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INTRODUCTION

And so it is with our past. It is a labour in vain to attempt to recapture it: all the efforts of the intellect must prove futile. The past is hidden somewhere outside the realm, beyond the reach of the intellect, in some material object (in the sensation which that material object will give us) of which we have no inkling. And it depends on chance whether or not we come upon this object before we ourselves must die. —MARCEL PROUST, SWANN’S WAY

When I walked around Old Shanghai for the first time in 1986, its buildings seemed a ruin from a bygone age. The villas, banks, hotels, shopping centers, entertainment halls, bars, and clubs that had made Shanghai the City of the Neon Lights in the first half of the twentieth century were still around. But they were in a state of disrepair. Window frames were rotting, plaster work was crumbling, paint was peeling off, and roof tiles were broken. In the 1930s, world stars like Noel Coward and G. B. Shaw stayed in hotels that were the height of luxury; rats disturbed our sleep in the mid-1980s. Then, the Shanghai rich lived in comfortable country-housestyle mansions. After 1949, they were divided into small apartments, with one family having just one room and shared kitchens and toilets. Rather than a playground for foreign adventurers, Shanghai became a dull, dusty, gray, and overcrowded place, with the jazz band of the Peace Hotel, some of whose members had first played there in the 1930s and 1940s, providing rare night-time entertainment.

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Even in the mid-1980s, after Deng Xiaoping’s reforms had already begun, Shanghai’s decrepitude suggested that those who argued that the foreign influence had been ephemeral at best and that the fundamental forces shaping China were to be found in the countryside were right.1 The Communists had won the battle for China by mobilizing the peasantry, responding to changes in China itself. After 1949, they had sent all Westerners packing, except for a few fellow travelers and Soviet advisors housed in the Friendship Hotel in Beijing, and the latter were dispatched home soon, too. Symbolizing the change, the Hongkong and Shanghai Bank building on the Shanghai Bund had been taken over by the Chinese Communist Party’s Shanghai municipal government. During the Cultural Revolution, the bells of the Shanghai Custom House no longer tolled the Big Ben chime, as they did when it opened in 1927, but the Maoist “The East Is Red.” Twenty-five years later, this narrative of the emergence of present-day China, focusing on rural revolution, can no longer be sustained. The past is back, in force, including its urban and foreign aspects. The Big Ben chime can once again be heard from the Shanghai Custom House, even if only dimly because of the noise of the traffic. The Hongkong and Shanghai Bank building on the Bund again houses a bank, the Shanghai Pudong Development Bank. The city once more is a meeting ground for businessmen, bankers, writers, artists, academics, lawyers, and tourists from Asia, the Middle East, Africa, Europe, and the United States. It again stages major sports events and pop concerts, attracting huge crowds, as the Shanghai race course did in earlier days, with the wealthy betting on fast Mongolian ponies and the poor, on dogs. The city’s foreign past is no longer decried as a source of shame but is explored with fascinated interest. Coffee-table books about its pre-1949 history and reprints of old Shanghai maps are crammed into book shops. Waitresses in Qipao dresses serve food in restaurants built in late Qing and Republican architectural styles. Businesses, shops, and banks parade their pre-1949 history. China’s current Customs Service has reclaimed its pre-1949 past with pride. What is true for Shanghai is also the case for Guangzhou, Tianjin, Wuhan, Xiamen, Ningbo, Tianjin, Dalian, and Chongqing, cities that thrived on contact with foreign countries during the second half of the nineteenth and the first part of the twentieth century and that have again become prominent, even if it is now the airplane rather than the steamship that connects them.

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This study focuses on the Chinese Maritime Customs Service, which emerged out of one violent epoch, the Taiping Rebellion from 1850 to 1864, and came to an end in another, that of World War II and the 1949 Communist conquest of China. In this century, the Customs Service was a key institution both on and off the China coast. Initially, its task was merely to assess—not even to collect—duties on cargo arriving in foreign steamships. But it soon accumulated other functions and became much more than just a customs agency. The Service built lighthouses, placed buoys, erected beacons, and managed China’s ports, thus facilitating the rapid expansion of China’s foreign trade. It funded China’s diplomatic missions abroad and put together China’s contributions to international exhibitions and world fairs, linking China into a new world of diplomacy based on sovereign nation-states and transnational institutions. It collected meteorological data to facilitate weather forecasting. It supervised the Translators College, which trained China’s diplomats, providing them with a liberal education, and translated Western works on natural science, political economy, and law. It helped China acquire a modern navy, several times. From 1895, it became deeply involved in the management of China’s foreign loans. It intervened in China’s diplomatic affairs, including during the Boxer Rebellion, when it helped prevent the partition of China. From 1911, it took over the actual collection of customs duties, which already for two decades had accounted for one-third of all revenue available to Beijing, and it would continue to do so until the outbreak of the War of Resistance in 1937. From 1914, the head of the Customs Service, the Inspector General (IG), was ex officio in charge of China’s domestic bond issues. In the 1930s, the Service became responsible for enforcing the Nationalists’ high-tariff policies, which it did by building a Preventive Fleet of some seventy vessels and policing a single integrated coastline. The Customs Service, in short, was one of the most, if not the most, powerful bureaucracies operating in China between the Taiping Rebellion and the Communist Revolution, and the only one that did so uninterruptedly and across most of China. Maritime Custom Houses, despite their name, could be found deep in China’s interior, even in landlocked Urumqi in Xinjiang—central Asia, really—and in the Himalayas. It proved durable, surviving the end of bureaucratic monarchical rule in 1912, the civil wars of the early republic, the rise of the Nationalists in the late 1920s, and even, just about, the Sino-Japanese War.

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The Customs Service was institutionally odd: formally, it was always an agency of the Chinese state; the Inspector General and his staff were Chinese officials and reported to a Chinese superior. But the IG—British until 1943, when an American was appointed—had sole control over the Customs Service. It facilitated trade and helped give rise to modern cities like Shanghai, where people and commodities from diverse origins were brought together into a new configuration. The senior staff of the Customs Service was foreign, drawn from all the countries that traded with China, in rough proportion to the importance of a country’s trade with China. The Service also employed many Chinese, initially only in inferior positions, but from the 1920s, when foreign hiring ended, increasingly in more senior posts as well. Its cosmopolitan nature caused awkward situations. When the Sino-Japanese War broke out in 1937, the Japanese chief secretary, Kishimoto Hirokichi, was in charge of the Service, and he issued orders as instructed by Kong Xiangxi, the Nationalist minister of finance, to Customs officials resisting his fellow nationals. Kishimoto remained the number two of a putatively Nationalist bureaucracy until the outbreak of the Pacific War. The Customs Service is, I believe, best thought of as a frontier regime, in a double sense. It was a regime of the frontier: a set of institutions, rules, practices, offices, and routines that governed the exchange of goods, the arrival and departure of vessels, and the comings and goings of people in a frontier region. The Service was also a regime in the frontier: a “state within a state,” an imperium in imperio, or in Chinese, 国中之国 (guo zhong zhi guo), based in a frontier zone. It was a civil service bureaucracy with a cosmopolitan nature, committed to upholding what it understood as the general good, with its own structure, ethos, esprit de corps, traditions, policies, rules, and regulations; its own armed forces; at times its own distinct diplomacy; and its own myths and illusions, important especially to the last Inspectors General as the end came in sight. It operated with considerable independence in the frontier zone between weak Chinese regimes and overstretched European empires. It inserted itself into niches wherever they existed or opened up as China’s states lost their grip and European empires brought new ways of conducting trade, diplomacy, and war. It was, to misappropriate a term pioneered by Giles Deleuze and Felix Guattari in A Thousand Plateaus, a bureaucratic rhizome, an entity in which everything is connected with everything else, which spreads in different directions and

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into different arenas, depending on where space is available, and which is multidimensional and multiple.2 It was, as its own members referred to it, “the Service” or, more commonly, just “the Customs.” In analyzing and narrating the century-long history of the Service, I emphasize, first, the role of the Inspectors General. Because they were autocrats in the Service, their views and policies were critical factors in shaping its history. I focus, too, on ruptures and tipping points. The responses of the Service to often unexpected events—even the outbreak of the SinoJapanese War in 1937 took the Customs Service unprepared—was critical. Third, in researching this study, one of the surprises has been just how important finance, banking, and bond markets were in shaping China’s modern history, which has largely been narrated from revolutionary and nationalist perspectives. Finance, therefore, stands prominently in this study, especially in its second half. The fourth major theme is the evolving relationship between the Customs Service, on the one hand, and Chinese and foreign diplomatic officials, on the other. One purpose of this book is to write the Customs, and by extension the foreign, back into China’s modern history. The Taiping Rebellion and the Communist Revolution bookended a century of rapid globalization in China, characterized by an acceleration of foreign trade, large-scale population movements, the emergence of large port cities along China’s coast and rivers, intense cultural transformations, major social shifts, and the spread of secular liberal governance of the civil service type. The Customs Service was important in this century in providing the regulatory infrastructure that facilitated China’s international trade and buttressed the transnational personal networks, involving China, Europe, Asia, and the United States, critical to its functioning. It supported China’s involvement not just in the new diplomacy based on supposedly equal nation-states but also in international agencies working to forge common international practices, such as in navigation. Its officers, who had ample leisure time, were often collectors, translators, linguists, and scholars in their private time; through their activities, they ensured a place for China in international cultural and scholarly organizations. China’s Republican regimes, including the Nationalists, did not abolish the Customs Service. As elsewhere in the world at the time of decolonization, the new ruling classes took over a foreign-built institution to strengthen their hold on power, protect their financial interests, and secure their new state. In all these ways, the history

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of the Customs Service runs through China’s modern history as a significant force, casting its shadows in many directions; affecting major events such as the Boxer Uprising, the 1911 Revolution, and the emergence of the Nationalists; and shaping the states that administered China in this period in fundamental ways. To try to recover the world of the Customs Service is opportune because Custom Houses are once again in use, operating in some cases from pre1949 Customs buildings or from new buildings put up on the sites their predecessors occupied. The reassuring beams of light cast by lighthouses built by the Customs Service once again guide ships along China’s coast and into harbors. Port cities have once again assumed predominance. After 1949, Mao rejected the world the Customs Service helped build, determined that China should follow its own road to a non-Western modernity on its own resources, but that proved a huge mistake. Despite many differences, the Customs Service of today is reclaiming, if gingerly, its pre1949 past. Not all historians in China still write about it as just tool of imperialism causing “a century of humiliation” that had to be overcome through arduous revolutionary struggle. Adopting one of the stories that the Customs Service liked to tell about itself, not always with justification,3 it is depicted as a bureaucracy with a disciplined and incorrupt staff even by its critics.4 One question I have been asked frequently in China, including by Customs officials, is what made the Service a disciplined and clean institution. A former Customs official, who did go to Taiwan, argues that had other Nationalist agencies been more like the Service, there would have been no Communist revolution.5 Ren Zhiyong has stressed the limits of its power, arguing that Chinese officials remained in control during the late Qing,6 and Zhan Qinghua has suggested that it served as a “bridge” that made possible “dialogue, exchange, and communication” between China and the West. Both explicitly reject the argument that foreign staff of the Customs Service were “cultural invaders.”7 The foreign presence was multifaceted, nor can it be maintained plausibly that the Qing was a happy and prosperous empire when the British arrived. The Taiping and Nian rebels clearly did not think so, and even Confucian revivalists who defended the established order, like Zeng Guofan, kept up a nice line in producing biting criticisms of their age. By focusing on the Customs Service, this study aims to open up a more nuanced perspective on the foreign presence in China in the past, one that complicates the trope of the foreign victimization of

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China. It does not rush to judgment but attempts to restore the moral universes and world outlooks in which decisions were made. This study has been written against the background of rapid economic growth in China and the country’s quick integration into a Western-dominated international order. The main factors making these developments possible must be that China has done extraordinarily well out of doing so; that commercialization has a deep history in China; that Korea, Taiwan, and Singapore have demonstrated their benefits; and that Chinese populations across the world gave a helping hand. But China’s globalization today also builds on the century of globalization that began in the early1800s, which in turn had antecedents in China’s involvement in East and Southeast Asian trade networks that began in the Ming Dynasty. One aim of this study is to write the Customs Service back into the history of modern China and modern globalization and so, more generally, to bring the foreign back. Its approach to modernity attempts to be alert to its patchwork nature, to its improvisational aspects, and to the fact that what we might see as typically European, or Chinese, in reality came about as the two met.

Little work has been done on the Customs Service. Most historians, in China and abroad, have depicted the Customs Service in the context of British imperialism in China.8 This is problematic in several ways. For most of its history, although not all, the Service consciously declined to align itself with British imperialism. The Service helped sustain the Qing and China’s Republican polities. Its establishment was the product of weakness rather than strength: the Service provided the British and the French, Britain’s junior partner in the European expansion in East Asia,9 with a way to offload responsibilities relating to the taxation and policing of foreign trade assumed during the 1838–1842 Opium War and which they found they did not have the capacity to shoulder. Greatly weakened by the Taiping Rebellion, the Qing readily seized the opportunity provided by outsourcing the policing of trade to foreigners working under Chinese supervision. Analyses stressing the imperialist nature of the Customs Service were written against the background of John Fairbank’s Panglossian and typically enigmatic depiction of the Customs Service as the institutional pillar underpinning what he called synarchy.10 By that he meant the joint rule by Manchus, Han officials, and the British of China’s treaty ports. Synarchy,

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Fairbank argued, opened up China, with its unique culture, to the supposedly beneficent forces of Western modernization and fitted it into the Westphalian system of equal nation-states. Fairbank has been rightly criticized for being insufficiently critical of imperialism, for judging China by a yardstick derived from Western modernization theories, and for holding to an Orientalist view of relations between East and West,11 but certain elements of his analysis, I believe, are in fact worth resuscitating, including the suggestion of a necessarily veiled accommodation between Qing officials and foreign diplomats trying to bring order during and after the Taiping Rebellion on a coast infested with Chinese and foreign pirates as well as cynically corrupt and colluding merchants. The same is true for his suggestion that the Customs Service had a base in Qing governmental practices, including the co-option of powerful outsiders. The minimal taxation of foreign trade and an internal correspondence system based on Chinese models, even if written in English, are other examples. However, Fairbank was naïve about the political context in which the Customs Service operated and did not do what is an imperative for historians: follow the money. He failed to pay sufficient attention to conflicts among foreigners as well as between Chinese officials and Manchu aristocrats. Nor was he sufficiently alert to China’s long history of commercialization and overseas trade, or of the fact that its officials and merchants often collaborated, or that the weak, too, often have some sort of power. It is also true that at times, and especially from 1911 until 1929, when Francis Aglen was Inspector General, the Service did align itself with British imperialism. Robert Hart, IG from 1863 until 1911, whose diaries and correspondence Fairbank lovingly, even adoringly, edited, was not, as Fairbank argued, a paragon of the rational, pragmatic, and modern Western bureaucrat. He was racked by religious doubt; he could be despotic; and he relied increasingly on his family, suspecting everybody else. Although usually of sound judgment, he recruited for the Translators College someone whose purpose in life was to prove Newton wrong about gravity. He fancied himself a naval expert, gave partial advice on the suitability of certain types of naval vessels without taking the views of his Chinese colleagues seriously, and delivered ships of shoddy quality. Fairbank ignored Hart’s Irishness, his intense religiosity, and his sexuality. None of that means that Hart was not a consummate administrator or an empire builder of the first order. His great gift was his ability to fit into the Chinese official world. Without

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him, the Customs Service would never have become the powerful institution that helped keep China together through a most turbulent century. One problem the imperialist and synarchist schools of thought share is that they see the Customs Service as a late Qing institution. In reality, it became more, not less, important after the 1911 Revolution, a period in China’s history about which Fairbank would remain largely silent and that he found intellectually and, perhaps, emotionally puzzling. When the Customs Service seized control of the collection of customs dues and associated harbor charges during the 1911 Revolution, it became a caisse de la dette, a debt-collection agency for foreign financial interests and countries receiving Boxer Indemnity payments. Francis Aglen, a paid-up member of the British establishment and entirely dismissive, unlike Hart, of Chinese officialdom, became China’s finance czar at a time when Britain was perhaps not the policeman of the world but certainly its bailiff. He not only banked China’s Customs revenue but, after 1913, gained the stewardship of domestic bond issues and so further expanded the power of the Customs Service. The Customs Service remained hugely powerful after the Nationalists took control in 1929. Foreign hiring was stopped, Customs collections were once more deposited into Chinese banks, and Customs surpluses—funds not needed for servicing domestic and foreign debt—were no longer controlled by the Inspector General. But it continued to be fiscally indispensable, delivering before the outbreak of war with Japan half of all Nationalist revenue, and the new Preventive Fleet was put in charge of eradicating seaborne smuggling. The history of the Customs Service did not end in 1911, nor in 1929, nor even in 1937; it remained fiscally, politically, diplomatically, and socially important right up until 1949. The independence and longevity of the Customs Service need explaining. The Service was able to isolate itself from both foreign and Chinese bureaucracies. It emerged, as said, in a situation of general governmental fragility. The Taiping and Nian rebellions had severely weakened the Qing. Although European empires were beginning to expand aggressively, they did so in China on the basis of limited resources while facing huge problems elsewhere and at home. The 1848 revolutions occurred only half a decade before the founding of the Customs Service. Great Britain faced the upheavals of the Irish Potato Famine from 1845 through 1852, fought with France against Russia in the Crimea from 1853 to 1856, and confronted the Indian Rebellion from 1856 through 1858 while the Chartist movement for

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electoral reform remade—slowly, of course, as this was Britain—political practices at home. Continental Europe was kept busy with the ramifications of the Prussian unification of Germany and the Italian Risorgimento in the 1860s, and the United States in the same decade was plunged into civil war. France had to deal with invasion by Prussia in 1870 and with consolidating its hold over new colonies in the Middle East. The Service, offering order, regularity, profit, and revenue, was an attractive proposition to officials on all sides. When the new imperialism arrived in China in the 1890s and British supremacy among the foreign powers there ended, there was a brief moment when Great Powers competed to establish control over the Customs Service. But that did not last. The loans extended to the Qing that financed the indemnity imposed by Japan after the first Sino-Japanese War created a common interest in maintaining the Qing Dynasty and the Service; Customs revenue stood guarantee for the loans. The Boxer War, when the partition of China threatened and foreign armies found themselves in possession of Beijing but also once more terribly exposed, drove home the point that the course of greater wisdom was not to risk the slaying of the golden goose, for it was laying eggs for all. The Boxer Indemnity was constructed as a single bond, again guaranteed by Customs revenue, between the Qing Dynasty and the eight countries that invaded the country that year. The Service was able to maintain its independence because its revenue provided a common interest in its survival. That revenue also provided one of the reasons for republican governments to allow it to continue its operations. The fact that the Customs Service was able to issue China’s bonds domestically and internationally—while the Chinese state was unable to do so— makes clear that it was seen as more reliable not just by foreigners but also by Chinese investors. But the independence of the Customs Service was not just the product of the geopolitical situation. It worked hard to carve out a solid space for itself in between the Qing and Western empires and policed its independence skillfully most of the time. It did so during the first decades of its existence by establishing the authority of Customs commissioners vis-àvis local Chinese officials and consuls, diminishing the power of both, in the case of the consuls by reaching over their heads and appealing to the British Crown. The first IG, Horatio Lay, ensured that although the Inspector General was appointed by an imperial edict, he had sole and untram-

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meled control over recruitment, transfer, promotions, and dismissals and could organize the Customs Service as he wished. Robert Hart turned the Inspectorate, the head office, into a bureaucratic panopticon by creating centralizing flows of information, enforcing standard procedures, laying down expected standards of behavior, promoting gentlemanly values and attitudes, and, importantly, prohibiting staff from engaging in trade on their own account or receiving extra payments for additional activities. The IG became the all-powerful, all-knowing center of a disciplined organization, with a self-confident senior staff, bound together by a strong esprit de corps. The Customs became a self-contained bureaucracy able to survive and even exploit the great shocks of the early twentieth century that befell China. As the Chinese state collapsed around it, the Service developed a powerful belief in possessing a historical mission, one independent of and transcending the Chinese states to which it formally subordinated itself. World War II and the Nationalist-Communist Civil War demonstrated just how tenacious an institution the Customs Service had become by the middle of the twentieth century. Shortly after the outbreak of war between China and Japan in 1937, the Service lost its main function of assessing and taxing China’s foreign trade. Nonetheless, until 1941 the Inspectorate continued to manage China’s Custom Houses across China, including in Japanese-occupied areas. In 1942, it forestalled a Nationalist attempt to abolish the Inspectorate or appoint a Chinese Inspector General. At the conclusion of World War II, it was the Nationalist bureaucracy best prepared to begin the work of reconstruction and rehabilitation. On the eve of the Communist takeover, many in the Customs Service, although not its few remaining foreign employees, believed that the institution would survive the transition to Communist rule. That this was a delusion became clear at the time of the Korean War, when the Communists cracked down hard on the Customs Service during the Three Anti and Five Anti Campaigns of 1951 and 1952, which were aimed at waste, corruption, dealing with the enemy, tax evasion, theft of state property, and so on. Thousands of staff were found guilty and punished at different levels of severity; at the same time, the principles and values which the Service had held up as important for the creation of a modern state in China were now denounced as bourgeois and antirevolutionary. In other words, the narrative that had sustained the Customs Service and in which it was seen as a kernel of a modern rational bureaucracy was turned upside-down. Rather than a harbinger of a better

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future, it was depicted as a pillar of a bad past. The denunciation of its historical role and of its guiding principles marked the true end of the Service. The Customs Service, in short, could function as a largely autarkic institution because of its own efforts, because Chinese and foreign governments found it convenient to rely on it or had little choice but to do so, and because it delivered essential services. As Robert Hart would say many times, its survival depended on being “useful” or, in other words, being of service to the institutions and governments around it. Its power was based on its ability to marshal reliable information about tax revenue and, after 1911, the actual collection of it. It drew strength from its administrative efficiency and its internal cohesion and from its ability to access and spread knowledge about Europe in China and about China in Europe. Its cosmopolitan recruitment policy gave elites in Britain, the United States, France, Germany, Russia, Japan, and other countries with which China traded a stake in its maintenance. It accumulated an idiosyncratic portfolio of activities, but that also ensured that its survival was not tied to just one function. The Marine Department before the 1911 Revolution, the involvement in state finance after it, and the Preventive Department in the 1930s made it a versatile organization. It was all this, its own internal discipline, and the fact that it never thought of itself as something unchanging and permanent that made it possible for the Customs Service to endure as China’s states succumbed one after the other and as one power replaced the next. The Customs Service, it should be emphasized, was perhaps special, but it was not unique. Within China, the Salt Tax Administration and the Postal Service employed foreigners while being formally agencies of the Chinese state. Elsewhere, analogous to the later Customs Service was the Caisse de la Dette, which from 1879 placed Khedive Ismail’s Egyptian tax collection under British and French supervision. The Ottoman Public Debt Administration, established in 1881, did the same on behalf of the European holders of Ottoman debt bonds. To extend the point, frontier zones between weak polities have often generated powerful and independent regimes. One can point to the maritime empire of Zheng Chenggong (鄭成功), or Koxinga, in China’s past as something similar. The United Nations has carved out significant spaces for itself between weak political and social structures in Africa, the Middle East, and elsewhere as well, by, among other things, coordinating humanitarian relief operations. A comparative study of the

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Customs Service with such institutions would be instructive but is well beyond the scope of this book.

Let me briefly introduce the chapters that make up this study. Chapter 1, “The Birth of a Chameleon,” begins with a brief discussion of the 1861 Xinyou coup d’état by Prince Gong. This was a decisive moment: Prince Gong endorsed the experiment that foreign and local Chinese officials had begun in 1854, by which foreign supervisors were appointed to the Shanghai Custom House. Prince Gong broke with the xenophobic attitudes of his brother, the Xianfeng Emperor. His policy was to give primacy to the suppression of the Taiping. Even though the British and French had just burned the Summer Palace, he nonetheless concluded that they could be useful in suppressing the Taiping and in providing a counterweight to the Russians, who had turned east after their defeat by France and Britain in the Crimea, cutting vast swaths of land from the Qing imperium. Prince Gong also wanted to prevent too great a closeness between the French and the British and the increasingly dominant Han officials in provinces along the Yangzi River. I discuss the activities of Horatio Lay, who launched the Shanghai experiment and then became the first Inspector General, laying the basis of the Customs Service. Prince Gong dismissed him after he demanded unfettered command over a naval force that he put together on behalf of the Qing, thus demonstrating that there were limits that the prince was not prepared to cross and that the IG would always have to bow to Chinese supremacy. The chapter pays attention to Robert Hart, focusing on his respect for Chinese culture and Chinese traditions, his rejection of the swashbuckling British imperialism that led to the two Opium Wars, and his adoption of a secular liberal and cosmopolitan stance, which grew out of a deep and personal religious crisis resulting from his growing familiarity with China and his skepticism about claims of British superiority. The chapter ends with a discussion of China’s previous methods of governing maritime trade, demonstrating that the Customs Service incorporated some of its key features. In the second chapter, “Robert Hart’s Panopticon,” I analyze how Robert Hart built up a disciplined, cohesive, and centralized organization; carved out a space for it in between the Qing and Western empires; and

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extended its functions, using niches wherever they opened up. It was Hart who turned the Service into a widely respected organization, involved in taxation as well as diplomacy, finance, scholarship, meteorology, and the management of China’s maritime sphere. A good example of the Service’s ability to take hold of new functions was its erection of lighthouses along the Chinese coast. Lighthouses were important to the transport revolution of the second half of the nineteenth century, but they were also symbols of modern engineering and management with complex political and cultural meanings. The main purpose of the chapter is to demonstrate the measures by which Hart turned the Service into a centralized hierarchical organization able to survive through many crises. Chapter 3, the “Customs Service During the Self-Strengthening Movement,” focuses on the period from the Taiping Rebellion until the 1894–1895 Sino-Japanese War. It begins with an examination of the London Office of the Service, through which the Customs Service gained access to highest reaches of the British government, which gave the Qing a head start in its competition with Japan for naval supremacy in East Asia and caused European and Qing politics to become intertwined. The chapter then examines the trajectory and the consequences of the increased maritime trade that the Service enabled. I will suggest that the Sino-French War of 1883–1885 was a major turning point. Before the war, when China’s economy grew quickly as it recovered from the Taiping and Nian rebellions, and in the early 1880s, China was the strongest East Asian naval power. The rapid decline in the value of silver caused the terms of trade to move against it. Unlike Japan, China did not develop light industry, with the result that it became underdeveloped, becoming an exporter of primary resources and an importer of industrially produced goods. Growth slowed, living standards began to decline, and Japan edged ahead in the East Asian naval arms race. The chapter also discusses the intensifying diplomatic, legal, scholarly, and banking links between China and Britain that the Customs Service fostered. With chapters 4 and 5, the focus shifts to the involvement of the Customs Service in fiscal affairs. Chapter 4, “The Rise of the Bond Markets: The Customs Service Becomes a Debt Collector,” begins by explaining the emergence of a market for China loans in London and then analyzes the Qing’s failed efforts to issue domestic loan bonds to pay for the indemnity Japan imposed after the first Sino-Japanese War of 1894–1895. This in-

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creased the Qing’s dependence on the Customs Service, as foreign banking consortia refused to issue loans unless they were formally hypothecated on Customs revenue. The Customs Service played a critical role in ending the 1900 Boxer War, preventing a threatened partition of China. It designed the Boxer Indemnity as a single state-to-state loan, rather than a private one, from the Qing to all affected countries collectively. It became a foundation for the collective security arrangements that would hold during the first quarter of the twentieth century. The chapter ends by narrating how the Customs Service first adjusted itself to the rise of Young China, a concept current at the time that deserves, I believe, much fuller exploration. However, in 1911 the Service captured control over Customs revenue collection with the support of Yuan Shikai, China’s strongman of the time, and British diplomats. Chapter 5, “Imperium in Imperio,” takes the financial story up to the Nationalists’ formation of a new government in 1928. Francis Aglen saw sound finance as a force for moral and social improvement, fostering honesty, responsibility, and dutifulness, whose lack among Chinese officials Aglen regarded as a major cause of the difficulties faced by the republic. The chapter examines how Aglen accumulated financial power and, in an ironic twist of fate, became a protector of Chinese bondholders, including against foreign interests. The chapter also explores how Gu Weijun, a leading Young China figure, made tariff autonomy, extraterritoriality, and control over the Customs Service into key demands of Chinese nationalism by his bravura performances at the Paris Peace Conference of 1919 and the 1921–1922 Washington Conference. In the same way that the Customs Service was a key factor during the 1911 Revolution, it also shaped the 1926– 1928 Northern Expedition, which led to the ascendancy of the Nationalists. The refusal of Aglen to raise promised additional Customs revenue for the northern government and the assistance provided to the Nationalists by Shanghai commissioner Frederick Maze tipped the financial scales in favor of the Nationalists and secured for Maze his succession of Aglen as Inspector General. The Nationalists did not nationalize the Customs Service when their armies marched into Beijing in 1928 and established their capital in Nanjing. While they had been hugely critical of the Service and Francis Aglen, they were also attracted to the revenue it delivered and the facilities it provided. In Maze they had a superficially suppliant Inspector General, one

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willing to work with them and accept their demands for a reduced foreign role in the Service, including the return of authority to China over the use of Customs revenue and the deposit of it into Chinese banks. This made it possible for the Nationalists to agree to the continued existence of the Customs Service and to recognize existing international and domestic debt obligations. They thereby gained control over an important revenue stream; secured the support, or at least the acquiescence in their rule, of coastal financial elites and foreigners; and put into their hands a functioning bureaucracy operating throughout China. Chapter 6, “Tariff Nation, Smugglers’ Nation,” suggests that high tariffs profoundly affected Nationalist state making. High tariffs increased the Nationalists’ revenue but also led to an epidemic in smuggling. They strengthened centrifugal forces: many regions resisted the high taxation imposed by Nanjing, seen less as a new national government than an upstart regional one. The Customs Service played an important role during the first decade of Nationalist rule because it was the one Nationalist bureaucracy that had a presence across China. It built up a strong preventive capacity that dampened smuggling, especially in southern China. Because of its capacity to act with a degree of independence, it also was able to broker deals and settlements between Nanjing and local governments, again more in southern China than in the north. Chapter 6 draws attention to the importance of tariffs and customs services in the making of the modern nation-state. It suggests that modern states arose not just as central governments enforced bureaucratic hierarchies throughout a clearly bounded territory, as in the Weberian model, nor a Foucauldian conspiracy entrapping unwary citizens, but also as an evolving patchwork of deals, settlements, and accommodations shaped by domestic and international conflict and self-interest. The final chapter, “Maintaining Integrity,” charts the history of the Customs Service from the outbreak of the Sino-Japanese War in 1937 to the Communist victory and its crackdown on the Service in 1952. During its first phase, continuing until December 8, 1941, Maze struggled to maintain the territorial integrity of the Customs Service without abandoning the Service’s formal allegiance to the Nationalists in Chongqing, a policy fraught with difficulty. The second phase lasted from 1942 to 1945. Maze’s policy became untenable after Japan began its Southern Advance in December 1941, attacking British and American colonies in Southeast Asia and occupying foreign concessions and settlements across China. China,

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although not Japan, now did declare war and appointed Kishimoto Hirokichi as Inspector General. This led to the creation of a new Inspectorate General in Chongqing, headed by the American Lester K. Little. These were the dark years: the Service had little to do, its prestige plummeted as corruption spread, and it was unwanted by most Nationalists. They kept it on as a sop to British and especially U.S. sensitivities, needing their assistance in China’s war with Japan. Little worked hard to keep up morale, combat corruption, and prepare the Customs Service to resume its duties after the end of the war. The Service began the postwar period well, recovering its position on the China coast with aplomb, but it was soon overwhelmed by problems, some resulting from World War II and others the consequence of the postwar malaise and disorder, including hyperinflation, which the Nationalists were unable to overcome. Most Chinese staff stayed in China, believing that continued commitment to the traditions and disciplines of service and honesty on which the Service had always prided itself would ensure that the Communists, like their predecessors, would want to keep it in place, even if all foreigners would have to leave, probably seeing an advantage in that, too. That proved a miscalculation when, in the context of the Korean War, the Communists became afraid of enemies within. They turned on the Service, an institution that their revolutionary instincts told them to distrust and that they would have wanted to transform sooner or later in any case.

The genesis of this book lies in a chance encounter. While I was researching a book on China’s military history at the Second Historical Archives in Nanjing, Vice Director Ma Zhendu mentioned to me during a lunch break that the archives had recently come into the possession of 55,000 files of the Inspectorate General of the Customs Service. Vice Director Ma asked whether I might help as most of the material was in English; needing his goodwill, I agreed. Because the archive was in a rough state, not even having a workable catalogue, and because most of its files dealt with the Customs Service after 1900, about which we knew little, we decided that a team was needed, involving specialists in archival management and historians of modern China and of British and imperial history. Thanks to the work of that team, first supported by the Chiang Ching-kuo Foundation and then the United Kingdom’s Arts and Humanities Research Council, the

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Inspectorate Archives are now available to researchers, with a rich website, an online catalogue, bibliographies, and various databases on China’s trade and the personnel of the Customs Service.12 Although the Inspectorate material is already so vast that no researcher can possibly establish control over it, its limitations nonetheless must be noted. First, it is incomplete. The Inspectorate archive was torched during the Boxer Uprising and only incompletely reconstructed during the 1930s. Second, only a few local Custom House archives are available. Most remain closed, including that of the Shanghai Custom House, by far the most important one. Important archives of Qing and especially Republican institutions, including those of the Chinese Superintendents of Trade, have been destroyed or remain closed, as is the case of all Communist archives and of Nationalist and Communist intelligence organizations. Every historian has to work in the knowledge that archives are imperfect and that they are not virginal depositories of the past, because key figures will have tried to ensure that history would look kindly on them (as Maze did in the case of the Customs Service). The truth is not always to be found in the archive. Nonetheless, the Customs Service is easily the best-documented bureaucracy of late imperial and modern China. It also offers a perspective separate from that of the Qing, the Nationalists, and the Communists. This study has relied not just on the Inspectorate archives. The British National Archives at Kew is the home of hundreds if not thousands of files relating to the Customs Service, most produced by the British Legation in China, China consuls, and the Foreign Office. Many foreign but also some Chinese Customs Service officers published diaries, memoirs, and novels.13 Working in the Customs Service left some staff members with the time to pursue their interests in Chinese language, art, economics, culture, and society.14 The correspondence between Robert Hart and James Duncan Campbell is a unique resource for the study of the Customs for the last four decades of the Qing Dynasty.15 One of the pleasures of working on Customs Service history has been that it led to contacts with families with forebears in the Customs Service.16 Some had scrapbooks, correspondence, and photographs that they were willing to share. Personal papers of Customs staff have also found their way into library or archive collections, especially at the School of Oriental and African Studies of the University of London, where papers of two Inspectors General—Frederick Maze and Francis Aglen—are kept but also elsewhere, including at the Queen’s University

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Belfast, where papers of Robert Hart and Stanley Wright are preserved. The Customs Service dealt with a myriad of companies and institutions in the course of its business. Their archives, too, are important, including those of the Hongkong and Shanghai Bank, which manages its own archive in London, and Jardine Matheson, whose archives are kept at the Cambridge University Library. The Bowring Papers, of John Bowring, British minister to China when the Customs Service was founded, can be found at Manchester University, while those of Stuart Rendel, an intimate of Gladstone who gave the Customs Service access to the highest political and commercial circles in Britain, are at the National Archive of Wales. Pursuing the Customs Service has been a journey of discovery of China in Britain.

This study tries to do justice to the multifaceted nature of the Customs Service. But I must note that I have been unable to explore the Marine Department of the Customs Service to any serious extent. The Inspectorate dealt with general policy, relations with Qing and foreign officials, personnel issues, diplomacy, and finance. The Marine Department did the hard work of building up harbors, installing and servicing aids to navigation, and maintaining Customs Service vessels, including of the Preventive Service. This was a different world, one in which nautical knowledge and experience was at a premium and in which expertise and leadership, as opposed to status or privilege, were decisive. It is where land and water meet, an area that moves constantly as tides go up and down and rivers change course, that interesting things happen. This is where people from different backgrounds congregate, where borders are uncertain and constantly shifting, and where local populations can easily ignore or subvert the claims of the state. Greater attention to the Marine Department would have enabled me to address an aspect of globalization, or imperialism, that is generally ignored, namely, what happens with and around goods and people as they are moved from one port to the next. Most histories are landlubber histories.17 It is on the water that part of the explanation of what Kenneth Pomeranz called “the great divergence� between the Europe and Asia is likely to be found.18 To profit from having sugar plantations or from South America’s silver deposits, one must first be able to get there. Superior navigational knowledge, especially the discovery of a way to fix longitude and

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so pinpoint a ship’s position on the seas, resulted from an ability to combine scholarly astronomy, already dependent on patient observation over decades and mathematical genius, with artisanal excellence in manufacturing accurate clocks able to withstand the harsh marine environment.19 Important too were shipbuilding techniques, port facilities, the training of crews, the availability of materials such as strong tall trees for masts, and a bureaucratic infrastructure able to gather together nautical knowledge from around the world and make it publicly available. Armed mercantilist competition among Europe’s small states and state support for nautical development accelerated the process. The study of the Customs Service has given me glimpses into this world, but much more work needs to be done. Finally, I would like to thank some of the many people who have supported my research. Zhou Zhongxin, the director of the Second Historical Archives, acted with bravery when he allowed Vice Director Ma and me to develop this project. Vice Director Ma has played a key role throughout. His organizational and administrative skills are phenomenal; he also proved a most congenial host and a wise friend. Other staff at the archives were also consistently helpful. Professor Robert Bickers took the lead during the second phase of the project. His perspective on British and imperial history has fundamentally reshaped my thinking about China and the Customs Service. Ts’ai Wei-pin was an invaluable research assistant whose work on China’s modern postal system is an important outgrowth of our Customs Service research. The dissertation that Felix Boecking wrote as a member of our team deepened our understanding of Nationalist tariff policy in the 1930s and foreign personnel in the Service. I am indebted to many colleagues in China and Taiwan, including Mao Haijian, Chen Qianping, Lian Xinhao, Ren Zhiyong, Dai Yifeng, Sun Xiufu, Chang Chih-yun, Lin Man-hoang, and Zhang Zhiyong. I thank Christopher Bayly, Rana Mitter, John Thompson, Timothy Brook, Julia Lovell, and Susan van de Ven for reading parts or all of the manuscript. I have given presentations on the history of the Customs Service at UC Berkeley, UCLA, the Modern History Institute of the Academy Sinica, the Academia Historica, Nanjing University, Huadong University, Xiamen University, Oxford University, Bristol University, the University of Warwick, Queen’s University Belfast, Manchester University, the University of British Columbia, and Leiden University. The discussions at these occasions were helpful in suggesting new ideas and perspectives but also in building my confidence that

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others might be interested in a history that for me became an obsession. I also thank all my students who have taken my course on China’s modern globalization; the dissertations they have produced pushed me to think again about many subjects and to think about some I had not thought about at all. Finally, I thank the Johns Hopkins–Nanjing University Center for making it possible for me to spend a year in Nanjing and have the time to read quietly through the Service’s archive at the Second Historical Archives of China. I also thank the Chiang Ching-kuo Foundation, the Universities China Committee in London, and the Arts and Humanities Research Council for financial support at various stages of this project. On Andax June 1, 2011

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Breaking with the Past, by Hans van de Ven