Papers Relating to the Foreign Relations of the United States, With the Annual Message of the President Transmitted to Congress December 3, 1907, (In two parts), Part I
File No. 788/70–76.
Consul-General Straight to the Assistant Secretary of State .
Mukden , May 21, 1907 .
Sir: In confirming my cipher telegram of the 20th instant as follows,a I have the honor to transmit herewith a copy of my dispatch No. 105, of even date, to the legation at Peking, as well as the inclosures therewith, excepting the Chinese texts, regarding the agreement above mentioned.
I have, etc.,
Consul-General Straight to Minister Rockhill .
Mukden , May 21, 1907 .
Sir: In confirming my telegram of the 20th instant, your reply of May 21, and my reply thereto of even date, as follows:b
[Cipher telegram received May 21, 1907.]
“American Consul, Mukden:
“Your cipher telegram received. Who signed agreement referred to?
“Rockhill.”
[Cipher telegram sent May 21, 1907.]
“American Minister, Peking:
“Your cipher telegrams received. Foreign oflice in formal note accepted my proposals.
“Straight.”
I have the honor to inclose for your information a copy of the note verbale presented to the directors of the bureau of foreign affairs, a copy of the translation of their reply, a copy, with the Chinese text thereof, of my final statement of the question under consideration, and a copy of the translation and Chinese text of the acceptance by the bureau of foreign affairs of my proposals regarding the noncollection of inland taxes on foreign goods in the treaty marts of Shengking.
Since the note verbale inclosed in my dispatch No. 82, of January 26, clearly stated the position of the American Government as outlined in the legation’s instruction to this office, I considered that by enabling the Chinese authorities to accept what is nominally a provisional arrangement it might be possible, without the waiver of any treaty rights, to secure for American goods the practical advantages for which we have contended.
The Chinese authorities insisted, as provided in paragraph 3 of inclosure No. 3, that should the American Government consent to the collection of inland dues on foreign goods passing the boundaries of the foreign concessions, the importers should pay the amounts recorded during the period preceding the conclusion of such arrangement as leviable. While regretting the necessity of even conditionally recognizing that such goods should ever be liable to inland taxation, I have felt that the fact that the American Government will insist that foreign goods shall be exempt from inland dues in the open cities in their entirety has been emphasized in such a manner as to virtually nullify the possibly prejudicial effect of such an admission.
I venture to hope that the legation may approve my action in this matter.
As reported in my No. 102, of April 28, I do not regard the selection of concession sites at either Mukden or Antung of vital importance at the present time. In approaching the viceroy, however, with a view to obtaining from him an admission that inland dues should not in the future be collected in the inland marts, I deemed it advisable to offer to proceed with the negotiations for settlement delimitation. I did so, confident that the obstacles to be overcome in drawing up regulations mutually satisfactory to the Chinese and ourselves are so great that this question will necessarily remain unsettled for an indefinite period. His Excellency having assured me that he was anxious to do all in his power to evolve some arrangement which would make it possible to proceed with the solution of questions which have for so long a time been confronting us, referred the matter to the foreign office for discussion. As I had reason to believe that the Chinese authorities would take no steps to perfect customs arrangements for the inland marts without first receiving some assusance that the question of settlement delimitation might at least be reopened, I embodied the suggestion that we proceed with such negotiations in my note to the foreign office of May 6 (inclosure No. 1).
In numerous interviews with the viceroy and the directors of the bureau of foreign affairs which followed the presentation of this note, the question of inaugurating customs procedure at the inland cities was brought forward. The directors of the foreign office, having a personal interview, agreed to my proposals as outlined in my note of the 16th of May (inclosures Nos. 3 to 4), in written communication, which they assured me would express their acquiescence in the course described in the note above referred to, attempted to evade the responsibility of making the promised admission. After a week’s delay, however, at the end of which time I had occasion to impress upon-them the importance of concluding some arrangement at an early date, they consented to quote my note in its entirety and to accept the proposals embodied therein.
Both the German and the British representatives have, in order to secure the exemption of goods imported by Arnhold, Karberg & Co., and Butterfield & Swire, respectively, consented that a record shall be kept of such goods, together with the amounts of inland dues to which the Chinese consider them liable, and have, moreover, guaranteed that, should it eventually be decided that inland dues may be collected on foreign goods outside the international concessions, these firms will pay the Chinese Government the taxes which have been recorded as leviable upon the goods imported. A copy of the agreement signed by the German consul is inclosed herewith. No provision was made for the noncollection of duties on goods covered by “exemption certificates.” These agreements, moreover, apply to special cases only. I was unwilling to enter into any such arrangement on behalf of American firms, as such a compromise seemed to me undesirable.
[Page 237]The assurance from the provincial authorities that no inland dues will be collected on foreign goods in the open marts will be beneficial to American interests. Moreover, if immediate steps are taken to provide for the issuance by the offices of the imperial maritime customs of “exemption certificates “to cover goods destined for Shengking and for the recognition of such certificates by the collectorates in the inland marts, as provided in your note to the Wai Wu Pu, inclosed in your dispatch No. 1142, of February 22, the fact that goods not provided therewith will be forced to pay import duties at these cities or possibly be liable to confiscation would perhaps hasten the installation of custom-houses at Dalny and on the Russian frontier, and thus restrict the privileged competition which, particularly owing to the absence of a customs collectorate at the former place, has been injurious to American interests.
I have, etc.,
Consul-General Straight to the Minister for Foreign Affairs .
[Note verbale.]
The American consul-general presents his compliments to MM. les Directeurs of the Bureau of Foreign Affairs. In answer to their verbal assurance that it is the desire of the Imperial Government to proceed with the delimitation of the international settlements at Mukden and Antung in accordance with the provisions of Article XII of the treaty of 1903 between the United States and China, the American consul-general has the honor to inform MM. les Directeurs that while maintaining his original contention regarding the status of the treaty marts in question, in view of the exigencies of the situation he is willing to resume negotiations for settlement delimitation upon receiving the assurance of MM. les Directeurs that, pending the mutually satisfactory settlement of the question regarding the limits of the duty-free areas at the treaty marts, foreign goods, when covered by “exemption certificates” issued by the imperial maritime customs, shall not be subject to the imposition of inland dues at or within the cities opened to international residence and trade.
The American consul-general avails himself of this opportunity to renew to MM. les Directeurs of the Bureau of Foreign Affairs, the assurances of his most distinguished consideration.
Minister for Foreign Affairs to Consul-General Straight .
Sir: In connection with our recent conversation regarding the levy of inland duty on foreign goods, I have the honor to acknowledge the receipt of your note which contains one or two matters concerning which there exists some ambiguity.
While maintaining that (territory) outside the concession areas should be treated as the interior, this office, realizing the difficulty of immediately reaching a satisfactory settlement of this question, agrees that, pending the conclusion of negotiations for the delimitation of the foreign concessions, a record shall be kept of all foreign goods imported, together with the amounts of duties leviable thereon, and that, if these goods are covered by “exemption certificates” issued by the maritime customs, no duty will be charged.
If in the future our respective Governments agree that inland taxation may be collected outside the limits of the foreign concessions duties shall be collected accordingly. It is agreed that this arrangement is provisional. This office hopes that, when this matter is decided, the maritime customs may be established throughout Fengtien at an early date,
Consul-General Straight to the Minister for Foreign Affairs .
Mukden, China , May 16, 1907 .
Messieurs les Directeurs: I have the honor to acknowledge the receipt of your recent note. As there are one or two matters concerning which there is apparently some degree of ambiguity, I venture in reply to review the proposals under consideration.
I have already had the honor to communicate to you the views of my Government regarding the opening of the treaty marts in Shengking. In your note you reiterate your contention that inland dues are leviable outside the boundaries of the foreign concessions. Since our views in this matter do not coincide it has been proposed that, pending the settlement of this question, all foreign goods imported into the open cities in their entirety, if they be covered by exemption certificates issued by the maritime customs, shall not be subjected to inland taxes, but that record shall be kept of the quantity of such goods and the amount of duty to which you consider them liable.
Hereafter, should our respective Governments agree that inland dues may be levied outside the foreign settlements, the amounts recorded shall be collected. It is agreed that the arrangement described in the preceding paragraph is provisional.
It is highly important that customs machinery for effectuating the above agreement should be installed in the open cities as soon as practicable, and I trust that the Imperial Government will immediately take steps to perfect the necessary arrangements. Until such action is taken it will be impossible for goods destined to Shengking to secure exemption certificates, as no provision has been made for the recognition thereof in the open marts. Prior to the inauguration of customs procedure, therefore, foreign goods shall not pay inland dues, but record shall be kept in the manner herein above described.
I avail myself, etc.,
The Minister for Foreign Affairs to Consul-General Straight .
Sir: I have the honor to acknowledge your note stating:
“I have the honor to acknowledge the receipt of your recent note. As there are one or two matters concerning which there is apparently some degree of ambiguity, I venture to review the proposals under consideration.
“I have already had the honor to communicate to you the views of my Government regarding the opening of the treaty marts in Shengking. In your note you reiterate your contention that inland dues are leviable outside the boundaries of the foreign concessions. Since our views in this matter do not coincide, it has been proposed that, pending the settlement of this question, all foreign goods imported into the open cities in their entirety, if they be covered by exemption certificates issued by the maritime customs, shall not be subjected to inland taxes, but that record shall be kept of the quantity of such goods and the amount of duty to which you consider them liable.
“Hereafter should our respective Governments agree that inland dues may be levied outside the foreign settlements, the amounts recorded shall be collected. It is agreed that the arrangement described in the preceding paragraph is provisional.
“It is highly important that customs machinery for effectuating the above agreement should be installed in the open cities as soon as practicable, and I trust that the Imperial Government will immediately take steps to perfect the necessary arrangements. Until such action is taken, it will be impossible for goods destined to Shengking to secure exemption certificates, as no provision has been made for the recognition thereof in the open marts. Prior to the inauguration of customs procedure, therefore, foreign goods shall not pay inland but record shall be kept in the manner herein above described.”
[Page 239]This office agrees to the above procedure, but wishes it clearly understood that the provisions refer to foreign goods, and that native Manchurian goods shall not be entitled to similar treatment.
Mr. Mezger to the Tartar-General and Governor-General, Chao Erh Sun .
Gentlemen: With reference to the conversation of this afternoon between Taotai Tao and Han and myself on the subject of levying taxes upon goods imported by the German firm Arnhold, Karberg & Co., to Tiehling, I have the honor to confirm herewith the arrangements verbally agreed upon.
- (1)
- The provincial government of Fengtien promises to give an immediate order to the tax collector at Tiehling not to impose any taxes on foreign goods being imported by the agents of Messrs. Arnhold, Karberg & Co.
- (2)
- The agents of Messrs. Arnhold, Karberg & Co. will in the future hand over bonds to the tax collector, stating the amount of foreign goods imported by them, and also stating the duty due on these goods.
- (3)
- The German consul agrees that this duty will be paid later on
by Messrs. Arnhold, Karberg & Co., provided—
- (a)
- That the Government of China, the United States of America, and Japan, who have concluded the treaties according to which the different places in Manchuria have been opened to foreign trade, agree that the right of free trade is only restricted to a certain settlement area at the opened towns and that the Chinese cities at these places are regarded as being in the interior.
- (b)
- That the merchants of all other nations are equally bound to pay up afterwards the duty in arrears if the interpretation of the treaties as explained in sub (a) has been adopted by the Governments concerned.
Asking for an adequate confirmation from your side, I avail myself of this opportunity to renew to you the assurances of my high consideration.