893.512/923

The Consul at Harbin ( Hanson ) to the Minister in China ( MacMurray )30

No. 1899

Sir: I have the honor to quote below Customs Notification No. 433 issued by the local Commissioner of Customs on February 1, 1929:

“The Public is hereby notified that under instructions received from the Inspector General of Customs a Surtax of 2.5% on Native Exports, of 1.25% on Native Imports and of 2.5% on the Export Duty collected on Chinese Factory Products will be levied from 1st February, 1929.”

Some weeks ago shippers of raw furs from North Manchuria to the United States inquired at the Consulate whether it had any news of increased Customs duties on exports. The local Commissioner of Customs informed me that he had no knowledge of such proposed increase. The Consulate telegraphically requested the Consul General in Shanghai to send whatever information he had on this subject. He replied that the Customs officials at Shanghai knew nothing about proposed increases of export duties. The business public here as evidently elsewhere in China was taken by surprise by the issuance of this notification. Japanese merchants were loud in their protests, and the Tokyo Government telegraphically instructed the local Japanese Consul General, Mr. M. Yagi, to protest against this surtax. The Japanese are especially interested, because they ship immense quantities [Page 797] of beancake to Japan via Suifenho and Vladivostok. The fact that this tax was imposed without giving them at least two months notice is working a hardship on them. American interests are affected by this surtax on furs, about six million American dollars worth of which are sent to the United States annually from North Manchuria.

As the Legation is aware, cargo shipped south, unless it is parcel post cargo, does not pay any export duty until it reaches Dairen. As the Japanese Commissioner of Customs at Dairen has so far refused to put this surtax into effect the natural tendency will be for all shippers of native produce to send their cargo south in order to avoid in those cases of eastern shipments paying the surtax at Suifenho, where there is a Maritime Customs House.

Mr. Yagi invited Mr. Grant-Jones, the British Consul, and myself for a conference at his house on February 5th to discuss this matter. As his Government had intimated that probably the British would protest against this surtax as a violation of the spirit of the recent Customs agreements, he requested the British Consul to join him in a protest to the local officials, and asked my opinion in regard to the surtax. I pointed out to him and to my British colleague that I did not feel inclined to protest unless there was some discrimination detrimental to American interests. The British Consul stated that his Government’s Customs Treaty with China only referred to imports, not making any mention of exports. Therefore he could not lodge a protest without instructions from his Legation, which he promised to secure. Out of courtesy to my Japanese colleague I informed him that I would also refer the matter to my Legation. This I did in my telegram dated February 5th, 3 P.M. on this subject.

Local businessmen feel that if without notice a surtax of 2½% can be placed on native goods today then perhaps tomorrow without notice a surtax of 10, or 20, or more per cent may also be placed on native exports.

The above is not the first case of cooperation between the Japanese Consul General and the British Consul which has come to my notice. Some time ago Mr. Grant-Jones informed me that he had been instructed by his Legation to cooperate with the Japanese Consul General in connection with the matter of the registration of land leases at Harbin. So it would appear that both the Japanese Consul General and the British Consul have been instructed by their respective Governments to work in cooperation.

There is enclosed herewith a copy of a letter from Mr. Jacques Klemantaski, the Distributor of the John N. Willys Export Corporation, American, dated January 30th,31 in which he states that he paid a total of L$12, including the new parcel post tax for which no [Page 798] receipt was given, on a parcel of spare parts for automobiles made in the United States valued at L$60. This means a tax of 20% in addition to the 5% import duty at Dairen.

I have [etc.]

G. C. Hanson
  1. Copy transmitted to the Department by the Consul at Harbin in his despatch No. 4751, February 7; received March 5, 1929.
  2. Not printed.