500.A4e/559: Telegram
The American Delegation to the Secretary of State
[Received February 22—2:43 p.m.]
Conference number 25. With reference to Conference summary number 10,57 the Chinese delegation offered two resolutions, the first proposing that the powers agree that the interim surtaxes on imports be levied so as to yield between 90 and 100 million Chinese dollars, the second proposing that, since the above-named surtaxes require sanction of a new treaty, surtax authorized by Washington Treaty meanwhile be made effective April 1st.
The foreign delegations unanimously rejected the first resolution, taking the position that no agreement could be made with regard to the amount of revenue to be raised from interim surtaxes independently of a definite understanding as to the purposes for which said revenues would be used, a subject which had not been agreed upon. The powers also rejected second resolution because it did not contain provision for impounding revenue until the Conference should determine its disposition. At a meeting Saturday of subcommittee named in Conference summary number 10, the Chinese again presented substantially the same resolutions in combined form and the powers rejected them for the reasons above indicated, whereupon subcommittee adjourned to Tuesday, 23rd. Now postponed by request [of] Chinese to Wednesday, 24th.
We feel the effort of the Chinese to name the amount of surtaxes agreed upon by the powers is for political purposes only and that such action would be very embarrassing not only to the powers but to the Chinese also because the amount would be given wide publicity [Page 745] which would not be coupled with the fact that the amount was dependent upon purposes to be hereafter agreed upon and that such action would make it exceedingly difficult by the powers to agree with China on the purposes. We are also convinced that if the amounts derived from surtaxes provided in the Washington Treaty are not impounded with the Customs Administration to await the decision of the Conference they would be dissipated, hypothecated or pledged immediately. We believe all foreign powers agree on the above propositions.