693.116/126
The Minister in China ( Johnson ) to the Secretary of State
[Received February 24.]
Sir: I have the honor to refer to the Legation’s despatch No. 2451, January 5, 1934,22 upon the subject of the restrictions placed upon the business of American oil companies by the Chinese authorities at Canton, and to enclose a copy of despatch No. 245, January 12, 1934, from the Consul General at Canton.22
From the Consul General’s despatch it appears that while a pretense is being made that this taxation is being applied uniformly and without discrimination, the provincial government is in fact granting to Chinese refiners of kerosene produced locally from liquid fuel a rebate of two-thirds of the tax under the guise of a subsidy to native industry.
As this rebate appeared to the Legation to be in fact discriminative tax treatment, the British Legation was consulted. As a result, we have both instructed our consuls general at Canton to protest the collection of this tax in the discriminative manner now evident. A copy of my instruction to the American Consul General at Canton is enclosed.22
Although we did not believe that the Ministry of Foreign Affairs was in a position to take any effective action in the premises, in order that our views upon this latest move of the Canton authorities towards the elimination of the oil companies from that region might be known to the National Government, we have addressed similar notes of protest to that Ministry. A copy of the Legation’s note, together with a copy of that sent by the British Legation is enclosed for the Department’s information.23
Respectfully yours,