The American Delegation to the Secretary of State

Sir: Reference is made to Conference telegram No. 43, dated June 10, 3 p.m., in which it was stated that a meeting of Delegates was held on that date for the purpose of dealing with a draft Resolution respecting Custodian Banks, to be attached to the Protocol implementing the Washington Treaty surtaxes, and that this meeting adjourned without any definite action being taken because of the refusal of the Japanese Delegates to proceed until they had heard from their Government, from which they expected to receive instructions at an early date.

In this connection, it should be made clear that the Japanese Delegates declined not only to discuss the draft Resolution respecting Custodian Banks, but also to give any intimation of the attitude of their Government toward the Protocol for implementing the Washington surtaxes which had been unanimously adopted ad referendum by the Delegates on May 15. (See Delegation’s No. 39, May 17, 5 p.m.) In taking this position, which apparently was done under instructions, the Japanese Delegates took upon themselves the sole responsibility for further delay with respect to the implementing of the Washington Treaty surtaxes: for all the other foreign Delegations were able to announce substantial acceptance of the Protocol as a basis of negotiation with the Chinese Delegation, or to state that they anticipated no objections from their Governments upon the subject.

[Page 761]

On June 17 Mr. Strawn telegraphed the Department that he expected to sail on July 13, but that he might be delayed another two weeks on account of the dilatory tactics now being practiced by the Japanese respecting the Tariff Conference, and that he would remain here until he had exhausted his efforts to effectuate the purpose of his mission.

The same day a message was received from the Japanese Delegation, stating that instructions had been received from Tokyo and that the Japanese Delegates would like to confer with the American Delegates. A meeting was accordingly held at the American Legation on the afternoon of June 18.

At this meeting Mr. Hioki77 stated that his Government would prefer not to implement the Washington surtaxes apart from the negotiation of the larger treaty which the Conference had had under consideration heretofore and that, in view of the difficulties in the way of concluding this task at the present juncture, the Japanese Government, while not proposing, would be willing to see the Conference take a recess for the summer, with the definite understanding that the Conference should reconvene on September 30. If, however, it was desired to proceed with the implementing of the Washington surtaxes at the present time, the Japanese Government would be prepared to agree to this course if the first two sections were deleted from the draft Protocol adopted by the Delegates ad referendum on May 15.

Mr. Hioki did not produce the text of his instructions either with regard to the Washington Treaty surtaxes or with regard to the recess. Mr. Strawn stated the reason for the insertion of the first two sections in the Protocol, explaining that they had been put there largely to satisfy the desire of the British Delegation that a definite beginning should be made with respect to the abolition of likin and that the omission of any step in this direction was regarded by the British as contrary, at least, to the spirit of the Washington Treaty. Mr. MacMurray made a lengthy statement with regard to the position of the American Delegation to the effect that the foreign Delegations ought to make no move which would give the Chinese opportunity, whether fairly or unfairly, to say that the foreign Powers had not performed their pledges and were not acting in good faith. It would be better to avoid any adjournment or recess by formal action. Mr. MacMurray then said that he was not in a position to say off-hand what might be the view of the American Delegates with regard to the Japanese proposals; but, since the British Delegation had been more primarily interested in the sections which it was proposed to delete, it might be advisable if the Japanese Delegates should ascertain the [Page 762] views of the British Delegation with respect to their proposals. Mr. Hioki replied that they had arranged for a conference with the British Delegation on the following morning.

On the afternoon of June 19 it was learned from the British Delegation that the Japanese Delegates had made the same proposals as they had previously made to the American Delegates and that they had been informed that the British Delegates would submit the proposals for the consideration of their Government. So far as can be ascertained, the British Delegation is not yet formally in a position to make known the views of the British Government with respect to the Japanese proposals. However, from conversations which Messrs. Mac-Murray and Strawn have had with the British Minister, we believe the British, if necessary to come to an accord with the Japanese, would consent to the deletion of the first two paragraphs of the proposed Protocol (paragraph one being with respect to the coast-wise reimport duties $4,000,000, and paragraph two the transit pass permits $5,000,000) and let all of the revenue from the surtaxes, except the $9,000,000 annually for administrative purposes, be impounded to await future disposition by the Conference.

The Japanese attitude during the past six weeks has been very disappointing to the American Delegation especially in view of the very cordial spirit of co-operation which had existed between the two Delegations throughout the Conference and of the efforts which the American Delegation had consistently made to accommodate the Japanese in matters which were regarded by them as of primary importance in the maintenance of their commercial and financial interests in China. The new attitude of the Japanese, indicative of a desire to dictate terms, or, in the alternative, of a readiness to take independent action, has been a surprise. The situation is probably to be explained by reason of a difference of opinion between the Japanese Foreign Office and the Japanese Delegation … Whatever the cause, the effect has not been the less annoying with respect to proceeding with the work of the Conference.

While it is, of course, impossible to ascertain the exact purpose of the Japanese proposals, one cannot avoid the impression that the Tokyo Foreign Office does not desire, at the present juncture, to make any commitments, preferring to watch the development and outcome of the present political situation at Peking.

Simultaneously with this unexpected action of the Japanese in insisting upon matters involving delay in the work of the Conference, there have been appearing in the press various articles, indicating the Japanese Delegation as their source of information, referring to Mr. Strawn’s early departure for the United States and drafted in such a way as to suggest that any eventual failure on the part of the Conference [Page 763] to reach agreements and effectuate concrete results will be due to the unwillingness of the American Delegation longer to cooperate. As illustrative of this sort of propaganda, there is enclosed herewith a copy of an article issued by the Nippon Dempo (Japanese Telegraph News), appearing in the People’s Tribune of Peking on June 25, entitled “Strawn Leaving—Conference will Hold Sessions”;78 also a copy of an article appearing in the Peking North China Standard (Japanese) of June 25, entitled “Expect to Settle Surtax Question Here—Mr. Strawn Sails.”79

To offset this obvious effort on the part of the Japanese to place the blame upon the American Delegation for a delay of the work of the Conference attaching solely to the Japanese themselves, Mr. Strawn issued to the local press a statement of his position with respect to the matter of his return to the United States. This statement appeared in the Peking press on the morning of June 26 and a copy of it is enclosed herewith for the Department’s information.78

In view of the failure to date of the Chinese to form a government with which negotiations can be carried on, it is, of course, difficult for the American Delegation to take any action in the face of the Japanese policy of delay. Should the Chinese form a nucleus of government within the immediate or near future, it would then, of course, be possible to resume negotiations and be necessary for any Delegation desirous of delay either to renounce such desires, or to disclose its reasons for refusing to co-operate. The American Delegation hopes that the present confused situation in which the Tariff Conference now finds itself may be clarified at an early date.

I have [etc.]

J. V. A. MacMurray

Chairman, American Delegation to the Special Conference on the Chinese Customs Tariff
  1. Eki Hioki, chairman of the Japanese delegation.
  2. Not printed.
  3. Not printed. The title of the article is incorrect; it should read “Expect to settle surtax issue ere Mr. Strawn sails.”
  4. Not printed.