The Consul at Tsingtao ( Dorsey ) to the Minister in China ( Johnson )22
Sir: I have the honor to refer to the Consulate’s despatch No. 408 of June 20, 1930,23 concerning the discriminatory tax upon public advertising imposed by the Tsingtao Special Municipality.
With this despatch, a copy of the protest lodged by this Consulate against the discriminatory feature of the tax was enclosed for the Legation’s information.24
There is now transmitted for the further information of the Legation copy in translation, as well as of the Chinese version, of the reply of the Municipal Authorities to the Consulate’s protest.23
The Legation will note that the Municipality finds nothing in the application of this tax which contravenes the Sino-American Tariff Treaty of 1928.
The Legation will further gather that the Municipality seeks to defend its position by reference to its obligations to promote native products, arguing that no country can legally stop the promotion of native products by another country, or claim that its nationals are being treated unequally on account of the promotion of native products.
An attitude of this nature carried to the extreme would serve as justification for internal taxation in China of any proportion upon foreign goods, provided it were imposed to promote the use of native products. The provision of the Sino-American Tariff Treaty framed to insure equality in taxation for American goods vis-à-vis Chinese products once the American wares have complied with the Customs requirements and passed the barrier of customs duty, would be nullified and as ineffective as though China had not committed itself to such equality of treatment.
Any further protest to the local Authorities in support of the general principle involved as outlined above would, it is submitted, be of no practical value, and no further comment will be made by [Page 285] the Consulate unless the Legation instructs that it is desirable to do so.
The Consulate would, of course, support the protest of any particular American firm that should desire to complain against the discrimination made possible by the Municipality’s Regulations.