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

No. 222

Sir: The Department has received the Legation’s despatch No. 274 of June 18, 1930,53 concerning the Chinese house tax at Soochow, in [Page 543]which the Legation reported that it had authorized the American Consul General at Shanghai to protest against any effort on the part of the Chinese to collect this tax from American missionaries or churches, if Chinese temples and the residences of Chinese priests were exempted from the tax.

The Department understands that this tax when paid by American citizens residing in Soochow is paid as a voluntary contribution. The Department believes that this circumstance would warrant American citizens and organizations in refusing to make voluntary contributions equal in amount to the stipulated house taxes when Chinese citizens or organizations similarly situated enjoy exemption under the regulations. The Department believes that the American consular authorities, likewise, would be warranted in supporting American citizens who may take this position.

There does not appear to be, however, any express stipulation in treaties between the United States and China upon which the American consular authorities might rely in claiming exemption for American citizens from the payment of taxes of the sort under discussion and apparently the claim of American citizens to exemption must rest upon those general stipulations of the treaties granting to this Government extraterritorial jurisdiction over its citizens in China and upon the most-favored-nation clauses.

The Department would suggest that the American consular authorities in corresponding with the Chinese authorities in this and similar instances make it clear that no penalty may be imposed on American citizens for failure to make these contributions but endeavor, nevertheless, to effect adjustments which shall be equitable and satisfactory to all concerned.

In connection with precedents in other parts of China, the Legation may wish to refer to despatch No. 745 of November 10, 1928, from the American Consul General at Canton to the American Minister,54 on page four of which despatch there is a passage entitled “Church Property Excused from Taxation”.

Very truly yours,

William R. Castle, Jr.
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