2. I have replied as follows: "December 3, 4 p. m. Your December 1, 1 p. m. Your proposed reply to the Foreign Office is approved. Please continue to keep the Legation fully informed as to any developments." MACMURRAY 893.512/888: Telegram The Minister in China (MacMurray) to the Secretary of State PEKING, December 12, 1928-5 p. m. 870. Legation's 854, December 3, 4 p. m. Following from Canton: "December 12, 10 a. m. Standard Oil Company lighters released yesterday afternoon on written assurance from me that company would be held to strict accountability under any decision reached through due process of law'. Lighters and cargoes were held exactly two months and, in my opinion, would never have been released if Marshal Li had not returned. Despatch follows." MACMURRAY 893.512/889: Telegram The Minister in China (MacMurray) to the Secretary of State PEKING, December 15, 1928—4 p. m. [Received December 16-10: 40 a. m.89] 880. 1. Following from Shanghai: "December 13, 3 p. m. The Minister of Finance of the Nationalist Government has approached the Standard Oil Company with the proposal that the present tax agreement be redrawn with a view to the incorporation of the dollar consumption tax on kerosene and gasoline in the present tariff. Soong recognizes the fact that the company have certain protective clauses in the agreement of March 2, 1928, and has offered to grant similar protective clauses in any new agreement which might be entered into, providing the equivalent of this consumption tax on kerosene and gasoline [omission?] by the Chinese Maritime Customs. The company is not inclined to consider favorably the proposal. The company would greatly appreciate comments and advices should there be any objection on the part of the American Government to the company entering into an agreement such as proposed by Soong. **Telegram in three sections. 237577-43- -41 Hopkins " of the Standard Oil Company wishes to recall his conversation of August 5, 1928, with Minister and Davis 1 at Peking." 2. I am replying in part as follows: "With reference to the attitude of the American Government toward the Standard Oil Company entering into an arrangement such as that proposed by Soong, the company should be informed that the making of private agreements of this character is a matter to be decided solely by the company itself, concerning which the Legation cannot undertake to give advice. I am however repeating your telegram to the Department for any possible comment that it may care to make." 3. When it was proposed at the time of the Customs Conference 2 to increase the duties on kerosene from 5 to 122 percent, it was contemplated that at least a definite program would be formulated and commenced for the gradual abolition of likin. Instead of following out this course the Chinese have apparently now added to an increased import duty the equivalent of the consumption tax now paid by the oil companies under private agreement in commutation of all other inland charges. This has been done in spite of the fact that the Nationalist Government, except in the provinces of Kiangsi, Chekiang, Anhui, Kiangsu and Fukien has acknowledged itself unable to give any assurance of immunity from still further transit and other taxes arbitrarily imposed by local authorities. It should be noted that other commodities concerning which private agreements were not made are apparently entering into the dangers now facing the oil companies. 4. Although the taxes paid by the tobacco companies under private agreement are apparently not being added to the import tariff, it is understood nevertheless that cigars and cigarettes are to be subjected to a 32 percent excise. MACMURRAY 893.512/889: Telegram The Secretary of State to the Minister in China (MacMurray) WASHINGTON, December 21, 1928—4 p. m. 416. Your 880, December 15, 4 p. m. Your reply to Cunningham as quoted is approved. 893.512/888: Telegram The Secretary of State to the Minister in China (MacMurray) WASHINGTON, December 21, 1928—7 p. m. 417. Your 870, December 12, 5 p. m. Inform Consul General Canton Department is gratified at the success of his efforts in obtaining release of Standard Oil Company's lighters. KELLOGG ARRANGEMENT FOR PAYMENT BY AMERICAN CITIZENS AND FIRMS OF VOLUNTARY CONTRIBUTIONS IN LIEU OF TAXES TO THE HARBIN MUNICIPALITY" 893.102 H/496: Telegram The Secretary of State to the Minister in China (MacMurray) WASHINGTON, February 3, 1928-5 p. m. 33. Department's instruction 675 of November 7, 1927.94 1. Following telegram received from Harbin: "January 30, 5 p. m. Referring to my despatch No. 4350 dated December 10,95 regarding municipal taxes at Harbin. The Department is requested to instruct by telegraph this office whether contributions in lieu of taxes should be made by Americans through the Consulate or direct to the municipal authorities." 2. Transmit following reply to Harbin : "Your January 30, 5 p. m. It is noted from your report that payments of municipal taxes are made to the Chinese authorities direct by two important American concerns and by all other extraterritorial foreigners except the Japanese. The Department perceives no cogent reason why American citizens in general should not follow this practice and accordingly the Department desires that payments through the consulate should be discontinued. You should offer advice to American citizens as set forth in the Department's instruction to the Legation of June 2, 1927,96 but should use all necessary and appropriate means to ensure the equitable treatment of American interests and the extraterritorial immunities of American citizens. The Department does not consider it advisable at this time to raise the question of participation by American citizens in the municipal government nor to enter into any commitment with the Chinese authorities as to the principle involved in their taxation by such authorities. The continuance of the Department's present attitude in the matter will largely depend on the treatment received by American interests." Continued from Foreign Relations, 1927, vol. 11, pp. 492-498. Foreign Relations, 1927, vol. I, p. 498. Not printed. "Foreign Relations, 1927, vol. II, p. 390. KELLOGG 893.102 H/501 The Secretary of State to the Minister in China (MacMurray) No. 1070 WASHINGTON, November 19, 1928. SIR: The Department has received your despatch No. 1689, dated October 5, 1928, in which you refer to despatch No. 1802, dated September 13, 1928, from the American Consul at Harbin, regarding the Harbin municipal question."7 In reply to your request for an expression of the Department's views you are informed that the Department concurs in the opinion held by you and Mr. Hanson 98 that it is inadvisable to take any steps having as their object participation by American citizens in the meetings of the Assembly of Delegates or the Municipal Council. In this connection you are referred to the Department's telegram No. 33, of February 3, 1928, 5 p. m., in which a similar position was taken. The suggestion has been made by Mr. Hanson that it might be possible to make an arrangement whereby the Japanese representative now placed in the Municipal Council would represent the interests of all extraterritorial foreigners, including American citizens. The Department believes that such an arrangement, in so far as citizens of this country are concerned, would be inexpedient. A review of events at Harbin would indicate that foreign residents have hitherto reaped small practical benefit from their attempted insistence on special municipal rights, while the advantage that will accrue to Japanese residents from being represented in the Municipal Government may be regarded as problematical. If the Legation agrees that this is the case, the Department desires that the American Consul at Harbin shall be instructed to abandon all attempts to obtain for American citizens any special right to participate in the Municipal Government, although he should report any offers made by the Chinese authorities in this connection, and to confine his efforts to obtaining for citizens of this country the enjoyment of their treaty rights and all advantages in the carrying on of their activities that may be enjoyed by the citizens of the nation most favored in such respects. PROTESTS BY THE UNITED STATES AGAINST PROPOSED CHINESE FINANCIAL MEASURES DIVERTING REVENUES FROM PAYMENT OF AMERICAN LOANS IN DEFAULT 693.003/853 The Chargé in China (Perkins) to the Secretary of State No. 1614 [Extract] PEKING, August 15, 1928. SIR: 99 In connection with the first paragraph of the enclosed memorandum, in which is mentioned the plan of Mr. T. V. Soong to float a domestic loan of some forty million dollars to be secured on the proceeds of the cancelled German indemnity, I have the honor to refer to the Legation's despatch No. 509, of March 25, 1926, referring to two separate protests that had been filed with the Chinese authorities by the diplomatic representatives concerned1 against the allocation, for fresh domestic loans, of that portion of the customs revenues formerly required for the services of the German Boxer Indemnity, and of recent years earmarked for the service of one of the earlier internal loans. In view of this action and the attitude which we have consistently taken toward the allocation of such funds to new obligations of the Chinese Government, I have the honor to recommend that I be authorized to make a further protest in the event the proposed loan is decided upon by the Nationalist Government. It would seem that a failure to protest in these circumstances might have a serious bearing upon the whole question of the assumption by the Nationalist Government of China's existing financial obligations. It is requested that a telegraphic instruction be sent with regard to the Department's wishes in the matter. I have [etc.] MAHLON F. PERKINS [Enclosure-Extract] Memorandum by the Chargé in China (Perkins) of a Conversation With the Officiating Inspector General of Customs in China (Edwardes) Mr. Edwardes took up the discussion of financial plans which he understands Mr. T. V. Soong, Nationalist Minister of Finance, has in mind for the near future. Mr. Edwardes said that, in the first "Not printed. 1 For the protests of Mar. 18, 1926, and Apr. 19, 1926, see Foreign Relations, 1926, vol. 1, pp. 947 and 948. |