893.51/5246: Telegram
The Minister in China (Johnson) to the Secretary of State
[Received 5:08 p.m.]
307. Legation’s 247, April 3, 9 p.m.,39 302, May 3, noon, and mail despatch 156, April 17.40 Following is the text of a letter dated May 3 [Page 230] addressed to the Legation by Bennett, American group representative in China of the Hukuang Railways loan grant [group?] banks:
“With reference to my letter of March 10 on the subject of execution [confiscation?] of customs charges, it is now confirmed that Marshal Yen Hsi-shan has instructed his local representatives to detain, until he arrives, all customs revenue collected at Tientsin in excess of the effective 5 percent duty. It is stated that he has no intention of infringing upon such revenues as are hypothecated for the service of indexes [indemnities?] and foreign loans but nevertheless the group’s representatives feel that in taking this action the Shansi authorities do not fully realize the responsibilities of the Maritime Administration [to?] foreign obligations. They desire therefore to emphasize the danger to the interests of foreign bondholders involved in this precedent at Tientsin.
As you are aware, foreign charges on the customs revenues during the current year exceed Pounds 7,000,000 or about silver $100,000,000 at present rates of exchange. If this precedent were to be followed elsewhere in China it is certain that the proceeds of the effective 5 percent duty would be insufficient to meet these charges which will be automatically increased on October 10 next by the additional charges for services of the Hukuang and Tientsin-Pukow Railway loan as a result of the National Government’s decision to abolish likin. It should also be borne in mind that there are other important foreign obligations secured on the customs surplus.
In view of the situation as outlined above I trust that the Legation will deem it expedient to direct the attention of the responsible authorities to the serious danger to assisting [existing?] foreign interests involved in any interference with the normal collection and banking of the Maritime Customs revenue.
A similar letter is being addressed to [by?] the French, British and Japanese group representatives to their respective Legations.”