893.512/8–2949: Telegram
The Consul at Shanghai (McConaughy) to the Secretary of State
[Received August 29—6:38 a. m.]
3529. Received following letter from Bureau Finance Shanghai Municipal People’s Government (Deptcirtel August 26, 6 a. m.54):
“Urlet dated August 18 requests us to note property of the country concerned is not liable to payment taxes. It is found that your request does not conform measures this municipality governing collection of house tax. Therefore, all house tax involved should be paid. Hope you will take due note.”
View consistency all Commie agencies Shanghai re liability US Government payment taxes, recommend question be taken up highest levels Peiping to ascertain whether taxation foreign government properties Commie China is policy of tops or only local policy which could be corrected from above. In raising question PPG [Peiping] could point out if Commies expect to be recognized would come into possession valuable Chinese properties New York, San Francisco and Washington which would be liable taxes retroactive to date taxes collected US properties China. Indication amount taxes in US might show they stand to gain on exemption taxation. This question cannot be indefinitely stalled off view liability occupants of property to payment tax in absence order. However, time probably could be gained if we informed authorities that matter being referred Peiping. Doubt if action will be taken against Glenline Building but anticipate trouble for individuals occupying Government houses Shanghai which could result their “re-education” [and] seizure private property in event lack funds prevented payment. Calculation amount now due in course preparation follows subsequent message.55