893.5034 Business Tax/49
The Minister in China (Johnson) to the Secretary of State
[Received August 29.]
Sir: I have the honor to refer to my despatch No. 1123 of August 17, 1931,48 transmitting to the Department a copy of my formal note of August 7, 1931, to the Ministry for Foreign Affairs49 in reference to the new Business Tax Law. In this note various objectionable features of the new law were pointed out to the Foreign Office, and it was requested that this whole question of the business tax be given further consideration. The Foreign Office on October 7, 1931, replied to the Legation’s note, but the answers to the objections raised in the Legation’s note were in most cases vague and inadequate and did not indicate that the matter had received any very serious re-consideration by the National Government. A copy, in translation, of the Ministry’s reply of October 7, 1931, is transmitted herewith for the Department’s information.50
Subsequent to the receipt of this unsatisfactory reply of the Foreign Office, there was reported to the Legation but one further instance of an effort by the Chinese authorities to apply the business tax to American firms, and in this particular instance (at Canton) the Consulate General informed the Chinese authorities that the matter had been referred to the American Government for its consideration and that, pending its further instructions, the regulations could not be [Page 603] considered as applicable to American citizens. This reply was apparently accepted without comment by the Chinese authorities, who since that time have, so far as the Legation is informed, not sought to impose the tax. (See despatch No. 90 of November 27, 1931, from the American Consulate General at Canton to the Legation on the subject: “Business Tax in Canton”, copies of which despatch were forwarded to the Department by the Legation without covering despatch.)51
In his telegram of July 28, 3 p.m., 1932, Consul General Adams at Hankow reported that he had received a letter dated July 15th from the Chairman of the Hupeh Provincial Government, requesting that American merchants at Hankow be told to begin paying the tax without delay, to which request Consul General Adams replied that the matter has been under discussion by the Legation and the Ministry of Foreign Affairs. In view of the seeming adequacy of such replies to previous efforts of the Chinese authorities at various points in China to apply the tax to American citizens, the Legation has accepted Consul General Adams’ telegram (copy of which is enclosed51) as merely informative and has confined its action to an approval of the reply which he has made to the Chairman of the Hupeh Provincial Government. Mr. Adams has been informed, however, that the matter is again being referred to the Department.
In view of the present financial situation, it is to be expected that the Chinese authorities in Hupeh and elsewhere will more urgently press for the application of some kind of a business tax to foreign as well as Chinese merchants, and the Department is accordingly again referred to the Legation’s despatch referred to above and to the enclosed Foreign Office note of October 7, 1931. The views of the Legation in the matter are clearly indicated in its note of August 7, 1931, to the Ministry of Foreign Affairs (copy enclosed with my despatch No. 1123 of August 17, 1931), and an expression of the Department’s views in regard to the position to be taken by the Legation in reference to the matter, in the likely event that the Chinese authorities become insistent in their demands, is requested.
Respectfully yours,
- Foreign Relations, 1931, vol. iii, p. 1001.↩
- Ibid., p. 1002.↩
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