File No. 788/354.
The Acting Secretary of State to the Chinese Minister.
Washington, March 12, 1910.
Sir: I have the honor to call attention to the improper levy by the provincial authorities in Manchuria of certain taxes upon foreign goods which are provided with certificates exempting them from such taxation.
[Page 199]The facts are set forth by the Newchwang Chamber of Commerce in a note to the consular body at that port in the following terms:
A tax, commonly known as the consumption tax, is collected in the treaty marts on goods arriving there under exemption certificates, and elsewhere in the interior on foreign goods sent up from the treaty ports under transit pass. In the province of Kirin an additional tax of 1 per cent ad valorem, called the “business tax,” is imposed on all goods, and a special tax of 15 candereens per case on kerosene oil, both of which are levied in contravention of the regulations, and specific cases in which the exemption certificates have been disregarded by likin officials at Liao-Yang and Tung-Chiangtzu have been brought to the notice of the viceroy.
You will probably recall that after the opening in 1906 of several inland cities of Manchuria to international residence and trade,1 the question arose as to whether or not likin or other taxes could be levied upon goods in transit from the seaports to these inland open cities, and that after some correspondence between the American Legation in Peking and the Chinese foreign office the latter on November 19, 1907,2 sent to the legation a copy of certain provisional regulations which had been adopted by the Chinese Imperial Maritime Customs for such shipments. According to these regulations “all foreign goods which have paid the regular import duty at Tientsin, Newchwang, Antung, or Dalny, as well as all native goods which have paid the coast trade half duty * * * and which are intended for transshipment to any of the newly opened ports of Manchuria will be given a special certificate exempting them from further payment of duty and this irrespective of the manner in which said goods are transshipped to their destination.” These regulations were accepted by the American Legation as satisfactory and it was hoped by this Government that there would be no further difficulty over this question. The regulations are still in force, and it would seem quite evident that the levy of a “consumption tax” or “business tax” or any such charge, by whatever name called, upon goods covered by exemption certificates is a plain violation of the provisions quoted.
In case of goods sent into the interior under transit pass the collection of any such taxes is equally illegal and is expressly forbidden by the provisions of the commercial treaties which state that upon payment of a commutation transit duty or tax equal to one-half of the import duty in respect of dutiable articles and to 2½ per cent upon the value in respect of duty-free articles, a certificate shall be issued which shall exempt the goods from all further inland charges whatsoever.
Such illegal taxation of foreign imports bears very heavily upon American trade, and the American Government must solemnly remonstrate against this violation of treaty provisions and customs regulations.
I have the honor therefore to ask that you be so kind as to convey to the Chinese foreign office at Peking the request of this Government that instructions be issued without delay to the provincial authorities in Manchuria to cease the collection of any duty or tax upon goods covered either by exemption certificates or by inland transit passes.
Accept, etc.,
- See Foreign Relations, 1906, p. 162 et seq., and Foreign Relations, 1907, p. 130 et seq.↩
- See Foreign Relations, 1908, p. 127↩