893.61331/43: Telegram

The Ambassador in China (Johnson) to the Secretary of State

250. Following from Shanghai:

“May 19, 10 a.m. American leaf tobacco interests at Shanghai have reported to me that a proposal is now under consideration by the [Page 604] Executive Yuan of the National Government to establish a Chinese Government monopoly of tobacco leaf grown in China from American seed and at the same time to increase the duty on imported tobacco leaf sufficient to protect the proposed domestic leaf monopoly.

This proposal if adopted would vitally affect the American leaf trade and at the same time the monopoly would throw out of business the same American leaf tobacco interests which are engaged in distributing seed and buying, curing and selling Chinese leaf in China to supply the market for low grade leaf at cheap prices, which market cannot be reached by American grown leaf.

I am mailing a report on this subject.24 Might I respectfully make the suggestion that the foregoing should be communicated to the Department of State which may wish to take advantage of the present negotiations with K. P. Chen in Washington to make it clear that the American Government disapproves this and other plans of the Chinese Government to establish monopolies which would seriously affect American trade and American business interests in China.”

  1. Dated May 19, not printed.