Foreign Relations of the United States Diplomatic Papers, 1932, The Far East, Volume IV

893.512/1199: Telegram

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

Peiping, March 30, 1932—1 p.m.
[Received March 30—5 a.m.]

389. Legation’s despatches No. 1189, September 25;⁴¹ and No. 1299, December 4, 1931,⁴² concerning the imposition of certain illegal taxes in Hunan.

1. Under date of March 11 Legation again protested against the imposition of these taxes and has now received a note from the Ministry of Foreign Affairs, dated March 21st, in which American firms are requested to pay the dike surtax and wharfage dues inasmuch as all revenues derived therefrom are intended for use in river works. It is also contended that these taxes were not included in the declaration regarding the abolition of likin or the annexes of the Sino-British tariff treaty.⁴³ However, the Ministry adds that the Hunan Provincial Government has been instructed to refrain from the imposition of the production tax, the most important of the taxes levied.

2. Legation is of the opinion that request of the Ministry is not unreasonable and that American firms might tacitly acquiesce in the payment taxes provided that they are reasonable and that the revenues derived therefrom are largely expended on river works and that no attempt is made to collect the so-called production tax. However, in view of the Department’s instruction regarding these taxes as set forth in paragraph 5 of its 249 of July 27, 11 a.m.,⁴⁵ the Department’s instructions are requested as to whether American firms should continue to refuse to pay them or tacitly agree thereto on the conditions mentioned above.

For the Minister:

Perkins

41. See footnote 63, Foreign Relations, 1931, vol. iii, p. 1005.
42. See footnote 71, ibid., p. 1009.
43. Signed at Nanking, December 20, 1928, League of Nations Treaty Series, vol. xc, p. 337.
45. Foreign Relations, 1931, vol. iii, p. 998.