893.51/5351
The Consul General at Tientsin (Gauss) to the Minister in China (Johnson)60
Sir: I have the honor to acknowledge the receipt of the Legation’s telegrams of 3 P.M. and 9 P.M. June 21st, and 12 noon, June 22d, in reference to the matter of the Tientsin Customs.
Apparently my position has not been made entirely clear to the Legation.
I am of the opinion that notwithstanding the closing of the Tientsin Customs by order of the National Government
- (1)
- Tientsin remains an open port, and American ships and merchants are entitled to carry on their trade and should not be subject to unreasonable delays or restrictions in so doing; and
- (2)
- There is no duty or obligation on the part of the American authorities to collect, or to require guarantees for the payment of, any Customs dues or duties.
Customs dues and duties are, under the treaties, payable at the port where the vessel enters and clears. It is the obligation of the Government to maintain a Customs administration at the port for the purpose of such collection; and if the Government deliberately closes the Custom House and removes the staff, abandoning fiscal control of the port but not closing it to trade, Tientsin becomes in effect a free port, with no restriction on the entry and departure of ships and the importation and exportation of cargo unless the authorities actually in control and exercising the functions of government at the port set up or recognize some de facto Customs administration replacing that of the National Government.
I do not pretend to pass on the question of the legal obligation of merchant and ship for the payment of duties and dues. I might mention [Page 245] that there is legal opinion here that by withdrawing its machinery for the collection of duties, the National Government has abandoned its right to the duties, which are payable, under the treaties, at the port where the cargo is discharged or shipped, as the case may be. (See Art. XXII American Treaty of 1858,61 and Art. XXV of the British treaty of the same year62).
The Legation is aware that the Shansi regime has set up its own Customs regime at Tientsin and that it claims to be functioning from yesterday (Saturday) morning.
In my despatches to the Legation, I considered two questions:
- 1.
- The question of recognition of any such de facto Customs regime.
- 2.
- The procedure to be followed in event that the de facto regime was unable to function and collapsed.
On point (1) I am of the opinion that a Customs regime set up under the authority and recognized and supported by the authorities actually in control and exercising the functions of Government at Tientsin must be regarded as a de facto or officiating Customs provided it actually functions.
On the second point, I am of the opinion that American ships and merchants are entitled to reasonably prompt despatch of ships and clearance of their cargo. If the Shansi-appointed Customs regime is unable to function, then it seems to me that American ships and merchants are entitled to consider Tientsin a free port, and I proposed to clear American ships without any requirement for the payment, or the posting of guarantees for the payment of Customs dues and duties.
I am aware that under Article XXII of the Treaty of 1858 between the United States and China “if the Consul permits a ship to leave the port before the duties and tonnage dues are paid, he shall be responsible therefor.” But I am of the opinion that the Government must maintain a Customs administration at the port for the purpose of assessing and collecting such duties, and if it closes the Customs and abandons fiscal control of the port, there is no obligation on the part of the consular officer to collect, or to require guarantees for the payment, of the dues and duties.
In further explanation of this position, I should explain that under the Customs regime in China shipping companies post annual guarantees for the payment of all dues and duties with respect to ships, and cargoes imported and exported by such ships. If there is any legal obligation for the payment of such dues and duties it may be [Page 246] enforced against the shipping companies under their annual guarantees, and there is no necessity for action by the consular authorities to require further or additional guarantees.
Under these circumstances, I proposed to advise American shipping companies, if consulted, that before delivering any import cargo or receiving any export cargo they should consider the advisability of requiring adequate financial guarantees to protect themselves against any claims for dues, duties or penalties on account of such cargo delivered or accepted for export.
Having been consulted by American shipping interests, I gave this advice, believing that they should be prepared if necessary to take measures in event that no functioning de facto Customs regime maintains itself at the port. At the same time, I pointed out that the Shansi regime had declared the Custom House to have been reopened and functioning and I expressed the opinion that, unless otherwise instructed by my Government, I believed that it was not possible to do otherwise than to regard it as the de facto or officiating Customs administration of the port.
The British and Japanese consular authorities appear to have taken the view that with the closing of the Tientsin Customs by the National Government they are entitled to take upon themselves the entry and clearance of ships and permit the delivery and acceptance of cargo without reference to any question as to a de facto Customs regime or authority established in the port.
British and Japanese shipping companies accordingly required that merchants exporting cargo or taking delivery of import cargo must submit signed guarantees for the future payment of Customs duties if required. On advice of their consular authorities, the British and Japanese shipping companies added the requirement that such guarantees must be endorsed and sealed by the consular authorities of the nationality of the merchant importing or exporting the cargo.
As you are aware, I declined to endorse any such guarantees and suggested the acceptance of bank guarantees—the most usual form of surety in the China ports. My British colleague declined even to consider this suggestion. My Japanese colleague was apparently well disposed to the suggestion but was reminded by the British Consul-General that the system in effect had been agreed upon between the British and Japanese shipping companies after advance consultation between the British and Japanese Consuls-General.
With reference to your suggestion that the interested Consuls should discuss the situation with a view to exploring the possibility of a uniform attitude being taken, it will appear from my reports that notwithstanding the apparent disinclination of my British colleague to enter into consultation and the independent action taken by him and his Japanese colleague, I took action as Senior Consul to call a meeting [Page 247] of the Consular Body on Saturday morning, June 21st. I have already reported to the Legation what transpired at that meeting. A further meeting is to be held on Monday, June 23d. I will inform the Legation promptly of the result of that meeting.
The fundamental question, in my opinion, is whether or not the Customs regime set up by the Shansi faction and recognized and supported by the territorial authorities in control and exercising the functions of government at Tientsin should be regarded as the de facto or officiating Customs.
I have [etc.]