693.003/1208: Telegram

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

74. Your 139, March 26, 11 a.m. The Department’s views with regard to the general subject of Chinese customs surtaxes, including conservancy taxes, may be briefly stated as follows:

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The Department, for practical considerations, is not disposed to raise any objections to the imposition by the Chinese Government of reasonable customs surtaxes to be used for financing harbor conservancy works or undertakings of a similar character. However, the Department is of the opinion that, in determining our attitude toward the imposition of specific surtaxes, there should be borne in mind (1) that, inasmuch as the American Government pursues a trade policy the object of which is to effect the removal or reduction of excessive barriers to trade, the imposition of customs surtaxes which place burdensome restrictions upon American trade would be a matter of concern to this Government (Department’s telegram No. 65 of April 1, 6 p.m.) and (2) that, inasmuch as it appears that the Chinese Government is committed to the maintenance of the principle of uniformity of duties on all customs frontiers (Department’s telegram No. 249, July 27, 1931, 11 a.m., to Peiping60), the Department would expect that the surtaxes would not be imposed at a rate which would materially disturb the principle of uniformity.

With regard to agreements now in force providing for the collection of conservancy surtaxes (the Whangpoo and Haiho conservancy agreements, for instance), the Department would expect any modification of those agreements to be the subject of arrangements mutually satisfactory to the parties concerned.

The Department desires that the Embassy carefully examine into the character and the possible effect upon American interests of each case involving the imposition of customs surtaxes and that the Embassy be guided by the Department’s views as expressed above in determining the attitude which should be taken toward each such case.

With special reference to the conservancy surtax at Canton, the Department would appreciate being informed by mail despatch in regard to (1) the character of that tax, (2) the attitude of the Chinese Government toward the Japanese protest mentioned in your telegram under reference, and (3) the views of the French and other interested Embassies in regard to the imposition of the surtax.