893.51/4441: Telegram

The Minister in China (Schurman) to the Secretary of State

389. My 385, December 6, 11 a.m., and 379, December 1, 4 p.m. dean of the diplomatic corps has received through senior consul at Canton following reply to telegram of December 1st to Sun:

“In reply I have to draw attention to the fact that Chinese Maritime Customs is first and last a Chinese Government service and as such subject to the orders of the Government, at least with regard to those ports within its jurisdiction and control. As customs revenues collected in Southern ports are and have been remitted to Peking [Page 565] and Peking has been sending against the South one military expedition after another which are financed indirectly by these Southern revenues, this Government intends to order Commissioner of Customs to cease such remittances and to retain funds for local use. There is no interference with customs contemplated nor has there been taking of administration of customs threatened. This is a purely Chinese internal affair and does not affect foreign powers. They are concerned only in protection of loan and indemnity services charged on the customs and even after action intended there is still a large margin in customs revenues for such services. In this connection it should be noted that lien of foreign creditors is on customs receipts of the country as a whole and not methods of any specific ports.

If foreign powers should resort to forcible measures it would clearly be an action of intervention in China’s internal affairs in favor of Northern militarists.

On September 5th I had the honor to address a communication to the dean of the diplomatic corps requesting foreign representative to instruct commission of bankers after service of foreign obligations charged on the customs revenues to hand over surplus unconditionally to the inspector general of customs who will be requested to remit a pro rata share to the South and to refund surplus accumulated since March, 1920, due to the South. On September 28th I was informed by telegraph that question was being considered by diplomatic body. After this Government has waited three months to a day for a reply in vain, it seems hardly reasonable for diplomatic body to complain of precipitous action on the part of this Government. In deference, however, to their representations and as proof of conciliatory spirit actuating this Government, it will refrain from taking any definite action for another two weeks in order to await this decision.”

For the Minister:
Bell