893.5123 Manchuria/3: Telegram
The Counselor of Embassy in China (Lockhart) to the Secretary of State
[Received 6:03 p.m.]
78. Embassy’s 22, October 2, 4 p.m.6 Mail report has been received from Consul General Adams. He states that Chinese and all non-extraterritorial foreigners will be required to pay this “head tax on individuals” and that determined effort undoubtedly be made to apply it to extraterritorial nationals. Japanese Consul General informed Adams that Japanese nationals will be required to pay it. Japanese acquaintances inform Adams that some Japanese individuals plan to pay tax, but that others are making vigorous objections. Adams considers that the amount of the tax is not unreasonable in relation to the municipal services performed in return. He feels that chief objectionable feature is that acceptance of the tax in present form will probably lead to attempts by the local authorities to inquire into personal affairs of American citizens.
[Page 369]Adams states that local authorities have the ability (as distinguished from the legal right) to require American citizens to pay this or any other tax within reason.
Adams proposes to object to the application to Americans of this tax with the ultimate aim of arriving at some arrangement which will enable Americans concerned to pay tax as “voluntary contribution” without investigation into their personal affairs by the local authorities.
Instructions issued to British Consuls General at Harbin and Mukden within the last few days by British Embassy here based on instruction received from British Foreign Office may be summarized as follows.
In case local authorities endeavor to investigate incomes of British persons you should refuse to admit their right to do so and make formal protest on the grounds that British subjects are not liable to taxation which has not been made applicable to them by treaty or British legislation.
British persons who object to investigation and payment of this tax should be advised that they should submit after making merely formal protest, and they should be informed that you can afford them no protection beyond representations on their behalf. It should be suggested that it would be advisable to supply accurate information as far as possible in order to avoid obnoxious investigation.
In the cases of British persons who are willing to consent to the application of this law you should informally cooperate with the authorities as far as possible.
Please keep in close touch with your American colleague. End of summary.
I recommend that proposal made by Adams be approved, but that, if he is unable to arrive at an arrangement for the payment of the tax as “voluntary contribution” without investigation into their personal affairs, he be instructed to follow course similar to that of the British, but that any representations made should be informal.
Department’s instructions are requested.7