File No. 4277/4-6. No. 271.] The Acting Secretary of State to Minister Rockhill. DEPARTMENT OF STATE, Washington, March 28, 1907. SIR: I have to acknowledge the receipt of your dispatch, No. 537, of the 15th ultimo, inclosing a copy of additional correspondence between you and Wai-wu Pu on the subject of the opening of Antung and Mukden to international trade. Your notes to the Wai-wu Pu are approved by the department. ROBERT BACON. RESERVATION OF AMERICAN RIGHTS IN THE EXTENSION OF THE JAPANESE CONCESSION AT HANKOW. File No. 8103. No. 663.] Minister Rockhill to the Secretary of State. AMERICAN LEGATION, SIR: I have the honor to inform you that the Chinese Government has entered into an agreement with the Japanese Government providing for the extension of the Japanese concession at Hankow. Article VIII of the agreement, which is on file in this legation, is the only stipulation affecting our interests and reads as follows: Property (in the concession extension) purchased by foreigners from Chinese subjects before the opening of the Japanese concession will, unless there is some reason existing to prevent it, be dealt with according to the rules in force in other foreign concessions. But as the "concession" is of very small area, none but Japanese subjects will be permitted to buy land therein after the signing of this agreement. Chinese subjects will not be permitted to mortgage their property in the concession to foreigners (other than Japanese) or to rent or sell to them. Transgressors of this rule will be severely punished by the local Chinese authorities. If reputable and well-to-do foreigners desire to live within the limits of the Japanese concession they may do so, but they may not buy land therein. I inclose copy of a letter on this subject from the Japanese consul to the American consul at Hankow forwarded to me by the latter, and a copy of my reply to Mr. Martin. In giving the consul-general instructions to inform the Japanese consul" that the United States reserves full extraterritorial rights over American-owned property situated in the concession extension, etc.," I was guided by the note addressed by Mr. Hay to Mr. Cambon, on June 12, 1899 (Foreign Relations 1899, p. 283), in reference to the extension of the French concession at Shanghai. I have, etc., [Inclosure 1.] W. W. ROCKHILL. Consul-General Martin to Minister Rockhill. AMERICAN CONSULATE-GENERAL, SIR: With reference to my No. 311, of the 15th instant, I have the honor to forward herewith a copy of a letter I have to-day received from His Imperial Japanese Majesty's consul at Hankow, which may be of interest to you in considering the question of the property of the Standard Oil Company, as both their tanks and godowns are situated in the area now to be known as the Japanese concession. WILLIAM MARTIN. [Subinclosure.] The Japanese Consul at Hánkau to Consul-General Martin. HANKOW, June 17, 1907. SIR AND DEAR COLLEAGUE: I have the honor to inform you that the area which extends from the end of the original Japanese concession at this port 150 chang northward along the river and 120 chang to the west from the bank of the river, having been leased in perpetuity to His Imperial Majesty's Government in virtue of an agreement signed on the 9th February last by the Taot'ai and myself and subsequently sanctioned by the respective superiors, this consulate is under instructions to start registry of ownership of the land situated within the above limits. I therefore have the honor to request that you will notify such of your nationals or protégés as may possess land on the said concession extension to produce their title deeds at this consulate for examination and registration before or on the 16th of August, 1907, and thereby to agree to their property being included in the Japanese concession extension. Thanking you in anticipation, I avail, etc., K. MIDZUNO. [Inclosure 2.] Minister Rockhill to Consul-General Martin. AMERICAN LEGATION, Peking, July 8, 1907. SIR Replying to your No. 312 of the 19th ultimo inclosing copy of a letter from His Imperial Japanese Majesty's consul at Hankow with reference to the extension of the Japanese concession at Hankow, I have to inform you that I see no objection to the compliance on the part of the Americans with the request therein contained, to produce their title deeds at the Japanese consulate for registration. In reply to the letter of the Japanese consul you should inform him that you have given the notification requested, but that the United States reserves full extraterritorial rights over American-owned property situated in the concession extension, as well as over American owners of such property. W. W. ROCKHILL. File No. 8103. No. 349.] The Acting Secretary of State to Minister Rockhill. DEPARTMENT OF STATE, Washington, August 28, 1907. SIR: I have to acknowledge the receipt of your dispatch No. 663, of the 9th ultimo, concerning the recent agreement between Japan and China, extending the Japanese concession at Hankow. You quote Article VIII of this agreement, which is on file in your legation, as the only stipulation affecting American interests. You also inclose a copy of a letter to you from the American consul at Hankau in which he incloses a copy of a letter to him from the Japanese consul at Hankow, in which the American consul is requested to notify the Americans of American protégés who may pos 85111-FR 1907-15 sess land on the said concession extension to produce their title deeds at the Japanese consulate for examination and registration before or on the 16th instant, and thereby to agree to their property being included in the Japanese concession extension. Your reply to the American consul advises him that he should inform the Japanese consul that the notification will be given, but that the United States reserves full extraterritorial rights over Americans and American-owned property situated in the extension. The department approves your action in the matter. I am, etc., ALVEY A. ADEE. CUSTOMS AND INLAND TAXATION. [See also correspondence, p. 130 et seq., "The Open Door Policy in Manchuria."] File No. 788/26-32. No. 504.] Minister Rockhill to the Secretary of State. AMERICAN LEGATION, Peking, January 12, 1907. SIR: I have the honor to inclose herewith copies of certain dispatches which I have addressed to Mr. Straight, consul-general at Mukden, in reference to the question of customs regulations and taxation of foreign merchandise at the city of Mukden. On December 11 last the legation instructed Mr. Straight not to accept a tax on retail trade if the goods were foreign, because after goods have paid the 5 per cent import and transit dues they can be subject to no impost whatever. I also expressed my opinion that there should be no custom-houses at Mukden or other interior places in Manchuria, and that the creation of interior custom-houses would hamper the development of the resources of the country. In his No. 64 of December 16, a copy of which has been sent to the department from Mukden, Mr. Straight, in reply to the above instructions, inclosed a copy of the proposed duty regulations as approved by their excellencies the superintendents of trade for the northern ports, Yuan Shih-k'ai, and the viceroy of Shengking, Chao Erh Sun. He also called my attention to a "consumption tax" which was being levied on all goods, native and foreign, imported by Chinese merchants, no matter what their destination. On December 27 I made certain comments to the consul-general on the proposed customs regulations, at the same time approving his suggestion, as contained in his No. 64, regarding "exemption certificates" which should be accepted by native revenue collectors, thus securing free transit for the goods covered by such certificates. I addressed a note to the foreign office on December 29, objecting to a consumption tax on foreign goods and requesting that the tartargeneral at Mukden be instructed that such tax may not be levied at any of the open cities or ports in his jurisdiction upon foreign goods that have already paid import duty. No reply has as yet been received to the above note other than that my note has been forwarded to the tartar-general for his consideration. Supplementing his dispatch No. 64 to this legation, Mr. Straight addressed me again in his No. 66, of December 25, a copy of which he also forwarded to the department, to which I replied on December 31, directing him to confer freely with the Japanese consul-general on all questions in which our respective Governments were mutually interested, and to be guided by the general instructions given by the Department of State to Mr. Sammons, consul-general at Newchwang, and by this legation. On January 3 the legation received a telegram from Mukden announcing that the viceroy was proposing to appoint commissioners to conduct negotiations for formulating customs regulations, and requesting instructions as to whether he (the consul-general) should hold separate conference or joint action with the Japanese consulgeneral. On the same date I telegraphed my reply, directing him to discuss the matter with the whole consular body at Mukden and informing him that it was not a subject reserved by our treaty to our exclusive or separate determination, whereas the questions connected with the foreign settlements were so reserved. I also instructed him to bear in mind that as Mukden and Antung were ordinary treaty ports, with all the rights and privileges of such, no particular customs regulations appeared necessary. In his No. 69, of December 31, also in the possession of the department, Mr. Straight forwarded to the legation a copy of a note which he had received from the viceroy, together with the draft of his reply, which he submitted to me for my approval. Owing to the fact that the question of a "consumption tax" was being discussed by the legation with the Wai-wu Pu, I suggested in my dispatch of January 8 that the note to the viceroy should omit all mention of the tax in question. I agreed with the consul-general's views as expressed in his No. 69, in regard to the problematic future of a special foreign settlement at Mukden. It would seem as if Mukden could only be virtually a distributing point and depot for the collection of native produce destined for transshipment to the coast, where the headquarters of the foreign firms will remain located, and that therefore the contention of the Tartar general that the rights of foreign trade should be restricted to a small area, if acceded to would deprive the opened city of all value whatsoever. I have, etc., W. W. ROCKHILL. [Inclosure 1.] Minister Rockhill to Consul-General Straight. AMERICAN LEGATION, Peking, December 11, 1906. SIR: I have to acknowledge the receipt of your dispatches of November 15 (2) and December 4. Regarding the leasing of land for the erection of a consulate-general, which you are informed by the Taot'ai might be arranged for a less rate than $50 a mow per annum, you are instructed that under no circumstances can this be agreed to, since it would curtail the right guaranteed to us by treaty to purchase land. You should not accept the tax on retail trade if goods are foreign. After the goods have paid the 5 per cent import and transit dues they can be subjected to no impost whatever, and you should inform Chinese merchants of this and report any case you may hear of where a tax is levied on foreign goods in retail trade. I am of opinion that there should be no custom-houses at Mukden or other interior places in Manchuria, but only at ports where goods enter the country, and think that the creation of interior custom-houses would hamper the development of the resources of the country. You should resist an arrangement which would in any way increase the levying of dues of any kind on foreign goods. It would be better to accept the view of Mr. Hagiwara and those of the British and German consuls, and have indiscriminate residence throughout the city, than accept a strict delimitation of territory to form an international settlement coupled with the restrictions the Chinese seek to impose on commercial rights. W. W. ROCKHILL. [Inclosure 2.] Minister Rockhill to Consul-General Straight. AMERICAN LEGATION, Peking, December 27, 1906. SIR: I have to acknowledge your dispatch No. 64, of December 16. The draft customs regulations which you inclose, while apparently framed for the purpose of facilitating trade at Mukden, appears to this legation cumbersome. As regards Articles VII and VIII, it would seem that the establishment of bonded warehouses by the railway company under the usual supervision that customs authorities exercise over such places would be a much better arrangement than that laid down in these articles. Mukden being no more in the interior than Hangchow or Soochow, since these must be reached via Shanghai, it should not be made the subject of a special article. I think that Article I should be omitted altogether. In Article II the words "exceptional treatment may be accorded" should be struck out, for if satisfactory reasons are given why import duty has not been paid on foreign goods at the seaboard it is a right the owner possesses to pay them at Mukden; it is not optional with the customs to refuse him. In the same article the words "to their place of destination" should be struck out, as the provisions of the treaties are that on the payment of transit dues goods are exempted from all inland taxation whatsoever. Article V This appears to be unjust. Under existing rules at the other ports goods going from one open port to another pay (1) export duty at the place of departure, and (2) coast-trade duty (one-half import) at port of entry. The proposal to add inland taxation on goods en route from Mukden to the sea practically leaves Mukden in the same position as an unopened city. Such goods should enjoy the same privileges as those coming to Mukden from other open ports of China, as set forth in Article III. Article IX: With whom do the commissioners intend to consult? I approve of your suggestion to secure the issue by customs authorities of "exemption certificates," and I shall bring the attention of the Waiwu Pu to the matter of the levy of a consumption tax, which, as you say, is practically a transit duty equivalent to the former likin and which is being levied in Manchuria on all goods, native and foreign, imported by Chinese merchants, no matter what their destination. W. W. ROCKHILL. [Inclosure 3.1 Minister Rockhill to the Prince of Ch'ing. AMERICAN LEGATION, Peking, December 29, 1906. YOUR IMPERIAL HIGHNESS: I have the honor to call the attention of your imperial highness to the action of the Tartar general at Mukden in levying a "consumption tax" on all goods, native or foreign, imported into the province of Feng-t'ien no matter what their destination. I am informed by the American consul-general at Mukden that such a tax is being collected upon American goods placed on sale at Mukden. I need scarcely remind your imperial highness that all goods of foreign origin which have paid the tariff duty upon such imports may not be subjected |