893.512/718: Telegram
The Chargé in China (Mayer) to the Secretary of State
[Received 1:40 p.m.]
1044. 1. Following from American consul general at Shanghai:
“November 17, noon. Nanking Government has promulgated special kerosene-tax laws similar to those previously enforced by [Page 427] Canton and Hankow Governments. Larger American companies have not yet registered complaint and apparently contemplate allowing such new tax of $1 per 10-gallon unit to fall on their native dealers, thereby obviating technical recognition of the tax by American trade. Smaller American oil companies however have requested information as to the attitude of the American Government in reference to kerosene-tax laws and as to probable steps which will be taken by American Government. Does the Legation desire that I file formal protest at promulgation of laws imposing this extra treaty tax. Please instruct as to replying [apparent omission].”
2. Following to consul general at Shanghai:
“November 19, 3 p.m. Your 219, November 17, noon.
- (1)
- If tax is direct levy on American products in American hands or is in any way discriminatory you should protest it on general treaty grounds.
- (2)
- In event tax is indirect levy and only affects native dealers and consignees of American firms take no action but report facts to the Legation for further instructions.”
3. Following from consul general at Shanghai.
“November 22, 12 noon. Your November 19, 3 p.m. Kerosene-tax authorities assure American oil companies that new tax is not in contravention of treaties since it is purely a consumption tax, yet local Texas Company’s consignment of kerosene to its Wenchow agent has been detained by local Chinese authorities for failure to pay such tax theoretically payable by Wenchow consumers. Tax therefore appears to be direct levy on American products but not in any way discriminating against American companies.
Tax authorities cite previous acceptance by American oil companies of similar collection arrangements at Hankow and Canton as precedents.
At least one American oil company is considering expediency of payment of tax here through its National City Bank agents ‘acting on behalf of the absentee consumers’.”
4. Department’s instructions in the premises are requested.