861.77/2658
The Secretary of State to the Minister in China (Schurman)
Sir: Please refer to your telegram No. 292, of July 1, 1922,96 concerning the tariff agreement between the Chinese Eastern and South Manchuria Railways. You report that following the receipt of Mr. John F. Stevens’ telegram of June 3097 you presented the matter to the Chinese Foreign Office and called attention to the alleged violation of the open door principle.
The Department has given careful consideration to Mr. Stevens’ telegrams of June 30,97 July 8,98 July 1299 and August 3, 1922,99 all [Page 919] of which appear to have been repeated to the Legation. It has also examined the document furnished the Embassy at Tokyo by Mr. Kibe, of the South Manchuria Railway, purporting to give the substance of the conference between the two railways and upon which the tariff agreement is understood to have been based. The document was enclosed in Ambassador Warren’s despatch No. 296, of July 28, 1922,99a a copy of which is presumed to have been supplied the Legation.
While the force of Mr. Stevens’ argument against the agreement is recognized, especially with reference to the probable decline in export traffic through Vladivostok and a corresponding increase in the movement of freight via Changchun over the South Manchuria Railway’s lines, the Department is unable at this time to find any ground upon which a protest can properly be based. There is nothing to indicate discrimination against American interests, for it is presumed the rates are to be the same for all shippers, regardless of nationality. Moreover, it would appear that Vladivostok will continue to be accessible as a port of shipment for north Manchurian products although not under such favorable tariff arrangements as in the past. It is recognized, however, that in practical operation the new tariff arrangement may develop conditions, not as yet apparent, which may be harmful to American business interests, or in some way contravene the spirit of the open door policy.
In view of this possibility the Department feels that the Legation should assume a noncommittal attitude with regard to the new tariff arrangement, pending its actual working out in practice. Without resorting to formal action of any sort, you will endeavor, when a suitable opportunity presents itself, to let the Chinese Government understand that this Government may later desire to protest against the agreement should it appear that American interests are being discriminated against or the open door policy otherwise infringed.
I am [etc.]