The Great Shanghai Question
 the legal basis of the settlements

That was all the treaties said about foreign settlement in China - that British citizens, and those of countries like France and America who signed similar agreements with Peking, could live and work in the treaty ports, could own property, and could provide themselves with certain physical and spiritual amenities. The treaties did not say that they could carve out particular pieces of Chinese territory and establish their own virtually independent municipal governments with powers to regulate and tax the foreigners who lived within their boundaries. They did not state foreigners could build roads, provide their own water, light, or power, or establish their own police or defense forces or call on outside military forces for protection. Still less did they imply that such governments could impose their powers upon the Chinese who lived within their borders, effectively excluding them from the purview of Chinese authority. By whatever name, both settlements and concessions infringed upon China's authority. The most important infringement from a legal standpoint was the provision of extraterritoriality.' The treaty of 1843 stipulated that British subjects involved in criminal cases in China be subject to British, not Chinese, law. When the American treaty of 1844 enlarged the provision to include civil cases as well, it became a model for future agreements. The treaty powers thus built upon the original British foundation a system of privilege far greater than originally intended. Over the years, the scope of extraterritoriality grew (it came to include freedom from most Chinese taxation, for example), undergirding the whole structure of foreign privilege. The reach of foreign privilege extended well beyond the strict provisions of the treaties. Westerners drew on their own international law to interpret the treaties in ways favorable to themselves. If China could not provide adequate protection for Shanghai's foreign residents, for instance, an internationally recognized right of self-protection justified the establishment of a police force or a militia. Nor did nineteenth-century Chinese negotiators at first consider unusual the kinds of concessions that twentieth-century nationalists would see as shameful derogatiops of sovereignty. To them, the treaty system was simply a way of fitting the Westerners into a long tradition of barbarian management, allowing foreign traders to handle their own affairs, troubling the imperial government as little as possible. On 11 July 1854, the foreign renters of land adopted the new Regulations. Though the daotai gave his approval, no reference was made to the imperial government in Peking; yet, out of this code was born the Shanghai Municipal Council, a foreign political authority on Chinese soil. In 1863, the Americans amalgamated their own tract of land with the British holding, thus formally bringing the International Settlement into being. The French, however, went their own way. In 1862 they formed a Conseil municipal for their settlement south of the Yang'ingbang Creek (this stream, paved over in 1914-1916, would become the avenue Edward VII, dividing the two settlements). In 1869, the ministers of the treaty powers in Peking approved a new set of Land Regulations for the International Settlement and a corresponding Reglement d'organisation for the French Settlement. This time the Chinese government played no role, and it is not clear that the daotai was even notified. By what right were these enclaves of foreign privilege maintained in a sovereign nation? Foreigners answered that the treaties had granted that right; but then, the question really being asked was, On what moral basis did the foreign position stand? By what moral right was it maintained? Had not the treaties been dictated to the Chinese at gunpoint? And had not the birth of the Chinese Republic in 1912F radically changed the state of affairs? How far, in short, could the new China tolerate the arrangements of an earlier day? How far could it tolerate arrangements that went beyond the letter of the treaties? Foreigners answered that the Chinese would do better to put their own house in order before raising such questions. They should study the orderly and efficient government of the International Settlement as a model for the corrupt and chaotic administration of their own cities. Of course, the foreigners were right, and, of course, they were entirely missing the point. The highest authority within the Settlement was the Shanghai Municipal Council (or, to give it the official name that no one used, the Council for the Foreign Settlement North of the Yang-king-pang). It was elected annually by the roughly twenty-seven hundred ratepayers who could meet the qualifications for the franchise: foreigners who owned land worth at least 500 taels (Tls.; about US $365), paying an annual assessment of at least Tls. 10 (roughly $8); or householders paying an assessed rental of at least Tls. 500 annually. A single individual might have more than one vote by virtue of owning several different units of qualifying property (a house and a business, for instance) or by holding the proxies of nonresident ratepayers. The Municipal Council's nine members, all foreigners, were elected annually. Though there were no official stipulations about nationality, a gentlemen's agreement provided for six Britons, two Americans, and a Japanese, the last occupying what had been a German seat before the war. In theory, any qualified person could stand for office; in practice, American and Japanese councillors were usually chosen by informal agreement before the election to avoid splitting the vote of those communities. Hence, usually the only real contest was among the British. Since each enfranchised ratepayer had nine votes to cast, the American and Japanese votes remaining after their own nominees had been chosen might well determine which British candidates (assuming there were more than six) would be seated. By the 1920s, however, the problem was not in deciding between well-qualified candidates but in inducing such men to stand for election. Councillors were not paid, the amount of work had grown considerably, and businessmen with large responsibilities were less and less willing to take on the burdens of office. Figures showed that in 1925, of the 1,031 foreign members of the municipal staff, 857 were British, only 47 were American, and 7 were Japanese, and British citizens held virtually all the responsible positions. There was one exception: The conductor of the Municipal Orchestra, Mario Paci, was an Italian. All in all, concluded the American consul-general, the Council's employees were chosen more for nationality than for competence, and vacancies were filled by advertising in the London papers rather than locally. The Concession's budget was a good deal smaller than that of the Settlement, and it had a much smaller administration. In 1927, for example, there were only about 148 Europeans on the payroll, of whom 105 were in the police force. Since it was responsible for less than a third of the Settlement's population, how much this smaller budget affected the provision of public services is less clear. Certainly it rewarded its servants considerably less well. The secretary, who was the most highly paid member, drew only Tls. 11,000 in 1927, compared with the Tls. 30,000 paid to Commissioner-General Hilton-johnson or the chief engineer of the Shanghai Municipal Power Company. The chief of the Garde municipale received Tls. 11,100, while the commissioner of the Shanghai Municipal Police drew Tls. 18,000, and there was a corresponding difference in the salaries of other officials, from public works engineers to schoolteachers." (paraphased from Clifford's Spoilt Children of Empire)

There was continual friction between foreigners and the Chinese with the foreigners refusing to recognise the authority of the local law courts in matters involving themselves.

The Treaty of Nanking in 1842 hinted at British subjects being under the jurisdiction only of the local British consul, but the terms of Extra-territoriality, under which foreigners were completely exempt from Chinese control were fully clarified in a treaty between the China and the United States in 1844:



"Subjects of China who may be guilty of any criminal act towards citizens of the United States shall be arrested and punished by the Chinese authorities according to the laws of China, and citizens of the United States who may commit any crime in China shall be subject to be tried and punished only by the Consul or other public functionary of the United States thereto authorised according to the laws of the United States; and in order to secure the prevention of all controversy and disaffection, justice shall be equitably and impartially administered on both sides."

Under the "most favoured nation" clause in the treaties all western countries signed with China, the rights obtained by any one country could automatically be claimed by all the others. Extra-territoriality included.