693.11212/7: Telegram

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

221. Your 543, June 21, 10 a.m. Department is of the opinion that while the Treaty concluded between the United States and [Page 623]China on July 25, 1928,73 regulating tariff relations, removed the limitations established by prior treaties in regard to “rates of duty on imports and exports of merchandise, drawbacks, transit dues and tonnage dues in China”, the Treaty confers no greater authority over American nationals than that exercised by the Chinese Customs authorities before the Treaty of 1928 became effective. As this Government has never admitted the right of the Chinese authorities to compel the inspection of the books of American nationals and as such a right is neither expressly nor impliedly granted by the Treaty of 1928, any attempt by the Chinese authorities to enforce the asserted right to examine the books of American nationals would appear clearly to be in contravention of American treaty rights.

The Department would not be opposed to voluntary compliance by American nationals with requests for the examination of their books by the Customs authorities for the facilitation of the proper administration of the Customs. Department could not, however, admit the right of the Customs authorities to compel the inspection of the books of American nationals except by appropriate proceedings in the United States Court for China.

Department is, therefore, of the opinion that the Consular Body protest as summarized in the second paragraph of your telegram under reference is warranted in so far as it relates to American nationals and you are authorized to join with the Diplomatic Body in supporting the consular protest if such action should be deemed necessary.

Please keep Department fully informed of any developments in this case.

Phillips