125.8571/7–2249: Telegram
The Consul at Shanghai (McConaughy) to the Secretary of State
[Received July 22—8:33 a. m.]
2895. ReDeptel 1419, July 15, tax assessment Glenline Building. Tax notices covering additional space Glenline Building recently received increase total tax bill months May and June only to equivalent over $10,000.22 Tax rate per annum Glenline Building therefore is fantastic figure of over $60,000. Smaller but substantial bills have also been received for some of residential properties owned by US Government. British ConGen which occupies second most valuable foreign government owned property so far has not received any tax bill. Several Consuls who occupy small rented quarters have indicated they prepared pay relatively modest sums involved without question. Sentiment informally expressed at meeting consular body July 15 seemed preponderantly opposed lodgment protest against either real estate taxes or auto taxes which at equivalent of $600 per vehicle per annum also exorbitant. Believe attitude consular body toward infringement consular prerogatives as revealed discussion tax matters and Olive case will be spineless.
On July 14 we addressed letter to Foreign Office setting forth claim to exemption from taxation US Government-owned consular property. Memorandum was returned by Foreign Affairs Bureau with notation we should approach Bureau of Finance directly. July 19 we sent same letter to Bureau Finance together with entire sheaf tax notices. No acknowledgment yet received.
I recommend we maintain firmly our right to exemption property tax. Showdown should be on principle involved, not on prohibitive amount assessed.
Commie behavior when cards are down on this issue should tell us something about their immediate intentions.
Sent Department; repeated Nanking 1627.