The Commercial Attaché in China (Arnold) to the Legation in China61a

The China Tariff Valuations Revision Commission met at the Shui Wu Chu on Friday, December 9, to consider schedules embodying valuations of chemicals, fishery, food products, animal products, canned goods and groceries. Concerning the varied items included in these schedules, France offered six counter-proposals affecting values as proposed by the Chinese delegate, Great Britain nine, Japan fifteen, and the United States one.

Very little progress was made at the meeting toward an agreement on values for the commodities under consideration. The British delegate acquiesced in a number of items by accepting the Chinese valuations, reserving several for further consideration. The French delegate was less conciliatory in accepting the Chinese values, whereas the Japanese delegate showed no disposition whatsoever to accept any other than the valuations as proposed by him. The differences between the Japanese and Chinese valuations are in many cases quite considerable. The Japanese delegate also objected to the idea of accepting a five per-cent ad valorem arrangement for any items concerning which the proposed valuations differed from those fixed by the Chinese delegates. However, the Japanese delegate submitted in each case a statement showing the method of arriving at the valuation which formed the basis of his counter-proposal. A similar procedure was adopted by the other delegates who had counter-proposals to offer. The one item concerning which the American delegate offered a counter-proposal was settled by accepting a five per cent ad valorem basis.

The French delegate, in answer to a proposal on the part of the Chairman that condensed milk be placed on a five per cent ad valorem basis, inquired as to the methods adopted by the Customs in assessing an ad valorem duty on condensed milks. He wished to know whether the duty would be assessed on what might be termed an average [Page 376] Shanghai wholesale market value for all brands of condensed milk, or whether each brand would be assessed a five per cent duty on the basis of its particular market value: For instance, it is commonly known that Eagle brand condensed milk, which is now marketed in China under the auspices of a Swiss corporation, commands from ten to twenty-five per cent higher price than does any other brand of condensed milk. The Customs’ expert as well as Chairman both asserted that the Customs’ duties are assessed on the basis of the actual wholesale market value of the particular commodity in question, thus any one brand of condensed milk would be considered on the basis of its Shanghai wholesale market value, and the duty assessed accordingly, provided this fell within the category of the open five per cent ad valorem items.

Julean Arnold
  1. Copy transmitted to the Department by the Minister in China in his despatch No. 1316, Dec. 15, 1927; received Jan. 23, 1928.