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The Minister in China ( MacMurray ) to the Secretary of State

[Paraphrase]

382. A personal letter written by the Commissioner of Customs at Shanghai, shown to me by the Acting Inspector of Customs, states that a demand is being made by Sun Ch’uan-fang that the Commissioner pay over some $900,000 from Customs revenues to the Chinese General Chamber of Commerce to be used to repay to the native guilds a forced loan for military purposes made by Sun at the time the Shanghai area was being occupied.

This threat is considered by the Commissioner to be so serious as to warrant the Inspector General’s attempting to make an arrangement with the Peking authorities providing authorization of the payment. However, the Acting Inspector General of Customs doubts whether Sun may not be bluffing. He is trying to temporize and is taking as his position that the matter has too much importance to be decided by him in the absence of the Inspector General. He thinks, and I entirely concur, that the enforcement of Sun’s demand would mean putting an end to the Maritime Customs Administration and producing among local leaders a scramble to control the revenues of the various customhouses.

MacMurray