CO129-345 - Public Offices & Foreign Office - 1907 — Page 60

This Document is the Property of His Britannic Majesty's Government.]

CHINA TRADE.

CONFIDENTIAL.

[26897]

C.0.

57

32446

[August 12]

Proce

10 SEP 07

SECTION 3,

No. 1.

(No. 307.) Sir,

Sir J. Jordan to Sir Edward Grey.-(Received August 12.)

Peking, June 24, 1907. WITH reference to my despatch No. 249 of the 28th May, respecting the arrangement come to at Mukden between the American Consul-General and the local Bureau for Foreign Affairs, with regard to the levy of consumption-tax on foreign goods in the towns opened to foreign trade in Manchuria, I have the honour to inclose copies of a further despatch from His Majesty's Consul General which clears away the ambiguity of the phrase "in their entirety."

Reference to the Chinese text of the correspondence shows that these words apply to the cities and not to the goods.

The Chinese authorities have thus taken proper steps, as reported in my despatch No. 285 of the 12th June, for the transport of foreign goods from the maritime port of entry to the new inland marts free of taxation under exemption certificates issued by the Imperial Maritime Customs; and they have conceded the long-vexed point as to taxation of the goods in the open cities.

It is true that the arrangement is described as provisional; and my American colleague has doubts as to whether he should accept it, as he fears that the proposed system of recording the amount of goods imported may prove cumbrous, and that the Chinese will now press him to carry out the stipulations of the Commercial Treaty of 1903 with regard to the selection of a foreign settlement. But the point gained is of great practical value, and should not, in my opinion, be abandoned.

As regards the taxation of native produce transported by foreign traders to and from the open marts, it will be observed from Mr. Fulford's despatch that this question still awaits settlement.

I have, &c.

(Signed)

J. N. JORDAN,

P.S. Since the above was written a despatch with regard to the issue of exemption certificates has reached me from Ilis Majesty's Consul at Newehwang, copy of which I have the honour to inclose.

Inclosure 1 in No. 1.

J. N. J.

Sir,

Consul-General Fulford to Sir J. Jordan.

Mukden, June 11, 1907.

I HAVE the honour to acknowledge receipt on the 9th instant of your despatch No. 24 of the 1st instant, with reference to the understanding between the American Consul-General and the Mukden Board of Foreign Affairs, concerning the question of the levy of consumption-tax on foreign goods imported into the open towns of this province.

The discussion here has dealt so exclusively with the question of the area of the open marts that the interpretation adopted by you of the words "all foreign goods imported into the open cities in their entirety" did not occur to my mind. I have again consulted Mr. Straight upon the subject, and he has now supplied me with the Chinese version of his letter to the Board of the 16th ultimo, and the text of their reply. I inclose copies.

From the wording of the first named you will see that there can be no doubt that the words" in their entirety" refer to the towns and not to the goods.

•

The question of native goods purchased in the open towns for export has not yet been arranged. I inclose copies and translations of a letter from Mr. Straight to the Board of the 28th ultimo and of their reply dated the 29th ultimo. These letters leave the question unsettled.

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