The Counselor of Embassy in China (Peck) to the Secretary of State
[Received April 22—6:55 a.m.]
103. 1. An officer of the Embassy has been informed by a responsible concerned Chinese official that the Chinese Government has decided, as the only effective means of stopping the smuggling of Japanese goods into North China, to lower the import tariff on rayon, sugar and cigarette papers in order to make smuggling unprofitable. He stated that the new tariff rates will shortly be made effective and intimated that this action was taken partially in order to preclude the Hopei-Chahar Council from carrying into effect an intention, recently reported in the press, of extending “special trading privileges” in North China which would be tantamount to reduction of import duties.
2. Repeated to the Department and Peiping, by mail to Tokyo.