893.512/938
The Consul at Mukden ( Myers ) to the Minister in China ( MacMurray )32
Sir: Having reference to the Legation’s telegraphic instruction of February 7th authorizing this office to protest against the confiscation by Chinese Authorities of oil, the property of American companies, I have the honor to enclose herewith a copy of my despatch of February 8th, addressed to the Commissioner of Foreign Affairs,33 in which a protest was lodged against the confiscation of the stocks of The Texas Company at Tiehling. The circumstances of the case are outlined in the company’s letter of February 6th, a copy of which is also enclosed.33 No answer to my letter has thus far been received.
The threatened confiscation of stocks at Shanchengtzu and Liaoyang has not been carried out and consequently this office has not written about these cases. It is understood that at Liaoyang the agents of the various companies paid the tax on the stocks in their possession while at Shanchengtzu their godowns have been sealed in lieu of payment.
At that time, it may be added, I strongly recommended the American companies to report confiscations and threatened confiscations to their head offices at Shanghai with a view to their securing the aid of the Nanking Government in preventing further seizures and in reaching a settlement in regard to the collection of the tax on stocks in the interior. This was done but to date no settlement of the matter has been reached and the $1.00 per case tax is still in force. I am informed that the Special Kerosene Tax Bureau advised the companies a few days ago that negotiations are now taking place between the Nanking and Mukden Governments and pending a settlement the tax will have to remain in force. It is thought that both the amount of the customs collections on kerosene oil and gasoline which is to be handed over by the Nanking Government to the Mukden Government in lieu of the tax and the collection of the tax on stocks imported prior to February 1st, the date of the going into effect of the new import tariff, are the matters now under discussion at Nanking and Shanghai.
[Page 799]Confidentially it has been learned that the Nanking Government has agreed to make a duty refund of $0.35 per case to the companies on all kerosene and gasoline imported by them into the Three Eastern Provinces and that it has offered the Mukden Government $0.40 per case in lieu of the present $1.00 tax. There is reason to believe that the early withdrawal of the $1.00 tax is expected.
Further developments will be reported as they occur.
I have [etc.]