The Minister in China (Reinsch) to the Secretary of State

No. 1772

Sir: I have the honor to forward copies of a note from the Foreign Office,65 in which the Chinese Government requests the immediate institution of a surtax on import duties, in order to make the payment received more nearly equal to the 5% effective, which has been agreed upon, and which is to be definitely fixed by the Customs Conference at Shanghai. The action suggested would have as a precedent the arrangement made in 1902, when a 5% ad valorem duty was permitted to be levied, in anticipation of the tariff to be fixed by the Customs Conference at that time. The Ministers of the Allied Powers unanimously agreed to recommend to their Governments that the request for an immediate surtax be granted in principle, and that the delegates at the Customs Conference at Shanghai be authorized immediately after the beginning of their work, to fix the definite amount of surtax to be granted. It is the opinion of the Ministers that a surtax of a definite percentage is preferable to the temporary institution of an ad valorem duty of 5%, partly because the market value of merchandise at the present time is abnormal, and partly because the administration of an ad valorem duty is most difficult.

I have the honor to recommend that the American Government authorize action in consonance with the above recommendations, and to request your telegraphic instructions.

Incidentally, the opinion has been expressed by a number of the Ministers that it would be most equitable to take the three years immediately preceding the war as a basis for the valuations to be fixed by the Tariff Conference. The reason for this preference is found in the abnormal prices attained by many articles of merchandise in the course of the war.

I have [etc.]

Paul S. Reinsch
  1. Not printed.↩