CHAPTER XXXVII.
WEIGHING AND BULKING OF INDIAN TEAS AT CUSTOM HOUSE.
One misapprehension with some exists on this head. The weighing is done by the Customs to ascertain the amount for duty. The bulking is done at the request of the vendor, the broker who is to sell it, or the purchaser, and it has to be paid for.
Two distinct injuries are inflicted on the producer by the present Custom House system—
- 1. The Tea is much damaged by exposure.
- 2. The quantity found is always less than the actual.
Now as to No. 1. When we consider how damp the London atmosphere is at the best, how in foggy days it teems with moisture, is it not very certain that Teas exposed to it, often for days, deteriorate? What care we take in India heating before packing—carefully with lead and solder, excluding all air—and then the Teas on arrival here are treated as above! It is simply monstrous.
The following extract from a letter to Home and Colonial Mail sets out the case forcibly:—
The blame ought not entirely to be laid upon the planter, however, for certain facts have come to our knowledge during the present week as regards the manner in which Indian Teas are bulked at some of the London warehouses, which somewhat explains how depreciation in quality comes about. We bought several breaks of Tea in the sales this week, which were stated to be bulked and ready for sampling six days before the sale; and yet we know for a fact that some of those very Teas were not put back into the chest till the day after the sale, if even then. More or less moisture is always to be found in the London atmosphere, particularly in rainy weather, and there can be no question that incalculable injury would be done to a fine Tea by seven days’ exposure on the floor of a warehouse. The damage and loss falls entirely on the buyer. The effects of it are not seen at once, but there can be little doubt that a gradual depreciation sets in, consequent on the absorption of moisture. No redrying process follows; the Tea is simply filled back into the chests when seven days of neglect have done what mischief is possible. Is it to be wondered at that samples drawn from such a break of Tea a few months after it has been bulked in London will have lost all their freshness and malty smell?
J. C. Taylor and Colman.
I have no reason to think the delay above is very unusual, and I must add to the above, that when the chests are closed no attempt is made even to cover the top with lead, much less to resolder it. Some paper on top is all attempted. I need say no more to prove that the quality of Indian Teas is most seriously damaged at the Custom House.
Now as to No. 2. The loss in quantity to producer.
The following article, which I wrote to the Indian Tea Gazette in 1881, shows how invariable the loss must be:—
The loss of Tea by the mode adopted at the Custom House in England is great.
When Teas are sold at Calcutta, though the English Custom House regulations do not then affect us immediately, they do so indirectly. If purchasers in Calcutta gain by our Teas, they will bid more; if they lose, they will bid less. Besides, many Teas are sold in London.
To understand what follows, it is necessary to remember that—
Garden Invoices never go to Custom House. Custom House arrives at weight of Tea by weighing the package for “gross,” and then turning out Tea, weighing box, lead, nails, iron hooping, in fact all but Tea, for “tare;” gross weight, minus tare, is the weight of Tea they demand duty on, and the weight so found by Custom House is all the producer or importer gets paid for.[106] It follows, therefore, that the less Tea declared by Customs means a loss to producer and a gain to buyer. To the latter in two ways, viz., less Tea to pay for than is really there, and a saving of 6d. per lb. duty! But to show, now, how the loss occurs. When weighing for gross, the fractions of a pound are discarded; when weighing for tares, the pounds above the actual weight are written. The greatest loss that can occur by this method, on one package, is 1 pound 14 ounces of Tea. It (this greatest loss) must always occur when the gross is 1 ounce short of a pound, and the tare 1 ounce more than the pound.
No. 1 Example.
Gross and tare can be put at any figures as to pounds. It will always come out the same. Say, therefore,
| lbs. | oz. | ||
| Gross | 132 | 15 | actual weights taken at Custom House. |
| Tare (deducted) | 37 | 1 | |
| Actual Tea in chest | 95 | 14 |
By rule quoted the gross and tare weights are set down at Custom House—
| lbs. | ||
| Gross | 132 | |
| Tare (deducted) | 38 | |
| Actual Tea thus paid for = | 94 | pounds—on which duty is also paid. Therefore the loss on the chest is 1 pound 14 ounces. |
The least loss that can take place (when ounces occur in gross and tare) is 2 ounces. To insure this the gross must be 1 ounce more than the pound, and the tare 1 ounce below.
No. 2 Example.
Say any figures in pounds.
| lbs. | oz. | ||
| Gross | 133 | 1 | actual weights taken at Custom House. |
| Tare (deducted) | 36 | 15 | |
| Actual Tea in chest | 96 | 2 |
But again, by rule quoted, it is written by Customs—
| lbs. | ||
| Gross | 133 | |
| Tare (deducted) | 37 | |
| Actual Tea paid for | 96 | pounds, on which duty is also paid. |
Therefore the loss on chest is 2 ounces only.
Now did weights turn out the same in London that they were on the garden, we could, by doing as in last example, insure only the above trifling 2 ounce loss. But it is not so. The wood dries and thus makes both the gross and tare less. The loss then comes out anything between 2 ounces and 1 pound 14 ounces.
I find the following simple rule will give the exact loss on each and every weight of both gross and tare.
Rule.—Add the ounces above a pound in the gross to the ounces short of a pound in the tare. The sum of the two, in ounces, will be the loss of Tea on the package.
This is only part of the article. I break off here to add a few remarks more appropriate now than what I then wrote.
There are means by which this varying loss, of which the maximum is 1 pound 14 ounces, can be reduced to 4 ounces only on each and every chest.
I admit the procedure is scarcely practical, but as nothing can demonstrate better the absurdity of the system as pursued at the Customs, I give it here.
How can we insure the least loss, taking into consideration the fact that the weights of both the gross and tare, because of the wood drying and lightening in transit, can never come out the same at the Custom House in London as they were on the garden.
We can do it thus: the Tea if well packed in a chest in no way alters in weight during transit. If dry, when put up, it cannot become lighter; if the leaden covering is air-tight, it can absorb no moisture, which would of course make it heavier. I therefore beg the question that it is a fixed quantity, for it must be so if well packed.
We have therefore only to consider the gross and the tare, and, as shown, the loss in Tea, varying from 2 ounces to 1 pound 14 ounces, depends entirely on the weights these are found to be at the Custom House. In other words, if we can insure the gross there being but little over any even number of pounds, and the tare there being but little below any other even number of pounds, we attain (approximately) the least loss we can be mulcted in.
Begging the question that we can add to, or detract from, the gross weight of each chest in the Custom House (before it is put into the scales by the officer there) by the addition or subtraction of a few nails if the weight is nearly what we want, or pieces of hoop iron if the actual varies much from the desired weight—I say, if we can do this, we can insure approximately the minimum of loss. I go to show how this is to be done.
Pack the Tea in the usual way, but whatever the quantity it is desired to put into the chest (it can be varied with each class, for it matters not what the weight is in pounds) add to it 4 ounces, and be very careful that the whole weight of Tea is exactly the number of pounds required, plus 4 ounces—for the whole success of the plan depends on this weight being exact. Nothing more is required to be done at the Factory than has been done hitherto, for it matters not one straw, as regards the success of the plan, what the gross and tare of each package is, nor what the weight of Tea is, as long as exactly 4 ounces above an even number of pounds is there; neither does it signify how much the wood lightens in transit, and thus decreases the weights which were found at Factory for gross and tare.
The next step must be taken at the Custom House in London. Let the importer or the producer’s agent attend and weigh each package himself nicely, any time before the weights are to be taken by the Customs. Then let him make each package 2 ounces above the even number of pounds. This will be easy enough, by the addition or subtraction of a few nails or hoop iron. For instance, suppose the chest to weigh 140 pounds 6 ounces, he would take away nails or hoop iron weighing 4 ounces. If it weighed 140 pounds 13 ounces, he would, by adding 5 ounces more nails or hoop iron, make it 141 pounds 2 ounces. All would then be finished, and each and every package so treated would give a loss in Tea of 4 ounces only.
If my plan could be carried out (as the minimum loss otherwise is 2 ounces, and the maximum 1 pound 14 ounces the mean is one pound), we save a loss of the said pound on each chest, minus the loss we compound for, viz., 4 ounces. That is to say, we gain 12 ounces on each package which, in a break of 2 or 3 hundred chests, means a good deal to the producer or Customs!
I will give one example in figures. Any other possible figures can be tried: it will always come out the same, if the weight of Tea is exactly 4 ounces above any given number of pounds.
No. 3. Example.
Were the plan feasible, the gain to the Indian planters would be large. Say this year (1883), fifty-seven million pounds are imported, and ninety pounds per chest is taken as the average, this gives over 600,000 chests, and 12 ounces saved on each = 450,000 pounds, of Tea, which at 12 annas per pound, Rs. 3,37,000.
The gain to the Customs would be 450,000 sixpences = £11,250.
This increase to the Customs would be attained by simply (though still keeping under the actual weight of Tea in each chest) taking the contents more correctly.
The above shows, if figures will show anything, that a great loss to both the producer and Customs takes place by the system in vogue. As the only object of the Customs should be to arrive at the true weight of Tea in the most expeditious and simple way, how very absurd is the system pursued! What the tare is can in no way signify to them; all they really want is the weight of the Tea. The absurdity of the system is proved by the fact (demonstrated) that the results to both producer and Customs can be altered by the addition or subtraction in the Custom-house of a few nails! How easy to weigh the Tea itself! What possible objection can exist?
The Indian Tea Districts Association having failed to move the Customs, have quite lately addressed the following Memorial to the Secretary of State for India:—
To the Right Honourable the Earl of KIMBERLEY, Her Majesty’s Secretary of State for India.
The Petition of the Indian Tea Districts Association sheweth—
That your Petitioners are a body representing the interests connected with the cultivation of Tea in British India, in which enterprise British capital to the extent of over fifteen millions sterling has been invested.
That the industry dates from the year 1838, when the first consignment of Indian Tea, consisting of 456 lbs., reached the London market.
That the imports of Indian Tea for the year ending 30th June, 1882, were 49,503,000 lbs., having a value of more than £3,300,000 sterling; while the estimated importation for the current season is upwards of 55,000,000 lbs., or fully one-third of the entire consumption of the United Kingdom for the year.
That the contribution to the Revenue accruing from Customs’ import duty on the above quantity of Tea will exceed a million and a quarter sterling.
That the whole of this large quantity is manufactured and packed on between 2,700 and 2,800 separate estates, situated on various parts of H.M.’s Indian dominions.
That the boxes in which the Teas are packed are in great part made of such wood as can be obtained on the several estates, or purchased from the neighbouring Forest Department, and it is very important on economic grounds, as also in the manifest interests of the districts, that this should be exclusively the case.
That it has been found, under these conditions, practically impossible to meet the imperative Custom-house standard of close uniformity of tare weight when the chests reach the Bonded Warehouses here.
That your Petitioners have reason to complain of the system of weighing the Teas in the said warehouses for the purpose of levying the duty.
That the present system of weighing is to weigh each package in the gross, then to turn out the contents, weigh the empty case, and thus arrive at the nett weight of the contents.
That the only exception to this rule is when the package, i.e., the empty cases, in a Break closely approximate in weight.
That by the said system of weighing, two serious injuries are inflicted on the grower and importer of Indian Tea, viz.:—
In the first place, a loss of weight is sustained by the fractions over the even pound in both gross and tare being given against the seller, and in favour of the buyer, amounting, it may be, to 1 lb. 15 oz., or an average of about 1 lb. in every package weighing over 28 lbs. gross, in addition to the usual trade allowance of 1 lb. per package.
Secondly, and by far the more serious grievance, very great injury is caused to the Teas by the process of turning them out of the packages, in which they arrive hermetically sealed, for the purpose of weighing the empty packages. The Teas are thus exposed to the atmosphere, the humidity of which they readily absorb, and sustain further serious injury and depreciation by breakage from rough handling in the process of repacking: the lead linings also are so torn in the process as to be rendered comparatively useless for the purpose for which they were intended, eliciting loud complaints from the trade of the rapid loss of condition of the Teas.
That the concession of this Petition, by rendering it unnecessary to turn out more than a small percentage of the chests to test the correct weight of contents, would admit of the Teas being bulked in India; and while it would free the industry from an injurious and vexatious restriction, and admit of the Teas reaching the consumer in a purer and sounder condition, it would also greatly simplify and reduce the work of the Customs.
That the foregoing statistics significantly demonstrate the importance of the Indian Tea industry to both England and India, and constitute a claim to the favourable consideration of both Governments, especially that of India, on the ground of the benefit accruing to the districts in which it is conducted, and the increment of State revenue to which it has directly and indirectly conduced.
That having regard to the existing close and hardening competition with China, Japan, and other Tea producing countries, your Petitioners naturally feel aggrieved that the important industry they represent should be hampered in the contest by the restrictive and superfluous impediment forming the subject of their petition.
That your Petitioners have unsuccessfully urged on the Commissioners of Her Majesty’s Customs the adoption of this change of system, and therefore venture to address your Lordship.
That your Petitioners beg to refer to the accompanying copies of correspondence between the Association and the Commissioners of Her Majesty’s Customs annexed to this Petition.
That the accompanying Memorial signed by the leading mercantile firms and others in Calcutta, interested in the growth and export of Indian Tea, is an illustration of the feeling in India on the subject of this Petition.
Your Petitioners therefore pray—
That your Lordship will kindly take such steps as may be necessary to secure for your Petitioners the relief sought for.
And your Petitioners will ever pray, &c.
T. D. FORSYTH,
Chairman of the Association.
ERNEST TYE,
Secretary.
The following reply was received:—
India Office, S.W.,
28th February, 1883.
Sir,—I am directed by the Secretary of State for India in Council to acknowledge the receipt of the Memorial addressed to the Earl of Kimberley by the Indian Tea Districts Association, respecting the method of weighing Indian Tea at the Custom House. In reply, I am to inform you that the Memorial has been forwarded to the Lords Commissioners of Her Majesty’s Treasury, with the expression of Lord Kimberley’s hope that whatever is practicable may be done to remedy the grievance complained of by the memorialists in the interests of the Indian Tea trade.
I am, Sir, your obedient servant,
(Signed) J. K. CROSS.
The Secretary, Indian Tea Districts Association.
It is possible, therefore, that some improvement will now be accomplished.[107]
But at the Crutched Friars Warehouse (belonging to the East and West India Docks) a great advance has already been made. The Tea there is now bulked, and re-packed by machinery. The Directors most kindly invited me to come and witness the process. I went, and was more than pleased with what I saw. The machinery, and all connected with the process, is so well described in an article in the Home and Colonial Mail, I cannot do better than give it here:—
Tea Bulking at the East and West India Dock Company’s Warehouses, in Crutched Friars.
It is not a little strange that the importance of effecting improvements in the present system of Tea bulking, which has exercised the minds of Tea growers and importers so much of late, should have hitherto been neglected or ignored by the proprietors of the various bonded warehouses in London wherein the Tea is bulked and stored. That Tea may be, and only too commonly is, bulked by an antiquated and unsatisfactory process is a fact which is well known to all who are interested in the matter. How this result is arrived at will be seen later on; at present we desire to show that at least at one warehouse the question has received the attention which it deserves, and to explain, so far as may be possible, the steps which have been taken in the matter.
It is, then, that old and powerful body, the East and West India Dock Company, who have taken up the matter. At the instance of Mr. Du Plat Taylor, the able and energetic secretary of the company, supported by the equally energetic warehouse superintendent, Mr. Robert Adams, the arrangements for bulking Tea at the warehouse of the Company have been very greatly improved. More than this; there has been invented and set up a special and very ingenious machine for the bulking of Tea in a manner which avoids all the failings of the old system. What this machine is, and what its peculiar merits are, will best, and perhaps only, be clearly understood by a brief description of the two systems as we lately saw them in operation at the warehouses of the company in Crutched Friars, which we may mention are nearer than any others to Mincing-lane, an advantage securing to planters and importers the certainty that their Teas will be sampled by the trade generally.
Under the old system, then, each chest of a break, after having been subjected to certain preliminary formalities, is opened, and the Tea turned out in a heap on the floor of the warehouse. When this is done the Tea is bulked by means of wooden spades, each spadeful being thrown to the top of the central heap, so that it falls over and on all sides. Here the Tea lies until it is placed back again in the chests after they are tared, there being a considerable interval at some of the London warehouses between the bulking and refilling. The refilling is thus accomplished. The Tea is first put into bags and weighed on a machine at the side of the bulk. The bag and chest are then taken off the weighing machine and the contents of the bag are emptied into the chest. The Tea, however, requires some pressure to force it into the chest, and this pressure is obtained by an expedient of a very primitive kind. When the chest is partly filled a man gets in and presses down the Tea by treading on it. So soon as the Tea is all in the chest the package is properly secured, and the operation is completed.
Now the serious faults of this plan are at once apparent. In the first place the Tea, being in heaps on the floor of the warehouse with a large surface exposed to the atmosphere, runs the risk of losing a great deal of its freshness and aroma, this risk being largely increased by the doors of the warehouse being kept open in order to discharge or to receive merchandise in all weathers. No atmospheric influences are calculated to benefit Tea. Then, again, the shovelling of the Tea by means of wooden spades, and the treading into the chests, can hardly do otherwise than injure the Tea—the filling in a minor degree and the treading to a more serious extent, the result being, of course, that the Tea is depreciated.
The East and West India Dock Company have made the best of this primitive method of Tea bulking. In the first place it is insisted on in their warehouses that previous to trampling the Tea into the chests, a cloth shall be placed over it to preserve it from the dirt of the man’s boots, and to some extent from injury—a precaution which, strange as it may seem, is not taken in every bonded warehouse. Then, again, Mr. Adams, the warehouse superintendent—who could hardly have the interests of planters and importers more at heart were he “in Tea” himself—uses his best endeavours to refill the boxes with as little delay as possible, and thus to prevent it from being injured by undue exposure to the atmosphere. He also keeps the floors of the warehouse as clean as practicable. But feeling that the best efforts, however well devised, and however strenuously carried out, must necessarily be attended with but partial success, the East and West India Dock Company have erected—as has already been mentioned—a Tea bulking machine, a device which is ingenious and meritorious, and which seems to be, so far as it has been tried, a great success.
This machine, designed by Mr. Tydeman, of the company’s engineering staff, and constructed under his supervision, consists, firstly, of a large hollow revolving drum weighing nearly two and a-half tons, and of sufficient capacity to thoroughly bulk about 50 chests of Tea. The drum is made to hold about 100 chests of Tea, which leaves ample space for the bulking of the above quantity. Inside this drum are frames fitted at intervals with iron rods, and extending at varying angles from the axle of the drum to its extremity. Externally the drum has two openings for the reception of the Tea, and two smaller ones for its discharge. In a line with the axle of the drum, some height from the floor, is a platform to which the chests are conveyed by a double lift which simultaneously ascends with a full chest and brings down an empty one. Adjuncts to the machine are a weighing machine, a presser, and four beaters—of the two latter the nature and object will be immediately apparent. The process of bulking as effected by this machine is briefly as follows: The drum being revolved till its receiving openings are level with the platform, a chest of Tea is raised, as before explained, and the contents examined on the door of the drum, which falls back into a horizontal position for that purpose, then by closing the tray or door the Tea is passed into the drum. The lift then brings up another full chest and takes down the emptied one, which is at once taken to a scale for taring purposes, and so the process is continued till the break is exhausted. This filling process can be carried on at both sides of a drum at once, as there are two openings and two lifts. The Tea being in, the drum is made to revolve, when the iron frames thoroughly mix the Tea in a very few revolutions—three would suffice.
The drum has now to be emptied, and this operation is effected in the following manner:—The revolution of the drum is stopped when the openings through which the Tea is released are brought over the weighing machines—there are two for greater expedition—on which are placed the chests ready to receive it. The delivery doors (worked by levers) being opened, the Tea is allowed to descend till the chest is about half full, when the presser and beaters are brought into play by hydraulic pressure. The presser is a piece of flat iron about an inch in thickness, removable at pleasure, and varies in size to fit either a chest or a box. The beaters are four pieces of the same metal, which support the chest so soon as it is on the weighing machine. When the chest is partly filled, the beaters are released, and, by the action of a wheel, are made to strike all four sides of the chest, and thus shake the Tea down. The presser is also brought down to press the Tea in. The action of both of these agents can be regulated to any required degree of force. Thus by degrees the chest is filled, and (the supporting beaters having been released and the presser raised) is weighed and ultimately removed. Such, in brief, is the action of the new Tea bulking machine. One or two points, however, remain to be mentioned. The power by which the machine is actuated is hydraulic. The presser will not injure the Tea. The beaters serve the triple purpose of holding the chest in position on the weighing machine, of supporting it should it be of weak construction, and of materially assisting the repacking of the Tea. The beating action does not in any way injure the chests. Our readers will also be pleased to know that certain very marked improvements even upon the above described are already in hand by this Dock Company—improvements which will greatly increase the value and usefulness of their machinery for bulking Teas.
To descant on the advantages over the old system of bulking which are possessed by the machine which has been described would be little better than a waste of time. Yet some few points may be briefly referred to. First, cleanliness is secured, for from first to last the Tea is never touched by hand or foot. Again, the Tea cannot be injured, nor can it lose its aroma, for it is never exposed to the atmosphere at all. Instead of being allowed to lie on the floor of the warehouse for any period, the entire process of bulking is completed without break or delay. The Directors of the East and West India Dock Company are not, of course, so sanguine as to imagine that the old system of bulking will be at once abandoned; indeed, they have, as has been mentioned, taken steps to improve that system; they do, however, think that it should be abandoned, and to that end have adopted the Tea Bulking Machinery as an alternative, and an immeasurably superior process. That they are justified in this view there can be no doubt in the minds of those who have witnessed both the systems in operation.
The said machinery is at the Crutched Friars Warehouse alone, and it is, of course, very desirable the machinery should be adopted in all Tea warehouses. This end will be quickly brought about if those who send their Tea home, and the importers here, insist on their Tea being sent to this one warehouse that has the machinery.
What an advantage to owners and managers of Tea estates is the fact that Tea bulked by machinery at Crutched Friars is not exposed to the changeable English atmosphere, or at least not for more than a few minutes, and consequently is not so likely to be classed as “flat.” How many planters are there who, after taking especial care in the manufacture of their crop, find to their chagrin that on arrival in London (and after exposure probably for some days), the shipment is described as “flat,” and worth so many pence per lb. less than if the atmospheric exposure had not occurred.
It appears to me that very little, added to the help this new machinery gives, would now do away with all the injury the producer and the Tea has hitherto borne in the Customs. So much has now been accomplished by this machinery, the Tea is well bulked, and receives no injury whatever thereby. But two further improvements are required:—
1. That the actual weight of Tea in each chest (discarding ounces) be recorded, and that thus the loss to the producer and the Customs, detailed above, be avoided.
2. That the lead at top of the Tea be carefully replaced and resoldered, so that every chest shall leave the Custom House in as good condition as it entered it.
Very little addition to the machinery detailed above would accomplish the first. The chest ready to receive the Tea, plus the lid and top lead (which should have been carefully removed), might be weighed on the platform at the side of the big drum (by simply making the said platform a weighing machine) and weighed again when filled, with the lid and lead laid on it. The difference of the two weights would, of course, be the weight of the Tea.
The second is a question of expense; it would not be great if done systematically. The chest should be carefully opened, and the top lead removed in a square piece nearly the size of the box. When replaced, a narrow strip of lead, soldered down on either side, would make the covering complete.
Justice will not be done to Indian Teas till this last is accomplished.
Who should bear the expense? The chests are received into the Customs for the benefit of the Revenue, and who can doubt, were the question tried in a Court of Law, that they are bound to return them in as good condition as they were received. They do not, and have never done so, and I only wonder the trade has stood it so long, and has not sued them. Were the course I advise followed out, there would remain no cause of complaint, and the trifling cost of soldering on the lid again should doubtless, therefore, be borne by the Customs.
But in reality the Customs would sustain no loss—in fact, the other way. I have shown clearly at page 278 that were the weight of Tea correctly recorded, the Customs would receive in duty upwards of £11,000 each year from Indian Tea more than it does now. To re-solder the lids on the boxes would cost nothing like that; and highly as Indian Tea is thought of now, how much higher still would it stand were it not injured to the frightful extent it is in passing through the Customs.
Conclusion.
I lit on the following in the Home and Colonial Mail just before going to press, and it is too pertinent to much in preceding pages to omit:—
The China Tea Trade.
The influence of the expansion of the Indian Tea enterprise on the trade in China is being felt. We have more than once adverted to the fact that the growing use of the well-flavoured Teas of India would diminish the consumption of the better grades of China Tea, and that the effect of the competition between the two countries would be first seen in the falling off in the demand for so-called fine China Tea.
The following letter, which appeared in the Times Money article lately, confirms this view, and refers to the present unsound condition of the China Tea trade:—
“Sir,—In view of the opening of the Tea season in China, a few remarks upon the present position and future prospects of this important trade may not be inopportune.
“It is no secret that for some years past the losses of merchants have been serious, and that while most of the wealthy firms so long known as connected with China have either entirely ceased to import Tea, or have reduced their operations to a very small compass, the trade has been carried on by new houses possessing but little capital, who are enabled, by the competition of the banks, to do a large business by drawing bills on China, not only for the whole cost of the Teas purchased, but also for their commissions on these purchases—that is to say, for an unrivalled profit of 3 per cent. The question, Who has so far paid the losses of the past two years? is one that greatly exercises the minds of the trade. Many suppose that large balances are being carried over in the books of some of the banks, or by the Chinese, and that it is the hope of recouping a portion of this loss that induces the banks or the Chinamen to support those who would otherwise be obliged to relinquish the trade. The Chinese have also a further inducement to support such firms, since it is partly through them that those high prices are established in China at the opening of the season which entail so much loss afterwards. As a result of these prices, about 30 per cent. more fine Congou is produced than (on account of the competition of the Indian growth) can be consumed except at the price of medium Tea. How large the excess is may be gathered from the fact that, although 5,000,000 lbs. of this class of Tea was lost last July in the ‘Moskwa’ and the ‘Fleurs Castle,’ yet stocks in Russia have increased by about 30,000 half-chests, and there is still so large a quantity on this market that it can only be realized at a loss of from 5d. to 6d. per lb. on the China cost; thus some Teas, said to have cost in Hankow 1s. 8d. to 1s. 9d., have been recently sold as low as 1s. 3d., and others costing 1s. 7d. in Foochow, have been sold at 1s. 1d. per lb.
“It is evident from the above that merchants as a rule do not realize the immense change that has been brought about in the conditions of the trade by the enormous increase in the use of Indian Tea, which now forms about one-third of the entire home consumption, and competes mostly with the finer qualities of China congou; nor the fact that all engaged in the trade are becoming year by year more averse to holding stock on account of the heavy charges involved, and the risk of deterioration in quality. Yet, as the whole twelve months’ supply of first crop Tea arrives within three months of the opening of the season, it is plain that some one must hold the balance, which can only be done with safety if the Tea be bought at a very low price.
“The one remedy for the present condition of things is that the great bulk of the so-called fine Teas should be bought in China at their present value on this market—viz., at about 5d. to 6d. below the prices given for them in recent years. With the large accumulated stocks in Russia, and consequently reduced orders from that country, the yearly-increasing supply of Indian Tea, and the present prices here, one would think that such a course would at once be adopted. Unfortunately, however, so much of the Tea is bought on commission, and the Russian agents seem so reckless as to the prices which they give, that any such prudent action can hardly be hoped for. It would, therefore, be wise for holders of shares in Eastern banks, as well as all who have been in the habit of intrusting orders to buying agents in China, to ponder the foregoing facts, which can be easily verified by a reference to any of the trade circulars lest their money should be lost in the crash which must certainly take place if the past policy of Tea buyers in China be continued.—I am, &c.,
“A. B.”
Will those warned be wise in time, and not swamp the Home Market with China Teas certain to be sold at a loss? Who can say? But “A. B.” is evidently master of the subject, and if his advice in not taken, the China Tea “crash” he predicts will not be a small one.
When China Teas are not sent home to realise a certain loss, our Indian Teas will have fairer play.
I cannot conclude without acknowledging the great help I have derived from the pages of the Tea Gazette in writing these additions to my Fourth Edition.
Since my remarks on Ceylon were printed, I have acquired much further information regarding the Tea industry in that island, and the prospects certainly seem very favourable. Anyhow, there seems to be no doubt that Ceylon for Tea offers quite as good a field as any part of India, always supposing that good sites are selected and the area to choose from is large.
The future market for Tea is really, as regards Ceylon, the only doubtful point, and consequently (as at page 183) I advise the planters there to act with caution.
Where it is proposed to put coffee lands under Tea, of course one great advantage in economy will be gained, inasmuch as there will be no jungle clearing or previous cultivation. But here again caution is necessary. Make sure the soil is not worn out, for Tea, though it will grow, will not yield largely on such.
June, 1883.
P.S.—The following are the new rules lately issued by the Customs regarding the future treatment of Indian Teas.
The weight of Indian Tea for duty may, if desired by the importers, be ascertained under the following regulations:—
1. The Tea on arrival to be weighed to ascertain the gross weight of each package.
2. With each entry the importer to give an endorsement of the net contents of each package.
3. To test the accuracy of this endorsement, 10 per cent. of each break to be turned out and weighed net.
4. If the difference between the weight given of any package and the weight found exceeds or is less than 3 lbs., the whole parcel should be weighed net.
5. Duty to be charged on the average weight of the packages weighed net, unless the importer elects to weigh the whole parcel in the usual way.
6. When the average of the packages weighed net amounts to so many pounds and a-half, an additional pound will be charged on each of the whole parcel; when the fraction is less than half a pound it is to be rejected.
7. The new system to come into operation on July the 1st next.