File No. 893.512/53.

The Acting Secretary of State to Chargé MacMurray.

No. 324.]

Sir: The Department has received your despatch No. 686 of July 12, 1915, with its enclosures, in reference to a so-called “99 Mercantile Tax” which the provincial authorities of Kiangsi have attempted to establish. Assuming that the Governor of Kiangsi correctly described [Page 230]the tax provisions on January 12 last, and assuming further that these have not since been changed, the levy of the above mentioned tax upon goods that have paid the Pao-shang-piao is, in the opinion of the Department, improper, and your instruction to the Consul General at Hankow under date of July 12 on this subject is therefore approved. While approving the Legation’s instruction, the Department believes it would be well to obtain a copy of the Pao-shang-piao regulations, or a receipt showing the payment of such a tax, in order that the propriety of the Standard Oil Company’s refusal to pay the “99 Mercantile Tax” may be determined.

I am [etc.]

Frank L. Polk.