894.0144/14
The Secretary of State to the Consul General at Mukden (Pontius)
Sir: Reference is made to your despatch No. 57 of May 26, 1920, regarding the payment of a tax for municipal purposes by American citizens residing in the Japanese settlement at Mukden.
[Page 32]In reply you are informed that the Department perceives no objection to the adoption of a plan along the lines indicated by you, namely for the payment by American citizens of assessments based upon rental values of property occupied by them. The Department is not in a position to determine whether the 12 per cent assessment suggested by you is equitable, but presumes that the matter has been carefully considered by you and the American citizens concerned. If this rate proves satisfactory to the railway officials you may inform American citizens that the arrangement has the approval of the Department.
The Department concurs in your suggestion that the payment should be made directly to the proper Japanese or railway authorities.
In communicating with the Japanese Consul General on the subject you should not fail to make it clear that in thus consenting to the making of contributions by American citizens this Government does not in any way recognize the right of the railway company to exercise political powers in the railway zone, or to impose a tax upon American citizens residing therein, nor does this Government in any way relinquish its exclusive jurisdiction over such citizens. On the other hand, the payments are to be considered as a voluntary contribution by American citizens of their fair share toward the up-keep of the municipality in return for benefits enjoyed. It should also be made clear that this arrangement is tentative in character and shall in no way prejudice any future action by this Government on the subject should the arrangement prove inequitable or otherwise unsatisfactory.
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I am [etc.]