693.003/806: Telegram
The Minister in China ( MacMurray ) to the Secretary of State
[Paraphrase]
Peking
,
February 13,
1928—6 p.m.
[Received February 13—11:45 a.m.]
[Received February 13—11:45 a.m.]
91. Department’s 12, January 12, 1 p.m.
- 1.
- With reference to your third paragraph, it is assumed that, with the exception of the so-called Washington surtax of two and a half percent (which you have authorized me to accept on the part of the United States, provided the other powers also accept it), no alteration can be made in the existing treaty stipulations fixing customs tariffs unless such change is achieved by one or the other of the two methods outlined in the Department’s telegram. Of the two alternatives mentioned, congressional authorization for entering into a modus vivendi would be, in my opinion, very perilous, not only because it would involve publicity tending to result in our involvement in Chinese domestic problems, but also because it would create a situation in which, as a matter of fact, we could be compelled to proceed with negotiations on the defensive.
- 2.
- With reference to the fourth paragraph of Department’s telegram, it is my understanding that the reciprocal agreements envisioned by the Edwardes proposal would not involve any discrimination or any impairment of the principle of equality of opportunity. What Edwardes intends is that which the delegation of Japan proposed in 1925 at the Tariff Conference and which the American delegation voiced its readiness to accept; namely, that in case there should be concessions of a mutual nature in the tariff rates upon, for example, certain items of Japanese imports into China, or vice versa, the advantage of the reduced rates on such items would accrue automatically to other nationalities which enjoyed most-favored-nation treatment. Even though we are not in a position, under our tariff system, to enter into such an arrangement in regard to items of especial interest to American trade, nevertheless we would not be subjected to any differential treatment with regard to those or other items.
- 3.
- It may be argued that the classes of trade in which we have an interest would be burdened with heavier duties in order to compensate for the lowering of the revenues to be obtained from those classes of goods; for example, low-grade cotton textiles, in which, in fact, there is no competition between us and the Japanese. However, there does not seem to me to be any practical force in such an argument since it has already been made clear by the Chinese that [Page 383] they are disposed to tax petroleum and tobacco products (which comprise a very great proportion of imports into China from the United States) to the full extent that the traffic will bear, and undoubtedly the Chinese will follow, under tariff autonomy, the same policy with respect to other products which make up what, in their view, is substantially a trade in luxuries or quasi luxuries.
- 4.
- There is, in my opinion, very little probability that the requisite assent of Japan to any change in existing tariff restrictions is obtainable until arrangements satisfactory to Japan have been made for low rates on the classes of goods which certain essential industries of Japan produce. As far as I am aware, the only means to that end suggested thus far is the kind of reciprocal agreement described above. I trust, in view of the nondiscriminatory nature of such an agreement, that there will be no need for us to oppose it and thereby obstruct the accomplishment of any practical result from the tariff autonomy negotiations which, in pursuance of the Edwardes project, the Chinese may undertake.
MacMurray