The Consul General at Canton (Jenkins) to the Chargé in China (Mayer)62
Sir: I have the honor to confirm my telegram of October 7, 10 a.m.,63 concerning the determination of the so-called Nationalist Government to begin collection on October 11 of the new consumption and production taxes and to enclose a copy of a note dated October 6 from the Acting Minister of Foreign Affairs. It will be observed that the mandate quoted by Mr. Eugene Chen refers to these taxes as temporary and provides that they shall be applicable on such articles as are subject to trade between the Liang-Kwang Provinces and other provinces in China and foreign countries.
According to Mr. Chen, these taxes are to be collected by officers appointed by the Ministry of Finance and are not to be considered in any sense as Customs duties. Mr. Chen intimates, however, that if the maritime customs service would lend its assistance possible friction and misunderstandings might be avoided. It is understood that the Ministry of Finance contemplates using so-called customs memos as a basis for levying these taxes and if the Commissioner of Customs declines to permit the carrying out of this plan, the Treasury Department’s appointees will probably experience considerable difficulty in fixing values on merchandise coming in and going out.
As already explained in reports from this Consulate General, Colonel Hayley Bell, the Commissioner of Customs, is afraid that if the collection of these new taxes is permitted to go unchallenged, other provinces will soon follow suit and in the course of time, there will be no limit on these so-called production and consumption imposts levied on merchandise passing through the Customs. Colonel Bell fears also that the very existence of the maritime customs service will be endangered. He is still hopeful that the Powers concerned will either decide to prevent the Cantonese from levying the taxes or will insist that the entire matter shall be administered through the customs service.
According to the Canton Gazette, the cooperation
of the maritime customs desired is indicated in a letter addressed to
the Commissioner of Customs by the Chinese Superintendent of Customs who
states that [Page 874] “further with
reference to the collection of the new consumption and production tax, I
wish to reply to your specific questions as follows:
I have [etc.]