The American Minister in China (Johnson) to the Chinese Acting Minister for Foreign Affairs (Wang Ching-wei)26

No. 656

Excellency: I have the honor to invite Your Excellency’s attention to the situation which the American Consul at Foochow informs me exists with relation to the efforts of the Fukien Provincial authorities to collect a so-called “business tax” upon the various products of the foreign oil companies doing business there.

In reply to the Consul’s protests, the Provincial authorities have maintained that this “business tax” was levied only upon Chinese dealers and retailers, and could in no way be considered as a tax upon the American oil companies. However, the American Consul informs me that on August 28, 1933, representatives of the tax office stopped a shipment of kerosene belonging to the Texas Company (China) Limited, which was en route from Kwangtow to Lau Gie, on the grounds that the “business tax” had not been paid; that they have seized and have not released a shipment of eleven (11) tins of kerosene consigned by the same company to its agent at Futsing; and that they have compelled that company to pay the “business tax” upon gasoline sold by it to the airplane of the Pacific American Airways, an American corporation, on September 2, 1933, when that plane called at Foochow for fuel.

In addition, the tax authorities have demanded that the American oil companies assist them in the collection of this so-called “business tax” by informing the collectors in advance for tax collecting purposes of all contemplated shipments made in their own floating equipment from one of their installations to the other in Foochow.

From the above, and from similar incidents which the Consul informs me occur frequently at Foochow, it appears that the tax authorities are in effect endeavoring to collect this so-called “business tax” from the American companies.

As the imposition of this so-called “business tax” upon the products of the American oil companies appears to be contrary to former rulings of Your Excellency’s Government and in violation of the “Provisional Law Governing the Supervision of Local Finances”, promulgated by Your Excellency’s Government on December 13, 1932, I have the honor to bring this situation to Your Excellency’s attention with the request that measures be taken to relieve the [Page 603] American oil companies from the illegal interference with their trade by the Fukien Provincial authorities.27

I avail [etc.]

Nelson Trusler Johnson
  1. Copy transmitted to Department by the Minister in China in his despatch No. 2323, October 12; received November 4.
  2. The Chinese Foreign Office reply on November 14 indicated that the Ministry of Finance had instructed the Fukien Provincial Bureau of Finance to cease the collection of these taxes upon gasoline and kerosene (893.512/1297).