893.5123/65: Telegram

The Secretary of State to the Counselor of Embassy in China (Lockhart)

411. Your 841, December 22, 6 p.m. In the light of the circumstances mentioned in your telegram under reference and of the Department’s [Page 685]instructions concerning the Chinese income tax, the Department feels that the question of the deduction by the Peiping Union Medical College, for payment to the new régime, of the Chinese income tax from salaries paid to officers and employees of the college is a matter for the institution concerned to decide. It is suggested that in replying to any request you may receive from the Peiping Union Medical College for advice in regard to this matter, you also state that this Government has not recognized the new régime, that the Chinese income tax is not applicable to American citizens, and that American organizations are under no obligation to collect the tax from their employees.

In the event that you find it necessary to approach the authorities of the new régime in regard to income tax matters, you should bear in mind the Department’s No. 400, December 15, 7 p.m.,28 particularly paragraph 1.

Please keep Department informed of developments.

Hull