Papers Relating to the Foreign Relations of the United States, 1926, Volume I

893.512/402: Telegram

The Chargé in China ( Mayer ) to the Secretary of State

[Paraphrase]

Peking , October 3, 1926—7 p.m.
[Received October 3—7:19 p.m.]

449. My telegram 440, September 30.

1. Following from me to MacMurray:

“September 28, 1 p.m. For MacMurray.

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(2) From what information I have been able to gather from British, Japanese, and Customs sources the new situation at Canton would appear to force us either to take decisive international action backed up by threat of naval force in the event that the Customs becomes directly involved and refuses to participate or on the other hand to negotiate at once with the Cantonese regime toward putting into effect a regional arrangement policy and to obtain satisfactory guarantees from that regime before we are confronted with a complete fait accompli and thus deprived of bargaining power.⁵¹

(3) I have been given to understand clearly by the Acting Inspector General of Customs⁵² that the Customs authorities, as is quite natural, cannot decide whether compliance with any instruction from the Cantonese to collect the new taxes should be refused unless adequate support is guaranteed to the Customs by the interested powers. Seemingly, he felt convinced that should a decision be made by the United States, Great Britain, and Japan to oppose the new prorata, and should they be ready to use force if necessary prior to the Customs being forced to obey any demand from the Cantonese for direct participation in the taxes, almost certainly the so-called Central Government would give an order to the Inspector General of Customs to refuse to obey the command of the Cantonese, which at least would add to the strength of the position of the powers before the world. In view of present circumstances I concur in the above regard with Edwardes, although I remember the Central Government’s attitude in 1923 toward the Canton customs conflict, when the Peking authorities, in effect, as you will recall, gave their support to the Cantonese against the foreigner, even though this was illogical in the light of the attitude they held toward Canton in regard to the matter of distributing customs funds.

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Following from MacMurray:

“September 30, 2 p.m. Referring to your September 28, 1 p.m.

(1) I was informed by the British consul general at Canton that while the Cantonese are naturally insistent that the new taxes should be imposed in connection with ending the boycott, each of these is completely distinct from the other. The British have made no commitment as to taxes, and remain free to make resistance to them. The Hongkong Governor who also holds this opinion has informed me that as yet he has not had an indication of the attitude of the British Government in regard to these taxes, but that he is personally strongly disposed not to accept them, considering that to do so would be tantamount to unconditionally granting tariff autonomy, also involving the breakdown of the Administration of the Customs. It was his expressed hope that in regard to the new taxes Great Britain, the United States, and Japan, and perhaps France, might possibly act together in refusing to accept them. But he acknowledged having doubt whether cooperation could be expected from those nations to the point, if necessary, of supporting a refusal to allow the taxes to be levied by means of a naval demonstration. Further he informs me that Aglen,⁵³ in consulting the Foreign Office, has stated that unless the powers principally interested in resisting the demand of the Cantonese for their cooperation in collecting taxes gave support to the Customs Administration, the latter must yield to force majeure.

(2) It is my view that in fact the proposed taxes, although levied under other names, are substantially import and export taxes and doubtless are purposely designed to anticipate the levies of the Washington surtaxes, and that their enforcement would have the result of putting those surtaxes into force independently of the powers in all sections of China, in disregard of the conditions which were contemplated by the Washington Treaty.⁵⁴ Moreover, once a break had been made away from treaty obligations by any Chinese group, nothing would be left to prevent the forces in control of any given region from making at will an indefinite increase of such taxes. Thus there would be a new situation in which in effect both the previous treaty provisions as to customs and the Washington Customs Treaty itself would be repudiated. Neither a possibility of securing relief in behalf of our unsecured creditors would then be left to us nor of doing what has for us in the long run far more importance, maintaining the safeguards against arbitrary exactions upon foreign trade.

(3) I believe that resolute action by the powers chiefly interested should be taken against this method of indirect piecemeal repudiation of treaties, even so far as to give naval protection to the Canton Customs and to take any action which may prove to be feasible in preventing the levy of the proposed taxes by Cantonese authorities.

(4) No drastic action would be necessary I believe if the fact that the powers were in earnest were realized by the Cantonese. When in Canton I gathered an extremely strong impression that the Kuomintang has a real desire to adopt towards the powers a policy of conciliation, in part owing to its present aspiration to receive recognition and treatment as the Government of China, but in the main because it has a dread of any such complication arising at the rear as might embarrass its present military and political endeavors in the North. Particular effort was made by Eugene Chen⁵⁵ and Sung⁵⁶ to impress me with the idea that treaty obligations had not been repudiated by them and that they were ready to accept those obligations as the point for beginning negotiations for eliminating by mutual consent the features they erroneously describe as “unequal.” Further, Chen insisted upon Cantonese political “realism” and admitted that they knew that successful defiance of the powers could not be made by them. I was very definitely impressed with the belief that, whatever degree of sincerity attached to his professions, the authorities at Canton feel a need now that their relations should be friendly with the powers, not excluding Great Britain.

(5) Chen stated quite frankly in adverting to his earlier championship of a regional agreement that they had been led by the improvement in their political prospects recently to hope that they could achieve more than regional recognition and to oppose any such arrangement with other regions. In any case this altered viewpoint apparently precludes the possibility of the special arrangement suggested as an alternative in your paragraph number (2). To me it seems that if we are not to stand by and see the treaties torn up, we must make a determined resistance to the proposed taxes. However, the attempt might be worth while—and politic even if it were unsuccessful—to persuade the Cantonese and other factions to lay their differences aside to the extent that they appoint representatives for the purpose of discussing with representatives of foreign powers at Peking whether it is possible to find a foundation for such an agreement on tariff problems as would meet with the approval of the various political groups in China. A suggestion to this purpose might be made informally and publicly simultaneously with the refusal of the powers to accept the taxes proposed by the Cantonese.”

Received September 30, at 6 p.m.

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2. Before I received the Minister’s telegram of September 30 I had reached exactly the conclusion at which he arrived. To me this appears as a final test whether we shall stand by while treaties and all obligations and rights due to the American Government and American citizens, if not in fact their personal safety and their commercial interests, are disregarded and jeopardized, according as the case may be, or whether we shall take action preventing this, producing a change in the atmosphere and ceasing to be longer in the defensive position into which the Chinese have cleverly maneuvered us. The Canton situation presents, in my opinion, the best opportunity for this promulgation that we have had or may hope to get. I am completely in agreement with the Minister in believing that the Cantonese are anxious to avoid contending with the foreign powers in a group and that they are not in a military position to do so. Their campaign is now at a stage that is critical. Should it become more successful, there will be an increase in their political aspirations, with the result that probably they will look forward more immediately to the powers’ recognition. On the other hand, they will prove to be easier to treat with at Canton if they do not win in the North.

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4. In view of the facts, I cannot recommend too strongly that everything possible be done by the Department to gain an agreement between the United States and Great Britain and Japan to prevent, even by means of a naval blockade or of some feasible measure of force similar to that, the imposition of the new taxes. It is respectfully suggested to this end that since the time is limited an exchange of views take place at once between Washington and Tokyo and London with the object of giving instructions to the respective missions at Peking to compose immediately a practical plan for achieving the end desired. Seemingly, a way to do this is open to the Department either in a reply to the note from the British Ambassador, September 20, 1926,⁵⁷ or alternatively, to use the opportunity afforded by the fact that the only foreign consular representative at Canton to be officially advised of the proposed taxes by the Cantonese is the British consul general. Thus it would appear to be entirely appropriate to interrogate the British Foreign Office on what attitude in this regard it plans to take, offering at the same time a suggestion that common action by Great Britain, the United States, and Japan is extremely advisable. If the Department were so minded, in informing the British of our opinion that it is expedient to oppose the new taxes, etc., it would appear to be desirable to suggest that any communication sent to the Cantonese on this matter should, in addition to making our decisive demand that treaty rights be complied with and the taxes withdrawn, advert to the fact that for some time the powers concerned have considered plans for placing in operation the Washington Conference surtaxes or other increases in Chinese customs duties that may be desirable—temporarily and provisionally in view of the absence of a central government—in a manner advantageous to the people of China and not disadvantageous to the ultimate political stability of China, while safeguarding our treaty relations at the same time; in effect, that we shall gladly undertake an informal discussion of this subject, with the regime at Canton and with other Chinese regional authorities also, when the Canton situation has been regularized again by means of the withdrawal of the proposed new taxes which contravene the treaties.

5. In case the Japanese fail to act in accord with this plan for forcible, if necessary, prevention of the taxes, I strongly advocate that we proceed on the plan with the British alone. I have a feeling that the Italians and French would cooperate on the project.

6. Telegram repeated to Tokyo by mail.

Mayer

51. This paragraph has not been paraphrased.
52. A. H. F. Edwardes.
53. Sir Francis Aglen, Inspector General of Chinese Maritime Customs.
54. Foreign Relations, 1922, vol. i, p. 282 ff.
55. Minister of Foreign Affairs of the so-called Canton Government.
56. Sung Tsu-wen, also known as T. V. Soong, Minister of Finance of the so-called Canton Government.
57. Apparently refers to British note of September 17, which was received September 20, p. 854.