Office of the Historian

893.512/1223: Telegram

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

Peiping, June 15, 1932—4 p.m.
[Received June 15—4:30 a.m.]

659. Department’s 108, April 21, 5 p.m., regarding collection of wharfage dues and dike surtax in Hunan. With reference to points raised therein following is summary of despatch L Number 145, dated June 7th, from Consul General at Hankow, copies of which have been forwarded to the Department direct.47

1.
Wharfage dues have been collected for many years at Changsha and Yochow on all imports and exports including gasoline and kerosene regardless whether the cargo paid customs duty or was covered by duty exemption certificates. It is collected indiscriminately upon cargoes of all native and foreign firms on the basis of 2 percent of the old 5 percent ad valorem tariff. Dike tax collected for many years at above ports on all imports and exports paying customs dues with the exception of kerosene and gasoline which are exempted by the terms of the consolidated tariff since July 1931. Repeated attempts have been made to force oil companies to pay dike surtax. Dike surtax collected from all foreign and Chinese firms.
2.
With respect to protests Japan[ese] Consul at Shanghai has protested against both taxes. British Consul has not and will do so only if British goods are discriminated against. Other powers have not protested and are not particularly interested.
3.
Standard Oil Company has paid wharf dues but with respect to the dike surtax is resisting efforts of provisional authorities to collect taxes on gasoline and kerosene which are exempted by terms of [consolidated?] tariff.
4.
With regard to total of both taxes per annum Consul General states that any accurate statement is quite impossible but that total may possibly amount to approximately 150,000 Haikwan taels. As to amount expended on conservancy work Consul General states inter alia “It is generally admitted locally, however, that only a small percentage if any of these or similar revenues are ever actually expended for the purpose declared”.
5.
With reference to the effect of such tax upon American trade the Consul General reports that “American firms interested in the wharfage dues and dike taxes in Hunan have expressed the opinion that their collection in a manner the same as that used for similar collections in other ports would not materially affect American trade. They would appear to be willing to acquiesce without protest in the [Page 602] collection of dike tax upon all cargo (other than kerosene and gasoline) and the collection of wharfage dues upon all cargo provided the current rates of exchange were used in computing all assessments and provided further that the dike taxes be assessed only upon cargo paying customs duty in the Hunan port of assessment. This arrangement would permit the importation into Hunan free from the dike tax of all cargo that has been cleared out of bond or through the customs at some other port in China. This is the procedure at Hankow and is reported to be that of other ports of China with the exception of those of Hunan”.
6.
With reference to the production tax the Consul General reports that while it has not been abolished the Hunan provisional authorities have temporarily ceased their efforts to collect the tax from foreign firms.
Johnson
  1. Not printed.↩