The Secretary of State to the Chargé in China (Mayer)
217. Your 449, October 3, 7 p.m., and 451, October 4, 5 p.m. Proposed taxes on imports and exports at Canton appear to have been mentioned only to the British Consul General at Canton in connection with a proposal of the Cantonese authorities for settlement of questions pending between Canton and Hongkong (see your telegram No. 419, September 20, 5 p.m.58). Unless proposal is broader than thus far made known the Department fails to perceive necessity for Chinese Customs Administration collecting proposed taxes or otherwise becoming involved except in connection with memoranda to enable Cantonese tax collectors to use Customs valuations as basis for tax (see Jenkins’ telegram of September 28, Noon to you59). Department believes adoption of proposal that Customs Administration collect taxes would only result in involving Administration, now collecting treaty tariff, in a dispute between the Powers and China and in making of the Chinese National Customs Administration a regional collecting agency for taxes not covered by tariff treaties. With regard to suggestion of MacMurray in Paragraph 3 of his telegram to you, September 30, 2 p.m.,60 and your suggestions contained in Paragraph 4 of your 449, Department does not perceive the urgency of initiating discussions with Great Britain and Japan looking to naval demonstrations or other forceful means of preventing collection of taxes which have not yet been put into effect. You should, however, authorize Jenkins in his discretion to bring to the attention of the authorities at Canton the grave concern felt by this Government over the report that new taxes are to be imposed on American goods in violation of existing treaties between the United States and China. When and if the new taxes are imposed on American trade Jenkins should protest to the Canton authorities in accordance with the procedure which has been followed in the past in connection with other taxes which have been imposed from time to time in different parts of the country contrary to American treaties with China. A similar protest should of course be made by you at Peking.