The Secretary of State to the Vice President of the Standard Oil Company of New York (Cole)

Dear Sir: The Department has received your letter of May 4, 1923, relating to the subject of taxation in China and particularly to the evidences recently apparent of the desire of Chinese provincial authorities to obtain possession for themselves of the inland transit revenues normally accruing to the Customs authorities from the funds derived from the issuance of “transit passes” covering the transportation of foreign goods to interior points. Your frank statement of the problems confronting your company in this respect is fully appreciated, as well as your reluctance to take any action which might tend to undermine the treaty provisions on the subject.

As you are aware, the Treaty Relating to the Chinese Customs Tariff, signed at Washington on February 6, 1922,3 provides for a Special Conference to meet in China within three months after the coming into force of the treaty for the purpose of taking steps [Page 589] to prepare the way for the speedy abolition of likin. Since the treaty has not yet been ratified by all the signatory Powers, it has not yet come into force; but the Special Conference, at such a time as it may convene, will naturally carefully consider such facts, and the problems arising therefrom, as are presented in your letter.

The conditions which you describe have already been receiving the attention of the Minister at Peking, who has reported thereon to the Department in his despatch No. 1457 of April 4, 1923.4 In this despatch, it appears that the facts contained in your letter have already been transmitted to the Minister. A copy of your letter, however, is being transmitted to Peking for such further comment as the Minister may be able to make on the subject.

I am [etc.]

For the Secretary of State:
J. V. A. MacMurray

Chief, Division of Far Eastern Affairs