893.52/330
The Chargé in China (Gauss) to the Secretary of State
[Received February 9.]
Sir: With reference to the last paragraph of the Legation’s despatch No. 3135 of November 15, 1934,25 on the subject of the reregistration of land titles at Nanking, in which the Legation stated that another despatch on the subject of the imposition of a land rent tax [Page 803] at Nanking, reported as being separate and distinct from the matter of reregistration of title deeds, was in the course of preparation, I have the honor to enclose copies26 of the following correspondence on the subject:
- 1.
- Despatch No. 691 of October 31, 1934, from the Consulate General at Nanking.
- 2.
- Legation’s instruction of November 30, 1934, to the Consulate General at Nanking, and
- 3.
- Despatch No. 716 of December 29, 1934, from the Consulate General at Nanking.
It appears from the information supplied by the Consulate General at Nanking that foreigners in Nanking have not since the revolution of 1911 paid land taxes of any kind. It appears also that no mention is made of payment of land taxes in title deeds issued to foreigners at Nanking, nor have Chinese paid such land taxes except on agricultural lands.
The question for the time being of the payment by American land owners of land taxes at Nanking has, it is believed, been amply covered by the Legation’s instruction of December 31, 1934, a copy of which was sent to the Department under cover of the Legation’s despatch No. 3243 of January 7, 1935.27 The Department will recall that in that despatch the Legation stated inter alia that, with reference to the suggestion that it might be advantageous to American missionary societies (who are the largest American land owners in Nanking) to hold their property under a strict lease status in the expectation that they might thus avoid payment of land value taxes, the Legation does not anticipate that any such exemption from land value taxes can be claimed under existing treaties or Chinese legislation; that it has generally been held that holders of perpetual leases are liable for the payment of the Government land tax; that it is believed that provision to this effect has sometimes been included in the perpetual leases or in the official certificates annexed to such leases when they are sealed by the Chinese authorities; that the substitution of a land value tax (tax based on the value of the land) for a land tax based on the area of the land, would not seem to alter the liability of the holder of the perpetual lease for the payment of Government taxes on the land held under such leases; but that if the original deeds of perpetual lease fixed the amount of the Government tax which must be paid on the land and provided that there shall be no increase thereof during the term of the perpetual lease, there might be ground for protesting the substitution of a land value tax in excess of the Government tax prescribed in the perpetual lease.
[Page 804]A copy of the Legation’s instruction of today’s date to the Consul General at Nanking on the subject is enclosed.31
Respectfully yours,