893.512/759: Telegram

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

72. Following from Shanghai:

“February 5, 10 a.m. Referring to my telegram of February 3, 1 p.m. This consul general has just received and is forwarding to the Legation by registered mail, copy of ‘Regulations governing collection of retail tobacco consolidated tax in the Provinces of Kiangsu, Chekiang, Fukien, Anhwei, Kiangsi, and any other provinces which may eventually come within the administration of the Nationalist Government of China.’39 These regulations have been promulgated by the Minister of Finance of Nationalist Government nominally under date of January 18, 1928, to implement agreement concluded on that date between British-American Tobacco Company and the Minister as previously reported. American tobacco companies have not yet taken action but it is believed those importing or manufacturing cigarettes only will probably acquiesce in new regulations.

2. On imported retail tobacco and goods manufactured with leaf tobacco, regulations provide for payment of 20 percent consolidated tobacco tax in addition to treaty import duty and 2½ surtax. Similar tobacco products manufactured in factories in China are to pay consolidated tobacco tax of 22½ percent of the Maritime Customs appraised value of such manufactures. Goods paying such consolidated tax then may be marketed without payment of further duties or tax in all provinces under the control of the Nationalist Government.”

Since there appears to be no discriminatory feature in this tax, consul general is not being instructed to lodge protest until copy of the regulations governing the collection of this tax is ready and it can be ascertained whether they involve discriminatory or other features such as were contemplated by the Department’s 283, July 12, 3 p.m., 1927,40 and previous instructions.

MacMurray
  1. See The China Year Book, 1929–30, p.1087.
  2. Foreign Relations, 1927, vol. ii, p. 397.