Papers relating to the foreign relations of the United States, 1931, The Far East, Volume III

893.512/1149: Telegram

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

Washington, July 27, 1931—11 a.m.

249. Your 380, June 30, 5 p.m., 432, July 17, 6 p.m.,⁴⁹ and Department’s 220, July 3, 4 p.m.

1. With regard to the surtax on customs duties at Foochow, Department approves protest concurrent with that of other Consuls on ground of violation of principle of uniformity of customs tariff on all frontiers. Department doubts need of supplementary statement insisting on non-discriminatory treatment.

2. In case authorities attempt to collect this surtax, you should endeavor informally to persuade Minister for Foreign Affairs to have its collection discontinued and in presenting the case, you might be guided by the following:

The Chinese Government in proclamation of July 20, 1927, announced its intention to abolish all forms of taxation levied in the name of “likin” and destination taxes.⁵⁰ This policy was confirmed in Annex III of the Sino-British Tariff Treaty of 1928.⁵¹ By Chinese Government Mandate of January 17, 1930, and supplementary Mandate of October 6, 1930, the abolition was made applicable to all parts of China and effective as from January 1, 1931. In view of the history of the negotiations whereby there were concluded the treaties establishing China’s tariff autonomy, and of the provisions of those treaties, relating to national tariffs, uniformity of duties on all Chinese frontiers, and most-favored-nation treatment; and in view particularly of the items cited above, it would appear entirely out of harmony with the letter and the spirit of the pronouncements and pledges of the Chinese Government for that Government or its provinces or municipalities to establish provincial import duties or to reestablish under any names or forms taxes equivalent thereto or to taxes which have been abolished in pursuance of pledges.

3. With regard to the “products tax” referred to in the second paragraph of your telegram, No. 380, it is not clear whether this is a production tax levied upon all wood oil produced in the province of Hunan or whether it is a tax levied only upon exports of wood oil. If the levy is assessed on exports in addition to the national export tax, it would seem that this tax warrants, for the reasons stated above, the making of a protest by the Consul General at Hankow and/or by the Legation.

4. The Hopei provincial taxes referred to in paragraph 3 of your telegram No. 380 would also appear to constitute an import tax imposed by the provincial government and would, therefore, seem to warrant an objection on similar grounds.

5. Referring to the wharfage dues and the dike surtax mentioned in your No. 432, Department considers that, as both are surtaxes on imports and exports, the instructions given above are also applicable to both. To the levying of a surtax for conservancy purposes, the Department would perceive no objection, provided arrangements for collection of such are embodied in an agreement similar to the arrangements in force with regard to such at certain other treaty ports.

In case it were proposed that there be levied a municipal tax not based on imports or exports and for conservancy purposes, the Department would perceive no objection, and for guidance in such case you should consult the Department’s previous instructions with regard to payment of municipal taxes by American citizens.

Castle

49. No. 432 not printed.
50. See telegrams No. 756, July 26, 1927, 4 p.m., and No. 765, July 27, 6 p.m., from the Minister in China, Foreign Relations, 1927, vol. ii, p. 400.
51. League of Nations Treaty Series, vol. xc, pp. 337, 354.