Front Page Titles (by Subject) III.: LAND TENURE AND TAXATION IN CHINA. - A History of Banking in all the Leading Nations, vol. 4 (Germany, Austria-Hungary, Netherlands, Scandinavian Nations, Japan, China)
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III.: LAND TENURE AND TAXATION IN CHINA. - A History of Banking in all the Leading Nations, vol. 4 (Germany, Austria-Hungary, Netherlands, Scandinavian Nations, Japan, China) 
A History of Banking in all the Leading Nations; comprising the United States; Great Britain; Germany; Austro-Hungary; France; Italy; Belgium; Spain; Switzerland; Portugal; Roumania; Russia; Holland; The Scandinavian Nations; Canada; China; Japan; compiled by thirteen authors. Edited by the Editor of the Journal of Commerce and Commercial Bulletin. In Four Volumes. (New York: The Journal of Commerce and Commercial Bulletin, 1896). Vol. 4 A History of Banking in all the Leading Nations, (Germany, Austria-Hungary, Netherlands, Scandinavian Nations, Japan, China).
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LAND TENURE AND TAXATION IN CHINA.
SOME of the leading rules which govern the tenure of land and the succession to estates in China may be of interest in connection with what has been written on the currency and banking of the empire.
It is a fundamental principle with the Chinese Government that everything under the sun belongs to the Emperor, and that all the people are his servants; and it is upon this maxim the doctrine is founded that all land belongs to the Crown. But the doctrine is theoretical only; for, from time immemorial the arable land of China has been minutely divided among the general mass of cultivators; and if the taxes due the Government are paid, the liberty of the holder to convey the land is not interfered with. So long as the taxes are paid, the rights of the private holder are about as absolute as they are under any government, the interference of officials being the exception, not the rule. This right extends to mortgages and leases, and the terms used in contracts to sell or purchase land are the same as those employed in the sale or buying of ordinary personal property. In general, the tax on land is moderate, averaging about one-twentieth or one-thirtieth of the gross produce; and owners who do not wish to cultivate their land can lease it on terms that leave a margin in their favor after the payment of the Government dues. Taxes are collected directly by officials of the Government, and the middleman, who is regarded as indispensable in almost every other business transaction in China, has no office in the collection of taxes, no place like the zamindar class of India, or hereditary rent receiver or farmers-general of taxes; but it should be understood that the principle of collecting taxes directly by officers of the Government is more theoretical than practical, and in consequence the Government sustains large losses. The principle is sound, but, like many laws of China likewise sound and just, it is viciously executed, entailing much hardship and injustice.
TWO KINDS OF TENURE.
There are two kinds of land tenure known to Chinese law; the military and the common. But, with a people where the military class occupy the lowest social grade, military tenure has not been encouraged. The rule against alienation having been relaxed, those who held land by this tenure now sell it as land is sold by those who hold by common tenure. The military tenure was introduced after the conquest of China by the present Manchu dynasty in 1644. Large tracts of land, especially in the province of Chihli, were confiscated by the conqueror, and grants were made to the more prominent of his followers and to their heirs, without the power of alienation and without reservation of rent. The condition, if not expressed, was implied to mean or be understood as the condition of military service; but, as stated, the military tenure is fast becoming obsolete, and it may be said that ninety-nine one-hundredths of the land in China is now held by common tenure. One of the principal incidents to land held by common tenure is the payment of land tax. The full tax which, at the beginning of the present dynasty, was levied on all adult males is now virtually incorporated with the land tax, and the amount of the combined tax, during the reign of K’ang Hi, 1662-1723, was, according to decree, fixed once for all.
During the reign of this emperor, a decree was promulgated (in the year 1711) declaring that the land tax should be levied for all time in accordance with the rolls of that year, and that no extra levy should be demanded in respect to any increase of population. While this decree would, literally interpreted, be as unchangeable as the laws of the Medes and Persians were meant to be, yet the more reasonable interpretation, and the one which has been made practical, applies it to land then under cultivation, the rate of taxation on which should not be increased because the population increased; and even this pledge has been but imperfectly observed. There was then no tax on waste lands, because waste land belonged to the Government; but when such land was brought under cultivation it became, as now, liable to be assessed for taxation by the custom of the province in which it was situated. According, therefore, to the principle of the more reasonable interpretation indicated, the gross amount of land tax varies with the prosperity of the country, and when such tax has been fixed for any particular locality, there is no law to increase it.
The logical conclusion here reached has not, however, successfully baffled the diplomacy of local officials. It is doubtful if any decree of the Chinese Government with reference to revenue, however clear and positive its language, has ever succeeded in depriving local administrators of the means of avoiding it in the interest of their customary “squeeze.” In the case now under consideration, the decree is explicit, and yet officials have tacked on extra charges under various designations, such as “allowance for difference of scale, transport fee, collection fee,” and so on, until, although the amount is set forth in the title deed (which is usual), the land-owner pays about half as much again. The Central Government seldom interferes with such avoidances of its decrees; for each district is assessed in the Government revenue book for a certain amount, and when the magistrate of the district so assessed furnishes the amount, the Government is satisfied. It is more of a general rule than an exception that, in ordinary years, the districts yield a very respectable surplus, which is the private perquisite of the magistrate and his subordinates. There is no relaxation of the decree; the assessed amount must be furnished. The remission of any part is only made when a serious calamity has visited the district, destroying crops or flooding lands; and in such case the facts must be reported, stating whether the injury is permanent or temporary; as must also be reported, under heavy penalties for failure, the improvements and general property of the district; but the land tax is now better determined and less liable to influence by Imperial or local officials than any other form of taxation in China.
THE TRANSFER OF LAND.
The transfer of land in China, by sale, has some peculiarities. The transfer is invariably evidenced by a deed reciting that the seller is in want of money, and, having first offered the land to his kinsmen, who declined to buy, he has arranged, through the middleman, to sell it to the intended purchaser, at the price named in the deed, in which the land is fully described and the purchase money acknowledged. It is also provided in the deed that the purchaser shall be the sole proprietor, with the rights and privileges belonging thereto. The deed is signed by the seller and the middleman, each subscribing his own private mark or affixing his seal. The middleman is usually the friend of both the seller and purchaser, and his name is not required as a guarantee of title, but as proof of the good faith of the transaction, and that the seller is what he represents himself to be. So necessary is the middleman thought to be, that no prudent purchaser will accept a transfer in the absence of the middleman’s name. But such name on the deed is not absolutely essential to the validity of the sale, though it gives publicity to it. There are not less than two middlemen to each sale, sometimes as many as eight or ten, and these receive a commission, or are entertained, the general practice, at a feast, the expenses of which are not infrequently provided for in the deed of sale.
In China, each village has its head-man. Not infrequently the entire population of a village are of the same family, either by blood or marriage, and the village head-man is always an indispensable party to the sale of land, to the extent that his seal must be attached to the deed of sale before it can be registered at the office of the district magistrate. The price of registration is a charge the purchaser must pay, and without registration the land is subject to confiscation. Nominally, the registration fee is about three per cent. on the amount of the purchase money, but there are extra charges which increase it to five or six per cent. In order to avoid this high tax for registration, the amount of the purchase money is universally understated. Another way of avoidance is to divide the amount, the seller executing two deeds in identical terms, one of which goes to the magistrate to be stamped, and the other is retained by the purchaser as a receipt for his money. If a deed has been properly registered, it should have attached to it a piece of paper with the names of seller and purchaser, and setting forth the location of the land, the amount paid as transfer fee, and the amount of the annual land tax for which the new proprietor is responsible, and bearing the impression, in red, of the magistrate’s seal in several places, thus making the deed the highest form of title obtainable.
When a foreigner acquires land at an open port he acquires it by lease in perpetuity, and the lease is registered in the consulate of the foreigner, no fee being charged by the Chinese authorities.
The ancient form of transferring land by mortgage has more the appearance of loaning than mortgaging the land for the money, as the original owner could at any time, on repayment of the money, get back his land, the use of the land being exchanged for the use of the money, and while the latter could be demanded back, the former could not. Among a business people like the Chinese, such a form of security naturally resulted in great inconveniences, and, later, a law was passed limiting the period of redemption to thirty years. It is doubtful if there ever was a law against the alienation of land, but so tenacious were the old families about the tenure of their landed estates that alienation was looked upon as impossible, and custom gave it the sanction of law. The idea was that land was not so much the property of the occupant or owner as it was the heritage of the family or tribe of which he was a member, all of whom had a qualified interest in the reversion, subject to the life interest of the occupant. But the spirit of commerce, civilizing wherever felt, has materially modified this iron-clad custom in favor of free trade in lands, and strengthened individual against family ownership. If the land is mortgaged for money, to be repaid at a short date, it does not change hands and need not be recorded, as in the other case; but the title deeds should be deposited with the mortgage, with a memorandum of the terms of the loan. If the debt so secured is not paid at the proper time, the creditors must apply to the authorities for leave to sell; and if there should be other creditors, it is not clear whether the creditors holding the mortgage could apply the proceeds of sale first to the payment of their debt. This defect is cured by the law of nearly every other country requiring all transactions of the above description to be recorded.
THE LAW OF SUCCESSION.
The universal rule in China as to the succession of real and personal property is that it descends in equal shares to all the male children, whether born of the proper wife or concubine. The intention of the rule to exclude females from the inheritance is manifested by the right of the owner of the land to adopt a son from among his relations; and, in the event of failing to do so, the relations have a right to hold a family council and adopt one, who succeeds to the whole inheritance. There must be a complete failure of male heirs, natural or adopted, before the daughters can succeed. The succession, by operation of law, does not require to be ratified by the authorities. The rules relating to succession of landed property are substantially as follows:
“Landed property shall descend in infinity to the issue of the last holder. The male issue shall be admitted before the female. Where there are two or more male issue in equal degree of consanguinity, they shall inherit altogether equally, and in default of male issue, the females shall inherit equally. This rule applies only to land of the people generally. All lineal descendants in infinity, of any person deceased, shall represent the last purchaser. On failure of lineal descendants of the purchaser, the inheritance shall descend to his widow or widows. There being no widow living, the inheritance shall descend to the collateral relations, being of the blood of the purchaser, subject to the preceding rules. In default of the heirs above mentioned, the land shall revert to the Government; and it is the duty of the head-borough and villagers to report such cases to the local authorities, on pain of punishment as abettors in an attempt at concealment.”
T. R. Jernigan.
Authorities.—Williams’s “Middle Kingdom,” Martin’s “History of China,” “Papers of the Asiatic Society,” Eakin’s “Papers on China.”