893.51/5012: Telegram

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

122. My telegram number 114, February 5, 9 p.m.

Senior Minister, accompanied by British, French, Italian and Japanese Ministers and myself, yesterday called on Koo and in the course of a friendly but very earnest discussion pointed out the apprehension with which all the foreign representatives regarded the break-up of the Customs organization which they considered inevitable if the Government were to persist in its present course. For my own part I emphasized that, while claiming no? right to interfere in matters of Chinese internal administration, I felt the most serious solicitude lest by forcing an issue in regard to the functions of the Customs the Peking authorities would bring about the destruction of that organization which would be a disaster to both Chinese and foreign interest[s] and would in particular create chaotic conditions and innumerable points of friction in the foreign trade of China.
Although at first he took the somewhat lofty tone that “the Central Government” could deal with such minor administrative matters without any occasion for alarm, and utterly ignored the actual circumstances under which the Customs would find it impossible to carry out the orders of the Peking regime, Koo during the general discussion professed to learn as a new and important fact the conviction of the foreign representatives that the Nationalists would really impair the integrity of the Customs Administration if it were to attempt to collect surtaxes for Peking. He asserted that the Northern regime appreciates the indispensability of the Customs Administration and earnestly desires to preserve it; and in the light of this new revelation he said that the Cabinet would consider the whole question afresh. Somewhat unguardedly he also let it appear that the Peking regime is in fact already considering means of undoing its hasty action reported in my No. 104, February 1, 5 p.m. In his reply he expressed his appreciation of our friendly and helpful discussion of the problem and reiterated that “his Government” regards the preservation of the Maritime Customs as essential.
The impression made upon my colleagues and myself was that he had realized the folly of the action taken and in fact welcomed our representations as a basis for asking reconsideration without personal loss of face. This surmise accords with the fact that he had on the previous evening sent a private intermediary to inquire [Page 462] of me my personal opinion on the question. I gather that the whole question arose out of the fact of irresponsible advisers having persuaded Chang Tso-lin that by having the Customs collect the surtax he could get his hands on the very considerable proportion (about 40 percent for all China) now being taken in at Shanghai by his nominally subordinate rival, Sun Ch’uan-fang.17 Thanks largely to the pressure of the Chinese bankers who would be ruined by the disrupting of the Customs it is now beginning to be understood that this attempt to deprive the Customs of its national character and make is subservient to the particular military group controlling Peking would kill the goose.
Your telegram No. 50, February 7, 3 p.m., has just been received. I regret having taken action which proves to have been not in accordance with your desire. From your previous instructions, particularly your number 286, November 29, 1 p.m., 1926,18 had not inferred that you wished me to disinterest myself in the Customs beyond the point of refusing to intervene as of right or to assume responsibilities for its maintenance.
  1. Nominal overlord of Provinces of Kiangsu, Kiangsi, Chekiang, Fukien, and Anhwei, and concurrently director general of Shanghai and Woosung Port Administration, allied with the Peking Government.
  2. Not printed.