangxu emperor，printed edition of Shanghai Optical League，p.20，the proportion was calculated according to the income of the current year.

〔14〕Editor-in-chief of the Editorial Committee of materials on modern Chinese history series，China Customs and the Yihetuan Movement，Beijing:Zhonghua Book Company，1983，pp.64-65，the proportion was calculated according to the income of the current year.

〔15〕The Fact，Salt Administrative Office，Lize essays，1910，Vol 1，issue 3，p.91.

〔16〕Ceng Yangfeng，Chinese Salt History，Beijing:The Commercial Press，1984，p.124.

〔17〕Shen Xuefeng，The Study of Fiscal Expenditure Policy in Late Qing Dynasty，Beijing:China Renmin University press，2006，p.198.

〔18〕〔Qing〕DuanFang，The New Law of Guangxu Emperor，〔Qing〕Xuantong:Shanghai Commercial Press edition，p.913.

〔20〕〔Qing〕Zhu Shoupeng，Donghuaxulu(In the Reign of Emperor Guangxu)，Emperor Guangxu one hundred and fifty four，Shanghai:Shanghai integrated Books Inc，pp.31-34.

〔21〕Zhou Yumin，Jia Wu postwar financial research in Qing Dynasty(1894-1899)，Chinese economic history research，1989，Vol 4，p.98.

〔22〕Peng Yuxin，The financial relationship between central and provincial in the late Qing Dynasty，Journal of Social Sciences(Beijing)，1937，Vol 9，Issue 1，pp.105-106.

〔23〕Memorial to the throne after the Salt Department discussed salt affairs，Shen Daily(Shanghai Vision)，14/3/1910，p.26.

〔24〕Telegram one(Beijing)，Shen Daily(Shanghai Vision)，10/3/1910，pp.2-3.

〔25〕Mingshui，Chinese Current Salt Policy，Kouk Fong Po，1910，Vol 1，Issue 6，pp.54-55.

〔26〕 China Chronicle:Salt Policy and the The Advisory Council，Kouk Fong Po，1910，Vol 1，Issue 14，p.96.

〔27〕〔28〕〔29〕〔30〕〔31〕〔32〕The Statute in Supervise Salt Policy，The Beiyang Journal of law and Politics，1910，Vol 132，pp.1-9，1-2，3，4，7，7.

〔33〕Minster Zaize report the new salt policy，Shen Daily(Shanghai Vision)，11/3/1910，p.4.

〔34〕Detailed report about the local governors oppose the Salt Policy Bureau，Shen Daily(Shanghai Vision)，9/4/1910，pp.3-4.

〔35〕Again the local governors unite to oppose the Statute in Supervise Salt policy，Shen Daily(Shanghai Vision)，2/5/1910，p.5.

〔36〕In the Guangxu eighteen years(in 1892)it was 39.5%，in the nineteen years of Guangxu(1893)it was 40%，Guangxu twenty years(in 1894)to 40.3%，see Chen Feng“research into the fiscal and monetary policy in Qing Dynasty”，Wuhan University press，2008 edition，p.398;Guangxu twenty-six years(1900)33.6%，according to the editorial board China materials of modern China History Series Editor，Chinese customs and the Yihetuan Movement，Beijing:Zhonghua Book Company in 1983 edition，p.64-65 data calculation.

〔37〕The fact:salt at the Ministry，Lize essays，1910，Vol 1，phase third，p.91.

〔38〕〔Qing〕Zhu Shoupeng，Donghua continued record(Guangxu)，Guangxu one hundred and fiftyfour，Qing Xuantong first year Shanghai integrated Books Inc letterpress，pp.3134-3135.

〔39〕Ceng Yangfeng，Chinese salt history，Beijing:the Commercial Press，1984，pp.124-125.