611.937/33: Telegram
The Minister in China (MacMurray) to the Secretary of State
1016. Following from Hankow:
“November 18, 4 p.m. Wood oil trade is again agitated by collection of tax of 90 cents per picul on wood oil under consolidated tax schedules. This tax is in effect likin, and taxable [taxing?] officials are insisting on its payment on export cargo passing through Hankow regardless of record of it[s] originating in or outside Hupeh, provided that cargo is not covered by a receipt showing that the tax has already [Page 817] been paid. While the Central Government has not yet formally abolished the consolidated tax or likin in Hupeh, the drastic manner in which tax officials are enforcing payment is causing an evidence of friction between American firms and the tax office. Chinese employees of foreign firms have been seized as a means of compelling payment.
If the Legation perceives grounds upon which to lodge a protest with the Nanking Government against the tax, the trade would be gratified.”
Subject to the Department’s approval, Legation proposes to instruct Hankow that, in the absence of discrimination, it does not feel that protest to Foreign Office is called for and to suggest, in his discretion, Consul General attempt, by informal local arrangement, to bring about less drastic means of collecting tax. Since immunity of Chinese employees of American firms seems to be based on precedent rather than treaty, I do not feel that protest against their arrest would be productive of any good result.72