894.512/40: Telegram

The Secretary of State to the Ambassador in Japan (Grew)

98. Your 154, March 7, 8 p.m., and 158, March 8, 7 p.m.

You are authorized to issue instructions to the Consul General in the sense of paragraph 3 of your 154, March 7, 8 p.m., and to draft and present a rejoinder to the Japanese note verbale along lines indicated in your 158, March 8, 7 p.m., keeping in mind comment given below.
With reference to the text of the proposed instruction to the Consul General, the Department suggests that the phrase “refuse payment” in the first sentence be changed to read “refrain from payment”.
With reference to section (a) of numbered paragraph 1 of your 158, the Department desires that you emphasize the fact that the proceeds of the tax are paid into and disbursed from a special account for military purposes, as well as the point, indicated in the first paragraph of the Department’s No. 53, February 11, 6 p.m., that it is the view of this Government that any special taxes imposed expressly for the support of the hostilities in China are “military exactions or contributions” from which American nationals are exempt under article I of the Treaty of Commerce and Navigation. Our case is based upon these two fundamental points which you should constantly emphasize in your representations.
In regard to subsection (b) of paragraph 1 of your No. 158, it might be emphasized that this Government is not convinced, and that it could not convince the affected American interests and the American public, that the “North China Incident special taxes” which the Japanese Government proposes to collect do not in fact constitute military exactions or contributions having for their purpose the support of Japanese military activities in China.