File No. 8602/6–10.
Chargé Fletcher to the Secretary of State.
Peking , December 26, 1907 .
Sir: I have the honor to inclose copies of recent correspondence with the Wai-wu Pu in relation to the imposition at Nanking and at Shun Te Fu of certain taxes on American kerosene oil, which seem to me to be in violation of treaty rights and against which I have protested.
The facts fully appear in the correspondence. Briefly stated, they are as follows:
At Nanking a contribution, called voluntary, but collection of which was enforced by fine and imprisonment, was levied by the local authorities on kerosene oil, the proceeds being devoted to the maintenance of a hospital. Nanking being an open port, I have taken the position that the taxes and charges which may be levied on American goods there are only those provided for by treaty, irrespective of whether in foreign or Chinese hands and whether the duty certificates have been canceled or not.
At Shun Te Fu the case differs slightly. There the tax has been imposed on kerosene oil by the local magistrate in aid of a girls’ school, and under Article XI of the commercial treaty of 1896 between China and Japan, which provides that—
It shall be at the option of any Japanese subject desiring to convey duly imported articles to an inland market to clear his goods of all transit duties by payment of a commutation transit tax or duty, equal to one-half of the import duty in respect of dutiable articles, and 2½ per cent upon the value in respect of duty-free articles, and on payment thereof a certificate shall be issued which shall exempt the goods from all further inland charges whatsoever—
seems to be in contravention of our treaty rights. To my note in reference to this case I have as yet received no reply.
In the Nanking case the principal question involved is whether the duty-free area of an open port includes the whole area of the port or city. This point has never been definitely settled, except in the case of Changsha, when China agreed to the British contention, but the treaty powers have always insisted that it includes the whole area of the port, and my protest is based on this assumption.
The fact that the taxes are collected from Chinese subjects complicates the question and makes effective protest and action on the part of the legation difficult, but in view of the far-reaching consequence of the exercise of this alleged right of local taxation, if allowed to [Page 135] go unchallenged, I have felt obliged, while disclaiming any desire or intention of interfering in purely Chinese questions, to point out its effect on American trade and to protest against it as in violation of our treaty rights. I have not asked for a restitution of the money collected, but merely that orders be given to the local authorities to refrain from the collection of the taxes.
Cases of this kind may be expected to recur, and I have the honor to request the department’s instructions in the premises.
I have, etc.,