500.A 4 e/439: Telegram

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

Summary number 1. Tariff Conference opened this morning at 10 a.m., presided over by Shen Jui-lin, Minister for Foreign Affairs and chairman of the Chinese delegation, who was chosen chairman of the conference by acclamation upon nomination of Mr. Oudendijk, Netherlands Minister and senior minister.

The Chief Executive of the Provisional Government, Marshal Tuan Chi-jui, delivered brief address of welcome and after referring to Washington Conference and particularly to section 1 of article I of nine-power treaty, stated that Chinese people attached great import to this declaration and that an opportunity would be provided at this conference for its realization. He renewed the claim for tariff autonomy and on this subject made following statement:

“The idea of tariff autonomy is not a new one, it is an inherent right of a sovereign nation. We, therefore, trust that friendly nations, actuated by spirit of equality and mutuality, will appreciate our position. The existing tariff regime in China is contrary to economic principles, and consequent loss of revenue to us cannot be fully estimated. It is true that with enforcement of the national tariff and the revision of rates, the burden of the importers will be somewhat increased. It will, however, remove the disadvantages under which the Chinese people have long been laboring, thereby improving their financial conditions, increasing their purchasing power and help develop their infant industries. China is recognized as one of the great markets of the World. The improvement of her financial condition[s], the growth of her wealth and the development of her industries will not only be a blessing to herself but also a source of benefit to the friendly nations. Believing that self-aggrandizement is a step to self-destruction and that mutual assistance is the basis of mutual salvation, my expectations grant [expectation is great] that this conference will be guided by the principle of equality and mutuality. Furthermore, the general feeling of unrest and dissatisfaction [,either] within a nation or between nations, may be traced to economic inequality. The establishment of a tariff regime in China on a basis of equality is the means towards stabilizing the economical reparations [economic relations] between China and the World, and forms the foundation of international [peace].”

The Minister for Foreign Affairs next addressed the conference, and, after thanking the delegates for the honor of selecting him to preside and extending a warm welcome to the delegates and their respective staffs, he referred to the many international conferences which have been held since the close of the Great War. He spoke particularly of the Locarno Conference; because, as he stated, its achievements are still fresh in our memory and have resulted in the [Page 862] readjustment of the relations between the interested powers in the light of and in harmony with the new conditions which have arisen since the signing of the Versailles Treaty. He said further that the Washington Conference has had a more direct effect on the Pacific and the Far East than any other conference. In referring to the Chinese customs tariff he said:

“I am inclined to think, and I feel confident that my opinion is [shared] by all of you present, that the treaty tariff regime in China, inaugurated some eighty years ago to meet a condition which no longer exists today, is entirely out-of-date and should not be allowed to continue to prevail. I, therefore, venture to hope that you, the distinguished delegates of this conference, inspired by the spirit of good will and sympathy and availing yourselves of the opportunity now offered, will arrive at [a] readjustment of the Chinese customs questions so that China may be enabled at an early date to exercise her sovereign rights of tariff autonomy.”

In concluding, he said that Dr. C. T. Wang, one of the Chinese delegates to the conference, would lay before it on behalf of the Chinese Government certain proposals for the settlement of the Chinese customs questions and that he was firmly convinced that the conference, animated by the spirit of justice, would agree to the proposal[s].

C. T. Wang spoke next and referred to the presentation of the question of tariff autonomy at the Paris Peace Conference in 1919 and also at the Washington Conference. He stated that it remains a matter of regret to the Chinese Government that the tariff proposals have not been accepted, in that he offered [sic] section 1 of article I of the nine-power treaty relating to principles and policies, and stated that, placing full reliance on the spirit of the nine-power treaty, the Chinese Government makes the following proposals for the removal of the restrictions imposed by existing treaties affecting the customs tariff:

The customs participating powers formally declare to the Government of the Republic of China their respect for its tariff autonomy and agree to the removal of all the tariff restrictions contained in existing treaties.

The “Government of the Republic of China agrees to the abolition of likin simultaneously with the enforcement of the Chinese national tariff law which shall take effect not later than the 1st day of January, 1929.

Previous to the enforcement of the Chinese national tariff law, an interim surtax of 5 percent on ordinary goods, 30 percent on A grade luxuries (namely, wine, tobacco) and 20 percent on B grade luxuries shall be levied in addition to the present customs tariff at 5 percent ad valorem.

The collection of the above-mentioned interim surtaxes shall begin three months from the date of signature.

[Page 863]

The decisions relative to the above four articles shall be carried into effect from the date of signature.

Chinese tariff law referred to in proposals 2 and 3 in Wang’s speech is a law promulgated October 24, 1925, by the Chief Executive of the revolutionary government and will be telegraphed tomorrow or later.75

Following Dr. Wang’s address, the American Minister spoke as follows:

“It is with a particular satisfaction that we of the American delegation take our place[s] in this conference called in pursuance of one of the treaties concluded at the Washington Conference [and] with the object of effectuating the purpose[s] of that treaty. [It] is our earnest hope that the work of the present conference may be carried on in the same spirit of mutual good will, hopefulness, and confidence, which characterized the proceedings at Washington.

There lies before this assembly a definite task imposed by the customs tariff treaty. We, for our part, approach these duties with [a] hearty good will, determined to do our share in bringing into practical operation the principles and the purposes established by the treaty. In so doing we are prepared to consider carefully, with open minds and in a generous spirit, any reasonable plan which may be proposed with a view to realizing [the] hopes and inspirations [aspirations] of the Chinese people in regard to the customs tariff of China.

We are hopeful that the deliberations of this conference, actuated by mutual respect and sympathetic understanding, may result in arrangement[s] that, while safeguarding the just interests of the foreign nations, may also be the means of assisting the Chinese people in developing and maintaining a sound national life.”

The French Minister in his address laid special emphasis on the necessity for the financial rehabilitation of China. He confined himself in the main to pleasant references to the conference and to the program of work.

The British Minister in his speech referred to the kind words of welcome spoken by Marshal Tuan and the Minister of Foreign Affairs and concluded as follows:

“This Customs Tariff Conference is, as you all know, the outcome of an engagement solemnly entered into by the nine powers including China which participated in the Washington Conference and its scope and objects were clearly laid down and defined in the treaties signed by those powers on the 6th of February 1922.

His Britannic Majesty’s Government, in accepting the invitation of the Chinese Government to take part in this conference and in appointing their delegates thereto, have been actuated by precisely the same motives which impelled him [them] to join in the resolutions respecting China adopted at Washington and to becoming [become] cosignatories of the Washington treaties; merely [namely] their earnest desire to assist the Chinese nation in the realization of [Page 864] its legitimate aspirations as [and] in the achievement of resolutions [results] beneficial to China as a whole.

His Majesty’s Government wish the British delegates to approach the conference in a generous and sympathetic spirit and I am authorized to state that this delegation be [is] prepared to discuss the question of tariff autonomy either at this conference or, if that cannot be arranged, at [a] later date.

We are anxious that the conclusions reached by this conference may make it possible for the Chinese [to] establish a thoroughly sound fiscal system and [to] raise adequate revenues for the needs of the Central Government and also [those of] the provincial authorities. One of the essential aims of the conference as laid down in the Washington treaty is the elaboration of measures leading to the abolition of likin and other internal levies on trade and in the view of His Majesty’s Government this must necessarily entail some readjustment of the fiscal relations between the Central Government and the provinces which will take into due account the financial necessities of the component parts of this great Republic.

We are convinced that British interests and Chinese interests are essentially the same. We have no doubt that it is in British interests only less than in Chinese interests to promote the establishment of a united, independent, orderly and prosperous China. We naturally recognize that the attainment of this aim lies in the hands of the Chinese themselves, but so far as British assistance may be practicable and may be desired, I can assure you that the wholehearted cooperation of this delegation is at the disposal of the Chinese delegation and of all our other colleagues.”

Mr. Hioki, chairman of the Japanese delegation, stated that his delegation have come here with the curious [serious] conviction that some definite results [in] the direction of a common purpose and a common understanding between China and other powers may well be attained at the present conference. He pledged that delegation’s wholehearted cooperation to this end and predicted that [deliberations of] the conference will be marked on all sides by fairness and moderation in spirit and simplicity and directness in method. He stated that Japan has always watched with keen interest every effort made by the Chinese people for the realization of their legitimate national aspirations. He stated also that Japan had at one time been subjected to unilateral restrictions upon her freedom of action in matters of fiscal and judicial administration and referred particularly to the fact that the present tariff restrictions in China had their counterpart in Japanese history of tariff restrictions in Japan and their relinquishment finally in 1911. Concluding this historical résumé he said:

“China is still following the same paths that we once pursued. The difficulties, the embarrassment[s], and the perplexities that confront China today have once been ours. The Japanese delegation will approach the problems before this conference with sympathy and [Page 865] understanding and with intimate apprehension of the Chinese position.

I am happy to state at the outset that the Japanese delegation are fully prepared to consider in the friendliest way the question of tariff autonomy which appears in the agenda presented by the Chinese delegation.”

Mr. Hioki then referred to certain provisions of the customs treaty particularly articles II and III concerning respectively likin and the 2½ [percent] surtax which he stated could provide additional revenue of approximately 99 [29] million dollars in silver. He made reference also to a general readjustment of Chinese finances and stated that the Japanese delegation would on another occasion make concrete suggestions on this subject. He stated also that the Japanese delegation would not be disinclined to take up any proposals which might be put forward with a view to the levying of a reasonable surtax, higher than 2½ [percent], pointing out that such a proposal might be considered as falling within the terms of article II of the treaty. He remarked, however, that since this would constitute an intermediate step prior to the total abolition of likin, it would be requisite for China to effectuate at least a partial abolition of likin as well as to fulfill certain conditions provided for in the treaties between China and other powers. Mr. Hioki here returned to the question of tariff autonomy and reiterated the statement that the Japanese delegation will consider sympathetically and helpfully any reasonable plan of the Chinese Government in this regard but stated that the goal could be reached only by successive stages and that immediate and unconditional surrender by the powers of their existing treaty rights is not within the contemplation of China herself. Mr. Hioki then proposed the following alternative plan:

  • “First. That a statutory tariff on a fair and reasonable basis be established for general application subject to the provisions of a special conventional tariff on certain specified articles to be agreed upon separately between China and each of the powers directly interested; or
  • Secondly. That a graduated tariff so devised as to be acceptable to the powers concerned be established at an average rate of not more than 12½ per centum ad valorem and generally in a manner consistent with the provisions of article II of the Washington Treaty.”

Mr. Hioki also said that: “The inauguration of a regime of tariff autonomy in China implies the existence of an adequately strong and unified government, and presupposes a complete removal of all restrictions which might impede the [freedom of] intercourse of [and] trade between China and other powers.” He expressed the hope that: “Endowed with remarkable qualities of self-government and supported [Page 866] by the growth of [nationalism now] so manifestly asserting itself in the country, the Chinese people will succeed in the accomplishing of reforms toward these ends, as much desirable for their own welfare as for the common good of all nations.”

In conclusion, Mr. Hioki stated:

“I desire to reaffirm, on behalf of the Japanese delegation, our faith in the spirit of friendliness which animates this important gathering. We ardently hope and believe that by frank discussion and neighborly cooperation, by mutual assistance and concession and by the exercise of due respect for one another’s rights and interests, the present conference will find equitable solution for every problem before it to the satisfaction of all and thus demonstrate its will to live and let live.”

The Belgian delegate, Mr. Le Maire de Warzée Hermaile; the Danish delegate, Mr. Henrik de Kauffmann; the Italian delegate, Mr. Vittorio Cerruti; the Netherlands delegate, Mr. W. J. Oudendijk; the Norwegian delegate, Mr. Johan Michelet; the Portuguese delegate, Mr. Joâo Antonio de Bianchi; the Spanish delegate, Mr. Justo Garrido y Cisneros; and the Swedish delegate, Mr. Ewerlöf, all made brief addresses referring to the work which lies before the conference and the sympathetic and hopeful attitude in which they approached it.

Upon the conclusion of the above-mentioned addresses Mr. Hawkling Yen was chosen secretary general of the conference by acclamation. A committee on program and procedure consisting of Mr. C. T. Wang, for the Chinese delegation, and the chairmen of the other delegations was chosen and is to meet tomorrow. The conference then adjourned subject to call.

  1. See telegram of October 28, from the Minister in China, p. 867.