693.003/476: Telegram

The Secretary of State to the Ambassador in Japan ( Morris )75

American Legation Peking telegraphs that Allied Ministers have agreed to recommend Japanese proposal that International Conference for Revision Chinese Customs, now sitting at Shanghai, adopt as basis for tariff revision, with proviso inaccuracies may be corrected, customs valuations for years 1912 to 1916, inclusive, which valuations, it is stated, customs authorities admit abound in serious discrepancies; and that American delegates at Conference unqualifiedly oppose on principle acceptance of customs valuations because burden of proof of inaccuracies would rest with those protesting them and acceptance of customs valuations would create undesirable precedent for future revision, placing premium on inaccurate declarations and forcing customs to provide elaborate checking machinery which might better be used for outright 5 per cent ad valorem duty. Minister adds that American delegates strongly favor Shanghai market values as basis with customs valuation as guide rather than as forced basis and if five years deemed impracticable for determination of valuations, they recommend 1916 year as basis with proviso for an optional 5 per cent ad valorem where importers find duties at any time in excess of 5 per cent.

While Department’s attitude has been that such questions should be left entirely to the Conference for determination, still it desires that the government to which you are accredited shall know that it believes the acceptance of customs valuations would work a hardship on the Chinese Government and possibly other interested governments. Department favored years 1913 to 1917, inclusive, for purposes of valuations, but has no particular objection to years 1912 to 1916, inclusive, if Shanghai market valuations are used as a basis [Page 653] with customs valuations as a guide instead of an actual basis. As an optional basis year 1916, with proviso above recommended, would seem to offer a working arrangement fair to all. You will bring this matter to the attention of the Government to which you are accredited with a view to obtaining its approval, if possible, of the American delegates’ suggestion, or of some basis of calculation more favorable to China than customs valuations would be.

  1. The same, May 1, to the Ambassadors in France (No. 3775) and Great Britain (No. 7513).