893.51 Salt Funds/50: Telegram

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

296. Legation’s No. 276, April 17, 5 p.m.33

1. The Peking Leader, which was recently taken over by the Northern authorities and is now being conducted as a propaganda organ under the editorship of Lenox Simpson,34 announced today that:

“The decision arrived at last week regarding the detention of customs and salt revenues has now become effective.

As from today, May 1st, no salt revenue of any sort is transferable out of the districts under control of the northern federation until new orders are issued. The principal revenue affected is the Changlu salt, one million dollars a month, the Shanghai, Suiyuan, Chahar and other district collectorates and the distribution areas in Honan, etc.

The total revenue involved is $2,000,000 a month of which a regular moiety was transferable month by month to Shanghai.

As regards the customs, the totals are more difficult to calculate as the whole Tientsin collections are affected, less the original 5 percent maritime tariff levies on which foreign loans and indemnities are secured. But the total exceeds $1,000,000 a month.

The Bank of Communications act as customs bankers in Tientsin, the net receipts being transferred day by day to the credit of the Commissioner of Customs. Constant precedence [sic] have been passing between North China and the Shanghai banking group which was mainly responsible for financing Chiang Kai-shek and his Nanking civil service.

As a result of this exchange an absolute undertaking has been demanded that no further accommodation be granted.

This action is likely to have a decisive effect on other parts of the country which will now understand that Marshal Yen Hsi-shan is irrevocably committed to equivalent of a new government.”

2. I am informed by the Consul General at Tientsin35 that the salt collectorate there evidently for some time [has] been unable to remit any funds to the Central Government and that one of the foreign inspectors has proceeded to Taiyuanfu in the hope of being able to arrange a settlement. As regards the customs the Chinese authorities at Tientsin have, for the last 10 days, been exerting pressure upon the local commissioner to retain all revenues save the original 5 percent which is released for the service of foreign loans and indemnities. On April 29th a definite order to this effect was issued by the superintendent of customs but it is not yet known exactly what course the Commissioner of Customs will follow. Should he refuse to comply, [Page 227] the customs revenues might be collected at Tangku. The collection at Tienstin (which includes Chinwangtao) last year exceeded Taels 16,000,000.

3. Should the Northern Coalition firmly carry out the policy above described, a very severe blow would be given to the whole Customs Administration even though foreign interests should not be immediately affected. It would seem certain that similar action would be taken at any other treaty ports situated in areas which the Yen-Feng combination might bring within their control. It is also not impossible that such an example might be followed in other parts of China, otherwise [and?] in Manchuria where the revenues in the four principal treaty ports last year exceeded Taels 20,000,000.

For the Minister:
Perkins
  1. Telegram in four sections.
  2. Not printed.
  3. B. Lenox Simpson (“Putnam Weale”), British journalist and writer.
  4. Clarence E. Gauss.