The Secretary of State to the Ambassador in China (Johnson)
221. Your 438, September 8, 11 a.m. and despatch No. 625 of August 4, in regard to the collection of land value taxes on property at Nanking.
Although the Department understands that the treaty powers in China have generally recognized the application to their nationals in China of the principle that the ownership of land is subject to the lex loci, the Department is not aware of any authoritative judicial decision by an American or other court as to the enforcement of the Chinese land tax against extraterritorial nationals in China. However, pending an authoritative judicial decision of the question, the Department is of the opinion that American-owned property in China (perpetual leaseholds) should properly be subject to the Chinese land tax, provided the tax is reasonable in amount and applied without discrimination and without violation of any treaty right. It is believed that the land tax has for years been paid by many American citizens in China either as a “voluntary contribution” or as a tax.
The substance of this instruction may be communicated to American citizens who request the advice of the American authorities in regard to the payment of the land tax.