893.512/677: Telegram
The Consul General at Shanghai (Cunningham) to the Secretary of State
[Received September 24—5:30 p.m.]
Department’s telegram of September 23, 2 p.m.
1. The suit referred to is described in paragraph 4 of my telegram of September 9, 2 p.m. to the Legation57 which was not repeated to the Department by me. It is an action brought in the American Consular Court at Shanghai by Longfellow and Adams, Incorporated, against the Robert Dollar Company. Plaintiff and defendant are recognized American corporations. Action was brought to compel defendant to deliver to plaintiff 25 cases of beer consigned to plaintiff imported in defendant’s steamship and discharged into and now remaining in defendant’s godown.
2. The essential facts are as follows: Twenty-five cases of beer consigned to plaintiff were brought from Manila to Shanghai in defendant’s steamship President Pierce and were discharged into defendant’s godown, where they are now; in the presence of an officer from this consulate general plaintiff tendered to the Customs bank the treaty import duty plus the two surtaxes of two and a half percent each plus the wharfage and conservancy dues on this shipment; the bank refused to accept payment of such duty, surtaxes and dues, or to receipt the agencies’ memorandum, unless and until there was also paid to it the illegal thirty percent stamp tax imposed effective August 11th by the Nanking authorities on imported foreign wines and liqueurs; plaintiff declined to pay this stamp tax; plaintiff advised defendant of the tender and refusal of the duty, surtaxes [and] dues and demanded delivery of the beer; defendant refused to deliver beer; plaintiff thereupon filed its suit against the defendant in the American Consular Court, depositing with the court the duty memorandum and import application and the duty, surtaxes and dues tendered to and refused by the Customs bank; plaintiff’s petition prayed for an order directing defendant to deliver the beer to plaintiff and for [Page 413] such other and further relief as may be just and equitable in the premises, or for the value of the beer, which was stated to be 156 gold dollars; the amount of duty, surtaxes and dues tendered, refused and deposited is 14 taels, 45 tael cents.
3. Defendant contested the suit on the ground that it had given to the Chinese Maritime Customs a written undertaking not to deliver to consignee or owners goods on which customs duties had not been paid.
Secondly and principally on the ground that the court had no jurisdiction of the subject matter of the action, which was described in the defendant’s answer as “a dispute between plaintiff and the Chinese Maritime Customs regarding the amount of customs import duties due, owing and payable by plaintiff to the Chinese Maritime Customs under and by virtue of the treaties existing between China and the United States.” In support of this plea the defendant contended that the court was a court of limited jurisdiction; that its jurisdiction is defined by the treaties between China and the United States and the acts of Congress enacted for the purpose of enabling the Government of the United States to put such treaties into operation and effect; that by virtue of article 27 of the treaty of 185858 the civil jurisdiction of the court is limited to questions of personal property rights arising between citizens of the United States [in] China and to controversies occurring in China between citizens of the United States and subjects of any other governments; that neither under this nor any other treaty between the United States and China has the court jurisdiction of any controversy arising in China between the Chinese Government as such and citizens of the United States where the subject matter of such controversy is exclusively and peculiarly a matter of treaty between China and the United States; and that the right of the Government of China to levy and collect customs duties upon goods imported into China by citizens of the United States and the obligation of citizens of the United States to pay such duties is exclusively a matter of treaty between the respective Governments of the United States and China.
4. The court’s decision today held that it had no jurisdiction and dismissed the plaintiff’s petition.
The court stated that both plaintiff and defendant were within their rights, that the defendant was bound by treaty and its undertaking to the Customs not to deliver dutiable cargo to consignees until such cargo had been cleared by the Customs and [had] done no wrong in refusing to deliver the beer in question to the plaintiff; and that the plaintiff had attempted to pay all and more than all the duties stipulated [Page 414] by the treaties in force between the United States and China.
The court held further that the direct cause of the controversy was the violation of existing treaties between the United States and China by the factions in charge of, or having authority to control, the Chinese Maritime Customs at Shanghai, who, by endeavoring to exact duties beyond those stipulated in the treaties, prevented the plaintiff from receiving his merchandise unless these exactions were met; and that the court had no jurisdiction over the persons in charge or control of the Customs or over the principal question involved in this suit, to wit, the violation of treaties which it declared to be a purely political one. The court said, in conclusion, that it was of the opinion that “the main question herein involved develops into a purely political one, and must be settled by the executive department of our Government, and that it belongs to diplomacy and not to the administration of the law. Whether or not our executive department chooses to settle this question, or to disregard it, is not within the purview of this court. The plaintiff must look to the executive department for such relief as it may deem itself to be entitled.”
The foregoing summarizes Lurton’s lengthy decision as concisely as possible, omitting several important statements which however do not modify the conclusions enumerated.
5. The conduct of this case shows a complete lack of cooperation of litigants and attorneys who really seek the same object, namely, the mutual protection of American shipping and commerce against the illegal exactions of the Nationalist Government. A further telegram will follow setting forth fully the practical effects of the decision, which are that relief cannot be found in a suit at law but, as the court’s opinion emphasizes, rests entirely with the Department.
Repeated to the Legation.