On the opening of what was called free trade with China--"free," that is to say, of the East India Company's monopoly--the duty was 96 per cent _ad valorem_ on all teas sold at or under 2s. a pound, or 100 per cent on all above that price. These _ad valorem_ duties worked iniquitously for both the Government and the merchants, the Customs levying the higher rate when the lower was appropriate, and the merchants redressing the injustice in their own fashion when occasion served. An attempt was made to remedy this regrettable situation by the reduction of tea to three classifications, and the conversion of the _ad valorem_ duties into specific duties ranging from 1s. 6d. to 3s. per pound on these classifications. The arrangement was still found unworkable, and the most glaring irregularities were common. The same parcel of tea, absolutely uniform in quality, divided between London and Liverpool, would be assessed in one port on the lower, and in the other on the higher, scale of duties, and the Customs would grant no redress, though the overcharge might be ruinous to the trader. This impossible state of things was remedied in 1836, when the duties were converted to one uniform rate of 2s. per pound on all teas. Subsequently 5 per cent was added to this, so that the duty in 1847 was 2s. 2¼d. The object to which the Government inquiry was primarily directed was to gauge the effect on the consumption of tea of the raising or lowering of the duties, on which depended the ultimate retail price. The admission of competition in the Chinese trade in 1834 had the immediate effect of reducing the "laid-down" cost of tea, which promptly reacted upon the consumption of the article in England. But as the import duty remained unaltered, while the prime cost of the tea was much lowered, the Exchequer derived the whole benefit from the increased consumption. The annual consumption at that time in Great Britain was 1 lb. 10 oz. per head, or 46,000,000 lb. in total, and it was shown that in every instance where the duty was lower the consumption was proportionately greater. In the Isle of Man, where the duty was 1s. per pound, the consumption quickly rose, when the restriction on the quantity allowed to be imported there was removed, to 2 lb. 10 oz. per head. In the Channel Islands it was 4 lb. 4 oz. per head. "In Newfoundland, Australia, and other colonies the consumption is very much larger per head than it is in this country." The Australian colonies have maintained to the present day their pre-eminence as tea-drinkers, their consumption averaging no less than 10 lb. per head. Consumption in Russia and the United States is estimated at a little over 1 lb. per head of the population.