File No. 893.512/38.

Consul Williams to the Secretary of State.

No. 6.]

Sir: I have the honor to enclose a copy of my despatch No. 5 of August 7th, 1914, addressed to the American Legation at Peking, [Page 126] respecting the collection of likin at Hsiakuan, the area set apart by the Chinese for foreign trade and residence.

I have [etc.]

C. L. L. Williams
.
[Inclosure.]

Consul Williams to Chargé MacMurray.

No. 5.]

Sir: I have the honor to enclose a copy of a communication46 received from the local agency of the Standard Oil Company of New York complaining of the likin collections at Hsiakuan.

It is believed that this matter will be self explanatory, and it will be seen that it raises two separate issues: first, the outstanding dispute as to whether or not Nanking is open to foreign trade as a treaty port; and second, whether or not the Chinese may stultify the opening of a port by the collection of likin on every package of merchandise leaving the area set apart for foreign trade and residence.

A reference to the sketch enclosed in the company’s letter shows that its installation is on the Island of Hsiakuan, and is therefore within the area which, the Chinese allege, constitutes the port of Nanking. To transport merchandise into the city two routes are available, via a system of creeks to the Han Hsi Gate, and by road through the I Feng Gate. On each route is a likin station which levies a tax on goods passing in or out. If the contention of the foreign treaty powers be adopted, i. e. that Nanking itself is an open port—as clearly stated by treaty—there can be no doubt that the collection of likin on goods en route between Hsiakuan and the city is a violation of treaty stipulations. Unfortunately, it is more than likely that the likin stations of which complaint is made were instituted by the Chinese with the object of emphasizing the fact that they do not regard the city of Nanking as a treaty port. As this question is one of some years standing, which has already been discussed from every possible point of view, I have no hope of being able to remedy locally the abuses of which complaint is made, and, while representations will be made to the provincial authorities, it is believed that the only chance for a settlement favorable to foreign interests lies in pressure on the Central Government by the Diplomatic Body. I am informed that the British and German Ministers have made representations on this subject recently.

The second point mentioned raises a much broader and less clearly defined issue. As has been stated likin is collected on all goods destined for Nanking city, and, incidentally, for other points to the south. The only other direction in which merchandise can be moved from Hsiakuan is via the Hui Min Creek to the Yangtze, and in point of fact the only important point to which the merchandise is moved—apart from the city itself—is Pukow. The Chinese authorities have established apparently a likin station on the east bank of this creek—see sketch plan—within the area admitted by them to be the open port, and collect there likin on all merchandise passing. “Apparently” is used advisedly as the Standard Oil Company states it has suspicions of the legality of the collection. It may prove possible to obtain the abolition of this station on the ground either that it is illegitimately established or that it is within the settlement area.

But it is felt that the authorities should not be permitted to establish likin stations on all the boundaries of any settlement or settlement area, as thereby they stultify the whole object of an open port and, in effect, increase the import duty to the extent of the likin collected. It appears to be an absurdity that the payment of import duty should free goods only to the wharf or go-down and that when moved to any market in any direction they should be compelled to pay an additional exaction.

I venture to suggest that the company be directed to refuse payment of this latter tax, and that the matter be taken up with the Chinese authorities along the lines indicated in the preceding paragraph; the possible illegitimacy of the [Page 127] station and its establishment within the settlement are being raised as minor issues only.

I have the honor to request the Legation’s instructions in the premises. A copy of this despatch has been forwarded to the Department of State.

I have [etc.]

C. L. L. Williams
.
  1. Not printed.