893.5123/36: Telegram

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

56. My 53, February 2, 2 p.m. I have learned from the British Embassy that the Embassy has recommended to the British Foreign Office that the Chinese authorities be informed that the British Government is prepared to assist the Chinese Government in the collection of the income tax from Chinese employed by British individuals and firms and that it is willing to advise British subjects to supply to the appropriate Chinese authorities on request lists of Chinese employees, with salaries paid. The Embassy has not yet received an instruction from the British Foreign Office on this point.

My informant in the British Embassy recalled that the attitude taken by the British Government toward the request of the Chinese Government that extraterritorial nationals pay Chinese income tax had been less “positive” than that of the American Government since the British Government had announced its willingness to consider payment of the tax by British subjects in China when the tax should be collected from all nationalities; whereas, the American Government had replied that it did not regard the tax as applicable to American citizens. The American and British Embassies are keeping in touch concerning this request.

Another note has been received from the Foreign Office dated January 27, [saying that?] the income tax went into effect January 1 and asking that American citizens in China be instructed to pay the tax. The British Embassy has not decided what reply, if any, shall be made to this note and is inclined to feel that no further declaration of the British position is required. Unless otherwise instructed by the Department I shall return no reply in writing but if the matter is taken up with me again in conversation and the circumstances seem to warrant I intend reopening the assurance contained [Page 680] in the Department’s 226, September 19, 3 p.m., to Peiping in the sentence beginning “Peck may add”.23

Repeated to the Department and Peiping.

  1. Telegram printed in Foreign Relations, 1936, vol. iv, p. 632. Sentence mentioned contained an assurance to the effect that the Department would be prepared to consider an income tax on Americans should all other governments concerned acquiesce in the imposition of an income tax on their respective nationals.