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530

M. les Directeurs,

Inclosure 2 in No. 1.

Mr. Straight to Mukden Foreign Office.

Mukden, May 16, 1907.

As there are I HAVE the honour to acknowledge the receipt of your recent note. one or two matters concerning which there is apparently some ambiguity, I venture, in reply, to review the proposals under consideration.

my

I have already had the honour to communicate to you the views of Government regarding the opening of the Treaty marts of Shengking. In your note you reiterate your contention that inland dues are leviable outside the boundaries of the foreign concessions. Since our views in this matter do not coincide, it has been proposed that, pending the settlement of this question, all foreign goods imported into the open cities in their entirety, if they be covered by exemption certificates issued by the Maritime Customs, shall not be subjected to inland taxes, but that record shall be kept of the quantity of such goods and the amount of duty to which you consider them liable.

Hereafter, should our respective Governments agree that inland dues may be levied outside foreign settlements, the amounts recorded shall be collected. It is agreed that the arrangement described in the preceding paragraph is provisional.

It is highly important that Customs machinery for effectuating the above agreement should be installed in the open cities as soon as practicable, and I trust that the Imperial Government will immediately take steps to perfect the necessary arrangements. Until such action is taken it will be impossible for goods destined for Shengking to secure exemption certificates, as no provision has been made for the recognition thereof in the open marts. Prior to the inauguration of Customs procedure, therefore, foreign goods shall not pay inland dues, but record shall be kept in the manner above described.

I avail, &c. (Signed)

Inclosure 3 in No. 1.

WILLARD D. STRAIGHT.

Mukden Foreign Office to Mr. Straight.

Mukden, May 20, 1907.

I HAVE the honour to acknowledge receipt of your note, stating: [Mr. Straight's note of the 16th May quoted in full.]

This Office agrees to the above procedure, but wishes it clearly understood that the provisions refer to foreign goods, and that native Manchurian goods shall not be entitled to similar treatment.

(Seal of Foreign Office).

Confidential.

The

Under - Secretary of State for Foreign Affairs

presents his compliments to the Under-Secretary of State for the Colonies

}

and is directed by the Secretary of State

for Foreign Affairs to transmit the accompanying sections of

printed confidential correspondence.

Foreign Office,

August 14, 1907.

$

Sir,

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