Papers Relating to the Foreign relations of the United States, 1927, Volume II

893.841 Surtax/10: Telegram

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

Peking, July 28 [29?], 1927—3 p.m.
[Received July 29—9:55 a.m.]

771. Legation’s July 28, noon. Following from the American consul general, Shanghai:

“July 28, 6 p.m. Referring to my telegram of July 27, 3 p.m. American shipping interests extremely perturbed over collection of surtax on tonnage dues by the Nationalist Government. They recommend opposing payment and to accomplish this offer following suggestions:

• First. American consul officially to request Commissioner of Customs here to accept tonnage dues authorized by treaty and to clear vessels without payment surtax. If the Commissioner refuses, Ministers at Peking to inform Inspector General that the Shanghai Commissioner is using Customs machinery for enforcing collection illegal revenue and should urge him to issue instructions to Shanghai Commissioner to confine himself to collections authorized by treaty. If the Customs bank refuses cooperation, another bank must be designated for collection dues authorized by treaty.
• Second. Failing action as indicated section 1, then American ships are to pay authorized tonnage dues but no surtax through American consulate. If Customs retaliates and refuses clearance, ships to leave port with consular clearance only. If Customs retaliates further by withdrawing all customs privileges, then shipowner and shipper should ignore the Customs and should respectively pay tonnage dues and duty on cargo to consulate, upon receipt of which consular clearance to be issued to ship.

In reference to first suggestion of steamship companies, Commissioner of Customs has stated he can issue clearance only upon production of documentary evidence of payment of authorized tonnage dues, which evidence Bank of China, acting under orders of Superintendent of Customs, withholds until surtax tonnage dues are [paid]. Difficulty therefore lies in Superintendent’s use of Customs machinery rather than Commissioner’s, but instructions from Inspector General at Peking may permit Commissioner to issue clearance on receipt of notification from consulates concerned that they have received authorized tonnage dues since Customs bank refuses to carry out established procedure.

As reported in my 104, July 27, 3 p.m., Customs have intimated that if present Customs procedure is disregarded by merchant vessels, Customs will be compelled to withdraw privilege of annual guarantee, thereby making clearance difficult until all duties paid. Which [While?] holding to my previously expressed opinions in the matter, it is important that the American Government fully appreciate responsibility possibly devolving upon it through provisions of article 22 of McKay treaty 1858,⁹⁴ which makes this consulate responsible for all tonnage dues as well as duties leviable on cargoes of vessels cleared by consulate without Customs clearance. In such case, American Government must establish machinery to collect tonnage dues and may eventually also be called upon to collect such duties and surtaxes as American Government recognizes as legally due to Chinese authorities. Whole matter of surtaxes and proposed new tariff therefore would be involved. While I do not consider matter one of insuperable difficulty, responsibilities assumed only after due consideration. Shipping interests request that Legation transmit their recommendations to the Department.”

MacMurray

94. Reference is erroneous. The treaty of peace, amity, and commerce of 1858 between the United States and China was signed by William B. Reed on behalf of the United States; Malloy, Treaties, 1776–1909, vol. i, p. 211. A commercial treaty between Great Britain and China was signed at Shanghai on Sept. 5, 1902, by James L. Mackay on behalf of Great Britain and is sometimes referred to as the “Mackay treaty”; for text, see China, Imperial Maritime Customs, Treaties (Shanghai, 1908), vol. i, p. 351.