500.A4e/686: Telegram
The Minister in China (MacMurray) to the Secretary of State
[Received 12:53 p.m.]
566. 1. In informal conversation recently Koo stated to me that he planned shortly to circularize a proposal to the interested Legations that the Tariff Conference be resumed. He requested me to give my opinion regarding the prospects. I recalled that foreign delegations had made their conviction clear at the “informal meeting” held July 23 (for which refer to conference number 51 of July 23, 11 p.m.) that no Chinese governmental entity with which such negotiations could be [Page 856] carried on was in existence. I pointed out quite frankly that the Peking administration has since that time become not only more definitely an agency of faction but by denunciation of the Belgian treaty24 has aroused doubt of its sense of responsibility in regard to foreign obligations. It was urged by Koo that his administration was amply able, except as he said, in certain provinces in the south, to discharge its obligations. Instancing the illegal export and import duties, the imposition of which is being attempted by the Military Governor of Shantung, I asked Koo where in fact his administration could control its own nominal adherents. He replied that levies of these taxes and similar ones on foreign trade were being made by various provinces in the place of the Washington surtaxes. They felt that the latter were being unjustly withheld from them by the powers. He made this remarkable statement: the Foreign Office could not expect to turn the provincial leaders away from so obviously a just action and it was, in fact, not so much as forwarding to them any of the protests which were made against taxes on foreign trade which were levied in contravention of treaties. In reply to my question of what position he took regarding taxes levied in Peking itself on tobacco, he outspokenly upheld such taxes as fully justified so long as the obligations the powers had under the Washington Customs Treaty were not fulfilled. He maintained this even though admitting that more than a year before the Chinese delegation had rebuffed the offer of the surtaxes. However he stated that when the surtaxes had once been put into force by the Special Conference, faithful observance of all conditions which might be stipulated could be and would be secured by the Peking Administration. As I knew, the argument could be carried no further, and undoubtedly he was aware that I knew these statements did not represent anything real.
2. Koo was most insistent concerning the matter which he termed the universal demand by the public that the Conference be resumed. Discussion of this pretension was similarly difficult. The situation is this: no one unconnected with the present regime in Peking has the least desire to have the Conference continued for the creation of a new source of revenue for the benefit of Chang Tso-lin and his associates in the warfare going on.
3. Nevertheless, the fact is that such public opinion as exists in China regards as evidence of bad faith by the foreign powers that they do not carry out the provisions of the Washington Treaty, although the great part of the people, I feel convinced, would feel bitter resentment if we made an agreement with the Peking regime implementing the recent obligations. If we bar the highly improbable [Page 857] contingency of a stable, responsible central government being established at an early date, we are confronted with a dilemma. The sole means of escape from it that I have thought of are the following: (1) To take [garbled group] action through the making of several regional agreements—as to this, the disapproval of the Department is to be inferred, in view of its telegram No. 226 of October 13;25 (2) to indicate in outline form the general conditions upon which basis the powers would be prepared to put into effect the Washington surtaxes, the powers to make a statement of willingness to negotiate with any Chinese delegation for this purpose if the delegation were constituted so as to represent the whole Chinese people and to be competent to offer effective assurances in regard to any agreements arrived at being generally respected; (3) the powers to take action independently of China to enforce the surtaxes upon their own nationals, waiving all such conditions as were contemplated by the Customs treaty and by the Tariff Conference; (4) to take the radical action of conceding unanimous tariff autonomy immediately, with the single condition that most-favored-nation treatment be provided for. Only the second and third of these alternatives appeal to me as offering possibly a hope of such a solution as will avoid entailing new, grave developments. Unquestionably the second if it were feasible would be the best, but I consider it a very long shot. Whether other powers, Japan and Great Britain particularly, would be willing to continue the Conference under conditions involving the great practical difficulties obviously to be encountered in negotiations with a representation which is so heterogeneous and doubtless fluctuating as that of the Chinese, is doubtful. And whether the administration at Peking would have any enthusiasm is rather more doubtful, since of necessity it would be given by this plan only part of whatever free money resulted from the surtaxes. And whether the Southern group would consent to send representatives to negotiate for what they have a disposition to claim as of right is extremely doubtful, for they are elated now by their having conquered at least half of China and are now confirmed in the rather arrogant attitude they have taken toward treaty powers and their rights. Therefore the feasibility of this project is in question. Yet it offers some chance for us to be able, in a manner fair to China as a whole, to set ourselves free of our obligations. Even were it to fail we would be left in the position that we went more than half way in endeavoring to discharge the obligations we have and to satisfy the reasonable demands made by Chinese national feeling. [Page 858] Certain theoretical attractions inhere in the fourth project, but I am not able to believe that, considering the temper of the Chinese at present, it would be effective in alleviating that sense of grievance against the treaty powers which the Chinese are nursing. Especially since it would follow the success of the Canton regime in ignoring treaties by imposing illegal surtaxes and the riposte of Peking in tearing up the Belgian treaty, I am afraid that it would only intoxicate the Chinese further with a sense of triumph, with the result that their zeal for the ousting of foreigners out of China altogether would be diverted merely to other questions. For the Department’s consideration I suggest the question whether action by us on this project might also not affect our relations with the Japanese most seriously and, in a lesser degree, possibly our relations with the British, in view of the creation by it of embarrassments of a kind more vital by far to their commercial interests than they would be to ours.
4. In submitting these comments, it is my hope that some indication of the lines along which the foreign policy of the Department is proceeding may be given to me if the Department is able to do so. I know that the Department feels an anxiety in this matter to avoid failure in fulfilling our obligations under the Washington Conference (according to telegram 171 from the Department, August 24, 2 p.m.,26) and that it concurs in the conviction I hold that to do this is impossible through negotiations with the unrepresentative, irresponsible regime at Peking (according to telegraphic instructions from the Department, No. 148 of July 26, 5 p.m. and No. 267 of November 15, 6 p.m.27). But beyond these facts I have no idea as to what course it is the desire of the Department that I should follow nor as to what attitude it is the wish of the Department that I should take in the imminent event that a request is made from the Chinese side that the Tariff Conference be resumed. The few, rather unpromising alternatives that through months of thought and discussion have been developed here I have presented above. Perhaps the Department has in mind other possibilities. I venture to make a request, in view of the probability that I shall find myself in the very near future under the necessity of taking in behalf of our Government some position on the practical and urgent question concerning the course to be taken toward the Tariff Conference, for such instructions in this regard as the Department may have to give me.